CEO 83-88 -- December 15, 1983

FINANCIAL DISCLOSURE; SUNSHINE AMENDMENT

APPLICABILITY OF FINANCIAL DISCLOSURE LAW TO CRUISE RECEIVED FROM CRUISE COMPANY

To: (Name withheld at the person's request.)

SUMMARY:

Where an elected constitutional officer is given a cruise, compliments of the cruise company as a quid pro quo for services rendered by his tour businesses, the cruise company should be disclosed as a source of income, and the value of the cruise should be reported, if it exceeds $1,000, on Form 6, Full and Public Disclosure of Financial Interests. The value of the cruise would be the advertised cost to the general public.

QUESTION:

In filing financial disclosure, how are you, a County Commissioner, to report a cruise which was given to you by a cruise company for services rendered by your tour businesses?

In your letter of inquiry you advise that you are a member of the Monroe County Board of County Commissioners and that as a businessman, you are involved with cruise ships in the Port of Key West. You also advise that recently you took a VIP cruise compliments of the cruise company, except for taxes, boarding fees, etc. You advise that this was a trade-off with the cruise company for services rendered by your companies, as you are in the tour business. Therefore, you do not consider this a gift, but rather a quid pro quo concerning a business relationship. You question how the cruise should be disclosed.

Elected public officials are required to report gifts which are worth in excess of $25 on Commission on Ethics Form 7 under Section 111.011, Florida Statutes (1981). As this requirement is not part of the disclosure law contained in Part III of Chapter 112, Florida Statutes, or of the Sunshine Amendment, Article II, Section 8, Florida Constitution, we are not authorized to render opinions concerning that gift disclosure provision. You may wish to contact the Attorney General in this regard. However, we note that the Attorney General has opined that only items received which are gratuitous in nature are to be reported under Section 111.011; items such as an honorarium or other compensation which represents a valid quid pro quo are not required to be disclosed on this form. AGO 071-25, AGO 073-386, and AGO 074-167.

The income of elected constitutional officers, such as county commissioners, is to be reported under Article II, Sections 8(a) and (h), Florida Constitution, on Commission on Ethics Form 6, which provides the disclosing official with the alternative of filing a copy of his most recent federal income tax return or of filing a sworn statement disclosing sources and amounts of income in excess of $1,000. Our rules provide that the amount of income to be disclosed on this form is to be determined by following federal income tax principles. Commission on Ethics Rule 34-8.06(2) F.A.C.

It appears that a cruise received as a quid pro quo concerning a business relationship would constitute income to the person receiving the cruise. See Patterson v. Thomas, 289 F.2d 108 (5th Cir. 1961), cert. den. 368 U.S. 837 (1961). Under Section 1.61-2(d) of the Treasury Regulations, if services are paid for in exchange for other services, the fair market value of such other services taken in payment must be included in income as compensation; if the services are rendered as a stipulated price, such price will be presumed to be the fair market value of the compensation received in the absence of evidence to the contrary.

Accordingly, we are of the opinion that if you choose to file a sworn statement of sources and amounts of income in excess of $1,000 as part of your Form 6 (Full and Public Disclosure of Financial Interests) instead of filing a copy of your income tax return, you should disclose the cruise company as a source of income and report the value of the cruise if that value exceeds $1,000. In valuing the cruise you should use the advertised cost to the general public and subtract such taxes and boarding fees as you paid, if those amounts are included in the advertised costs of the cruise.