GIFT PROHIBITIONS; CONFLICT OF INTEREST

DISTRICT SCHOOL BOARD MEMBER AFFILIATED WITH NONPROFIT THAT
IS ACCEPTING DONATIONS FROM/ENTERING INTO CONTRACTS
WITH DISTRICT VENDORS

To: Name withheld at person's request (Broward County)

SUMMARY:

Donations received by a nonprofit corporation where a District School Board member serves as the founder, president, and spokesperson will not constitute "gifts" to the Board member under Section 112.3148, Florida Statutes, even if the donations are made by entities doing business with the District. And because the Board member does not have an employment or contractual relationship with the nonprofit, she will not be presented with a conflict of interest under Section 112.313(7)(a), Florida Statutes, if the nonprofit enters into a contractual arrangement with a District vendor. Referenced are CEO 18-13, CEO 16-1, CEO 15-8, CEO 14-12, CEO 10-2, CEO 00-23, and CEO 91-52.

QUESTION 1:

Does a member of a District School Board receive a prohibited gift under Section 112.3148(4), Florida Statutes, if a nonprofit corporation, which she founded and for which she serves as an uncompensated officer, accepts donations from District vendors?

Question 1 is answered in the negative.

In your letter of inquiry and additional information provided to our staff, you state you currently serve as a member of the Broward County School Board. You also indicate you and your husband are the founders of Make Our Schools Safe, a nonprofit corporation organized pursuant to s. 501(c)(3) of the Internal Revenue Code. Currently, you relate, you serve as the president of the nonprofit while your husband serves as vice-president. You emphasize that neither of you collects a salary or receives any monetary compensation from the nonprofit, and that—while officers—you are not members, as the nonprofit's articles of incorporation do not provide for membership.

You state Make Our Schools Safe was formed in response to the shooting at Marjory Stoneman Douglas High School in 2018, an incident in which your daughter was killed. You indicate the nonprofit is dedicated to promoting awareness, creating education, and providing financial support for school-safety initiatives. As such, it engages in extensive fundraising. Your inquiry centers on the gift law implications for you if the nonprofit accepts donations from entities conducting business with the District, considering that you hold public office on the District Board. You relate you do not anticipate directly soliciting contributions or donations from District vendors, although vendors may respond to a general solicitation made to the public or simply through awareness of the nonprofit's goals. You indicate Make Our Schools Safe intends to give a large percentage of the donations it receives to the District.¹

As a public officer required to file financial disclosure, you are a "reporting individual" subject to the restrictions and disclosure requirements of Section 112.3148, Florida Statutes (the "gifts" law). See CEO 16-1. Section 112.3148(4), Florida Statutes, which is one of the prohibitions to which you are subject, states:

A reporting individual or procurement employee or any other person on his or her behalf is prohibited from knowingly accepting, directly or indirectly, a gift from a vendor doing business with the reporting individual's or procurement employee's agency, a political committee as defined in s. 106.011, or a lobbyist who lobbies the reporting individual's or procurement employee's agency, or, directly or indirectly on behalf of the partner, firm, employer, or principal of a lobbyist, if he or she knows or reasonably believes that the gift has a value in excess of $100; however, such a gift may be accepted by such person on behalf of a governmental entity or a charitable organization. If the gift is accepted on behalf of a governmental entity or charitable organization, the person receiving the gift shall not maintain custody of the gift for any period of time beyond that reasonably necessary to arrange for the transfer of custody and ownership of the gift.

In short, Section 112.3148(4) prohibits you, or anyone acting on your behalf, from accepting "directly or indirectly" any gift worth more than $100 from a District lobbyist,² a principal of a District lobbyist, or a District vendor³.

Your situation does not involve a "direct" gift because the donations will be made to Make Our Schools Safe, not to you personally. The question then becomes whether the contributions can be viewed as "indirect" gifts to you. Commission on Ethics Rule 34-13.310(8)(a), Florida Administrative Code, describes the concept of an "indirect gift" as follows:

Where a gift is provided to a person other than the reporting individual or procurement employee by a political committee or vendor, by a lobbyist who lobbies the agency of the reporting individual or procurement employee, or by the partner, firm, employer, or principal of a lobbyist, where the gift or the benefit of the gift ultimately is received by the reporting individual or procurement employee, and where the gift is provided with the intent to benefit the reporting individual or procurement employee, such gift will be considered an indirect gift to the reporting individual or procurement employee.

The Rule proceeds to list factors the Commission can weigh in determining whether an indirect gift has been made, but expressly states the Commission is not limited to those factors alone.⁴

Here, we acknowledge the fact that you are intertwined with Make Our Schools Safe. You and your husband founded the corporation and currently serve, respectively, as its president and vice-president. You indicate you attend its meetings and have spoken on its behalf at various events. However, the fact remains that any donations made to Make Our Schools Safe will be kept and used only by the nonprofit, and you advise that Make Our Schools Safe will not be releasing any portion of the donations—or any other consideration—to you or your husband. Nor will you or your husband personally benefit from the financial stability the donations will bring to the organization, as neither of you collect a salary or receive any monetary compensation from it. Because you will not personally benefit from the donations made to Make Our Schools Safe, we find they cannot be considered "indirect gifts" to you.

We considered a similar situation in CEO 91-52, which concerned a city commissioner soliciting funds on behalf of a nonprofit organization that was hoping to establish a bird sanctuary and nature center at a municipal park. In that situation, we found that because any solicited donations would benefit the nonprofit without bringing a corresponding benefit to the commissioner, they would not be considered "gifts" to her. We find your situation comparable, as the donations here to Make Our Schools Safe will not bring a corresponding benefit to you.

However, while the donations will not be considered "indirect gifts," you should be aware of two other provisions of the Code of Ethics concerning any contributions made to Make Our Schools Safe. Section 112.313(2), Florida Statutes, prohibits you from soliciting or accepting any donation based on an understanding that the contribution will influence some vote, official action, or judgment that you must make in your capacity as a School Board member. In addition, Section 112.313(4), Florida Statutes, prohibits you from accepting any donation when you know, or with the exercise of reasonable care should know, that it is being given to influence some action you might take as a School Board member.⁵

Question 1 is answered accordingly.

QUESTION 2:

Would you have a prohibited conflict of interest under Section 112.313(7)(a), Florida Statutes, if the nonprofit corporation previously described contracts with a District vendor?

Question 2 is answered in the negative.

You state the website for Make Our Schools Safe has a page where visitors can browse and purchase hats, shirts, and sweatshirts made by I-Uniforms, a clothing company. You indicate I-Uniforms sends a quarterly check to Make Our Schools Safe with a percentage of any sales made from the website. Although not expressly stated in your inquiry, it is assumed that this arrangement is pursuant to a contractual relationship between Make Our Schools Safe and I-Uniforms. You also relate I-Uniforms sells uniforms to several charter schools within the District. You inquire whether you will have a conflict of interest if Make Our Schools Safe continues in its arrangement with I-Uniforms, considering that I-Uniforms is a District vendor.

The statute pertinent to your inquiry is Section 112.313(7)(a), Florida Statutes, which states:

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 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.

The statute is only triggered, however, if a public officer or employee holds an employment or contractual relationship in addition to his primary public office or employment. See CEO 18-13 and CEO 15-8. The question thus becomes whether your involvement with Make Our Schools Safe constitutes an "employment" or "contractual" relationship.

Neither relationship is present here. A necessary element of "employment" is compensation or some form of consideration. See CEO 18-13 and CEO 00-23. Here, you indicate you accept no compensation or any form of consideration from Make Our Schools Safe. You also state that while you serve as president of Make Our Schools Safe, its articles of incorporation do not provide for membership. In the past, we have found an uncompensated director or officer of a nonprofit corporation, who is not a member, does not have a "contractual relationship" with the corporation. See CEO 14-12 and CEO 10-2. Accordingly, assuming the facts you describe remain materially unchanged, Section 112.313(7)(a) does not apply as you have not entered into an "employment" or "contractual relationship" with Make Our Schools Safe.

Question 2 is answered accordingly.

ORDERED by the State of Florida Commission on Ethics meeting in public session on January 25, 2019, and RENDERED this 30th day of January, 2019.

____________________________________

Guy W. Norris, Chair

^[1]There is no legal obligation for Make Our Schools Safe to release any of its funds to the District. You indicate it has no contractual relationship with the District or with any schools within the District, and is not selling any goods or services to the District.

^[2]The term "lobbyist" is defined in Section 112.3148(2)(b)1., Florida Statutes, to mean

any natural person who, for compensation, seeks, or sought during the preceding 12 months, to influence the governmental decisionmaking of a reporting individual or procurement employee or his or her agency or seeks, or sought during the preceding 12 months, to encourage the passage, defeat, or modification of any proposal or recommendation by the reporting individual or procurement employee or his or her agency.

^[3]The term "vendor" is defined in Section 112.3148(2)(f), Florida Statutes, to mean "a business entity doing business directly with an agency, such as renting, leasing, or selling any realty, goods or services." Your inquiry specifically concerns District vendors, as you ask about donations made by entities doing business with the District.

^[4]The considerations are listed in Rule 34-13.310(8)(c), Florida Administrative Code, which states:

Factors which the Commission will consider in determining whether an indirect gift has been made include but are not limited to:

1. The existence or nonexistence of communications by the donor indicating the donor's intent to make or convey the gift to the reporting individual or procurement employee rather than to the intervening third person;

2. The existence or nonexistence of any relationship between the donor and the third person, independent of the relationship between the donor and the reporting individual or procurement employee, that would motivate a gift to the third person;

3. The existence or nonexistence of any relationship between the third person and the reporting individual or procurement employee that would motivate the gift;

4. Whether the same or similar gifts have been or are being provided to other persons having the same relationship to the donor as the third person;

5. Whether, under the circumstances, the third person had full and independent decision-making authority to determine whether the reporting individual or procurement employee, or another, would receive the gift;

6. Whether the third person was acting with the knowledge or consent of, or under the direction of, the donor;

7. Whether there were or were intended any payments or bookkeeping transactions between the third person and the donor, reimbursing the third person for the gift; and

8. The degree of ownership or control the donor has over the third person.

^[5]You also inquire whether you must file any forms if you engage in fundraising activities on behalf of Make Our Schools Safe. The forms promulgated by the Commission for filing by gift recipients are not relevant to raising funds on behalf of another entity. We recommend you contact the District's General Counsel to clarify whether additional forms outside the Commission on Ethics' purview are required.