GIFT PROHIBITIONS; MISUSE OF PUBLIC POSITION;
CONFLICT OF INTEREST

CITY POLICE CHIEF AFFILIATED WITH NONPROFIT ACCEPTING
DONATIONS FROM POLICE DEPARTMENT LOBBYISTS/VENDORS
AND ENGAGING IN FUNDRAISING ACTIVITIES

To: Wade C. Vose, Esq., Attorney for City of Cocoa Beach

SUMMARY:

Under the circumstances presented, where a municipal police chief serves as an uncompensated director and engages in fundraising activities for a nonprofit organization, and where the nonprofit uses donations to make charitable contributions to local families, individuals, and community organizations, the donations will not constitute "indirect gifts" to the police chief under Section 112.3148, Florida Statutes. However, if the nonprofit uses the donations to purchase equipment or gear for the police department, and were the police chief to use that equipment or gear, the donations would be considered "indirect gifts" to him. If the police chief engages in fundraising on the nonprofit's behalf, no provision in the Code of Ethics prohibits him from wearing his uniform or identifying his public position, so long as he obtains permission and remains in compliance with local ordinances governing such conduct. And since the police chief does not intend to have employment or a contractual relationship with the nonprofit, his affiliation with the nonprofit will not trigger the prohibitions found in Section 112.313(7)(a), Florida Statutes. Referenced are CEO 19-1, CEO 18-13, CEO 17-15, CEO 16-1, CEO 15-6, CEO 15-1, CEO 14-12, CEO 10-2, CEO 08-20, CEO 07-24, CEO 91-69, CEO 91-52, and CEO 93-27.

QUESTION 1:

Do donations given to a nonprofit organization where a municipal police chief serves as an uncompensated director—including donations from police department lobbyists, the partners, firms, employers, or principals of such lobbyists, and police department vendors—constitute "indirect gifts" to the police chief under Section 112.3148(4), Florida Statutes, when they are used to make charitable contributions to local families, individuals, and community organizations?¹

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

In your letter of inquiry and additional information provided to our staff, you indicate you are inquiring on behalf of a city police chief who is organizing—along with other city police officers and, potentially, members of the public—a charitable nonprofit organization. You indicate the nonprofit intends to solicit donations and use them, at least in part, to make charitable contributions to needy or deserving local families, individuals, and community organizations.

You relate the police chief intends to serve on the nonprofit's board of directors, although you emphasize neither the chief—nor any city personnel—will be compensated for their service to or work on behalf of the nonprofit.² You also indicate it is anticipated that the nonprofit's constitution and bylaws, which have yet to be written, will not provide for persons to have membership in the nonprofit.

Your inquiry stems partially from the nonprofit's intent to engage in fundraising.³ You relate that the nonprofit may consider soliciting and accepting donations from lobbyists of his public agency (the police department), the partners, firms, employers, or principals of such lobbyists, or vendors of his public agency.⁴ You also indicate the police chief—acting on behalf of the nonprofit—may himself engage in such fundraising, either in person, by telephone, or in writing. You inquire whether the Code of Ethics prohibits the police chief from engaging in the fundraising.

The police chief is subject to the restrictions and disclosure requirements of Section 112.3148, Florida Statutes (the "gifts" law), as he is a "reporting individual" required to file financial disclosure. See CEO 16-1. Section 112.3148(4), Florida Statutes, the provision of the "gifts" law most pertinent to this situation, 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 the police chief, or anyone acting on his behalf, from accepting "directly or indirectly" any gift worth more than $100 from a lobbyist of his public agency,⁵ the partner, firm, employer, or principal of such a lobbyist, or a vendor⁶ of his public agency (hereinafter, throughout the remainder of this opinion, "prohibited sources").

The situation you present does not involve a direct gift to the police chief because the donations will be made to the nonprofit, not to him personally. The question remains, though, whether the donations can be viewed as indirect gifts to him. This analysis hinges upon whether the police chief will experience any personal benefit of a tangible or concrete nature—thereby constituting a "gift" (see Section 112.312(12), Florida Statutes)—from the donations.

The term "indirect gift" is addressed in Commission on Ethics Rule 34-13.310(8)(a), Florida Administrative Code, as follows:

Where a gift is provided to a person other than the reporting individual or procurement employee by a . . . 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 various factors the Commission can consider when determining if an indirect gift has been made, although the Rule indicates the list is not exclusive.⁷

Here, from what you indicate, the nonprofit intends to use donations, at least in part, to make charitable contributions to local families, individuals, and community organizations. Thus, we find the donations, when used by the nonprofit for this purpose, will not constitute an indirect gift to the police chief. There are two reasons why.

First, the police chief receives no compensation from the nonprofit. Although you indicate he is affiliated with the nonprofit and hopes to serve on its board of directors, he does not intend to accept any compensation for his services. Accordingly, the police chief will not experience any tangible or concrete benefit, and, therefore, no indirect "gift," simply because a donation is made to the nonprofit.

We encountered a similar situation in CEO 19-1, in which a school board member founded a nonprofit corporation for which she served as an uncompensated officer. The nonprofit engaged in extensive fundraising and the board member inquired whether donations could be accepted from school district vendors. We advised that because the board member was not being compensated for her work on behalf of the nonprofit, any donations that the nonprofit received could not be considered indirect gifts to her as they were benefitting the nonprofit alone. See also CEO 91-5291-52 (finding the donations solicited by a city commissioner on behalf of a nonprofit seeking to establish a bird sanctuary and nature center could not be considered gifts to her as they were benefiting only the nonprofit).

Second, if the donations are used by the nonprofit to make charitable contributions to local families, individuals, and community organizations, no tangible or concrete benefit will flow to the police chief, provided he has no familial, business, or similar private capacity connection to the individuals and entities receiving the funds. We are aware that, in certain circumstances, donors may contribute to the nonprofit intending that the funds be used to benefit the police chief. Such a circumstance could present an indirect gift scenario, even if the police chief is not accepting compensation from the nonprofit, as the nonprofit would essentially be used as a conduit to transfer a gift that the donors could not directly give the chief. However, when the donations are being used to provide charitable contributions to the needy in the community, the police chief will not be experiencing the commensurate tangible or concrete benefit required to trigger indirect gift concerns.⁸

The police chief should be aware, though, that two other provisions in the Code of Ethics could be triggered, in certain circumstances, by contributions that he solicits or receives on the nonprofit's behalf, regardless of how the contributions are ultimately used. Section 112.313(2), Florida Statutes, prohibits him from soliciting or accepting any donation based on an understanding that the contribution will influence some vote, official action, or judgment that he might make in his capacity as the police chief. In addition, Section 112.313(4),⁹ Florida Statutes, prohibits him from accepting any donation when he knows, or with the exercise of reasonable care should know, that it is being given to influence some action he might take as the police chief. The chief and other city personnel should carefully screen the circumstances of particular solicitations and donations, in light of these statutes.¹⁰

Question 1 is answered accordingly.

QUESTION 2:

Do donations given to a nonprofit organization where a municipal police chief serves as an uncompensated director—including donations from prohibited sources—constitute "indirect gifts" to the police chief under Section 112.3148(4) when they are used to purchase equipment and gear for the police department?

Under the circumstances presented, Question 2 is answered below.

You also indicate the nonprofit may use donated funds to purchase gear or equipment that it, in turn, intends to donate to the police department. This scenario raises concerns not present when the nonprofit simply intends to make charitable contributions to private families, individuals, and community organizations, as there is the potential here that the police chief could use—and, therefore, personally benefit from—the donated equipment or gear.

In CEO 93-27, we opined that sheriffs attending a Florida Sheriffs' Association (FSA) conference were prohibited from accepting door prizes when they were donated to the FSA by lobbyists of sheriffs. We attributed the door prizes to the lobbyists and concluded they were indirect gifts, as they had been given by the lobbyists with the intent to benefit the sheriffs. See also CEO 91-69 (opining that county commission employees attending a seminar sponsored by a local chamber of commerce were prohibited from accepting a $500 cash door prize that had been donated to the chamber by organizations who lobbied the county commission).

Similarly, here, if a donor to the nonprofit—including a prohibited source—were to contribute with the understanding that the nonprofit will use the funds to purchase equipment or gear for the police department, the police chief should consider the donations to be indirect gifts under Section 112.3148(4). It is possible in that scenario, and perhaps likely, that the donor was attempting to benefit the police chief by providing funding for items that he would have the potential to use. Accordingly, if the donations are given for the purpose of purchasing equipment and gear for the police department, the police chief should consider the donations to be indirect gifts and should respond in the manner described below.

In the event that the police chief wants to use the equipment or gear, he must consider whether a prohibited source contributed more than $100 for their purchase. If a prohibited source contributed more than $100 towards the purchase of an item of equipment or gear, we find that the chief will be prohibited by Section 112.3148(4) from personally using the item, as such use would constitute acceptance of a prohibited indirect gift.¹¹

However, in the event that the funding for the equipment or gear came from donors other than a prohibited source, the police chief can use the item so long as he properly discloses it. In that circumstance, he should report as an indirect gift on a CE Form 9 any donation of over $100 made to purchase the equipment or item in question, listing the individual(s) or entity(s) contributing the funds as the source of the gift. See Section 112.3148(8), Florida Statutes, and CE Form 9.

Importantly, this does not prohibit the police chief from accepting equipment or gear on behalf of the police department, even when the nonprofit purchases the items using donations from prohibited sources. Section 112.3148(4) permits the chief to accept gifts on behalf of the department so long as he does "not maintain custody of [them] for any period of time beyond that reasonably necessary to arrange for" their transfer to the department. Therefore, the statute will not be triggered so long as the police chief simply accepts the equipment or gear on behalf of the department and does not personally use it.

And, finally, this opinion pertains only to equipment and gear donated by the nonprofit to the police department. If the City provides a piece of equipment or gear to the police chief to be used in the proper performance of his duties, it will not be considered a gift.

Question 2 is answered accordingly.

QUESTION 3:

Would the police chief misuse his public position contrary to Section 112.313(6), Florida Statutes, were he to wear his police uniform or identify his title with the police department while fundraising for the nonprofit?

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

You also inquire on behalf of the police chief whether he will be in violation of Section 112.313(6) if he wears his police uniform or identifies himself by title, either verbally or in writing, while fundraising for the nonprofit. You indicate the police chief will obtain the permission of the city manager prior to wearing his uniform or using his title during fundraising.

Section 112.313(6), Florida Statutes, provides:

MISUSE OF PUBLIC POSITION.--No public officer, employee of an agency, or local government attorney shall corruptly use or attempt to use his or her official position or any property or resource which may be within his or her trust, or perform his or her official duties, to secure a special privilege, benefit, or exemption for himself, herself, or others.

The statute will prohibit the police chief from "corruptly" using or attempting to use his official position—or any property or resources placed within his public trust—in order to specially benefit himself or another. The wearing of his uniform or the mention of his title during fundraising would qualify as use of his public position and/or property or resources placed within his public trust. The question then becomes whether such use would be "corrupt."

For purposes of the prohibition, the term "corruptly" is defined in Section 112.312(9), Florida Statutes, as follows:

"Corruptly" means done with a wrongful intent and for the purpose of obtaining, or compensating or receiving compensation for, any benefit resulting from some act or omission of a public servant which is inconsistent with the proper performance of his or her public duties.

In CEO 07-24, the Commission found it would not be "corrupt" under Section 112.313(6) for sheriff's office employees to wear their uniforms and associated equipment while privately campaigning for public office, so long as such use was with the permission of the sheriff and was in accord with the directive, policies, and orders of the sheriff's office. Similarly, in CEO 08-2008-20, the Commission found that a State Senator would not be engaging in "corrupt" conduct under Section 112.313(6) were he to allow his private equity firm to identify his public position in memoranda and publications. We noted that while the self-identification of the Senator's public title might be, in a strict sense, a "use of position," it did not suggest the type of wrongful intent, or the type of action inconsistent with the proper performance of public duties, necessary to constitute "corrupt" conduct.

Here, you indicate the police chief will obtain permission from the city manager prior to using his uniform or mentioning his title during fundraising. Assuming the city manager is in a position to approve these uses of the police chief's public position and/or the property or resources placed within the chief's public trust, and assuming this conduct does not violate the city's, or the police department's, policies or regulations, then we do not find that the use of title or wearing of the uniform would rise to the level of "corrupt" conduct needed to trigger Section 112.313(6). However, we caution the chief that the weight of his uniform or title may intimidate or coerce constituents into donating, despite a lack of any wrongful intent on his part.

Question 3 is answered accordingly.

QUESTION 4:

Would the police chief have a prohibited conflict of interest under Section 112.313(7)(a), Florida Statutes, if the nonprofit donates equipment and gear to the city's police department?

Under the circumstances presented, Question 4 is answered in the negative.

You further inquire whether the police chief's intended service as an uncompensated director of the nonprofit will create a prohibited conflict of interest under Section 112.313(7)(a), Florida Statutes, which concerns conflicting employment or contractual relationships. The statute states:

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 employment or a contractual relationship in addition to his public office or public employment. See CEO 15-6. For this reason, the threshold question is whether the police chief will have either employment or a contractual relationship with the nonprofit.

From what you indicate, the police chief does not intend to have either type of relationship. A necessary element of "employment" is compensation or some form of remuneration. See CEO 19-1 and CEO 18-13. You state that while the police chief intends to serve as a director for the nonprofit, he does not plan to accept compensation or any form of consideration for his services. You also state you do not anticipate the nonprofit's constitution or bylaws providing for mere membership in the nonprofit. In the past, the Commission has found an uncompensated director of a nonprofit corporation does not have a "contractual relationship" with the corporation unless he or she also is a member. See CEO 14-12 and CEO 10-2. Accordingly, assuming the facts you describe remain unchanged, Section 112.313(7)(a) will not apply as the police chief will not have employment or a contractual relationship with the nonprofit.¹²

Question 4 is answered accordingly.

ORDERED by the State of Florida Commission on Ethics meeting in public session on September 13, 2019, and RENDERED this 18th day of September, 2019.

____________________________________

Kimberly B. Rezanka, Chair

^[1]While your inquiry contains four numbered questions, this opinion, while addressing each question, reorganizes them and does not respond to them in the order presented in the inquiry. Questions 1 and 2 of this opinion, in particular, address the fourth question of your inquiry, which asks whether the police chief's involvement with the nonprofit triggers any provisions in the Code of Ethics besides Section 112.313(6) and 112.313(7), Florida Statutes.

^[2]You state that, at most, the nonprofit might reimburse the police chief and affiliated city employees for any out-of-pocket expenses incurred in the course of serving as a director or engaging in fundraising.

^[3]In particular, you state the nonprofit anticipates: (1) applying for charitable grants from large corporations; (2) requesting donations from local businesses; (3) holding fundraising events, such as charity dinners and silent auctions; and (4) selling merchandise to the public.

^[4]Importantly, you relate the nonprofit does not intend to solicit or accept donations from political committees.

^[5]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.

^[6]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."

^[7]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.

^[8]We are aware that the police chief's reputation may be bolstered were a nonprofit with which he is associated to make generous contributions to those in need. However, philanthropic or altruistic satisfaction or recognition to the chief from successes of the nonprofit do not fit the applicable definition of "gift." Section 112.312(12)(a)14., Florida Statutes, emphasizes that, for the purposes of Section 112.3148, a "gift" is a "thing" having an attributable value.

^[9]See Commission on Ethics v. Barker, 677 So. 2d 254 (Fla. 1996).

^[10]An additional statutory provision—Section 112.3148(3), Florida Statutes—prohibits the police chief from soliciting a gift of any amount from a vendor, lobbyist, or principal of a lobbyist of his agency, or from a political committee. However, because Section 112.3148(3) is limited to solicitations for the personal benefit of the police chief, another "reporting individual," or a member of their immediate family, it is not applicable where the police chief is soliciting the donations for the benefit of local persons (not the immediate family member of the chief or of another reporting individual) and entities in need.

^[11]We remind the police chief that he should not be soliciting donations of any amount from a prohibited source if the donations will fund the purchase of equipment and gear that he intends to use personally. The solicitation of an indirect gift for his personal benefit from a prohibited source would transgress Section 112.3148(3).

^[12]In addition, as long as the equipment and gear is donated (not sold) by the nonprofit to the police department, it will not constitute "doing business" under Section 112.313(7)(a). See CEO 17-15 and CEO 15-1. Similarly, Section 112.313(3), Florida Statutes, is not implicated due to the donation not being a sale.