CEO 82-14 -- March 4, 1982

CONFLICT OF INTEREST

AIRPORT AUTHORITY BOARD MEMBER LEASING PROPERTY FROM AUTHORITY AND ENGAGING IN BUSINESS WITH TENANT OF AUTHORITY

To: Mr. W. C. Hutchison, Jr., Attorney for Sanford Airport Authority

SUMMARY:

A prohibited conflict of interest would be created were a corporation owned by a airport authority board member to lease a building from the authority. Under Section 112.313(7), Florida Statutes, the board member would have employment or contractual relationship with a business entity which is doing business with his agency by virtue of the lease. Leases between the board member's corporation and the authority in existence at the time he first was appointed to the authority would be "grandfathered in" under the rationale of previous opinions CEO's 80-88, 77-37, 76-114, and 76-48.

No prohibited conflict of interest exists where an airport authority board member is a member of an association of tenants of the authority. Membership in a voluntary, unincorporated association is a contractual relationship within the provisions of Section 112.313(7), Florida Statutes. Although a conflict of interest would result from the board member's membership in an association of authority tenants, that conflict is not so substantial as to be prohibited under Section 112.313(7). The provision of Section 112.313(11), Florida Statutes, is analogous in this respect.

A prohibited conflict of interest would be created were a member of an airport authority board to establish a fuel farm facility with two other airport tenants requiring the approval of the authority and a contractual relationship. Here the board member would have a contractual relationship with a tenant of the authority -- a business entity doing business with his public agency -- as prohibited by Section 112.313(7).

QUESTION 1:

Would a prohibited conflict of interest be created were a corporation owned by an airport authority board member to lease a building from the authority?

Your question is answered in the affirmative.

In your letter of inquiry you advise that Mr. Robert W. Birks has been a member of the governing board of the Sanford Airport Authority since 1980. You also advise that in approximately 1972 a corporation of which he is president and a principal leased one or more of the buildings within the airport complex under the jurisdiction of the Authority. You further advise that prior to his appointment to the Board, the subject Board member was a charter member, organizer, and officer of an airport tenant association, which has acted as a representative of tenants during Airport Authority Board meetings.

Recently, you advise, a hangar became available for rent, and the Board solicited proposals for the lease of the building in order to determine the best activities to be conducted in the building as they related to flightline activities, number of employees, and orientation to aircraft activity. The subject Board member was one of three persons to submit a proposal to the Authority for the lease of the building through his corporation. He did not participate in any evaluation, discussion, or action as a Board member in considering the proposals. Finally, you advise that the subject Board member is contemplating joining two other tenants at the airport in establishing a fuel farm facility in order to supply fuel to aircraft controlled by the three participants. This operation necessarily would require the approval of the Authority and a contractual relationship, you advise.

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), Fla. Stat. (1981)]

This provision prohibits a public officer from having any employment or contractual relationship with a business entity which is doing business with his agency. If the Board member's corporation were to lease the building from the Authority, we find that the corporation would be doing business with the Authority. In addition, we find that the subject Board member has an employment or contractual relationship with the corporation by virtue of his service as president and his relationship as principal to the corporation. See CEO 80-11.

Accordingly, we find that a prohibited conflict of interest would be created were the corporation of the subject Board member to lease a building from the Airport Authority. For your information, in previous opinions CEO 80-88, 77-37, 76-114, and 76-48 we have read this provision together with Section 112.316, Florida Statutes, to imply a "grandfather clause" which would exempt business transactions occurring prior to the time the subject official took office. Therefore, leases between the subject Board member's corporation and the Airport Authority which were in existence at the time he first was appointed to the Authority will not result in a prohibited conflict of interest.

QUESTION 2:

Does a prohibited conflict of interest exist where an airport authority board member is a member of an association of tenants of the authority?

This question is answered in the negative.

Membership in a voluntary, unincorporated association rests on contract; the constitution and by-laws of a voluntary association become a contract between each member and the association. 4 Fla. Jur. 2d Associations and Clubs, Sections 5 and 7. Therefore, as a member of the tenant association, the subject board member has a contractual relationship with the association, which is a "business entity" as that term is defined in Section 112.312(3), Florida Statutes.

Although it does not appear that the tenant association is doing business with or subject to the regulation of the Authority in representing the tenants before the Authority, it is clear that the tenants are doing business with the Authority. As a member of the Airport Authority, the subject board member is responsible for acting in the best interests of the Authority, which interests do not necessarily coincide with the interests of the tenant. Therefore, to an extent, there will be a conflict of interest between the Board member's public duties and his interests as a member of the tenant association.

However, we do not find that mere membership in the association presents such a substantial conflict of interest as to result in a continuing or frequently recurring conflict of interest or as to impede the full and faithful discharge of the subject Board member's public duties, in violation of Section 112.313(7)(a), Florida Statutes. Analogously, Section 112.313(11), Florida Statutes, prohibits a State professional licensing board member from serving as an officer, director, or administrator of a professional organization or association, while not prohibiting membership in such organizations or associations. In addition, we observe that the subject Board member would be prohibited from representing the association or tenants before the Board. See CEO 77-126 and CEO 78-86.

Accordingly, we find that no prohibited conflict of interest exists where the subject Airport Authority Board member is a member of an association of tenants of the Authority.

QUESTION 3:

Would a prohibited conflict of interest be created were a member of an airport authority board to establish a fuel farm facility with two other airport tenants, requiring the approval of the authority and a contractual relationship?

This question is answered in the affirmative.

Section 112.313(7)(a), Florida Statutes, quoted above in our response to your first question, would prohibit the subject Board member from having any contractual relationship with a tenant of the Authority -- a business entity doing business with his public agency. For a similar example, see CEO 80-56, in which we advised that a prohibited conflict of interest would be created were a port authority commissioner to have a contractual relationship with tenants of the port.

Accordingly, we find that a prohibited conflict of interest would be created were the subject Board member to establish a fuel farm facility with two other airport tenants, requiring the approval of the Authority and a contractual relationship.