CEO 75-209 -- December 15, 1975
CONFLICT OF INTEREST
CITY COMMISSIONER DIRECTOR OF BANK SERVING AS DEPOSITORY FOR CITY FUNDS
To: W. W. Caldwell, Jr., City Attorney, Fort Lauderdale
Section 112.313(3), F. S. 1975, prohibits an officer of a political subdivision of the state from acting in a private capacity to do business with his own agency or with any agency within that political subdivision. A city commissioner who serves on the board of directors of a bank which serves as the depository and collection center for city water bills and as the depository used in the administration of the city pension plan has no conflict of interest where such transactions were negotiated prior to the effective date of the law and/or prior to his qualifying for elective office pursuant to the "grandfather" clause contained in the provision. Furthermore, s. 136.02(5), F. S. 1973 creates a partial exception to s. 112.313(3) in providing that where a county or municipal officer is a stockholder or officer or director of a bank, such bank will not be prohibited from qualifying as a depository of funds for the officer's agency, provided the records show that no favoritism was exercised in the selection of such bank. The specific language of this provision is judged to rule over the more general prohibition set forth in s. 112.313(3).
There is no contradiction between ss. 112.3145 and 112.313(3) and (7), F. S. 1975. The latter section, dealing with conflicting business interests and conflicting employment, is intended to identify and prohibit those private involvements which, by their very nature, pose a threat to the impartial discharge of public responsibility. The voting conflict of interest section, s. 112.3145, on the other hand, relates to the disclosure of occasional or infrequent conflicts which may stand to affect an official's impartiality on particular matters up for vote. Where a voting conflict of interest exists, the officer is not required to abstain from voting but, should he choose to vote on the matter, is required to disclose his private interest in the voting issue via the filing of CE Form 4, Memorandum of Voting Conflict, within 15 days of the vote with the person keeping the minutes of the meeting at which the vote occurred.
1. Does a prohibited conflict of interest exist where a city commissioner is a member of the board of directors of a bank which serves as the depository and collection center for city water bills and as the depository used in the administration of the city pension plan?
2. Is there not a conflict between s. 112.3145, created by Ch. 75-208, Laws of Florida, pertaining to voting conflicts of interest, and s. 112.313(3) and (7)?
Question 1 is answered in the negative.
You inform us in your letter of inquiry that Ms. Virginia S. Young, a Fort Lauderdale City Commissioner, serves on the Board of Directors of the First National Bank which was established as a depository of city funds prior to Ms. Young's election to the city commission or appointment to the board of directors of the bank.
The applicable section of the Code of Ethics for Public Officers and Employees provides as follows:
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.
[Section 112.313(3), F. S., as amended by Ch. 75-208, Laws of Florida; emphasis supplied.]
It is our view that where a municipality selects a bank to serve as a depository of city funds, the city officials who serve on that decision-making body are acting in their official capacities to purchase services from the chosen bank. In the instant case, however, the transaction took place prior to Ms. Young's election to the city commission and therefore is exempted pursuant to the underscored language in the above-quoted "grandfather clause."
We would also like to call your attention to another chapter of the Florida Statutes which creates a partial exception to s. 112.313(3).
The fact that a county or municipal officer or member of a public board or body, including a district school officer and an officer of any district within a county is a stockholder or an officer or director of a bank will not bar such banks from qualifying as a depository of funds coming under the jurisdiction of any such county or municipal officer, provided it shall appear in the records of the state or county agency that the governing body of such agency has investigated and determined that such county officer or member of a public board or body as aforesaid has not favored such bank or banks over other qualified banks and that there is no violation of subsection (1). [Section 136.02(5), F. S. 1973.]
This language, in its specificity, must control over s. 112.313(3), which is only a general prohibition against business conflicts. See 82 C.J.S. Statutes s. 34(b), (1953). However, it must be recognized that s. 136.02(5) applies only to a bank's serving as a depository of funds, and then only when the governing body of the agency has made an investigation and has determined that there has been no favoritism involved in the selection of the bank. Should new contracts be entered into, or should the existing contracts be renewed, with First National Bank relating to that bank's acting as a depository of city funds, such contracts would not constitute a violation of the Code of Ethics so long as the stipulations set forth in s. 136.02(5) are adhered to.
Question 2 is answered in the negative.
Section 112.313(3), quoted in question 1 above, prohibits a public official from holding certain private business interests which, because of a business' relationship(s) with a governmental agency or agencies, would affect the official's impartial discharge of public duty. Similarly, s. 112.313(7), the prohibition against conflicting employment, prohibits a public official's holding private employment which would conflict with his public responsibilities in a broad or continual manner. Both sections are intended to identify those private involvements which, by their very nature, pose a threat to the impartial discharge of public responsibility.
Section 112.3143, created by Ch. 75-208, provides as follows:
Voting conflicts. -- No public officer shall be prohibited from voting in his official capacity on any matter. However, any public officer voting in his official capacity upon any measure in which he has a personal, private, or professional interest which inures to his special private gain, or the special gain of any principal by whom he is retained, shall within 15 days after the vote occurs disclose the nature of his 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.
This section relates to the disclosure of occasional or infrequent conflicts -- conflicts which, though remote from public duty as a whole, nevertheless potentially stand to affect an officer's impartiality on a particular matter up for vote. Where a voting conflict of interest exists, the officer is not required to abstain from voting but, should he choose to exercise his right to vote, he is required to disclose his private interest in the particular matter.