CEO 90-18 -- March 8, 1990

CONFLICT OF INTEREST

CANDIDATE FOR PORT AUTHORITY DOING BUSINESS WITH THE PORT

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

SUMMARY:

A prohibited conflict of interest would be created were a member of the Port Everglades Commission also to lease office space and pay fees to the port. Section 112.313(3), Florida Statutes, would not apply inasmuch as the member is not selling services to the port but, rather, paying fees and rentals to the port. However, Section 112.313(7)(a), Florida Statutes, would prohibit the individual from serving as a commissioner under these circumstances as he would hold employment with a business entity doing business with his agency.

QUESTION:

Would a prohibited conflict of interest be created were you to become a member of the Port Everglades Authority where your company has various business relationships with the Port?

Your question is answered in the affirmative.

In your letter of inquiry and in telephone conversations with our staff, you have advised that you are considering running for office as a Commissioner of the Port Everglades Authority. You also advise that you are the chief operating officer of a marine construction company. This company leases office space from the Port Authority, having done so for a number of years. In addition, the company holds a permit from the Authority which allows it to perform services in the port for various private entities. On occasion, vessels owned by the company pay set fees for use of Port facilities, while at other times fees for the company's vessels are paid by the private entity for whom the work is being performed. Finally, you advise that you also serve as an officer in a nonprofit association which leases office space from the Port Authority. You inquire whether you may serve as a Port Commissioner under these circumstances.

The Code of Ethics provides in part:

DOING BUSINESS WITH ONE'S AGENCY.--No employee of an agency acting in his official capacity as a purchasing agent, or public officer acting in his official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his own agency from any business entity of which he or his spouse or child is an officer, partner, director, or proprietor or in which such officer or employee of his 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 his own agency, if he is a state officer or employee, or to any political subdivision or any agency thereof, if he 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. This subsection shall not affect or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(d) Beginning public employment.

Were you to serve as a Commissioner, this provision would prohibit you from purchasing services or leasing realty for the Port Authority from your company and would prohibit your company from selling services or leasing realty to the Port. However, in the instances described, you would not be selling services to the Port, but rather would be leasing space from the Port, paying fees to the Port, and selling services to private parties who use the Port. Under these circumstances, this section would be inapplicable. See CEO 84-63.

In addition, 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 section would prohibit you from holding employment or a contractual relationship with your company or the association if it were regulated by or doing business with the Port which you serve as a Commissioner. Applying this section to the facts presented requires an examination of the business relationships between the Port, the association, and your company. First, we find that the permit you hold from the Port to transact business with private parties in the Port would constitute regulation by or doing business with the Port. See CEO 84-63. Secondly, your post with an association leasing space in the Port also would constitute doing business with the Port Authority. In CEO 82-14, we found that membership in a voluntary unincorporated association is a contractual relationship with a business entity. While we found that mere membership in that association did not create a prohibited conflict, you have indicated in this case that you are an officer of the association. On that basis, we find that you have a contractual relationship with a business entity doing business with the Port Authority. Finally, your company is doing business with the Port by leasing space and paying fees for use of Port facilities. Further, your employment as chief executive officer of the corporation would constitute employment or a contractual relationship within the meaning of Section 112.313(7)(a). Under this provision, your company apparently would be prohibited from holding these business relationships while you served as a Commissioner.

However, several exceptions to this prohibition are provided which may be considered here. In reviewing these exceptions, it appears that only two could potentially apply to the facts presented. See also Section 112.313(12), Florida Statutes. First, Section 112.313(7)(b), Florida Statutes, provides that this provision shall not prohibit practice of an occupation when that practice is required or permitted by law or ordinance. In CEO 84-63, we found that this exception applied where an appointee to the Port Everglades Commission was required to be a representative of business entities doing business with or at the Port. However, you have advised that the conditions for the seat you are considering require only that a candidate reside in a certain geographical area but do not mention business or occupational status. Therefore, this provision would not apply.

Secondly, in prior opinions we have advised that an official would not be in violation of Section 112.313(7)(a), Florida Statutes, where the contracts which otherwise would result in violation were entered into prior to the individual's assuming office. In CEO 82-10, we noted that the conditions of the pre-existing lease involved there made the contract term virtually perpetual, such that the officer's agency had no discretion in continuing the lease. In CEO 80-88, we advised that an existing insurance contract written by a port commissioner's agency could continue after the commissioner took office but that no new contracts could be entered into after that time. On this basis, you would not be precluded from assuming office while your business held an existing contract with the Port, but you would be precluded from renewing or entering new contracts which involve any discretionary action by the Port. Under the rationale of these opinions, both renewal of the lease for office space for your company and payment of any new fees not covered under an existing agreement for use of Port facilities would create a violation of Section 112.313(7)(a).

Accordingly, we find that a prohibited conflict of interest would be created were you to serve as a Port Commissioner where your company also holds leases and agreements with the Port and where you serve as an officer of an association that is leasing space from the Port, unless those business transactions are conducted under agreements which predate your assuming the office of Commissioner.