CEO 85-59 -- September 3, 1985

CONFLICT OF INTEREST

HISTORIC PRESERVATION BOARD TRUSTEES AND STAFF SERVING AS OFFICERS OR DIRECTORS OF NONPROFIT DIRECT SUPPORT ORGANIZATION

To: Mr. William R. Adams, Director, Historic St. Augustine Preservation Board

SUMMARY:

No prohibited conflict of interest would be created were trustees or staff of the Historic St. Augustine Preservation Board to serve as officers or directors, without compensation, of a nonprofit direct support organization created under Section 266.08, Florida Statutes, to operate for the benefit of the Board. As the direct support organization is to function exclusively for the support and promotion of the Board, there is a unity of interest rather than a conflict of interest between the Board and the organization. However, trustees and staff of the Board would be prohibited from being employed by or contracting with the organization by Section 112.313(7), Florida Statutes.

QUESTION:

Would a prohibited conflict of interest be created were trustees or staff of the Historic St. Augustine Preservation Board to serve as officers or directors, without compensation, of a nonprofit direct support organization created under statutory authority to operate for the benefit of the Board?

Your question is answered in the negative.

In your letter of inquiry you have advised that Section 266.08, Florida Statutes (Supp. 1984), authorizes the creation of a nonprofit direct support organization for the benefit of the Historic St. Augustine Preservation Board. Under the statute and under the Board's rules contained in Chapter 1H-4, F.A.C., the organization is to be a nonprofit corporation organized and operated exclusively for the support and promotion of the Board and to make expenditures to or for the benefit of the Board. The Board is authorized to allow the organization to use its property, facilities, and personal services without charge and to operate the Board's museum and museum store. In addition, the Board is authorized to provide incidental financial support in the form of expense reimbursement from the Board's expense appropriations.

In addition, you have advised that a corporation has been formed for this purpose. The By-laws of the corporation provide that a majority of the directors shall be members of the staff or trustees of the Preservation Board. The By-laws also specify that directors and officers are to serve without compensation. You question whether members of the Board of Trustees or its staff may serve as officers or directors of the direct support organization.

The Code of Ethics for Public Officers and Employees provides 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 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. 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 or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(c) Appointment to public office.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (1983).]

This provision prohibits a public officer or employee from purchasing, renting or leasing any realty, goods, or services for his agency from a business entity of which he is an officer or director. In addition, it prohibits a public officer or employee from acting in a private capacity, which would include acting as an officer or director of a business entity, to rent, lease, or sell any realty, goods, or services to his agency.

We doubt that a nonprofit corporation created under specific statutory authority as a direct support organization for the benefit of an agency should be considered to be selling or leasing any goods, services, or realty to that agency within the contemplation of Section 112.313(3). However, we do not decide this question because of the following provision of the Code of Ethics:

Construction. -- It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his duties to the state or the county, city, or other political subdivision of the state involved. [Section 112.316, Florida Statutes (1983).]

Under this provision we advised in CEO 81-40 that a school board member could serve as a trustee of the Florida School Board Association Insurance Trust which had been created in order to allow school districts to form a statewide consortium for the purchase of insurance. In that opinion we found a unity of interest, rather than a conflict of interest, between the responsibilities of a school board member and a trustee for the Insurance Trust.

Similarly, the direct support organization for the Preservation Board is to function exclusively for the support and promotion of the Board, creating a unity of interest between the Board and the organization. Although the Board is given certain oversight responsibilities over the organization by Section 266.08, it appears that under these particular circumstances the Board could conclude that maximum control over the organization could be retained through direct involvement of Board trustees and staff in the organization.

Please note that Section 112.313(7), Florida Statutes, prohibits a public officer or employee from being employed by or having a contractual relationship with a business entity which is doing business with his agency. Although it is not clear that the organization will be selling any goods, services, or realty to the Board, it appears that the organization will be "doing business with" the Board at least in a general sense. We have advised that service as an officer or director of a nonprofit corporation without compensation does not constitute an employment or contractual relationship subject to this prohibition. See CEO 83-70. However, this provision limits the possibility that a trustee or staff member can derive any private gain through the organization by prohibiting them from contracting with or being employed by the organization.

Accordingly, we find that no prohibited conflict of interest would be created were a Trustee or staff member of the Preservation Board to serve as an officer or director without compensation of the direct support organization for the Board. Please be advised that we have no authority to interpret the Sunshine Law, Section 286.011, Florida Statutes, in an advisory opinion. You may wish to contact the Attorney General for his advice on this question.