CEO 94-44 -- December 1, 1994

CONFLICT OF INTEREST

CITY COUNCILMAN EMPLOYED BY TOWING COMPANY

CONTRACTING WITH CITY

To: The Honorable Kenneth A. DeFillipo, City Councilman (North Miami Beach)

SUMMARY:

No prohibited conflict of interest exists under Section 112.313(7)(a), Florida Statutes, where a city council member accepts employment with a towing company that is under contract with the city, where the contract was entered into prior to the councilman's election to office. Although the contract was let by competitive bid, the exemption contained in Section 112.313(12)(b) would not apply where the councilman was neither a public officer nor employee of the towing company at the time of the bid. However, under the circumstances presented, Section 112.316 would have the effect of "grandfathering-in" the contractual relationship between the city and the towing company.

QUESTION:

Would a prohibited conflict of interest be created were you, a city councilman, to become employed by a towing company under contract with the city, where the contract between the company and the City was entered into prior to your election to office?

Under the circumstances presented, your question is answered in the negative.

Through your letter of inquiry and additional information provided by you to our staff, we are advised that you recently were sworn in as a member of the City Council for the City of North Miami Beach. Subsequent to your election, you were offered employment with a towing company currently contracting with the City. You relate that the contract between the towing company and the City was awarded through the competitive bidding process at a time prior to your candidacy for the City Council. The current contract will expire in February 1996, at which time the contract will be re-bid. You question whether acceptance of the offer of employment would create a conflict of interest prohibited by the Code of Ethics for Public Officers and Employees.

The applicable statute is Section 112.313(7)(a), Florida Statutes, which states:

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.--No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business, with an agency of which he is an officer or employee . . .; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties, or that would impede the full and faithful discharge of his public duties.

Without question, you would have an employment relationship with a business entity doing business with the City, which Section 112.313(7)(a) prohibits absent the applicability of some statutory exemption. You have directed our attention to Section 112.313(12)(b), regarding competitive bidding, which states:

The business is awarded under a system of sealed, competitive bidding to the lowest or best bidder and:

1. The official or his spouse or child has in no way participated in the determination of the bid specifications or the determination of the lowest or best bidder;

2. The official or his spouse or child has in no way used or attempted to use his influence to persuade the agency or any personnel thereof to enter such a contract other than by the mere submission of a bid; and

3. The official, prior to or at the time of the submission of the bid, has filed a statement with the Department of State, if he is a state officer or employee, or with the supervisor of elections of the county in which the agency has its principal office, if he is an officer or employee of a political subdivision, disclosing his interest, or the interest of his spouse or child, and the nature of the intended business.

In numerous opinions we have applied this provision to exempt a conflict of interest which might otherwise exist under Section 112.313(7), Florida Statutes. See, for example, CEO 86-36, CEO 84-84, and CEO 83-90. However, none of our earlier opinions squarely addresses a situation like that presented here, where the contract which was awarded by competitive bid pre-dates your becoming a public officer and would pre-date your employment with the towing company. Thus, while it is clear that you had no involvement as a City Councilman in directing City business to this particular towing company, it is not clear whether Section 112.313(12)(b) would permit you to now accept employment with that company with the contract between it and the City already in place.

In our view, the competitive bidding exemption is not applicable. First, the wording of the statute itself is written in the present tense and appears to us to apply to prospective situations where the public officer has an employment or contractual relationship with the bidder at the time the agency calls for bids. Not only were you not employed by the towing company at the time it submitted its bid, you were not even a public officer. Thus, while you may not have participated in the determination of bid specifications or the determination of lowest or best bidder, you obviously could not have complied with the requirement that you disclose the nature of your interest in the bid prior to the submission of the bid. Therefore, in our view, the competitive bid exemption contained in Section 112.313(12)(b) is not applicable.

We also note that where business relationships between a public agency and the employer of a public official were entered into before the official took office, we have interpreted Section 112.316, Florida Statutes, to "grandfather-in" the relationship. Section 112.316 states:

CONSTRUCTION.--It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his duties to the state or the county, city, or other political subdivision of the state involved.

In CEO 88-29, we found that this provision would negate a potential conflict of interest under Section 112.313(7)(a), where a city councilman was employed as a property manager at an office park where the city leased office space. There, the councilman's employer (his wife's realty firm) contracted with the owner of the office park to provide property management services; however, the lease agreement between the property owner and the city had been entered into prior to the councilman's election to office and the councilman had no dealings with the city in his capacity as property manager. We also pointed out in that opinion that the contractual relationship was only grandfathered-in until the expiration or renegotiation of the lease and that the councilman would be required under Section 112.3143(3), Florida Statutes, to abstain from any votes which inured to his special private gain or to that of a principal by whom he was retained.

We believe that your situation should be governed by the rationale of CEO 88-29. You have advised our staff that you would have no dealings with the City as an employee of the towing company, as it is anticipated that your efforts would be directed towards public relations and sales contacts with auto clubs and car dealerships in Dade and Broward counties. Nor would your compensation be linked to the performance of the contract. You also have advised that the City Council generally has no involvement in administering the contract with the towing company, as the City Manager normally handles all matters in that regard. Further, when the 3-year contract ends in February 1996, the City will likely put it out for bid, and the City Manager, not the City Council, will select a towing vendor for the City. Thus, if the intent of Section 112.316 is to permit public officers to accept employment that does not interfere with the full and faithful discharge of their public duties, we cannot conclude that your employment with this particular towing company under the circumstances set forth herein would interfere with your responsibilities as a member of the City Council.

Further, while we are mindful of the proscriptions contained in Section 112.313(2), which prohibits a public officer from soliciting or accepting something of value including the promise of future employment, based upon an understanding that his official actions would be influenced as a result, and Section 112.313(4), which prohibits him from accepting something of value when he knows, or with the exercise of reasonable care should know, that it was given to influence actions in which he is expected to participate in his official capacity, we have not been made aware of any circumstances which would indicate that these provisions are implicated here. First, you relate that you previously were employed by a different towing company prior to running for the City Council. Thus, it appears that your employment background has included the line of work contemplated here, and it does not appear that you are being offered this job solely because of your election to the City Council. Also, your ability to assist the towing company as a member of the City Council will be limited, as the Council's involvement in administering the present contract or in selecting a successful bidder for a future City contract is substantially circumscribed by both the situation as it exists as well as the Code of Ethics, particularly Section 112.313(6), involving misuse of position, and Section 112.3143(3), involving voting conflicts. Therefore, although you are cautioned to keep these provisions in mind if you accept the job offer, we cannot conclude that the offer of employment in and of itself contravenes either Section 112.313(2) or 112.313(4), Florida Statutes.

Accordingly, we find that no prohibited conflict of interest would exist where you, as a City Council member, are employed by a towing company which entered into a contract with the City before you took office.