CEO 76-3 -- January 16, 1976
CONFLICT OF INTEREST
PUBLIC OFFICERS CONTRACTING WITH CITY OR CONTRACTING WITH OTHERS WHO ARE CONTRACTING WITH CITY
To: (Name withheld at the person's request.)
SUMMARY:
Although Fla. Stat. s. 112.313(3)(1975) prohibits a local officer from acting in a private capacity to do business with his own agency or with any agency within his agency's political subdivision, s. 112.316(1975) stipulates that it is not the intention of the Code of Ethics to prevent a public officer or employee from holding private employment which does not interfere with the full and faithful discharge of his public duties. In the instant case, emphasis is placed on the latter statute. Accordingly, no prohibited conflict of interest is found to be created where a member of a municipal electrical board enters into a contract for services to the city. Neither is the subject board member in a position to supervise or regulate the city agencies with which he is privately contracting, nor do his public duties in any way involve approval of or the giving of advice as to maintenance and service contracts. His private contractual relationships with the city therefore do not interfere with his public responsibilities.
Nor is a conflict of interest created where a member of a municipal board of contract examiners enters into contracts with real property owners who receive grants or loans from the city. Such contracts would be with private citizens for the sole purpose of renovating their personal residences and thus do not constitute "doing business" as contemplated by the definition of "business entity" found in s. 112.312(4). Furthermore, even if the property owners were "doing business" within the meaning of this statute, the business would be with the city council rather than with the board of contract examiners.
Similarly, no violation would exist were a contractor who is also a member of the city board of contract examiners to enter into a subcontract with a contractor who is doing business with the city. Fla. Stat. s. 112.313(3)(1975) would not be breached under such circumstances because, as a subcontractor, the board member would not be selling goods or services to a public agency but to the major contractor. Neither would s. 112.313(7) be violated because the major contractor would be doing business with the city council rather than with the board of contract examiners, the subject officer's agency.
Pursuant to Fla. Stat. s. 112.313(1)(1975), the Standards of Conduct for Public Officers and Employees, as contained in s. 112.313, apply to all public officers and employees, including members of advisory bodies.
QUESTIONS:
1. Does a prohibited conflict of interest exist where a member of the city electrical board bids on and enters into a contract for services to the city?
2. Would a prohibited conflict of interest exist if a contractor who is also a member of the city board of contract examiners entered into a contract with a real property owner who is receiving a grant or loan from the city?
3. Would a prohibited conflict of interest exist if a contractor who is also a member of the city board of contract examiners entered into a subcontract with a contractor who is doing business with the city?
4. Does s. 112.313, F. S., Standards of Conduct for Public Officers and Employees of Agencies, apply to members of advisory bodies?
Question 1 is answered in the negative.
You have informed us that the concerned electrical board member presently has contracts with the city for maintenance of the city's traffic control system and white way lighting system. Additionally, he has been issued purchase orders for repairing the city's communication equipment.
The Code of Ethics for Public Officers and Employees states in relevant part:
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 for his own agency purchase, rent, or lease any realty, goods, or services from any business entity of which he, his spouse, or child is an officer, partner, director, or proprietor, or in which such officer or employee, 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, if he is serving as an officer or employee of any political subdivision, to that subdivision or to any agency thereof. 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 nor be construed to prohibit contracts entered into prior to:
(a) The effective date of this act;
(b) Qualifications for elective office;
(c) Appointment to public office;
(d) Beginning public employment.
[Emphasis supplied; Fla. Stat. s. 112.313(3)(1975).]
The emphasized portion of the above-quoted provision would appear to prohibit officers of a political subdivision from selling services to agencies of that subdivision. However, in construing the provisions of this code as they apply to a public official's employment or business interests in the private sector, we must place primary importance on that provision of the Code of Ethics which states:
CONSTRUCTION. -- It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a . . . city . . . from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, [or] employee . . . of his duties to the . . . city . . . involved. [Fla. Stat. s. 112.316(1975).]
The above-quoted provision makes it clear that the Code of Ethics shall not be construed to prohibit a public officer from following any pursuit which does not interfere with the full and faithful discharge of his duties. The electrical board member in this instance is not in a position either to supervise or regulate the city agencies with which he is privately contracting; nor do his public duties in any way involve approval of or the giving of advice or recommendations as to who to employ for these maintenance and service contracts. This being the case, the above-described contractual relationship would not in our view interfere with the full and faithful discharge of his public duties. He is, of course, prohibited by s. 112.313(3) from contracting with the electrical board.
As to question 2, your letter of inquiry advises us that your city is the recipient of approximately $1,000,000 in community development funds and plans to make outright grants or low interest loans to property owners for the purpose of rehabilitating housing in the city. The subject member of the board of contract examiners is, in his private capacity, a general contractor.
The emphasized portion of s. 112.313(3), quoted in our reply to question 1 above, prohibits officers of a political subdivision from selling goods or services to agencies of that subdivision. In the situation you have described, however, the subject contractor would be contracting with a property owner rather than with an agency of his political subdivision. This being the case, we find s. 112.313(3) inapplicable.
The Code of Ethics for Public Officers and Employees additionally 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 doing business with, an agency of which he is an officer or employee, excluding those organizations and their officers who enter into or negotiate a collective bargaining contract with any state, county, municipal, or other political subdivision of the state when acting in their official capacity; 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. [Fla. Stat. s. 112.313(7)(1975).]
This provision prohibits the subject board member from holding his public position on the board of contract examiners while having a contractual relationship with a business entity doing business with said board. The Code of Ethics defines the term "business entity" to mean:
. . . any corporation, partnership, limited partnership, proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust, whether fictitiously named or not, doing business in this state. [Fla. Stat. s. 112.312(4)(1975).]
In the present instance the person for whom the contractor anticipates doing construction work would be a private citizen contracting for the sole purpose of renovating his personal residence. Such person would not be engaged in any mercantile or commercial activity for which the contractual services are sought. Thus, in our opinion this person is not "doing business" as contemplated by s. 112.312(4). Furthermore, even if the property owners were "doing business" within the meaning of this statute, the business would be with the city council and not with the city board of contract examiners.
This being the case, we find no prohibition against the subject board members entering into the above-described contracts.
Question 3 is answered in the negative.
We understand that the subject member of the board of contract examiners is not now subcontracting with any contractors doing business with the city, but he may wish to do so in the future.
This inquiry is substantially the same as question 2 of this opinion. There would be no violation of s. 112.313(3) under such circumstances because, as a subcontractor, the board member would not be selling goods or services to an agency in his political subdivision, but rather would be selling to the contractor.
Neither would there be a violation of s. 112.313(7) because, although the contractor would qualify as a business entity (see Fla. Stat. s. 112.312[4]), the contractor would be doing business with the city council rather than with the board of contract examiners.
The rationale used in answering question 2 is equally applicable to this inquiry and the question is answered accordingly.
Question 4 is answered in the affirmative.
The standards of conduct section of the Code of Ethics for Public Officers and Employees begins:
As used in this section, unless the context otherwise requires, the term "public officer" shall include any person elected or appointed to hold office in any agency including any person serving on an advisory body. [Fla. Stat. s. 112.313(1)(1975).]