CONFLICT OF INTEREST; VOTING CONFLICT

CITY COMMISSIONER'S BUSINESS ENGAGING IN VARIOUS
PURSUITS INCLUDING DOING BUSINESS WITH SHERIFF'S
OFFICE THAT PROVIDES LAW ENFORCEMENT TO CITY

To: Samuel S. Goren and Jacob G. Horowitz, Attorneys (Tamarac)

SUMMARY:

Guidance is provided to a city commissioner regarding existing and possible future private capacity work of himself and his company. CEOs 14-2, 10-16, 08-8, and 08-6, are referenced. ¹

QUESTION:²

Does a prohibited conflict of interest exist where a business owned by a city commissioner does business with a sheriff's office that provides law enforcement to the city under a contract that predates the commissioner's assumption of office?

Under the circumstances presented, Question 1 is answered in the negative.³

In your letter of inquiry and additional information and materials provided to our staff, you state that a city commissioner (who did not run as an incumbent and who first took office on November 27, 2018) is president and sole shareholder of a business (company) that provides its clients with insurance advisory, brokerage, and benefits consulting services and that the commissioner and the company both are licensed through the Department of Financial Services (DFS) to broker insurance. Further, you relate that the company entered into an agreement, in February 2018, with the local sheriff's office to provide services to secure insurance services or life insurance policies for the sheriff's office, and that DFS insurance licensure personal to the commissioner is involved with the company's provision of services to the sheriff's office. In addition, you state that the sheriff's office provides law enforcement services to the city under an agreement entered into in 2010 and most recently amended in September 2018.

Pertinent to this Question 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.

Standing alone, or on its face, Section 112.313(7)(a) would seem to prohibit the commissioner from holding a contractual relationship with the sheriff's office [a government "agency" as defined in Section 112.312(2), Florida Statutes] because the sheriff's office has an agreement with the city (the commissioner's "agency"). However, in many decisions, we have found that an agreement between a public officer's agency and another agency (or a business entity), entered into prior to the officer's assumption of office, is "grandfathered" out of the prohibition due to the operation of Section 112.316, Florida Statutes.⁴ See, among others, CEO 10-16. We also have found that agreements between governmental entities for the provision of governmental services generally do not constitute "doing business" as prohibited by Section 112.313(7)(a). See, among others, CEO 08-6 (city commissioner employed by sheriff's office contracting law enforcement services to city); and see the discussion, below, under Question 2. Thus, we find that a prohibited conflict of interest does not exist under Section 112.313(7)(a) where the commissioner's business does business with the sheriff's office which provides law enforcement services to the city.⁵

Question 1 is answered accordingly.

QUESTION 2:

Would a prohibited conflict of interest be created were the city and the sheriff's office to enter into a new agreement for law enforcement services after the existing agreement expires?

Under the circumstances presented, Question 2 is answered in the negative.

As in CEO 08-6, here we find that the provision of law enforcement services from the sheriff's office to the city does not constitute "doing business" as is necessary to trigger the prohibition of Section 112.313(7)(a). In CEO 08-6 and many other opinions, we have found that a purpose of the Code of Ethics is to prevent private gain at public expense, not to interfere with cooperation between governmental agencies to foster the delivery of public services.⁶

Question 2 is answered accordingly.

QUESTION 3:

Would a prohibited conflict of interest be created were the commissioner's company to work for other government agencies in the county in which the commissioner's city is located or for agencies throughout Florida?

Continuing, you relate that the commissioner's company is not specifically seeking to do business with agencies within the county, or elsewhere, that have relationships with the city, that the city has agreements with a number of government agencies but it is unknown whether these agencies will be in the market for services provided by the commissioner's company, and that there is not, nor is there anticipated to be, any lawsuit or friction between the city and any other government agency that the commissioner's company might work for.

As to Question 3, because its factual predicate is necessarily somewhat amorphous at this time, we are unable to specifically answer. However, suffice it to say that our answers to Questions 1 and 2, above, should provide adequate guidance by analogy as the facts of situations with other government agencies and the commissioner's business become more certain. Nevertheless, if the commissioner needs more particular guidance in the future, he, or you in his behalf, should feel free to contact our staff.

QUESTION 4:

Would a prohibited conflict of interest be created were the commissioner's company to collaborate (partner) with an existing vendor of the city to work for other government agencies?

Question 4 is answered as set forth below.

You relate that the city has engaged vendors (not the commissioner or his company) to provide insurance brokerage and related services and that the commissioner is familiar with several of these vendors through relationships in the insurance industry unrelated to his elected public position. Further, you state that it is not uncommon for businesses to collaborate and submit joint proposals in response to a government agency's solicitations in order to provide a more complete or responsive bid or in order to gain a minority-owned business⁷ preference or credit.

Section 112.313(7)(a), set forth above, again is pertinent. Since the existing city vendors unquestionably are business entities doing business with the city (the commissioner's public agency), the issue is whether the commissioner, as opposed to merely his company, would hold employment or a contractual relationship with a city vendor by virtue of the collaborating. In the situation described in this opinion, we find that the commissioner would hold a contractual relationship with the vendor and thus that the collaborating would create a prohibited conflict of interest. While we have found that one's company can hold a contractual relationship with a business entity without the owner or principal of the company thereby also holding a contractual relationship with the business entity, such has not been our finding when the work of the company is conducted under professional or government licensure personal to the owner or principal [see, for example, CEO 08-8 (county commissioner engineer doing business in county)], and such has not been our finding when the business entity specifically sought or obtained the services of a particular human principal or owner of the company [see, for example, CEO 14-2 (city commissioner or commissioner's firm contracting with radio station)]. Here, in the instant inquiry, it is apparent that personal licensure (insurance) of the commissioner is involved with the collaborating and that the business entity the commissioner would be working with would be seeking or using his services particularly.

Accordingly, we find, under Question 4, that a prohibited conflict of interest would be created under Section 112.313(7)(a), Florida Statutes, were the commissioner's company to collaborate with existing city vendors.⁸

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]Prior opinions of the Commission on Ethics may be obtained from its website (www.ethics.state.fl.us).

^[2]We have rephrased somewhat the questions asked. Our intent is not to disturb the substance of the inquiry.

^[3]Measures (votes) of the city commission which would affect the sheriff's office (a client/principal of the commissioner and his business) will not present the commissioner with a voting conflict under Section 112.3143(3)(a), Florida Statutes, unless the measure also would inure to the special private gain or loss of the commissioner, his company, his relative, or other persons or entities listed in the statute. This is so because the statute excludes a public "agency" from principals within its scope. Section 112.3143(3)(a) provides, with emphasis supplied:

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.

^[4]Section 112.316 provides:

CONSTRUCTION.—It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his or her duties to the state or the county, city, or other political subdivision of the state involved.

^[5]We also see no indication that the situation is conflicting under the second part of Section 112.313(7)(a); and the situation does not trigger a prohibition under Section 112.313(3), Florida Statutes, because the commissioner's business is not renting, leasing, or selling any services to the city (his political subdivision) or to any part of city government.

^[6]CEO 08-6 was based, in part, on there being a lack of connection between the city commissioner's employment with the sheriff's office and the sheriff office's agreement with her city (that the funding of her employment was not through the relationship between the two agencies). Here, in the instant inquiry, we also see no connection between the commissioner's business with the sheriff's office and the city's agreement with the sheriff's office, especially since the compensation from the sheriff's office to the commissioner's business is a flat fee.

^[7]The commissioner's company is a minority-owned business.

^[8]We find that a grandfathering is not applicable to negate the conflict. While the business between an existing city vendor and the city apparently predates the commissioner's assumption of office, his company's collaborating with the vendor would begin while he is a commissioner. Generally, our finding of a grandfathering in such a situation has been grounded in both the business between the public agency and the vendor, and the contractual relationship between the public officer and the business entity (vendor), predating one's holding of public office. See, among others, CEO 10-16.