CONFLICT OF INTEREST; VOTING CONFLICT
COUNTY COMMISSIONER SERVING ON ECONOMIC
DEVELOPMENT COUNCIL, VOTING TO FUND COUNCIL,
ATTENDING ECONOMIC DEVELOPMENT MEETINGS, AND EMPLOYED
BY CORPORATION WITH LARGE, DECREASING, PRESENCE IN COUNTY
To: Name withheld at person's request (Hendry County)
SUMMARY:
A prohibited conflict of interest does not exist where a county commissioner serves on an economic development council which might receive county funds; and the commissioner would not be prohibited from voting to provide funds to the council. In addition, a prohibited conflict does not exist due to the commissioner's relationships with corporations with a large, decreasing, presence in the county. CEO 08-4, CEO 06-12, CEO 04-6, and CEO 03-13 are referenced.1
QUESTION 1:
Does a prohibited conflict of interest exist where a county commissioner serves on the board of directors of an economic development council receiving county funds?
Question 1 is answered as set forth below.
By your letter of inquiry, we are advised that … (Commissioner) serves as a member of the Hendry County Commission, having been elected on November 4, 2008. Further, we are advised that on December 10, 2008, he became a member of the board of directors (an uncompensated position) of the Hendry County Economic Development Council (EDC), by unanimous vote of the EDC board, following a unanimous request by the County Commission for the EDC board to do so. Previously, you advise, no County Commissioner had sat on the EDC board. Additionally, you advise that the EDC is a private (nongovernmental) organization, that the County has appropriated funds to it in the past, although no funds were appropriated this fiscal year, but that in the future it is possible that the County may again appropriate moneys to it. Also, you advise that the EDC has been in existence since 1997; that its mission includes economic development of all sorts, not just replacement of the jobs expected to be lost as the result of the reduction of sugar/citrus farming/processing discussed below; and that any County monies appropriated to the EDC would be used to fund the EDC's operations, primarily to pay the staff of the EDC, inasmuch as board members of the EDC are not compensated.
Continuing, you advise that the Commissioner is, and has been for the past fifteen years, employed as vice president and general manager of a corporation (orange juice corporation) that operates an orange juice processing plant in the County, and that the orange juice corporation is a wholly-owned subsidiary of another corporation (sugar corporation), which is diversified in its operations but which primarily grows sugar cane, refines sugar, grows oranges, and processes oranges. You advise that the Commissioner is a corporate officer of both corporations.
Further, you advise that in June 2008, the Governor announced the general framework of a deal for the South Florida Water Management District (WMD) to purchase real property assets of the sugar corporation; that the WMD and the sugar corporation negotiated, and signed in December 2008, a contract for the WMD to purchase most of the sugar corporation's land upon which it grows cane and oranges; and that if the contract closes, the resulting loss of cane/orange production/processing likely will result in a substantial loss of jobs within the County after seven years.2 Also, you advise that pursuant to a term added to the Commissioner's employment contract with the orange juice corporation several years ago, upon closing of the contract between the sugar corporation and the WMD, the Commissioner will receive a cash pay-out of some of his stock in the sugar corporation, but that this term could be triggered by the closing of a sale to any buyer, its applicability not being limited to a sale to the WMD.
Further, you advise that due to the likely job losses, the County has devoted considerable attention to securing new government and private sector jobs for the County; that the effort for new jobs will continue for the foreseeable future, including the holding of numerous meetings other than County Commission meetings, some of which will be public forums and some of which will be private gatherings; and that attendees at such meetings could include staff of the Florida Office of Tourism, Trade and Economic Development (OTTED), WMD staff, and private business persons.3
Also, you advise that the Commissioner has extensive private sector business experience, that one of his campaign promises was that he would promote economic development for the County, and that he would like to attend and actively participate in the various economic development meetings that will be held, including meetings relating to securing new jobs for the area. However, you advise that some in the community have questioned whether the Commissioner would have a conflict of interest if he were to be involved in such meetings, and have questioned whether he has a conflict due to his being a director of the EDC. Thus, you seek our opinion in behalf of the Commissioner. Relevant to your inquiry is Section 112.313(7)(a), Florida Statutes, which 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.
In CEO 04-6, under circumstances very similar to those of your inquiry, we found that no prohibited conflict of interest would be created under the statute were a city council member to be employed as executive director of a private economic development council receiving city funds, reasoning that the economic development council was neither regulated by, nor doing business with, the city, and finding no continuing or frequently recurring conflict or impediment to the performance of public duty on the part of the member. Likewise, we find that the situation presented does not indicate a prohibited conflict as to the Commissioner, occasioned by his position as an EDC board member.4 Further, we find that the County's provision of funding to the EDC, should it decide to do so in the future, will not create a prohibited conflict for the Commissioner. Assuming that we were to find that the Commissioner's uncompensated service for the EDC constituted a "contractual relationship" (see CEO 06-12), an essential element under the statute, we do not find that the relationship would create a prohibited conflict, provided that the lobbying efforts of the EDC, vis-à-vis the County Commission, remain minimal and provided that the Commissioner is not the person who lobbies the County Commission on behalf of the EDC. CEO 04-6.5
Accordingly, we find that a prohibited conflict of interest does not exist where the Commissioner serves as a member of the EDC board.6
QUESTION 2:
Would the Commissioner be presented with a voting conflict of interest regarding votes/measures of the County Commission to appropriate County funds to the EDC?
Question 2 is answered in the negative.
Assuming arguendo, under the situation presented herein, that the Commissioner would be the EDC's agent and that it would be his principal, we find that he would not be retained by the EDC, as required by the voting conflicts law, Section 112.3143(3)(a), Florida Statutes, given his lack of compensation from the EDC.7 See, for example, CEO 08-4 (Question 4), and opinions cited therein.8
Section 112.3143(3)(a) provides:
VOTING CONFLICTS.—No county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure to his or her special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(2); or which he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of the officer’s interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes.
Question 2 is answered accordingly.9
ORDERED by the State of Florida Commission on Ethics meeting in public session on January 23, 2009 and RENDERED this 28th day of January, 2009.
____________________________________
Cheryl Forchilli, Chair
[1]Prior opinions of the Commission on Ethics can be accessed on its website: www.ethics.state.fl.us
[2]You advise that under the contract, the sugar corporation would be able to lease the land back for seven years, beyond which the sugar corporation would have no right to farm the land, but that the sugar corporation possibly could negotiate successfully with the WMD to continue farming longer; that the sugar corporation would continue to own its juice plant, sugar cane refinery, and short-line railroad, although long-term continued operation of these facilities is uncertain without ownership of land on which to grow cane and citrus; that the sugar corporation employs approximately 1,700 people and is the County's largest employer; that the Commissioner expects that the sugar corporation's operations over the next seven years will continue, as in the past; but that it is unknown whether the sugar corporation will continue operations in any form after seven years.
[3]You advise that OTTED has been charged by the Governor to work with the County on economic development opportunities.
[4]Also, we do not find that his employment or contractual relationships with the orange juice corporation or the sugar corporation are conflicting under Section 112.313(7)(a). The situation presented does not indicate that either corporation is doing business with the County or is regulated by the County Commission. Rather, the situation presented indicates that the sugar corporation is doing business with the WMD (a separate agency from the Commissioner's agency) under the real property contract. And the situation presented indicates no continuing or frequently recurring conflict or impediment to the performance of the Commissioner's public duties occasioned by his employment or contractual relationship with the two corporations.
[5]We also find that the situation presented does not indicate that a prohibited conflict of interest exist for the Commissioner under Section 112.313(3), Florida Statutes, inasmuch as it is the WMD, rather than the County, which is the government agency or political subdivision involved in the purchase-sale with the sugar corporation. 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.
[6]Question 1 herein restates and combines questions 1, 2, and 4 of your inquiry. The first question of your inquiry, "[m]ay [the Commissioner] continue to serve as a board member for the EDC?," is the focus of our response to Question 1. The second question of your inquiry, "is there any limitation on the issues [the Commissioner] may work on or meetings [the Commissioner] may attend as and EDC board member?," is implicitly answered via our "no prohibited conflict" response to Question 1, with the provision that the Commissioner not lobby the County Commission for the EDC. The fourth question of your inquiry, "[m]ay [the Commissioner] attend, as a county commissioner or as a private citizen, private meetings concerning securing new jobs for the area?," is implicitly answered via our "no prohibited conflict" response to Question 1. Your third question is answered in our response to Question 2.
[7]Also, we do not find that the Commissioner would be presented with a voting conflict regarding votes/measures to fund the EDC, due to the term in his employment contract with the orange juice corporation which provides for a cash pay-out to him if the sugar corporation closes on a land sale contract. County assistance, or lack thereof, in EDC funding would not directly impact whether the contract would close or not; rather, such funding votes/measures would be remote and speculative as to their effects, if any, on the contract closing and, thus, on the cash pay-out to the Commissioner.
[8]As your inquiry recognizes, the Commissioner must abstain and comply with the voting conflicts law regarding votes/measures of the County Commission which would inure to the special private gain or loss of either corporation, or to that of a parent or subsidiary organization of either corporation. Note that "parent" and "subsidiary" have a broad meaning under the voting conflicts law. CEO 03-13.
[9]In addition, while we typically cannot opine definitively regarding Section 112.313(6), Florida Statutes, in the context of a request for an advisory opinion, the situation presented appears to indicate that the Commissioner's conduct in attending economic development meetings and promoting job creation for the County would not violate the statute, it appearing that such conduct would be consistent, rather than inconsistent, with the proper performance of his public duties as a County Commissioner. Section 112.313(6) provides:
MISUSE OF PUBLIC POSITION.—No public officer, employee of an agency, or local government attorney shall corruptly use or attempt to use his or her official position or any property or resource which may be within his or her trust, or perform his or her official duties, to secure a special privilege, benefit, or exemption for himself, herself, or others. This section shall not be construed to conflict with s. 104.31.