CEO 95-16 -- August 31, 1995

CONFLICT OF INTEREST; GIFT ACCEPTANCE

CITY GOLF COURSES MANAGER RECEIVING

GOLF EQUIPMENT FROM SUPPLIER

To: Robert Michael Eschenfelder, Assistant City Attorney, City of St. Petersburg

SUMMARY:

Under the factual representations upon which this opinion is based, a prohibited conflict of interest was not created under Section 112.313(7)(a), Florida Statutes, where a city golf courses manager received personal golf equipment from a supplier that sells golf equipment to the city for resale in its public golf course pro shops. Because neither compensation nor contractual rights were present between the manager and the supplier, the provision of equipment did not constitute "employment" or a "contractual relationship." However, the equipment appears to have constituted prohibited "gifts" under Section 112.3148, Florida Statutes, in some instances. Therefore, the manager should carefully scrutinize any such gifts offered in the future, primarily as to their value, in regard to whether he can accept them. Inasmuch as a determination as to whether Section 112.313(4), Florida Statutes, has been violated requires determinations by a finder of fact in a particular and detailed context containing many nuances of fact and evidential minutia, no decision as to whether the provision of equipment constituted "unlawful compensation" can be made in the context of this advisory opinion. CEO's 76-21, 80-29, and 93-23 are referenced.

QUESTION:

Was a prohibited conflict of interest created under Sections 112.313(7)(a) and 112.313(4), Florida Statutes, or were prohibited gifts received under Section 112.3148, Florida Statutes, where a city golf courses manager personally was provided with golf equipment from a supplier which sells golf equipment to the city for resale in the city's golf course pro shops?

Your question is answered in the negative as to Section 112.313(7)(a). In regard to Section 112.313(4), no determination can be made in the context of this advisory opinion. However, in some instances, prohibited gifts appear to have been received under Section 112.3148, and the value of any gifts offered in the future should be carefully scrutinized.

By your letter of inquiry and by additional written information provided by you to our staff, we are advised that . . . is employed by the City of St. Petersburg as Golf Course Operations Manager (hereinafter "Manager"). The Manager, you advise, operates the "pro shops" on all City-owned golf courses, including purchasing (in excess of $1,000 per year) golf equipment to be resold in the pro shops. Further, you advise, the Manager also is a "PGA Golf Professional," a certification or designation bestowed upon him by the Professional Golfer's Association (PGA), a private entity. You advise that as a result of this designation the Manager's standing in the golfing community is greatly increased, with other golfers thus looking to the Manager for "tips on equipment, training or other advice about their own games."

You advise further that various suppliers of golf equipment, in recognition of the stature of a PGA Golf Professional, have begun the practice of entering into "staff agreements" with persons so certified who are associated with particular golf courses. The Manager, you advise, has engaged in such a staff agreement with a particular supplier or manufacturer of golf equipment (hereinafter "Supplier"). Essentially, these staff agreements, we are advised, ask the Professional to play exclusively with the particular supplier's brand of equipment. Further, you advise, these agreements are not in writing, carry no binding rights or obligations, and amount to only a hope that the Professional will play with the equipment. In reference to such agreements, your letter of inquiry states:

[The Manager] indicates that these agreements are not contractual, in that there is no written agreement and no penalty for failure to use that supplier[']s equipment exclusively. The term 'gentleman's agreement' might well best describe the arrangement. [The Manager] indicates that he is not expected to sell or actively promote in any way the equipment of the supplier. He indicates that the supplier gives him the equipment in the hope that other golfers will see a certified professional playing with its equipment and thus be motivated to play with that same equipment. [The Manager] further indicates that the type and value of equipment given each year fluctuates and that in some years, new clubs may be given while in other years, only golf balls or similar items of lesser value are given. Finally, [the Manager] indicates that the pro shops under his control carry most major lines of equipment, including [the Supplier's] equipment.

In regard to golf equipment sold at the City's pro shops and in regard to related matters, the materials provided to us state:

Pro Shop merchandising and buying is the responsibility of the Golf Course Supervisor assigned to that specific area . . . . [The Manager] meets with both supervisors on a regular basis to discuss inventory levels, cost of sales, and the pro shop buying plan. On occasion, [the Manager] will sit-in on a meeting with a supervisor and a vendor sales representative. Both of the Golf Course supervisors are supervised by [the Manager].

The direction [the Manager] is given from his superior, as it relates to the pro shops, is a goal to achieve gross sales in excess of $200,000.00 per year while maintaining a cost of sales at 75%.

[The Supplier] as well as other golf equipment suppliers have sales representatives that meet with pro shop buyers throughout the year. As stated earlier, [the Manager] on occasion will sit-in on these meetings. The purpose of the meeting is for the sales representative to show their equipment or apparel line to the buyer.

The sales representative from [the Supplier] contacts the golf courses buyer directly.

[The Manager] has the authority to determine what specific brands of golf equipment are purchased and displayed through supervision of his Golf Course Supervisor. However, the majority of items purchased for resale (i.e.: clubs, apparel, balls) are directed from customer requests and needs.

[The Supplier] is and has been doing business with the City. [The Supplier's] account is set up with the City of St. Petersburg. Items purchased for resale with companies such as [the Supplier] are purchased through the City Purchasing Department with golf course funds.

Section 112.313(7)(a), Florida Statutes, 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.

This provision, which addresses a public officer's or employee's private or secondary employment or contractual relationships, prohibits a public officer or employee from having or holding employment or a contractual relationship with an agency or with a business entity that is doing business with his public agency, and also would prohibit employment or a contractual relationship that would 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.

However, in order for the statute to be applicable, "employment" or a "contractual relationship" must exist. Stated similarly, the issue of whether a prohibited conflict exist does not even present itself absent the presence of the essential element of employment or a contractual relationship.

We find, in assessing the factual scenario presented to us, that neither employment nor a contractual relationship exists between the Supplier and the Manager based upon the provision of personal golf equipment from the Supplier to the Manager. The Manager is not paid by the Supplier, receives no compensation from the Supplier, and is not obligated to use the clubs. In short, neither the Supplier nor the Manager appear to have any legal obligations or enforceable rights against one another which flow from the provision of the golf equipment. See CEO 76-21 and CEO 80-29 for examples of precedent in which we have found compensation to be necessary to the existence of employment. Also, see CEO 93-23 for an example of our recognition that noncompensated service does not constitute a contractual relationship.

Therefore, in following our precedent, we find that the Manager's receipt of golf equipment from the Supplier does not constitute employment or a contractual relationship within the meaning of Section 112.313(7)(a), and thus that the Manager does not have a prohibited conflict of interest under that statute. Nevertheless, we caution that our finding is based upon factual representations. Thus, our finding is not binding if the reality of the situation differs from those representations.

However, under Section 112.3148, we do find that the golf equipment appears to have constituted a prohibited gift, in the occurrences of giving in which the value of the equipment provided exceeded $100, that in the future the Manager is prohibited from accepting any equipment from the Supplier that has a value in excess of $100, and that in the future the Manager may accept equipment from the Supplier that does not exceed $100 in value, but that the donor must report the same and notify the recipient that the gift will be reported.

Under Sections 112.3148(2)(d) and 112.3145(1)(a)3, Florida Statutes, the Manager is a "reporting individual" by virtue of his being a "purchasing agent having the authority to make purchases exceeding $1,000" for the City or an entity of the City. As a reporting individual, he is prohibited under Section 112.3148(4), Florida Statutes, from accepting a gift valued in excess of $100 from a lobbyist who lobbies his public agency, or from the partner, firm, employer, or principal of such a lobbyist. The Supplier appears to be the employer or principal of a lobbyist, since the information provided to our staff states that "[the Supplier], as well as other golf equipment suppliers have sales representatives that meet with pro shop buyers throughout the year," that [the Manager] on occasion will sit-in on these meetings," that the purpose of the meeting is for the sales representative to show their equipment or apparel line to the buyer," that "[t]he sales representative from [the Supplier] contacts the golf courses buyer directly," and that "[the Manager] has the authority to determine what specific brands of golf equipment are purchased and displayed through supervision of his Golf Course Supervisor." "Lobbyist" is defined at Section 112.3148(2)(b)1, Florida Statutes, to mean

any natural person who, for compensation, seeks, or sought during the preceding 12 months, to influence the governmental decisionmaking or a reporting individual or procurement employee or his agency or seeks, or sought during the preceding 12 months, to encourage the passage, defeat, or modification of any proposal or recommendation by the reporting individual or procurement employee or his agency.

For detailed guidance in determining the value of any future gifts from the Supplier to the Manager, we refer you to our rules contained in Chapter 34-13, Florida Administrative Code, emphasizing Rule 34-13.500(1) which provides:

'Actual cost to the donor' as stated in Section 112.3148(7)(a), F.S., means the price paid by the donor which enabled the donor to provide the gift to the donee. Where the donor engages in the business of selling the item or service, other than personal services, that is provided as a gift, the donor's 'actual cost' includes the total costs associated with providing the items or services divided by the number of units of goods or services produced.

If a gift has a value in excess of $100, then the Manager is prohibited from accepting it from the Supplier. If a gift has a value of $25, but not in excess of $100, the Manager may accept it from the Supplier. However, under Section 112.3148(5)(b), Florida Statutes, the donor must notify the Manager at the time the $25-$100 gift is made that the gift will be disclosed on a report filed with the Secretary of State. Such a report is required by Section 112.3148(5)(b), is to be made on CE Form 30 (Donor's Quarterly Gift Disclosure), and must be filed by the last day of the calendar quarter following the quarter in which the gift is provided.

The question of whether the Manager's acceptance of golf equipment from the Supplier constituted a violation of Section 112.313(4), Florida Statutes, cannot be answered in the context of this advisory opinion, because questions of intent and knowledge usually turn on nuances of fact that must be evaluated by a trier of fact in a detailed evidential context not available under an advisory opinion request. Section 112.313(4) provides:

UNAUTHORIZED COMPENSATION.--No public officer or employee of an agency, or local government attorney or his spouse or minor child shall, at any time, accept any compensation, payment, or thing of value when such public officer employee, or local government attorney knows, or, with the exercise of reasonable care, should know, that it was given to influence a vote or other action in which the officer, employee, or local government attorney was expected to participate in his official capacity.

Accordingly, we find that a prohibited conflict was not created under Section 112.313(7)(a), Florida Statutes; that the Manager appears to have received prohibited gifts under Section 112.3148, Florida Statutes, in instances in which the value of equipment provided exceeded $100; that, in the future, he is prohibited from accepting any gifts with a value in excess of $100 from the Supplier, other similarly situated persons or entities, or other prohibited persons or entities; that, in the future, he may accept gifts from such persons or entities if the value does not exceed $100, but that the donor must report such gifts on CE Form 30 and disclose to the Manager, at the time of the provision of the gift, that the gift will be reported.

ORDERED by the State of Florida Commission on Ethics meeting in public session on August 31, 1995, and RENDERED this _____ day of September, 1995.

__________________________

William J. Rish

Chairman