SUMMARY:

No prohibited conflict of interest exists where a law firm of which a County Commissioner's son-in-law is a non-equity shareholder represents clients before the County Commission in land use matters. Under the circumstances presented, the Commissioner is not required to abstain from voting and follow the disclosure requirements of Section 112.3143(3)(a) when considering land use measures involving a property owner that is represented by the law firm in which her son-in-law is a non-equity shareholder. CEO 07-5 is referenced.

QUESTION 1:

Would a prohibited conflict of interest be created where a law firm, of which a County Commissioner's son-in-law is a non-equity shareholder, represents clients before the County Commission in land use matters and where the son-in-law occasionally handles the representation?

This question is answered in the negative.

In your letter of inquiry you advise that Ms. Carol Whitmore is a member of the Manatee County Board of County Commissioners, having been elected first in 2006 and then being re-elected in 2010. You also advise that, prior to her first election, her daughter began dating an attorney who was an associate with a local law firm which represents private landowners through the County's various approval processes and who personally handled that type of representation for the firm. They subsequently have married.

As a salaried associate of the firm, the attorney had no profit-sharing privileges with the firm. However, having been an associate for a number of years, he anticipates having the opportunity to become a non-equity shareholder with the firm. He advises that the firm's fee agreements for land use projects in Manatee County have been structured so that the client is charged on an hourly basis for time spent by the various attorneys of the firm, but occasionally may be charged on a flat fee, with no financial incentives related to the outcome of the matter. Thus, he concludes, the firm receives the same payment whether the project is approved or denied.

We are advised that within the firm's structure a non-equity shareholder is allowed access to firm information and informal input into firm decisions, but does not have an ownership interest in the firm or an official vote on any firm business decisions. It also is not an officer or director position in the firm. In that position, compensation for the commissioner's son-in-law would continue to be determined by a committee of equity shareholders, in their discretion, based on a number of factors including the overall revenues of the firm, personal performance figures, and subjective factors related to professional achievements and firm participation. No direct compensation would be provided for fees received from work performed by the firm before the County Commission, and no direct bonus, compensation, or original fee related to such work would be provided.

The majority of the provisions of the Code of Ethics for Public Officers and Employees address conflicts of interest arising out of the actions and interests of the public officer or employee, rather than those of his or her relatives. For example, the standard that addresses prohibited employment and contractual relationships (Section 112.313(7), Florida Statutes) applies only to employment and contractual relationships of the public officer or employee. The provisions that do address prohibited conflicts of interest arising out of the interests or actions of relatives are contained in Section 112.313(3) and (4) and Section 112.3135, Florida Statutes¹.

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. [E.S.]

Clearly, this standard does not apply here. The services of the law firm are being purchased by and provided to its clients rather than by or to the County.

Section 112.313(4), provides:

UNAUTHORIZED COMPENSATION.—No public officer, employee of an agency, or local government attorney or his or her spouse or minor child shall, at any time, accept any compensation, payment, or thing of value when such public officer, employee, or local government attorney knows, or, with the exercise of reasonable care, should know, that it was given to influence a vote or other action in which the officer, employee, or local government attorney was expected to participate in his or her official capacity. [E.S.]

As the relatives addressed by this standard are only the spouse or minor child of the public officer or employee, it does not apply here.

Finally, Section 112.3135, Florida Statutes, is Florida’s "anti-nepotism" law; for the purposes of this standard a "relative" includes one's son-in-law. However, it applies only to situations where the relative is being considered for appointment, employment, promotion, or advancement "in or to a position in the agency" in which the official serves or over which the official exercises jurisdiction or control. As the son-in-law’s position is in the private law firm and not in a governmental agency, this provision also would not be applicable here.

Accordingly, we find that no prohibited conflict of interest would be created where a law firm, of which the subject County Commissioner’s son-in-law is a non-equity shareholder, represents clients before the County Commission in land use matters, and where the son-in-law occasionally handles the representation.

QUESTION 2:

Would a voting conflict of interest be created for the subject County Commissioner were the Commission to consider a land use matter in which the law firm of which her son-in-law is a shareholder represents the property owner?

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

Section 112.3143, Florida Statutes, is the provision of the Code of Ethics that governs voting conflicts of interest for county commissioners, requiring them to abstain from voting on conflicting matters and to disclose the nature of their interest as follows:

No county, municipal, or other local public officer shall vote in an official capacity upon any measure which inures 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 the officer 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(3); 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. [Section 112.3143(3)(a), Florida Statutes.]

This law directly addresses conflicts arising out of gain or loss to a client or employer ("principal by whom the officer is retained") of the local official, requiring the official to abstain from voting and make the appropriate disclosures if he or she knows that the measure under consideration would inure to the special private gain or loss of the client or employer. It also addresses conflicts arising out of gain or loss to a relative, requiring the official to abstain from voting and make the appropriate disclosures if he or she knows that the measure would inure to the special private gain or loss of a relative².

However, because the statute does not speak directly in terms of gain or loss to a client or employer of the official's relative, in order to determine whether it applies to a situation where the measure would impact a relative's client or employer, we are required to evaluate – not whether the measure impacts the relative's client or employer – but whether the measure would inure to the special private gain or loss of the relative. For example, in CEO 07-5 we concluded that a county commissioner was not presented with a voting conflict regarding measures affecting clients of the lobbying firm that employed her husband, where the husband received no compensation from any firm fee derived from the firm's work in behalf of a client on a matter involving the county. We were advised that the husband had no ownership interest in the firm, was not an officer or director of the firm, and would receive no compensation, bonus, or origination fees from any fee generated to the firm from the firm's work for a client in matters before the county. Under those circumstances, we found that there was no indication that the husband would receive "any compensation or loss of compensation or any similar gain or loss" from the measures. On the other hand, in Complaint Nos. 05-109 and 05-124 (Consolidated), In re Diana Wasserman-Rubin (2006), we concluded that Section 112.3143 had been violated where a county commissioner had voted on grant applications that her husband had authored for a town, when, although he was paid a flat fee for writing grant applications for the town, his compensation included a bonus that was based in part on grants that had been approved by the county commission.

As was the situation in CEO 07-5, here the Commissioner's son-in-law as a non-equity shareholder in the law firm would have no ownership interest in the firm, would not be an officer or director of the firm, would receive no direct bonus, compensation, or origination fee related to the firm's work before the County Commission, and would receive no direct compensation for fees received from the firm's work before the County Commission. His compensation would continue to be based on the same factors as are applicable to the firm's associates. Under these circumstances, we cannot conclude that the Commissioner's son-in-law would derive "special private gain" from a land use measure in which the firm is representing the property owner before the County Commission.

Accordingly, we find that a voting conflict of interest would not be created for the subject County Commissioner were her son-in-law to become a non-equity shareholder in the law firm, as described above, when the Commission is considering a land use matter in which the law firm is representing the property owner.

ORDERED by the State of Florida Commission on Ethics meeting in public session on May 13, 2011 and RENDERED this 18th day of May, 2011.

^[1] Employees of the State executive and judicial branches also should review the provisions of Sec. 112.3185(6), Fla. Stat., which is not relevant here because it does not apply to local government officials. In addition, various provisions of the gift law contained in Sec. 112.3148, Fla. Stat., may apply to situations involving relatives, but those provisions are not relevant here.

^[2] Defined in Sec. 112.3143(1)(b), Fla. Stat., to include one's "son-in-law."