CEO 02-10 -- April 30, 2002

CONFLICT OF INTEREST

SPOUSE OF CHILDREN'S SERVICES COUNCIL BOARD MEMBER

PRESIDENT OF CORPORATION CONTRACTING WITH COUNCIL

To: (Name withheld at person's request)

SUMMARY:

A prohibited conflict of interest would be created under Section 112.313(3), Florida Statutes, were a county Children's Service Council to enter into future contracts with a private, nonprofit corporation to provide certain services to children, as the spouse of a board member is the president/CEO of the corporation. The board's use of contractors to fulfill its statutory duties constitutes a purchase of services for the board and is prohibited by Section 112.313(3) absent the applicability of a Section 112.313(12) exemption. However, existing contracts would be "grandfathered-in."

QUESTION:

Would a prohibited conflict of interest be created were a county children's services council to contract with a private nonprofit corporation for certain services where the spouse of a council member is the president/CEO of the corporation?

Your question is answered in the affirmative.

In your letter requesting an opinion, you indicate that you serve as General Counsel to the Children's Services Council of Palm Beach County (CSC), an independent special district established by state law. One of your newly-appointed Board members, Ms. Jeannette Corbett, has authorized you to seek an opinion on her behalf regarding the following situation. The Board member's spouse is the president/CEO of a 501(c)(3) not-for-profit corporation which contracts with CSC to provide after-school and summer programs, as well as a home and community-based preventive and early intervention program. These contracts pre-date the Board member's appointment to the CSC Board and are among a number of other CSC-funded programs involving various nonprofits and governmental entities. Although existing contracts would be "grandfathered-in" and the Board member would comply with Section 112.3143(3), Florida Statutes, regarding any votes, you question whether a prohibited conflict of interest would be created under Section 112.313(3), Florida Statutes, if additional contracts are entered into between CSC and the corporation.

Section 112.313(3), Florida Statutes, provides:

DOING BUSINESS WITH ONE'S AGENCY. -- No employee of an agency acting in his or her official capacity as a purchasing agent, or public officer acting in his or her official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his or her own agency from any business entity of which the officer or employee or the officer's or employee's spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or the officer's or employee's 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 the officer's or employee's own agency, if he or she is a state officer or employee, or to any political subdivision or any agency thereof, if he or she 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 or when such offices are on property wholly or partially owned by the legislator. This subsection shall not affect or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (2001).]

Section 112.313(3) prohibits a public officer from acting in her official capacity to purchase services for her agency from a business entity in which her spouse is an officer, partner, director, or proprietor, or in which he owns a material interest.

In CEO 82-9, we opined that a prohibited conflict of interest would be created under Section 112.313(3), where the spouse of an HRS district administrator was a director for a nonprofit corporation which provided vocational training and other services to Cuban immigrants. As we discussed in CEO 82-9, where the agency contracts with an entity to provide services for a designated clientele, the agency is purchasing services for itself, as contemplated by Section 112.313(3), Florida Statutes. Where the agency has the responsibility of providing specified services to a particular clientele, a contract with another entity to provide those services was a purchase of those services for the agency. This rationale was followed in CEO 82-51, where various county officers were also officers or directors of nonprofit corporations receiving tourist development funds to promote tourism within the county.

In CEO 92-43, we opined that Section 112.313(3) would not be violated where a city councilman's spouse was employed as the executive director of a nonprofit corporation which contracted with the city to prepare a newsletter, studies and reports on the types of downtown improvements needed in the city, a marketing plan, and other types of services designed to enhance the city's downtown redevelopment project. Significantly, the councilman's spouse was an employee of the organization and not an officer, partner, director, or proprietor. However, even though she had been on the organization's board of directors when earlier contracts were entered into, we did not view those contracts as violating Section 112.313(3) as the city was not purchasing services for itself, but the contractor's efforts were directed towards the public.

Here, you write that CSC, in carrying out its statutory duties pursuant to Section 125.901(2)(a), Florida Statutes, has made determinations as to where its principal areas of focus will be and that, currently, the focus areas are: early childhood, school success, family strengthening, and Beacon schools and family support centers. Although the CSC clearly has the discretion to decide how it will fulfill its statutory mandate and where it will place its funding emphasis, in our view its use of contractors to provide services to its constituency clearly brings it in line with the rationale of CEO 82-9. As in that opinion, we view CSC's contract with the private, nonprofit corporation as a purchase of services for CSC, as CSC uses the contracted-for services to fulfill its obligation to provide certain types of services for children within Palm Beach County.

There is no information in your letter as to whether any of the exemptions in Section 112.313(12), Florida Statutes, might be applicable to effectuate the waiver of a conflict which would otherwise exist for future contracts between CSC and the corporation. We would encourage you to contact our staff if additional guidance is necessary on this issue.

Accordingly, we find that a prohibited conflict of interest would be created under Section 112.313(3), Florida Statutes, where CSC contracts with a private nonprofit corporation to provide certain services to children and where the spouse of a CSC Board member is the President/CEO of the corporation.

ORDERED by the State of Florida Commission on Ethics meeting in public session on April 25, 2002 and RENDERED this 30th day of April, 2002.

_____________________________

Ronald S. Spencer, Jr. , Chairman