CEO 77-127 -- August 24, 1977
CONFLICT OF INTEREST
COUNSEL FOR FIRE DISTRICT COMMISSION OWNING MATERIAL INTEREST IN COMPANY DOING BUSINESS WITH FIRE DISTRICT
To: (Name withheld at the person's request.)
Prepared by: Phil Claypool
Although s. 112.313(3), F. S., prohibits a public employee acting in a private capacity from selling services to the political subdivision he serves or to any agency of that political subdivision, Ch. 77-349, Laws of Florida, creates several limited exceptions to this general prohibition. Section 1 of that chapter, for example, provides such exemption where "[t]he business entity involved is the only source of supply within the political subdivision of the officer or employee, and there is full disclosure of the officer's or employee's interest in the business entity to the governing body of the political subdivision. . . ." Therefore, where the general counsel for a fire control district owns a material interest in the only telephone answering service which provides 24 hour per day service 7 days per week, no conflict would be created were the district to employ such answering service to receive fire calls for transmittal to area volunteer fire departments.
Would a prohibited conflict of interest be created were a company in which I own a material interest to provide telephone answering service for the fire district whose commission employs me as legal counsel?
Your question is answered in the negative, subject to conditions specified in this opinion.
In your letter of inquiry you advise that you are employed as legal counsel to the governing commission of the Special Fire Tax District for Citrus County. The district has only volunteer fire protection and does not yet have a "911" telephone alert system. In addition, you advise that you own 25 percent of a corporation that operates a 24 hours per day, 7 days per week telephone answering service which the fire district commission wishes to employ.
In a telephone conversation with our staff, you stated that the fire district encompasses the entire county, with the exception of two municipalities. Under the control of the fire district commission are 11 volunteer fire departments, each of which is responsible for a separate geographic area and each of which has a separate telephone number. Should the fire district be allowed to contract with your corporation, these telephone numbers would be consolidated into one so that a resident of the county could dial the number of the answering service, which then would dispatch the appropriate fire department by calling the roster of volunteers in that department. You advise that this will be temporary, as the commission has been informed that the "911" system will be available in the county in 1 to 2 years. In addition, you advise that, while there are two other answering services operating in the county, neither operates 24 hours per day, 7 days per week.
The Code of Ethics for Public Officers and Employees provides in relevant part 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 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. . . . [Section 112.313(3), F. S. 1975.]
This provision prohibits a public employee acting in a private capacity from selling services to the political subdivision he serves or to any agency of that political subdivision.
For purposes of the standards of conduct provisions of the Code of Ethics, we are of the view that you are in the position of an employee of the fire district rather than an independent contractor with the district. In a telephone conversation with our staff, you advised that you have been retained to serve as general counsel for the district, which pays you an annual salary for all legal work done by you for the district. See CEO 76-189. In past opinions, we have found that a public officer or employee is acting in a private capacity to sell whenever a business entity of which he owns more than 5 percent sells. See, for example, CEO 75-196. Therefore, you seemingly would have a prohibited conflict of interest were your corporation to sell any services to the fire district.
However, Ch. 77-349, Laws of Florida, passed during the recent legislative session, amends s. 112.313 and creates several limited exemptions to the general prohibition contained in s. 112.313(3), above. Section 1 of that chapter provides such exemption where:
The business entity involved is the only source of supply within the political subdivision of the officer or employee, and there is full disclosure of the officer's or employee's interest in the business entity to the governing body of the political subdivision . . . .
The apparent legislative purpose behind this exemption is to alleviate the hardships which otherwise would be imposed by the Code of Ethics on governmental agencies in the less populous areas of the state, where an agency might have to forego some services to avoid creating conflicts of interest for its officers or employees. Here, although there are two other answering services within the political subdivision, neither provides the continuous service necessary for effective operation of the fire district.
Accordingly, so long as you make full disclosure of your interest in the business entity as provided in Ch. 77-349, above, and so long as your answering service remains the only provider of 24-hour service, we find that there would be no prohibited conflict of interest were the corporation to provide telephone answering services for the fire district which employs you as legal counsel.