CEO 89-29 -- July 27, 1989

CONFLICT OF INTEREST

CITY COMMISSIONER EMPLOYED AS EXECUTIVE DIRECTOR OF CITY CHAMBER OF COMMERCE

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

SUMMARY:

No prohibited conflict of interest exists where a city commissioner is employed as the executive director of the chamber of commerce for the city, where the chamber does not lease or sell any realty, goods, or services to the city, where all other contracts between the chamber and the city are exempted by Section 112.313(14), Florida Statutes (Supp. 1988), and where the executive director's employment does not encompass activities related to lobbying the city commission. Under these circumstances, the commissioner's employment with the chamber would not violate Sections 112.313(3) and (7), Florida Statutes.

QUESTION:

Does a prohibited conflict of interest exist where you, a city commissioner, are employed as the executive director of the city chamber of commerce?

Under the circumstances presented, your question is answered in the negative.

In your letter of inquiry you advise that you serve as a member of the City Commission for the City of Miami Beach. You also advise that you are employed as the Executive Director of the Chamber of Commerce for the City. The Chamber of Commerce is a nonprofit corporation with tax exempt status under Section 501(c) of the Internal Revenue Code. According to the Chamber's by-laws, it has been organized for the purposes of advancing the economic, industrial, professional, cultural, educational, health, and civic welfare of the area; encouraging the growth of existing industries and businesses while giving proper assistance to new firms or individuals seeking to locate in the area; supporting activities believed to be beneficial to the community; opposing those which might be detrimental; and promoting the welfare of all area citizens by following those policies intended to accomplish the greatest good for the greatest number.

As Executive Director (Executive Vice President) of the Chamber, you are charged with the general supervision and management of the organization. You perform the duties of secretary; act as agent for service of process; conduct correspondence; preserve records, documents, and communications; keep books of account; and maintain accurate records of the Chamber and the meetings of its Board of Directors. In addition, you are responsible for hiring, supervising, and discharging Chamber personnel. You advise that although occasionally you are called upon to give speeches on City-wide issues in which the Chamber has an interest, you are not a spokesperson for the Chamber, but rather are a manager who is responsible for coordinating and organizing the Chamber's committees to take positions on issues affecting the Chamber.

Your three-year employment contract with the Chamber provides that you may be terminated for cause after a 30-day period within which you may cure the alleged breach of contract. In addition, you may be terminated without cause by a vote of at least three-fourths of the members of the Board of Directors.

With respect to the relationship between the Chamber and the City, you advise that the Chamber may refer potential developers or corporations interested in locating within the City to the City for information. The Chamber also takes positions occasionally on topics which concern the City as a whole, including bond issues, the construction of a light rail system, transportation improvements, Charter amendments, and the location of a heliport on the City owned convention center. You advise that the Chamber President, the Chairman, or members of a particular Chamber committee appear before the City Commission and other citizen groups to advocate the Chamber's point of view.

You advise that there are no business relationships between the Chamber and the City, except that the Chamber rents from the City a kiosk which formerly had been boarded-up for $1 per year. The kiosk has been sublet for a fee to a sightseeing service operating in the City. No funds are provided by the City to the Chamber, but the Chamber has received funds from the Visitors and Convention Authority for special events. Although the members of the Authority are appointed by the City Commission and the Authority receives $100,000 per year from the City, the Authority is an autonomous, independent agency directly funded by resort tax revenues. Past examples of funds being provided by the Authority to the Chamber include funding for a trick-or-treat night, for the printing of a fold-out map to be included in the Chamber's tourist guide, and for Superbowl banners. In these instances, the Chamber acted as a "conduit" to raise funds from both the public and the private sectors for the programs. On the trick-or-treat night, the Chamber used the funds received from the Authority to reimburse the City for its in-kind services, such as cleanup and security for the event.

The Code of Ethics for Public Officers and Employees provides in relevant 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

[Section 112.313(3), Florida Statutes.]

This provision prohibits you from serving as an officer or director of a business entity that is selling or leasing any realty, goods, or services to your agency (the City Commission) or to any agency of the City.

As Executive Vice President of the Chamber, it is possible that you might be considered to be an officer of the Chamber. Section 8.01 of your employment agreement requires the Chamber to indemnify you as an officer or director of the Chamber to the extent permitted by law. However, even assuming that you are an officer of the Chamber, we do not find that the Chamber is selling or leasing any realty, goods, or services to the City. In renting the kiosk, the Chamber is not providing any realty, goods, or services to the City Commission. Nor do we find that the Chamber is selling any goods or services to the Visitors and Convention Authority, as the three grants extended by the Authority to the Chamber apparently were not in payment for services or goods sold to the Authority. See CEO 79-65, CEO 82-22, and CEO 82-64. Therefore, we find that Section 112.313(3) does not prohibit you from holding your positions with the City and with the Chamber.

The Code of Ethics also 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. [Section 112.313(7)(a), Florida Statutes.]

The first part of this provision prohibits you from being employed by a business entity which is doing business with your agency, the City Commission. In a previous opinion, CEO 88-20 (Question 3), we found that in-kind services provided by a city to a nonprofit corporation for a public event did not constitute "doing business." Similarly, we are of the opinion that the converse of that situation, the Chamber's reimbursement to the City for in-kind services provided in conjunction with its trick-or-treat night, would not be prohibited by Section 112.313(7)(a). However, we do find that the Chamber is "doing business with" the City through the rental of the kiosk. See CEO 80-10, in which we found that a school board was doing business with a foundation which had leased a building from the school board for the nominal sum of $1 per year.

Nevertheless, the Legislature has adopted an exemption which specifically contemplates this type of situation. Section 112.313(14), Florida Statutes (Supp. 1988), states:

ADDITIONAL EXEMPTION.--No elected public officer shall be held in violation of subsection (7) if the officer maintains an employment relationship with an entity which is currently a tax-exempt organization under s. 501(c) of the Internal Revenue Code and which contracts with or otherwise enters into a business relationship with the officer's agency and:

(a) The officer's employment is not directly or indirectly compensated as a result of such contract or business relationship;

(b) The officer has in no way participated in the agency's decision to contract or to enter into the business relationship with his employer, whether by participating in discussion at the meeting, by communicating with officers or employees of the agency, or otherwise; and

(c) The officer abstains from voting on any matter which may come before the agency involving the officer's employer, publicly states to the assembly the nature of his interest in the matter from which he is abstaining, and files a written memorandum as provided in s. 112.3143.

As your situation clearly falls within the introductory language of this subsection, we must address the question of whether you have complied with the additional requirements of paragraphs (a), (b), and (c).

Through your employment contract and a telephone conversation with our staff, we have been advised that you receive a base salary which is paid out of membership dues received by the Chamber. In addition, you may receive an annual bonus which is based on a percentage of any increase in membership dues and of any increase in other revenues of the Chamber. No public funds are included in these two categories of revenue, you advise. You also have advised that the kiosk revenues are not considered as membership dues and specifically are not included in the category of other revenues of the Chamber for purposes of calculating your possible bonus. Therefore, we conclude that your employment should not be considered to be directly or indirectly compensated as a result of the business relationship between the Chamber and the City.

You further have advised that when the idea of the Chamber's using the kiosk came up, you spoke with the Assistant City Manager about who controlled its use and advised her that the Chamber would be interested in it. She advised you what the appropriate procedure would be for leasing the kiosk. When the kiosk matter came before the City Commission, you abstained from voting, publicly announced the conflict, and filed a memorandum of voting conflict. Under these circumstances, we conclude that you did not participate in the City's decision to enter into the lease with the City and that you complied with the requirements of Section 112.3143, Florida Statutes. Therefore, we find that you have met the terms of the exemption of Section 112.313(14).

Although Section 112.313(14) exempts from the prohibition of Section 112.313(7) conflicts of interest arising out of business relationships between your employer and the City, we note that the second part of Section 112.313(7)(a) further prohibits you from having any employment that would create a continuing or frequently recurring conflict of interest or that would impede the full and faithful discharge of your public duties as a City Commissioner. In a previous opinion, CEO 86-68, we found that a city planning board member who was employed as executive director of the local chamber of commerce was not prohibited from voting on an application where a member of the chamber's board of governors or executive committee was the applicant, was employed by the applicant, was an attorney representing the applicant, or was an attorney whose law firm was representing the applicant. There, we distinguished between the interests of the chamber, which was the board member's employer, and the interests of the individual directors of the chamber. Similarly, here, we are of the opinion that the fact that some members of the Chamber's Board of Directors may appear before the City Commission in their individual capacities does not give rise to such a substantial conflict of interest as to prohibit you from serving on the City Commission while being employed by the Chamber.

The final question is whether your employment with the Chamber poses a frequently recurring conflict or impedes the full and faithful discharge of your public duties because the Chamber appears before the City Commission to advocate its point of view on various issues impacting the City as a whole. In this regard, we note particularly that you do not represent the Chamber before the City Commission. We have found that a public official is prohibited from appearing before the board on which he sits in order to represent the interests of a client or of his employer. See CEO 77-126, CEO 78-86, and CEO 88-40. However, we previously have not rendered an opinion on the question of whether an official may be employed by an organization that can be expected to appear before his agency on a regular basis in order to advocate its positions on various issues.

We are of the opinion that so long as your employment does not encompass activities related to lobbying the City Commission, your employment would not be violative of Section 112.313(7). In our view, lobbying activities include not only actual contact through physical attendance at meetings of City officials and employees, the submission of written materials, and personal communications with City officials and employees in an effort to encourage the passage, defeat, or modification of any measure before the City Commission, but also directing the activities of those who will contact the City, participating in setting the strategies of whom to contact and what to say, and assisting in preparing amendments to documents in support of the Chamber's positions. In other words, a city commissioner should not be banned from being employed by an entity which engages in lobbying the city on a regular basis regarding issues of the nature described here, but his employment should be completely separated from the lobbying activities of his employer.

In our view, this does not limit your ability to participate in Chamber activities which lead to the Chamber's decision to approach the City for action. However, once the Chamber has made such a decision, your employment should not encompass accomplishing the objectives of the Chamber before the City through the lobbying activities described above.

We previously have advised that a city council member is not prohibited by the Code of Ethics from representing clients as a consulting engineer or land surveyor before boards of the city other than the city council. See CEO 86-47. Similarly, we do not conclude that you are prohibited from representing the Chamber before boards of the City other than the City Commission, although we would caution you to avoid even the appearance of using your official position if you choose to appear before these boards as a representative of the Chamber.

Accordingly, under the circumstances presented we find that no prohibited conflict of interest exists by virtue of your employment as Executive Director of the Chamber of Commerce while serving as a member of the City Commission.