CEO 07-2 -- January 31, 2007

CONFLICT OF INTEREST

CRA MEMBER'S CORPORATION SUBCONTRACTING WITH
PRIME CONSULTANT HIRED BY ECONOMIC DEVELOPMENT
COMMISSION TO UPDATE CRA'S REDEVELOPMENT PLAN

To: Name withheld at person's request (Jacksonville)

SUMMARY:

No conflict of interest would be created were the company of a member of a community redevelopment agency (CRA) to become a sub-consultant to the prime consultant hired by an economic development commission to update the CRA's redevelopment plan. Under Section 112.313(3), Florida Statutes, the member would not be purchasing services as a public officer from his company and he would not be acting in a private capacity to sell services to the CRA. Under the first part of Section 112.313(7)(a), Florida Statutes, the member would not hold employment or a contractual relationship with the prime consultant (the business entity doing business with the CRA). Under the particular facts of this opinion, no conflict would be created under the second part of Section 112.313(7)(a). CEO 06-23, CEO 04-9, CEO 01-1, CEO 97-17, CEO 96-1, CEO 94-37, CEO 94-21, CEO 88-43, CEO 88-40, CEO 86-54, CEO 86-13, CEO 81-47, CEO 79-1, CEO 78-83, and CEO 77-126 are referenced.1


QUESTION:

Would a conflict of interest be created were the company of a member of a community redevelopment agency (CRA) to become a sub-consultant to the prime consultant hired by an economic development commission to update the CRA's redevelopment plan?


Under the scenario presented in this inquiry, your question is answered in the negative.


By your letter of inquiry and additional information provided to our staff, we are advised that ... (member) serves as a board member of the Jacksonville International Airport/Community Redevelopment Agency (JIA/CRA or CRA). In addition, we are advised that the Jacksonville Economic Development Commission (JEDC or EDC) plans to retain a prime consultant to update the redevelopment plan for the CRA,2 to address the course of future development and improvements in the CRA area. Further, we are advised that the member is president of a transportation planning corporation that would like to be a sub-consultant to a prime consultant competing for the contract to develop the redevelopment plan, but that the member has not lobbied (and will not lobby) any public agency boards or public agency personnel advocating that the prime consultant be hired. Also, we are advised that if the prime consultant is hired by the EDC to produce the report, the member's corporation will contract with the prime consultant to work on part of the content of the report (approximately ten percent of the total report). Additionally, we are advised that during the planning process, the member (or other representatives of his corporation) could be asked to explain to either the JIA/CRA or the JEDC the report's recommendations and the factual bases or support therefor, with any such explanation or presentation being part and parcel of the prime consultant's presentation and not independent of the prime's. Further, you advise that neither the member, the member's corporation, nor the prime consultant stand to benefit in any manner from the recommendations (content) and outcome (usages) of the report. Thus, in behalf of the member, you ask whether the scenario set forth above would create a prohibited conflict of interest for him.


Under the particular circumstances of this inquiry, we find, as set forth below, that no prohibited conflict of interest would be created for the member under the Code of Ethics. Regarding Section 112.313(3), Florida Statutes,3 we find, in accord with our precedent, that the member (in his capacity as a public officer with the CRA) would not be purchasing services from his company and we find that he would not be acting in a private capacity to sell services to his political subdivision or an agency thereof. Rather, the prime consultant would be purchasing services from the member's company and the member's company would be selling services to the prime. We have not found that such subcontracting constitutes an indirect purchase or sale in violation of the statute. See, for example, CEO 04-9 (city commissioner member of law firm representing underwriter on "conduit" bond issue, representing corporation contracting with city, and representing interlocal agency of which city is a member), CEO 01-1 (school board member's corporation selling building supplies to school board), CEO 88-43 (water management board member officer and owner of corporation subcontracting with general contractor on district project), CEO 86-54 (county commissioner's spouse's engineering firm doing business with county), and CEO 78-83 (children of aviation authority member owning construction company which subcontracts on authority project).


Regarding the first part of Section 112.313(7)(a), Florida Statutes,4 we find, in accord with our precedent, that the member would not hold employment or a contractual relationship with the business entity (the prime consultant) which would be doing business with the public agency. In our view, a public officer does not hold employment or a contractual relationship with a business entity which is doing business with a public agency because he holds employment or a contractual relationship with another business entity (even his own, closely-held entity) which in turn is doing business with the business entity contracting with the public agency. See, for example, CEO 06-23, CEO 97-17, CEO 96-1 (Question 2), CEO 94-37, CEO 94-21, CEO 88-43, CEO 81-47, and CEO 79-1. Regarding the second part of Section 112.313(7)(a), which is at issue here because the member might explain parts of the redevelopment plan update to the JIA/CRA and the JEDC, while we have found that representation of a private client before one's own public board creates a conflict for lawyer-members and other professionally-licensed members of the public board,5 we distinguish the dynamic of the instant inquiry. Unlike a situation in which one's own public board is adjudicating or deciding an insular matter of a petitioning client of one of its members, to whom the member owes a licensed, professional duty,6 the instant situation merely involves possible commentary on a delivered product (a report) purchased by a public board other than the member's public board.


Accordingly, under the particular facts of this inquiry, we find that the member will not have a conflict under Section 112.313(3) or Section 112.313(7)(a), Florida Statutes, should his company subcontract with a prime consultant to update the CRA's redevelopment plan.7


ORDERED by the State of Florida Commission on Ethics meeting in public session on January 26, 2007 and RENDERED this 31st day of January, 2007.


________________________
Norman M. Ostrau, Chair

[1]For prior opinions of the Commission on Ethics, go to www.ethics.state.fl.us.

[2]By telephone you confirmed that the JEDC board (not the CRA board on which the member sits) will hire the prime consultant.

[3] Section 112.313(3) provides:

DOING BUSINESS WITH ONE’S AGENCY.—No employee of an agency acting in his or her official capacity as a purchasing agent, or public officer acting in his or her official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his or her own agency from any business entity of which the officer or employee or the officer’s or employee’s spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or the officer’s or employee’s 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 the officer’s or employee’s own agency, if he or she is a state officer or employee, or to any political subdivision or any agency thereof, if he or she 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.

[4] Section 112.313(7)(a) 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 or she 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 or her private interests and the performance of his or her public duties or that would impede the full and faithful discharge of his or her public duties.

[5] See, for example, CEO 96-1 (Question 1), CEO 88-40, and CEO 77-126.

[6] Via a telephone conversation between you, the member, and our staff, we are informed that the member's work for his company does not require professional licensure.

[7] Also, the member should be aware of the voting conflicts law, Section 112.3143(3)(a)&(b) and Section 112.3143(4), Florida Statutes, regarding any CRA board votes/measures which may impact the prime consultant or his company. CEO 86-13; CE Form 8B. If any such votes/measures arise, the member should consult you or our staff as necessary.