CEO 82-78 -- September 20, 1982

CONFLICT OF INTEREST

TOWN MAYOR ACTING AS SALESMAN FOR COMPANY GRANTED FRANCHISE BY TOWN

To: Mr. Ron Wier, Mayor, Town of Interlachen

SUMMARY:

A prohibited conflict of interest would be created were a town mayor to act as a salesman for a company which has been granted a nonexclusive cable television franchise by the town. This employment would violate Section 112.313(7), Florida Statutes, which prohibits a public officer from having a contractual relationship with a business entity which is subject to the regulation of his agency. However, if the owner of the company were to form a separate limited partnership for the operation of the cable television system, that business entity would be subject to the regulation of the town, and no prohibited conflict of interest would be created were the mayor to act as a salesman for the original corporation.

QUESTION:

Would a prohibited conflict of interest be created were you, a town mayor, to act as a salesman for a company which has been granted a nonexclusive cable television franchise by the town?

Your question is answered in the affirmative.

In your letter of inquiry you advise that you are the Mayor of the Town of Interlachen. You also advise that after the Town Council had granted a nonexclusive cable television franchise to a company, you were approached by the owner of that corporation and offered the opportunity to work as a commissioned salesman of burglar alarm systems for the company. In a telephone conversation with our staff, you advised that the owner of the corporation is planning to create a separate limited partnership for the cable television operation together with the backer who enabled the company to become involved in cable television. It is anticipated that the franchise granted by the Town to the company soon will be amended to replace the company with the limited partnership as franchisee.

The Code of Ethics provides in relevant 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 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 private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), Florida Statutes (1981).]

The first sentence of this provision prohibits a public officer from having a contractual relationship with a business entity which is doing business with, or is subject to the regulation of, his agency. As we found in CEO 81-37, we find that the franchisee is subject to the regulation of the Town through the franchise agreement (Town Ordinance No. 80-3). Therefore, you may not contract with the franchisee to act as its salesman.

However, the term "business entity" is defined 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. [Section 112.312(3), Florida Statutes (1981).]

Under this definition, we have treated each corporation or partnership as a separate business entity for purposes of the Code of Ethics. See, for example, CEO's 78-20 and 79-55, in which we advised that wholly-owned subsidiary corporations were separate business entities from their parent corporations. Therefore, if a limited partnership is formed for the operation of the cable television system, that business entity would be subject to the regulation of the Town. The present corporation, for which you would be selling burglar alarms, would be a separate business entity not doing business with or subject to the regulation of the Town.

Accordingly, we find that a prohibited conflict of interest would be created were you to act as a salesman for a corporation which has been granted a franchise by the Town. However, if in the future a separate limited partnership is created for the operation of the cable television system, no prohibited conflict of interest would be created were you to sell burglar alarms for another company.