CEO 91-13 -- March 7, 1991

CONFLICT OF INTEREST; VOTING CONFLICT

MEMBER OF COUNCIL FOR THE HEARING IMPAIRED EMPLOYED BY

NONPROFIT CORPORATION DOING BUSINESS WITH COUNCIL

To: Marilyn Knetzer, Member, Florida Council for the Hearing Impaired (Pinellas Park)

SUMMARY:

No prohibited conflict of interest is created by a member of a statewide council being employed as finance director of a nonprofit corporation which houses organizations which contract with the Council to provide training to hearing-impaired and speech-impaired persons in the use of assistive devices provided to said persons by the Council and which contract with the Council to provide repair and service of said devices. Section 112.313(3), Florida Statutes, prohibits the sale of goods or services between a public officer acting in his official capacity and business entities with which the officer has a certain relationship, but here the officer does not have a position of control in the entity which employs her and several exemptions of the Code of Ethics are applicable. The prohibitions of Section 112.313(7)(a), Florida Statutes, are not violated because of the language of Section 112.313(7)(b), Florida Statutes.

The Council Member, because she is not a local officer, would not be prohibited by Section 112.3143(3), Florida Statutes, from voting on matters inuring to her gain or the gain of her employer. However, she must comply with the voting and participation disclosure and filing requirements of Sections 112.3143(2)(a) and 112.3143(2)(b), Florida Statutes. She may abstain from voting as provided in Section 286.012, Florida Statutes. CEO's 80-59, 86-71, 89-64, and 91-5 are referenced.

QUESTION 1:

Is a prohibited conflict of interest created by your serving as a member of the Florida Council for the Hearing Impaired while being employed as finance director of a private, nonprofit corporation which houses organizations which contract with the Council to trainhearing-impaired and speech-impaired residents of Pinellas, Manatee, and Sarasota Counties in the use of assistive devices provided to them by the Council and which repair and service the devices?

This question is answered in the negative.

In your letter of inquiry and a subsequent written communication to our staff, you advise that you were appointed by the Governor in August, 1989 as a member of the Florida Council for the Hearing Impaired (FCHI) to complete the unexpired term of a resigned member and that you subsequently were reappointed to a three-year term. Since 1985 you have been employed as finance director of the Friends of the Deaf Service Center, Inc. (FDSC). FCHI is a statewide agency which is statutorily responsible for various matters concerning hearing-impaired persons, including providing such persons with assistive devices. FDSC is a nonprofit corporation which serves as an "umbrella organization" that "houses" several entities which do business with FCHI to provide goods or services for the benefit of hearing-impaired persons. Your employee duties for FDSC regarding business between FDSC and FCHI are limited to preparing bills and issuing checks, and you have no direct supervision over any of the activities of any of the entities housed under FDSC. FCHI purchases repair and maintenance services for assistive devices and training services in the use of assistive devices from entities housed under FDSC, through existing contracts entered into prior to your original appointment to FCHI. The entity under FDSC which provides the repair and service of assistive devices is the only facility of its kind in Florida. The entities under FDSC which provide the training are selected on the basis of a competitive bid process, presumably sealed and to the lowest or best bidder, with no participation by you in determining bid specifications or in determining the lowest bidder and with no influence or attempted influence on your part to persuade FCHI or its personnel to enter into the training agreements. FDSC and the entities housed under it are not subject to regulation by FCHI.

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 purchasing goods or services for your agency from a business entity in which you have a material interest or hold a governing position. It also prohibits, with exceptions, you from selling goods or services in your private capacity to your agency.

To the extent that your position as "finance director" is an employment position of ministerial duties and not a governing position such as "officer", "partner", "director", or "proprietor", you are not violating Section 112.313(3). See CEO 86-71. Additionally, since you have told us that all of the contracts between FCHI and the entities under FDSC were entered into prior to your appointment to FCHI, your situation falls within the express exemption of Section 112.313(3)(c) and thus would not constitute a violation. However, if new contracts are entered into, this exemption will not apply. See CEO 86-71. Lastly, to the extent that the goods or services provided to FCHI are obtained under a system of "competitive bidding" as provided by Section 112.313(12)(b), Florida Statutes, you would be insulated from a violation of Section 112.313(3); also, the exemption in Section 112.313(12)(f), Florida Statutes, would shield you from a violation if payment for each transaction for goods or services does not exceed $500. See CEO 89-64. These exemptions read, respectively, as follows:

EXEMPTION.--. . .In addition, no person shall be held in violation of subsection (3) or subsection (7) if:

(b) The business is awarded under a system of sealed, competitive bidding to the lowest or best bidder and:

1. The official or his spouse or child has in no way participated in the determination of the bid specifications or the determination of the lowest or best bidder;

2. The official or his spouse or child has in no way used or attempted to use his influence to persuade the agency or any personnel thereof to enter such a contract other than by the mere submission of the bid; and

3. The official, prior to or at the time of the submission of the bid, has filed a statement with the Department of State, if he is a state officer or employee, or with the supervisor of elections of the county in which the agency has its principal office, if he is an officer or employee of a political subdivision, disclosing his interest, or the interest of his spouse or child, and the nature of the intended business.

(f) The total amount of the subject transaction does not exceed $500.

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

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.]

This provision prohibits you from having certain employment or contractual relationships while you serve on the Council. It also prohibits your having an employment relationship 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.

However, Section 112.313(7)(b), Florida Statutes, provides as follows:

This subsection shall not prohibit a public officer or employee from practicing in a particular profession or occupation when such practice by persons holding such public office or employment is required or permitted by law or ordinance.

Section 229.8361(1)(e), Florida Statutes, a portion of the law which establishes FCHI, provides as follows regarding appointments to:

Nine persons to be appointed by the Governor by August 15, 1983, five of whom shall be hearing-impaired persons. Of these five persons, three shall be representatives of statewide organizations serving hearing-impaired persons and at least one shall be 'oral deaf,' which means a person with a hearing loss who depends primarily on visual input or speech reading skills for receiving information and who uses speech to communicate with other persons.

Therefore, it is our view that since the law contemplates that three members of the Council be representatives of statewide organizations serving hearing-impaired persons, your service as a member of FCHI while employed by such an organization is not a violation of Section 112.313(7)(a). See CEO 80-59 and CEO 91-5.

The Code further provides in relevant part:

MISUSE OF PUBLIC POSITION.--No public officer or employee of an agency shall corruptly use or attempt to use his official position or any property or resource which may be within his trust, or perform his official duties, to secure a special privilege, benefit, or exemption for himself or others. This section shall not be construed to conflict with s. 104.31. [Section 112.313(6), Florida Statutes.]

DISCLOSURE OR USE OF CERTAIN INFORMATION.--No public officer or employee of an agency shall disclose or use information not available to members of the general public and gained by reason of his official position for his personal gain or benefit or for the personal gain or benefit of any other person or business entity. [Section 112.313(8), Florida Statutes.]

In light of these provisions, you should exercise caution not to use your FCHI position or resources or information from it for improper benefit or gain to yourself, FDSC, the entities under it, or others.

Accordingly, we find that no prohibited conflict of interest is created under the Code of Ethics by your serving as a member of the Florida Council for the Hearing Impaired while being employed as finance director of a private, nonprofit corporation which houses organizations which contract with the Council to provide training to hearing-impaired and speech-impaired persons in the use of assistive devices and which repair and service said devices.

QUESTION 2:

Would you, a member of the Florida Council for the Hearing Impaired, be required to abstain from voting on or participating in matters concerning contracts or business between the Council and organizations which are housed under the nonprofit corporation which employs you?

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

Except as provided in subsection (3), no public officer is prohibited from voting in his official capacity on any matter. However, any public officer voting in his official capacity upon any measure which inures to his special private gain or the special gain of any principal by whom he is retained shall, within 15 days after the vote occurs, disclose the nature of his 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(2)(a), Florida Statutes.]

(b) No appointed public officer shall participate in any matter which inures to his special private gain or the special gain of any principal by whom he is retained, without first disclosing the nature of his interest in the matter. Such disclosure, indicating the nature of the conflict, shall be made in a written memorandum filed with the person responsible for recording the minutes of the meeting and shall be incorporated in the minutes; if the disclosure is initially made orally at a meeting attended by the officer, the written memorandum disclosing the nature of the conflict shall be filed within 15 days with the person responsible for recording the minutes of the meeting and shall be incorporated in the minutes. A copy of such memorandum, which shall become a public record upon filing, shall immediately be provided to the other members of the agency and shall be read publicly at the meeting prior to the consideration of the matter. For purposes of this paragraph, the term "participate" means any attempt to influence the decision by oral or written communication whether made by the officer or at his direction. [Section 112.3143(2)(b), Florida Statutes].

No county, municipal, or other local public officer shall vote in his official capacity upon any measure which inures to his special private gain or shall knowingly vote in his official capacity upon any measure which inures to the special gain of any principal, other than an agency as defined in s. 112.312(2), by whom he is retained. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of his interest in the matter from which he is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his 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. However, a commissioner of a community redevelopment agency created or designated pursuant to s. 163.356 or s. 163.357 or an officer of an independent special tax district elected on a one-acre, one-vote basis is not prohibited from voting. [Section 112.3143(3), Florida Statutes.]

It is apparent from a reading of Section 229.8361, Florida Statutes, the section which establishes and describes the duties of FCHI, that the Council is a statewide agency. Accordingly, you are not a "local public officer" for purposes of Section 112.3143(3), and therefore can participate in and vote on such matters, provided you comply with the disclosure and filing requirements of Sections 112.3143(2)(a) and 112.3143(2)(b). For more detailed instructions, see Commission on Ethics Form 8A, Memorandum of Voting Conflict for State Officers.

For your information, Section 286.012, Florida Statutes, permits a public official to abstain from voting where there is or appears to be a conflict of interest under one of the provisions of the Code of Ethics for Public Officers and Employees. Under this statute, you may wish to abstain from voting on matters brought before the Council by FDSC or entities housed under it, even though you may not be required to abstain on those particular matters by the law.

Your question is answered accordingly.