CEO 89-33 -- July 27, 1989
CITY COMMISSIONER SERVING ON BOARD OF
DIRECTORS OF CHAMBER OF COMMERCE WHICH HAS PROVIDED
BOND TO CITY TO ATTRACT BUSINESSES TO CITY
SUMMARY:
No prohibited conflict of interest exists under Sections 112.313(3) and (7)(a), Florida Statutes, where a city commissioner serves on the board of directors of the local chamber of commerce which provided a bond to the city as a financial incentive to attract two businesses to the city. Here, the transaction was completed before he was appointed as a director, the chamber did not rent or sell any property or services to the city, and the commissioner does not have any employment or contractual relationship with the chamber by virtue of his uncompensated service as a director.
Nor was the commissioner prohibited by Section 112.3143(3), Florida Statutes, from voting on a lease agreement with the business which the city was seeking to attract because of his service on the board of the chamber, which had donated a bond to the city in order to induce the business to locate there. Under the circumstances presented, the commissioner was not "retained" by the chamber, and the lease would not inure to the "special gain" of the chamber.
QUESTION 1:
Does a prohibited conflict of interest exist where you, a city commissioner, serve on the board of directors of the local chamber of commerce which provided a bond to the city as a financial incentive to attract two businesses to the city before you were appointed as a director?
This question is answered in the negative.
Through your letter of inquiry and a telephone conversation with our staff, we have been advised that you serve as a member of the Tallahassee City Commission and that since October of 1988 you also have served on the board of directors of the area's chamber of commerce. You receive no compensation for your voluntary service as a director of the chamber. Recently, you voted as a member of the City Commission to approve a lease agreement between the City and a business which the City had been seeking to attract to the area.
During the City's earlier negotiations with that business and another company, the local chamber of commerce agreed in February, 1988, to provide a substantial financial incentive to attract the businesses. Through an adjunct group the chamber raised funds to purchase a zero coupon bond and then donated the bond to the City in August of 1988.
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 of 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 (1987).]
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 (1987).]
Section 112.313(3) prohibits you from acting in your official capacity to purchase, rent, or lease any realty, goods, or services for the City from the chamber of commerce of which you are a director; that section also prohibits you from acting in a private capacity to rent, lease, or sell any realty, goods, or services to the City. Under the circumstances presented, however, the chamber simply gave a donation to the City in the form of a zero coupon bond and did not rent or sell any property or services to the City. Moreover, the transaction was completed prior to your appointment as a director of the chamber of commerce.
Section 112.313(7)(a) prohibits you from having any employment or contractual relationship with a business entity which is doing business with the City Commission, your "agency" as that term is defined in Section 112.312(2), Florida Statutes. With regard to this prohibition we have advised that a director of a nonprofit organization, such as the chamber of commerce, who serves without compensation does not have an "employment or contractual relationship" with the organization. See CEO 79-65, in which we found that a city council member was not prohibited from serving on the board of directors of the city's chamber of commerce, which had contracted with the city to provide publicity for the city. In addition, we note that here the chamber's donation to the City predated your service on the chamber's board of directors.
Accordingly, under the circumstances presented we find that no prohibited conflict of interest exists in your serving on the City Commission and as a member of the board of directors of the chamber of commerce.
QUESTION 2:
Were you prohibited from voting as a city commissioner on the lease agreement with the business which the city was seeking to attract because of your service on the board of directors of the chamber of commerce?
This question also is answered in the negative.
With respect to voting conflicts of interest for local officials, the Code of Ethics provides:
No county, municipal, or other local public officer shall vote in his official capacity upon any measure which inures to his special private gain or shall knowingly vote in his official capacity upon any measure which inures to the special gain of any principal, other than an agency as defined in s. 112.312(2), by whom he is retained. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of his interest in the matter from which he is abstaining from voting and, 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. However, a commissioner of a community redevelopment agency created or designated pursuant to s. 163.356 or s. 163.357 or an officer of an independent special tax district elected on a one-acre, one-vote basis is not prohibited from voting. [Section 112.3143(3), Florida Statutes (1987).]
As you have not indicated that you have any financial interest in the business with which the City has entered into a lease or that you otherwise stand to personally gain as a result of the lease, our only concern is whether the lease inures to the special gain of any principal by whom you are retained.
We previously have advised that the term "retained" requires that an official must be kept in pay or in one's service or be employed by paying a retainer. See CEO 79-66. On this basis, we have found that a city councilman who was an uncompensated director of a chamber of commerce was not presented with a voting conflict when called upon to vote on a contract between the city and the chamber (CEO 79-65), and that a city commissioner could vote without creating a voting conflict of interest on matters benefiting a nonprofit corporation which he served as vice president without compensation (CEO 83-70). Similarly, here, we find that you are not "retained" by the chamber of commerce by virtue of your uncompensated service as a member of its board of directors.
Further, it does not appear that the lease could be considered to inure to the "special gain" of the chamber. In CEO 83-32 we advised that a city council member would not have a voting conflict of interest when voting on site selection or on committing city property for use as a cultural arts center, where the member served on the board of trustees of a nonprofit corporation requesting that the city use public land for that purpose. There, we distinguished between the general "interest" the corporation had in seeing that a cultural arts center was established and the interest that the member or the corporation could have had if they stood to receive any benefit as a result of the city's decision. In the situation presented here, the chamber clearly has been supportive of the lease between the City and the business, having gone to considerable effort to collect funds to assist the City in attracting the business. As in CEO 83-32, however, the chamber is not a party to the lease and will receive no direct benefit, or "special gain," from it.
Accordingly, we find that you were not prohibited by Section 112.3143(3), Florida Statutes, from voting on the lease between the City and the business because of your service on the board of directors of the chamber of commerce.