CEO 98-11 -- May 28, 1998
CONFLICT OF INTEREST
CITY COUNCIL MEMBER'S LAW FIRM REPRESENTING
LOCAL TRANSPORTATION MANAGEMENT ASSOCIATION
To: Name Withheld At Person's Request (Oveido)
SUMMARY:
A prohibited conflict of interest would not be created under Section 112.313(7)(a), Florida Statutes, were the law firm of a city council member to represent a local transportation management association (TMA) of which the city is a member. Under the circumstances of this opinion, the council member's contractual relationship with the TMA would be grandfathered under Section 112.316, Florida Statutes.
Also, the member would be required to comply with Section 112.3143(3)(a), Florida Statutes, in regard to council measures inuring to the special gain or loss of the TMA. CEOs 77-36, 80-79, 84-2, 88-29, 94-5, 94-8, and 95-13 are referenced.
QUESTION:
Would a prohibited conflict of interest exist under Section 112.313(7)(a), Florida Statutes, were the law firm of a city council member to represent a local transportation management association of which the city is a member?
Under the circumstances herein, your question is answered in the negative.
By your letter of inquiry, we are advised that you desire to become a member of the City Council of the City of Oviedo and that you are a member of a law firm which has as one of its clients a local transportation management association (TMA).[1] Further, you advise that the TMA is a nonprofit organization established under Chapter 617, Florida Statutes, to help solve transportation problems by encouraging businesses and governments to implement ridesharing and transportation demand-management strategies; that it is a 501(c) organization under the Internal Revenue Code; that it is governed and regulated by representatives of its membership, who make up its board of directors (with each member having a directorship); that its membership (which totals fifteen to twenty, and which includes the City of Oviedo) is mixed between local municipalities, businesses, and higher-education institutions; and that each member pays a portion of the TMA's overall budget through membership dues.
Further, you advise that the TMA has hired your firm to assist it in accomplishing its goals of transportation demand management (TDM); that in addition to your firm's services, the TMA plans to utilize part-time assistance in accomplishing its goals and objectives; that all members of the TMA Abelong to the (TMA) because they share a commonality of interests pertaining to TDM; and that neither you nor your family have any interest, either indirect or material, in the TMA.
The Code of Ethics for Public Offices and Employees provides in part:
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 or she 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 or her private interests and the performance of his or her public duties, or that would impede the full and faithful discharge of his or her public duties. [Section 112.313(7)(a), Florida Statutes.]
Absent the applicability of an exemption and absent grandfathering, Section 112.313(7)(a) would prohibit your serving as a City Council member while simultaneously holding employment or a contractual relationship with a business entity that is doing business with the City.
By virtue of the TMA's being your firm's client, we find that you hold a contractual relationship with the TMA, regardless of whether or not you personally work on or are responsible for your firm's TMA matters. See, for example, CEO 80-79 and CEO 94-5, in which we found, in reliance on caselaw, that every client of a law firm is a client of every member of the law firm. Also, in accordance with our precedent, we find that the TMA is a business entity. See, for example, CEO 84-2, in which we found that a Chapter 617, Florida Statutes, nonprofit corporation constituted a Abusiness entity. Further, we find that the TMA is doing business with the City Council. Our view is that an agency and a business entity are doing business where the parties have entered into a lease, contract, or other type of legal arrangement under which one party would have a cause of action against the other in the event of a default or breach. See, for example, CEO 77-36. Presumably, the City and other TMA members pay dues to the TMA in exchange for services, in the nature of an agreement or legal arrangement that could be breached or not performed, thereby creating a cause of action.
Therefore, under an application of Section 112.313(7)(a) alone, we would be compelled to find that you would hold a contractual relationship with a business entity doing business with your public agency in violation of that statute, were you to become a City Council member. However, the Code of Ethics also provides:
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 or her duties to the state or the county, city, or other political subdivision of the state involved. [Section 112.316, Florida Statutes.]
In past opinions, we have recognized that Section 112.316 grandfathers situations such as yours, where the business between the public agency and the business entity and the contractual relationship between the public officer and the business entity predates the officer's assumption of public office, reasoning that the officer could not have been tempted to compromise nonexistent public duties in relation to the business between the agency and the business entity. See, for example, CEO 95-13 (city mayor vice-president of insurance firm doing business with city), CEO 94-8 (town mayor employed by engineering firm doing business with town), CEO 88-29 (city council member employed as property manager for office park at which city leases offices), and CEO 77-36 (school board member also president and director of bank which owns capital improvement bonds issued by school board), among many others. Therefore, in accord with our precedent, we find that you are grandfathered regarding the existing relationship between the City and the TMA, and thus that no conflict would be created under Section 112.313(7)(a) were you to become a City Council member.[2]
Nevertheless, please be aware of Section 112.3143(3)(a), Florida Statutes, and take care that you comply with its provisions regarding Council measures which would inure to the special gain or loss of yourself, your firm, or the TMA (a principal by whom you are retained).[3] Section 112.3143(3)(a) provides:
No county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure to his or her special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(3); or which he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of the officer's interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes.
Accordingly, we find that no prohibited conflict of interest would be created were you to become a member of the City Council.
ORDERED by the State of Florida Commission on Ethics meeting in public session on May 28, 1998 and RENDERED this 2nd day of June, 1998.
______________________________________
Kathy Chinoy
Chair
[1] You also advise that you are a member of the City's Land Planning Agency (LPA). However, inasmuch as it appears that the LPA (as opposed to the City Council) is not the agency which is doing business with the TMA, it is unnecessary to treat your LPA status in this opinion.
[2] Also, we find that the exemption contained in Section 112.313(15), Florida Statutes, is inapplicable to your situation, inasmuch as it speaks to the holding of employment and not to the holding of a contractual relationship and inasmuch as all of our previous opinions considering this exemption have been in the context of employment. Section 112.313(15) provides:
(15) ADDITIONAL EXEMPTION.--No elected public officer shall be held in violation of subsection (7) if the officer maintains an employment relationship with an entity which is currently a tax-exempt organization under s. 501(c) of the Internal Revenue Code and which contracts with or otherwise enters into a business relationship with the officer's agency and:
(a) The officer's employment is not directly or indirectly compensated as a result of such contract or business relationship;
(b) The officer has in no way participated in the agency's decision to contract or to enter into the business relationship with his
or her employer, whether by participating in discussion at the meeting, by communicating with officers or employees of the agency, or otherwise; and
(c) The officer abstains from voting on any matter which may come before the agency involving the officer's employer, publicly states to the assembly the nature of the officer's interest in the matter from which he or she is abstaining, and files a written memorandum as provided in s. 112.3143.
[3]For use in carrying out the obligations of Section 112.3143(3)(a), the Commission on Ethics has promulgated CE Form 8B (Memorandum of Voting Conflict for County, Municipal, and other Local Public Officers).