CEO 92-2 -- January 24, 1992
CONFLICT OF INTEREST
COUNTY COMMISSIONER SERVING AS REAL ESTATE BROKER FOR
PURCHASERS OF PHOSPHATE COMPANY PROPERTY, PURCHASING SUCH
PROPERTY HIMSELF, AND SERVING AS BROKER FOR EMPLOYEE-OFFICER-
DIRECTOR OF ENGINEERING CONSULTING CORPORATION CONTRACTING
WITH COUNTY
To: Larry Libertore, Member of the Board of County Commissioners of Polk County (Bartow)
SUMMARY:
A prohibited conflict of interest would not be created were a county commissioner to act as broker for buyers, or personally be the buyer, in real estate transactions in the county when the seller is a phosphate mining company. Neither Section 112.313(7) nor Section 112.316, Florida Statutes, contemplates such a broad prohibition against public service as would result if a prohibited conflict of interest were found here.
A prohibited conflict of interest would be created were the commissioner to broker real estate transactions for an individual buyer where the buyer is an officer-director-employee and two percent shareholder of a corporation performing engineering consulting work for the county. The buyer is sufficiently intertwined with the corporation such that a temptation to put the interests of the corporation ahead of the interests of the public is present. CEO's 76-173, 77-126, 82-54, 82-88, 88-43, 91-7, 91-20, and 91-42 are referenced.
QUESTION 1:
Would a prohibited conflict of interest be created were you, a member of the Board of County Commissioners of Polk County and a registered real estate broker, to represent a buyer in a local real estate transaction where the seller is a phosphate mining company?
Your question is answered in the negative.
In your letter of inquiry, telephone conversation with our staff, and other materials sent to our staff, you advise that you are a member of the Board of County Commissioners of Polk County. You further advise that you are a registered real estate broker and that you want to represent buyers in transactions involving real property located in the County, where the seller is a phosphate company. The buyers would be individuals and would not be subject to the regulation of or doing business with the Board, you relate. Virtually all land in the County that a phosphate company would be willing to sell already has been mined. The buyer and not the seller would be obligated to pay your commission as broker. Phosphate mining companies own many thousands of acres of land in Polk County, and their mining operations are subject to County ordinance. Under the ordinance (Polk County Ordinance No. 88-19), the Board decides whether to grant or suspend permits for the operation of phosphate mines and decides whether to grant variances or waivers from requirements for mining operations. Matters addressed by the ordinance and of concern to the Board in its decisions are phosphate mining, debris mining, phosphate processing operations, disposition of waste clays, setback and buffer requirements for mining operations, drainage, erosion prevention, and reclamation of mined areas.
The Board also has approval/disapproval authority under other County ordinances as to whether many uses of land, other than phosphate operations, are conducted. For example, you point to Polk County Ordinance No. 91-06 which adopted the Polk County Comprehensive Plan. The Plan's land use element delineates in a general way all permissible land uses; if a proposed use is inconsistent with the Plan, it cannot legally occur without the Board's approval of an amendment to the Plan. You relate further that the Board must approve all rezonings of land and issuances of variances or conditional use permits, under the Polk County Zoning Ordinance (Polk County Ordinance No. 83-02, as amended), an ordinance which addresses land use in an even more specific way than the Comprehensive Plan.
Several other ordinances providing for the Board's control as to variances and exceptions also affect land use in the County. The ordinances apply to areas or activities such as wetlands, aquifer recharge areas, floodplains, an area of critical state concern, development infrastructure construction, surface water management, installation of septic tanks, location of driveways, minimum frontage requirements, limerock mining, sand mining, mobile home and recreational vehicle development, development near airports, and subdivision of land.
The active enforcement under all of the ordinances described, including the phosphate ordinance, has been delegated to County staff, with the Board retaining the ultimate decisionmaking authority as outlined above.
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 prohibits you from having or holding any employment or contractual relationship with a business entity which is subject to the regulation of or is doing business with your agency. It also prohibits you from having or holding any employment or contractual relationship, with a business entity or an individual, that will create a continuing or frequently recurring conflict between your private interests and the performance of your public duties or that would impede the full and faithful discharge of your public duties.
Since you would be representing buyers and not sellers, since buyers would be paying you for your services, and further since the buyers would not be subject to the regulation of or doing business with the Board, your agency, you would not be in violation of the first part of Section 112.313(7)(a) by virtue of such representation. Further, under the scenario you relate to us, your representation of buyers would not violate the first part of that section because your contractual relationship would be with them as individuals rather than as business entities. See CEO 82-88.
In addition to Section 112.313(7)(a), the Code of Ethics for Public Officers and Employees provides:
It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his duties to the state or the county, city, or other political subdivision of the state involved. [Section 112.316, Florida Statutes.]
Due to the Board's control over a host of activities and uses on all land in unincorporated Polk County under the ordinances summarized above, a finding by us of a prohibited conflict under the first or second parts of Section 112.313(7)(a) would suggest that a real estate broker could not hold office as a county commissioner in a county which has enacted apparently common, usual, and statutorily directed or required land use controls or growth management measures while engaging in his chosen private profession or occupation. Further, virtually the whole of the unincorporated portion of the County could be said to be "subject to the regulation of" the Board, and thus no County Commissioner could do business with any landowner were we to find as outlined above. We believe such a finding would be contrary to Section 112.316 and is not contemplated by Section 112.313(7). See CEO 77-126 and CEO 76-173. Accordingly, we find that a prohibited conflict of interest would not be created were you to act as a real estate broker for a buyer purchasing land from a phosphate mining company.
QUESTION 2:
Would a prohibited conflict of interest be created were you, individually or jointly, to purchase land from a phosphate mining company?
This question is answered in the negative.
In addition, you advise that you, acting alone or with others, propose to purchase land in the County from phosphate mining companies, under express contracts of sale and purchase. You would abstain from votes of the Board concerning further development of such property and publicly disclose your interest as buyer.
We are persuaded that the same considerations upon which we based our answer to your first question compel us to find that such purchases by you from mining companies likewise would not create a prohibited conflict of interest under Section 112.313(7)(a). Further, we find that the Board's role under the ordinances, which potentially affect all land and landowners in unincorporated Polk County, does not constitute "regulation" as we have interpreted that term in matters previously before us, such as In Re JOHN ZERWECK, Commission Complaint No. 79-74, 2 FALR 1097A, wherein we stated:
The first portion of Sec. 112.313(7)(a), F.S., concerning employment with a business entity 'subject to the regulation of' the public body of which the public official is a member, does not apply to the factual circumstances presented.
While the City Commission has enacted numerous, detailed ordinances which specify the manner and mode of land development and building construction within the City of Margate, the active enforcement of these ordinances through review of plans, permitting and inspections has been delegated to the various boards and departments of the City. These agencies directly regulate construction and development within the City. Therefore, given the structure of this City government, any regulation by the City Commission is indirect at most, and not within the contemplation of the term 'regulation' as used by the Legislature in Sec. 112.313(7)(a). Clearly, the City Commission has subjected all residents and businesses of the City to various legal controls and restrictions. But it is equally clear that if those controls and restrictions, in themselves constitute 'regulation' by the City Commission, then no City Commissioner could work or reside in the City. The Legislature did not intend such a result when it enacted the Code of Ethics for Public Officers and Employees...
Accordingly, we find that no prohibited conflict of interest would be created were you to purchase land from a phosphate mining company.
QUESTION 3:
Would a prohibited conflict of interest be created were you to act as a broker for an individual in a real estate transaction and receive a commission from him, where he is employed by, is a director and officer of, and owns two percent of the stock of a corporation which performs engineering consulting work for the County under a contract with the Board?
This question is answered in the affirmative.
You further relate that you wish to broker a real estate transaction on behalf of an individual, under the terms of which he would pay your commission. He is an officer, director, salaried employee, and two-percent stockholder of a corporation which provides engineering consulting services to the County pursuant to a contract with the Board. The contract does not predate your becoming a member of the Board, and was not awarded under a system of sealed, competitive bidding to the lowest or best bidder.
We find that the first prohibition of Section 112.313(7)(a) would not be violated by your acting as broker for the individual, because your contract is not with the corporation with which he is affiliated and because the corporation, not the individual, is the business entity doing business with your agency--the Board. See CEO 82-54, CEO 88-43, CEO 91-7, CEO 91-20, and CEO 91-42.
However, we do find that the second prohibition of Section 112.313(7)(a) would be violated by such brokerage on your part. The individual is sufficiently intertwined with the corporation such that a temptation would exist for you to disregard your public duty to, for example, make sure that the corporation is performing its obligations under the contract, in favor of the interests of the corporation--the company of an individual whose retention of you as a broker would have generated profit (i.e. a real estate commission) for you.
This question is answered accordingly.