CEO 75-62 -- March 31, 1975

STATE EMPLOYEE

APPLICABILITY OF DISCLOSURE LAW TO STATE EMPLOYEE WITH INTEREST IN CONSULTING FIRM

To: Lynn M. LoPucki, Attorney, Gainesville

Prepared by: Lawrence A. Gonzalez

SUMMARY:

Section 112.313(3), F. S. (1974 Supp.), requires that a public employee holding a material interest in any business entity doing business with an agency of which he is an employee must disclose such interest by the filing of CE Form 3, Disclosure of Conflicts of Interest. Although Mr. LoPucki's client is no longer active in the environmental consulting firm which is transacting business with his agency, he nevertheless must disclose his 40 percent interest in the firm by the filing of CE Form 3.

QUESTION:

Is Mr. Curry Hutchinson, who is a full-time employee of the State of Florida Division of State Planning and owner of 40 percent of Eco-Impact, Inc., which does ecological and environmental consulting for various clients including the Division of State Planning, required to make a public disclosure of such interest pursuant to s. 112.313(3), F. S., even though he personally is not active in the workings of the firm?

This question is answered in the affirmative.

The Code of Ethics for Public Officers and Employees states in pertinent part:

If a public officer or employee of an agency is an officer, director, partner, proprietor, associate or general agent . . . of, or owns a material interest in any business entity which is . . . doing business with an agency of which he is an officer or employee, he shall file a statement disclosing such facts within forty-five days of becoming an officer or employee or within forty-five (45) days of the acquisition of such position or of such material interest. [Section 112.313(3), F. S.; emphasis supplied.]

Based upon the terms of this provision, a public employee is required to make a disclosure of a material interest in any business entity which is doing business with an agency of which he is an officer or employee. Active participation in the business entity is not a condition precedent to disclosure where such an ownership interest exists.

A "material interest" is defined by law as ". . . direct or indirect ownership of ten percent or more of the total assets or capital stock of any business entity." Section 112.312(5), F. S. Since Mr. Hutchinson owns 40 percent of Eco-Impact, Inc., which is currently doing business with the Division of State Planning, he must disclose this on CE Form 3, Disclosure of Specified Interests by Public Officers, Public Employees and Candidates. For your convenience, we are enclosing a copy of CE Form 3 which is to be completed by Mr. Hutchinson.