CEO 86-60 -- September 17, 1986

 

CONFLICT OF INTEREST

 

CITY HOUSING AUTHORITY EMPLOYEES AND THEIR RELATIVES PARTICIPATING IN HOUSING AUTHORITY PROGRAMS

 

To:      Mr. Robert W. Federspiel, Attorney for Delray Beach Housing Authority

 

SUMMARY:

 

No prohibited conflict of interest exists where the spouse of the executive director of a housing authority owns a home which is the subject of a HUD Section 8 lease subsidized by the housing authority. Opinions CEO 77-88 and CEO 81-87 are distinguished on the basis that the executive director has no property interests in the home. No prohibited conflict of interest exists where a housing authority has hired in clerical positions several individuals who receive HUD Section 8 subsidies and public housing benefits. Especially where their participation in the housing programs began before employment with the housing authority, their relationships with the authority would not present a continuing or frequently recurring conflict with, or impede the full and faithful discharge of, their clerical positions. No provision of the Code of Ethics prohibits a relative of a housing authority commissioner or housing authority employee from participating in programs administered by the housing authority. However, Section 112.313(6) and (8), Florida Statutes, prohibits public officers and employees from misusing their official positions to benefit another and from disclosing and using information not available to the general public for the personal benefit of another.

 

QUESTION 1:

 

Does a prohibited conflict of interest exist where the spouse of the executive director of a housing authority owns a home which is the subject of a HUD Section 8 lease subsidized by the Housing Authority?

 

This question is answered in the negative.

 

In your letter of inquiry and in a telephone conversation with our staff, you have advised that Ms. Deborah Williams Castellow is employed as the Executive Director of the Delray Beach Housing Authority. You also advise that she has married an individual who owns a house which is the subject of a HUD Section 8 lease. The Housing Authority, through its Section 8 program, subsidizes the rent for the tenant leasing the home. The husband's participation in the program predated the marriage.

We previously have considered and described the HUD Section 8 program in opinions CEO 77-88 and CEO 81-87. In CEO 77-88 we found that the Code of Ethics would prohibit a county commissioner from contracting with the county housing assistance office, a county agency, as a landlord under the Section 8 program. In CEO 81-87, we advised that neither a housing authority member nor its executive director should contract with the housing authority as a landlord under the Section 8 program.

Both of these opinions were based upon the following provision of the Code of Ethics for Public Officers and Employees:

 

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. [Section 112.313(7)(a), Florida Statutes (1985).]

 

In the present case, however, we find that this provision is inapplicable. You have advised that since the marriage of the Executive Director and her husband, the house has remained in the name of the husband and that the Executive Director does not own an interest in the property. As the Executive Director has no contractual relationship involving the property and the Section 8 program, and as this provision of the Code of Ethics does not address conflicts of interest based on a spouse's interests, Section 112.313(7)(a) simply does not apply here.

The Code of Ethics also provides:

 

DOING BUSINESS WITH ONE'S AGENCY. -- No employee of an agency acting in his official capacity as a purchasing agent, or public officer acting in his official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his own agency from any business entity of which he or his spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or his spouse or child, or any combination of them, has a material interest. Nor shall a public officer or employee, acting in a private capacity, rent, lease, or sell any realty, goods, or services to his own agency, if he is a state officer or employee, or to any political subdivision or any agency thereof, if he is serving as an officer or employee of that political subdivision. The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator's place of business. This subsection shall not affect or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(c) Appointment to public office.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (1985).]

 

This provision prohibits the Executive Director from acting in an official capacity as a purchasing agent to directly or indirectly lease any realty for the Housing Authority or purchase any services for the Housing Authority from a business entity of which her spouse is the proprietor or the owner of more than a five percent interest. As we noted in CEO 77-88, the public housing agency which is responsible for the Section 8 program does not lease any property from the landlord; rather, the tenant leases the property from the landlord and the housing agency makes assistance payments directly to the property owner which subsidize the rent paid from the tenant to the owner. Under these circumstances, it is apparent that the Executive Director's husband is not leasing any realty to the Housing Authority and is not selling any services to the Housing Authority.

Accordingly, we find that no prohibited conflict of interest exists where the husband of the Housing Authority Executive Director participates as a landlord in the Authority's Section 8 program.

 

QUESTION 2:

 

Does a prohibited conflict of interest exist where a housing authority has hired in clerical positions several individuals who receive HUD Section 8 subsidies and public housing benefits?

 

This question also is answered in the negative.

 

In your letter of inquiry and in a telephone conversation with our staff, you have advised that the Housing Authority has hired in clerical positions several recipients of HUD Section 8 rent subsidies and public housing benefits. The Authority's intent in employing these participants was to provide employment to otherwise qualified individuals, thereby increasing their income with the result of reducing the total amount of benefits paid to them by the Authority.

We address this question in light of the prohibitions contained in Sections 112.313(3) and 112.313(7), Florida Statutes, quoted above. We find that Section 112.313(3) does not apply here on the basis that a tenant in public housing or receiving Section 8 subsidies is not leasing any realty or selling any services to the Housing Authority.

Although the subject Housing Authority employees would have a contractual relationship with the Authority as a tenant in public housing or as a participant in the rent subsidy program, it is clear that they do not have a contractual relationship with either a business entity or an agency which is doing business with the Housing Authority or is subject to the regulation of the Housing Authority. Further, especially where their participation in the housing programs began before their employment with the Housing Authority, we find that their contractual relationships would not present a continuing or frequently recurring conflict with, or impede the full and faithful discharge of, their clerical positions with the Housing Authority.

Accordingly, we find that no prohibited conflict of interest exists where the Housing Authority has hired recipients of rent subsidies and public housing benefits.

 

QUESTION 3:

 

Would a prohibited conflict of interest be created were a relative of a housing authority commissioner or housing authority employee to participate in programs administered by the housing authority?

 

There is no provision of the Code of Ethics for Public Officers and Employees which would prohibit per se the participation of a relative of a Housing Authority Commissioner or employee in programs administered by the Housing Authority. Authority Commissioners and employees are prohibited from misusing their official positions to benefit another and from disclosing or using information not available to the general public for the personal benefit of another by the following provisions of the Code of Ethics:

 

MISUSE OF PUBLIC POSITION. -- No public officer or employee of an agency shall corruptly use or attempt to use his official position or any property or resource which may be within his trust, or perform his official duties, to secure a special privilege, benefit or exemption for himself or others. This section shall not be construed to conflict with s. 104.31. [Section 112.313(6), Florida Statutes (1985).]

 

DISCLOSURE OR USE OF CERTAIN INFORMATION. -- No public officer or employee of an agency shall disclose or use information not available to members of the general public and gained by reason of his official position for his personal gain or benefit or for the personal gain or benefit of any other person or business entity. [Section 112.313(8), Florida Statutes (1985).]

 

Therefore, we would suggest that Authority Commissioners and employees be advised of these prohibitions and we would urge them to take whatever steps may be possible to avoid even the appearance that they have used their official positions to secure public housing benefits for relatives.