CEO 94-3 -- January 27, 1994
CONFLICT OF INTEREST
CITY MAYOR EMPLOYEE OF TRAVEL AGENCY
SERVING CITY PERSONNEL
To: Michael E. Watkins, City Attorney, City of Homestead
No prohibited conflict of interest would be created under Sections 112.313(3) or 112.313(7)(a), Florida Statutes, were a travel agency which employs a city's mayor to provide travel services to city personnel traveling on official business, where the personnel individually purchase travel services from the travel agency and seek reimbursement from the city. Nor would a prohibited conflict be created were the city to purchase travel services in advance by check from the travel agency for city personnel, other than the mayor and members of the city council. The mayor does not hold a "material interest" or serve as a partner, officer, or director of the travel agency and, because of the nature of his duties with the travel agency, the mayor would not be acting in a private capacity to sell services to his political subdivision. The travel agency would not be "doing business" with the city where personnel purchase their own travel services and are reimbursed. Where the travel is purchased by the city from the travel agency in advance, except for the travel of council members, no prohibited conflict would be created because the travel agency would be doing business with agencies of the city other than the city council (the mayor's public agency). No frequently recurring conflict or impediment to duty would be created. CEO's 75-196, 75-200, 76-12, 76-31, 76-85, 76-124, 76-175, 79-18, 80-1, 80-13, 81-50, 85-71, 87-2, 87-26, 87-41, 89-21, 92-17, 92-39, and 92-48 are referenced.
Would a prohibited conflict of interest be created were a travel agency which employs a city's mayor to provide travel services to city personnel traveling on official business, where the personnel individually purchase travel services from the travel agency and seek reimbursement from the city?
Your question is answered in the negative.
By your letter of inquiry, a letter from a law firm describing a travel agency and the Mayor's connection with it, and two telephone conversations between you and our staff, we are advised that J. W. DeMilly, III serves as Mayor and a member of the City Council of the City of Homestead and that he is an employee and two percent owner of a partnership (hereinafter "Travel Agency") providing travel services (primarily airline tickets and occasionally hotel reservations, rental car reservations, etc.). Further, you advise that the Mayor's "employment and participation in the business of [the Travel Agency] is that of handling in-house management and that none of [the Mayor's] responsibilities include client contact and outside solicitation of business."
The Travel Agency, you advise, resulted from the combination of a corporation in which the Mayor is a four percent owner and a corporation owned by parties other than the Mayor. In addition, you advise that the City does not have a contract with the Travel Agency to provide exclusive services to the City, that all City department heads, Council members, and employees who travel on behalf of the City are not required to use the Travel Agency, and that City personnel are permitted to use any other travel agency or airline for City travel.
Prior to the Mayor's election to the City Council in 1981, you advise, the Mayor's corporation did a large amount of travel business with the City, but after his election he "voluntarily gave up any work with the City as a perceived conflict of interest." You advise further that prior to the formation of the Travel Agency, personnel who traveled, particularly members of the City Council, used with satisfaction the travel services of the other corporation with which the Mayor was not associated and that they personally, with no coercion from the Mayor or anyone else, wish to utilize the services of the Travel Agency which now includes the corporation which they formerly used; but they fear that such use would create a prohibited conflict of interest.
When travel for the City is necessitated, you advise, the travel is approved in advance by the City Manager and applicable department head, and the City Finance Director approves the reimbursement to the traveling officer or employee. The City, you advise, has a strong city manager form of government, and the Finance Director (the head of the Finance Department) reports to the City Manager. In addition, you relate, neither the Mayor nor any member of the City Council actually approves the issuance of a travel check to travel agencies or the payment of travel reimbursement, although the Mayor's facsimile signature may appear on checks to travel agencies or employees who are reimbursed. Checks to travel agencies are issued by the Finance Department (the agency of the City which actually has contact with the travel agencies) with the approval of the City Manager and the applicable department head. Personnel who later seek reimbursement directly pay a travel agency or airline, using a personal credit card, cash, personal check, etc.; no City credit card, "corporate card," or government agency credit card is involved. Often, you advise, City personnel use for their personal travel the same travel agency that they use for their official travel, obligating themselves to pay the travel agency for such travel in the same manner that they obligate themselves to personally pay the travel agency for the travel services they use in performing their public duties. The Mayor's duties regarding official travel, you advise, are limited to deciding whether he personally will travel to certain events or locations for official business.
Section 112.313(3), Florida Statutes, provides:
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 of 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 or when such offices are on property wholly or partially owned by the legislator. 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.
CEO 87-2 is our seminal opinion most analogous to the Mayor's situation. In that opinion, we found that Section 112.313(3) would be violated were a State Representative to be a partner in a travel agency which made travel arrangements for members and employees of the Legislature traveling on official business. In CEO 87-2, we reversed CEO 76-175, CEO 80-1, CEO 80-13, and CEO 85-71 which found that a travel service would not be doing business with a public agency when officials and employees of that agency personally paid for their official travel and were reimbursed later by their agency, reasoning that such a view allows a public official to do indirectly what he is prohibited from doing directly and thereby circumvents the intent of Section 112.313(3).
However, the Mayor's situation is materially distinguishable from that set forth in CEO 87-2 in that he is not an officer, partner, director, or proprietor of, nor a holder of a "material interest" in, the Travel Agency from which his public agency would be purchasing services. As to the second sentence of Section 112.313(3), due to the nature of his employment for the Travel Agency (handling in-house management, with no client contact and no solicitation of business), we find that the Mayor is not "acting in a private capacity" to sell services to the City. See CEO 75-196, CEO 76-12, CEO 76-31, CEO 76-124, and CEO 81-50. Therefore, we find no prohibited conflict under Section 112.313(3).
Nevertheless, we must also examine the Mayor's situation under Section 112.313(7)(a), Florida Statutes, which provides:
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.
The first part of Section 112.313(7)(a) would prohibit the Mayor from being employed by the travel agency if it is "doing business with" his "agency." We have found the agency of a city councilman to be the city council. See CEO 75-200, CEO 76-31, and CEO 92-39.
We find that in order for a business entity to be "doing business with" a public agency, such as an "agency" of the City, under Section 112.313(7)(a), the parties (the public agency and the travel agency) must actually have agreed, each on its own behalf, by way of an express agreement, an exchange of value for payment, etc., to the relationship. We do not find that individual choice and use of a travel agency by City personnel who are entering into an express agreement between themselves and the travel agency, who do not use a "City credit card" for travel, and who do not purport to obligate the City or hold themselves out as agents of the City for purposes of purchasing the travel services, constitutes the "doing of business" between the City and the travel agency under Section 112.313(7)(a). We believe that the language of the first clause of Section 112.313(7)(a) contemplates actual agreement and knowing exchanges of things of value, and that the "doing of business" does not exist merely because a quasi-contractual obligation under a theory such as quantum meruit or estoppel might at some future time be impressed by a court upon the City in order to prevent the City's unjust enrichment at the expense of the Travel Agency following some breach of payment by City personnel to the Travel Agency for travel services agreed to by the personnel in their individual capacities but which actually benefited the City. See 43 Fla Jur 2d, Public Works, Sections 51 and 52.
In CEO 87-2 we focused on Section 112.313(3), and we did not construe Section 112.313(7)(a). However, in that opinion we did find that a travel agency would be "doing business with" a public agency where employees and officials of the public agency personally paid for their official travel and were reimbursed later by their public agency.
We are persuaded that because CEO 87-2 only dealt with Section 112.313(3), it does not control our analysis of your inquiry under Section 112.313(7)(a), and that it is therefore unnecessary to affirm, overrule, or otherwise disturb our finding in that opinion and in CEO 87-26 and CEO 87-41 (two opinions which were based upon CEO 87-2) in answering your inquiry. The "doing of business" discussed in CEO 87-2 is actually a reference to the title of Section 112.313(3) as it is codified in the Florida Statutes (DOING BUSINESS WITH ONE'S AGENCY), a provision which substantively addresses the transfer for valuable consideration of realty, goods, or services from the private sector to public agencies, and which does not address transfers from public agencies to private parties or the general doing of business between government agencies and private businesses.
The second part or clause of Section 112.313(7)(a) would prohibit the Mayor from holding any employment or contractual relationship, regardless of whether or not the employment or contractual relationship was with a business entity doing business with the Mayor's public agency, if the employment or contractual relationship would create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or would impede the full and faithful discharge of his public duties. The second clause requires that we examine the nature and extent of an officer's public duties in light of his private interests to determine whether the two are separate and distinct or whether they coincide to create a situation which tempts dishonor.
We find no conflict under the scenario you present, regarding the second clause, because the City has in place a system whereby all official travel must be approved in advance by the City Manager's office and the applicable department head, because the Mayor's public duties regarding official travel of City personnel are few (i.e. limited to deciding whether he will personally travel to certain official events), and because the Mayor could declare a voting conflict, abstain from voting, and file the appropriate memorandum regarding any matters involving City travel which would come before the City Council for official action and which would inure to his special private gain or that of the Travel Agency. We do not find that the Mayor would be tempted to disregard the uniform travel law (Section 112.061, Florida Statutes), which requires that all travel by public personnel be for official business, and thereby misuse his official position by engaging in unnecessary publicly-paid travel in order to boost sales of the travel agency. See CEO 92-17 in which we declined to find that a Marine Patrol officer would be tempted to disregard fishing laws and other marine laws in an effort to satisfy the recreational appetites of the customers of his charter fishing boat business, and CEO 92-48 in which we declined to find that D.O.T. Motor Carrier Compliance officers would be tempted to disregard traffic laws and other laws in an effort to curry favor with road-construction firms which privately employed them.
Accordingly, we find that no prohibited conflict of interest would be created under Sections 112.313(3) and 112.313(7)(a), Florida Statutes, were the Travel Agency to provide travel services to City personnel.
Would a prohibited conflict of interest be created were the City Finance Department to purchase travel services for personnel directly from the Travel Agency?
In addition to the information set forth above, you advise that the City Finance Department at times purchases services from the Travel Agency for the official use of some personnel prior to the travel taking place, via City checks payable to the travel agency. You advise that this practice is necessary in situations where personnel travel frequently or could not individually obtain the services, and that this travel is approved in advance by the City Manager and applicable department head.
For the reasons set forth in our response to Question 1, we find that no prohibited conflict would be created under Section 112.313(3). However, in answering your second question, we find that a prohibited conflict of interest would be created under Section 112.313(7)(a), regarding any prepaid travel for members of the City Council (including the Mayor), notwithstanding the fact that the City Finance Department would be delivering checks for travel services purchased in advance and making other ministerial contact with the Travel Agency. The funds for such payments would be debited to the budget of the City Council, or would be substantively attributable to activities of the City Council or its members, and payment would be via City checks payable to the Travel Agency. Such a situation is much more akin to an agreed upon buying and selling between willing parties (the "doing of business" for which a cause of action would exist were the City to fail to pay the Travel Agency) than is the quasi-contractual, quantum meruit, legally-impressed remedy discussed under Question 1. Thus, the City Council (the Mayor's agency) would be doing business with the Travel Agency (a business entity employing the Mayor).
This question is answered accordingly.
In spite of our not finding a prohibited conflict under Question 1 and our not finding a prohibited conflict under Question 2 (except as to members of the City Council using prepaid travel services), the Mayor should be aware of Section 112.313(6), Florida Statutes, which provides:
MISUSE OF PUBLIC POSITION.--No public officer or employee of an agency shall corruptly use or attempt to use his official position or any property or resource which may be within his trust, or perform his official duties, to secure a special privilege, benefit, or exemption for himself or others. This section shall not be construed to conflict with s. 104.31
For purposes of this provision, the term "corruptly" is defined as follows:
'Corruptly' means done with a wrongful intent and for the purpose of obtaining, or compensating or receiving compensation for, any benefit resulting from some act or omission of a public servant which is inconsistent with the proper performance of his public duties. [Section 112.312(9), Florida Statutes.]
The Mayor should take care that none of his conduct could be interpreted as a use or attempted use of his official position or an attribute thereof in order to specially benefit himself or another person or business.