CEO 90-8 -- January 24, 1990

SUNSHINE AMENDMENT; CONFLICT OF INTEREST;

VOTING CONFLICT OF INTEREST

LEGISLATOR SEEKING EMPLOYMENT AS PRESIDENT AND

CEO OF NONPROFIT CORPORATION REPRESENTING INTERESTS

OF PRIVATE COLLEGES AND UNIVERSITIES

To: The Honorable T. K. Wetherell, State Representative, 29th District (Daytona Beach)

SUMMARY:

Article II, Section 8(e), Florida Constitution, would not prohibit a State Representative from serving as president and CEO of a nonprofit corporation formed to promote private higher education in Florida, where he would not personally represent the corporation before any State agency. No prohibited conflict of interest would be created under Section 112.313(7)(a), Florida Statutes, by this contractual relationship based on the corporation's being subject to the regulation of the Legislature. Section 112.313(7)(a)2, Florida Statutes, provides an exemption for conflicts of interest arising from regulatory authority exerted by the Legislature through the enactment of laws. Section 112.313(7)(a) also prohibits any employment which would create a continuing or frequently recurring conflict or impede the full and faithful discharge of public duties. No prohibited conflict of interest would be created under this provision so long as the subject Legislator has no role in the organization's efforts to lobby the Legislature, in addition to not personally engaging in lobbying activities. However, a voting conflict under Section 112.3143(2)(a), Florida Statutes, could exist, requiring the filing of a memorandum of conflict, where a measure under consideration represents a special private gain to the corporation.

QUESTION 1:

Would the Sunshine Amendment to the Florida Constitution prohibit you, a State Representative, from serving as president of a nonprofit corporation formed to represent the interests of private Florida colleges and universities?

This question is answered in the negative.

In your letter of inquiry, you advise that you are considering a position as president and chief executive officer of a nonprofit corporation organized to support issues of interest to private colleges and universities in Florida. You also serve as a member of the Florida House of Representatives, where you currently serve as Chairman of the House Appropriations Committee; additionally, you advise that you will become the Speaker of the House of Representatives. Your proposed employment contract with the private corporation provides that it is not dependent on your representing the corporation before any State agency and will not impose requirements on you which would cause you to violate any statutory or ethical provision, including the requirements of Chapter 112, Florida Statutes, and Article II, Section (8)(e), Florida Constitution. Your proposed duties would include management and operation of the corporation, representation of the corporation at all appropriate professional meetings, and service as spokesman for private higher education where it would not conflict with your legislative duties. You advise that under this contract you will be compensated on a fixed basis, which is not conditioned on any specific appropriation or other action of the Legislature. You inquire first whether your acceptance of this position would violate any provision of the Sunshine Amendment to the Florida Constitution.

Article II, Section 8(e), Florida Constitution, provides in relevant part:

No member of the Legislature shall personally represent another person or entity for compensation during term of office before any state agency other than judicial tribunals.

In CEO 82-33, we advised that this provision would not be violated were a State Representative to be employed by an insurance company under contract to a State agency, where the subject Representative's duties in the performance of the contract would not involve any contact with the members or staff of the agency. See also CEO 81-12. You advise that your employment contract expressly provides that the president and CEO will not represent the corporation before any State agency. Where any required contact with State agencies is undertaken by other officers or representatives of the corporation, no violation of this provision is indicated. Furthermore, application of this provision would not change were you to hold leadership posts within the Legislature such as chairman of a committee or Speaker.

Accordingly, so long as you do not represent the corporation before State agencies other than judicial tribunals, we find that Article II, Section 8(e), Florida Constitution, does not prohibit you from serving as president and CEO of a nonprofit corporation organized to promote private higher education in Florida while you serve as a member of the Florida House of Representatives.

QUESTION 2:

Would a prohibited conflict of interest be created under the Code of Ethics for Public Officers and Employees were you to serve as president and CEO of a nonprofit corporation formed to promote private higher education in Florida?

This question is answered in the negative, subject to the conditions noted below.

The Code of Ethics for Public Officers and Employees 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.]

The first part of this provision would prohibit you from being employed by, or having a contractual relationship with, a business entity which is subject to the regulation of the Legislature. You advise that the corporation which is your proposed employer from time to time has interests in matters before the Florida Legislature. Under the circumstances presented, we are of the opinion that the corporation is subject to the regulatory power of the Legislature. However, the Code of Ethics contains the following exemption from this provision for members of legislative bodies:

When the agency referred to is a legislative body and the regulatory power over the business entity resides in another agency, or when the regulatory power which the legislative body exercises over the business entity or agency is strictly through the enactment of laws or ordinances, then employment or a contractual relationship with such business entity by a public officer or employee shall not be prohibited by this subsection or be deemed a conflict. [Section 112.313(7)(a)2, Florida Statutes.]

In CEO 81-12, this exemption was applied to permit the law firm of a State Representative to represent a city housing authority. The situation you describe also would come within this exemption, where the only regulatory authority of the Legislature over the corporation or its members is through the enactment of laws. As in Question 1, there is no distinction in the exemption based on the office held within the legislative body. Therefore, under the facts presented the application of this exemption would not change were you to serve as either Chairman of the House Appropriations Committee or as Speaker of the House.

Although Section 112.313(7)(a)2, Florida Statutes, exempts from Section 112.313(7)(a) conflicts of interest arising out of a regulatory relationship between your employer and the Legislature, the second part of this prohibition further precludes you from having employment that would create a continuing or frequently recurring conflict of interest or that would impede the full and faithful discharge of your public duties as a Legislator. In this regard, we must consider whether the appearance of representatives of the corporation or its member institutions before the Legislature, or the necessity to act on issues of interest to the corporation, would create this type of conflict.

In CEO 89-29, we considered whether a city commissioner could be employed by an organization that was expected to appear before his agency on a regular basis to advocate its position on a variety of issues. In that opinion, we found that the commissioner's private employment was permissible so long as it did not encompass activities related to lobbying his agency, and we specified the types of activities which we considered to be related to lobbying. We find the rationale of that opinion to be applicable here, prohibiting you from engaging in lobbying activities personally and also in any activities related to lobbying. This would include not only actual contact with legislators through physical attendance at legislative meetings, submission of written materials, and personal contact with legislators in an effort to encourage the passage, defeat, or modification of any measure before the Legislature, as part of your employment responsibilities, but also directing the activities of those who will contact the Legislature, participating in setting the strategies of whom to contact and what to say, and assisting in preparing amendments to documents in support of the corporation's position. In other words, it is our view that your employment with the corporation should be completely separated from the lobbying activities of your employer.

You state in your letter of inquiry that your employment contract at this time is unexecuted and subject to modification and that you are prepared to place additional conditions on the employment should we deem it appropriate. Your draft contract with the corporation specifies that you will not represent the corporation before any State agency or engage in any conduct which would violate Chapter 112, Florida Statutes. We are of the opinion that it would be helpful if the contract would specify the limitations on your involvement in the lobbying activities of the organization using language similar to the above paragraph. This would avoid even the appearance that there is any conflict created between your activities as a legislator and your employment with the corporation. In our view, these restrictions would not preclude your participation in corporate activities leading to a decision to approach the Legislature concerning an issue. However, once such a decision is made, your employment should not include any activities related to accomplishing the goals of the corporation before the Legislature.

Although not raised in your letter of inquiry, you also may wish to consider instances where matters may arise for a vote of the Legislature which could potentially benefit the corporation which employs you. Under Section 112.3143(2)(a), Florida Statutes, a State officer cannot be prohibited from voting in his official capacity on any matter. However, if the measure being voted upon would inure to his special private gain or the special gain of a principal by whom he is retained, the officer is required to file a memorandum of voting conflict.

In CEO 89-19, we advised that no voting conflict of interest would be created were a county commissioner to vote on general measures which affect a large class of persons, though the public utility employing him also might realize an incidental benefit. However, a voting conflict would exist if a measure benefited the utility specially. In CEO 81-12, we advised that whether a measure inures to the "special" gain of a principal will turn in part on the number of persons who stand to benefit from the measure. Where the class of persons is large, a "special" gain will result only if there are circumstances unique to the principal under which the principal would stand to gain more than the other members of the affected class. See also CEO 77-129.

In applying this restriction to measures which potentially could benefit your proposed employer, a determination would have to be made as to whether a particular measure represented this type of special private gain, as opposed to a more general measure such as a General Appropriations Act which could contain items of interest to the corporation. However, the presence of a special benefit must be evaluated in the context of a specific vote rather than in terms of general proscriptions. Therefore, you may wish to request an additional opinion if you envision a particular bill which may present a potential voting conflict.

Accordingly, subject to the conditions noted above, we find that no prohibited conflict of interest would exist under the Code of Ethics for Public Officers and Employees were you to serve as president and CEO of a corporation formed to represent the interests of private higher education in Florida while you also serve as a member of the House of Representatives.