CEO 75-116 -- May 23, 1975

CONFLICT OF INTEREST

MEMBER OF ST. AUGUSTINE PORT, WATERWAY AND BEACH DISTRICT; SALE OF PERFORMANCE BONDS TO COMMISSIONERS

To: Pierre D. Thompson, St. Augustine

Prepared by: Carol Ann Turner

SUMMARY:

Section 112.313(2), F. S. (1974 Supp.), provides that no public officer shall own a material interest in a business entity doing business with the agency of which he is an officer except in those cases where the business is contracted with full public competition. Therefore, where a public officer who owns a material interest in an insurance agency and sells, through that agency, performance bonds to his fellow commissioners, such sale constitutes a conflict of interest under the above-cited provision unless the bonds were awarded to his agency as the lowest or best bidder.

QUESTION:

Does a conflict exist where I, a Commissioner of the St. Augustine Port, Waterway and Beach District, sell performance bonds to other members of the authority?

Your question is answered in the affirmative.

The Code of Ethics provides:

No public officer or employee of an agency shall own a material interest in any business entity doing business with the agency of which he is an officer or employee, except in those cases when the business is contracted with full public competition . . . . [Section 112.313(2), F. S. (1974 Supp.).]

As you informed us in your letter of inquiry, you own a 40 percent interest in the insurance agency which wrote the bonds for the commissioners, thereby owning a "material interest" in such agency as defined by s. 112.312(5), F. S. We further note that the premiums on official bonds are paid with funds of the St. Augustine Port, Waterway and Beach District, as provided by Ch. 70-922, Laws of Florida. Because the premiums on the performance bonds are purchased with public funds, your insurance agency's sale of the bonds constitutes "doing business" with the agency of which you are an officer within the meaning of s. 112.313(2), F. S. (1974 Supp.). Therefore we must conclude that this sale of performance bonds to Commissioners of the St. Augustine Port, Waterway and Beach District would constitute a prohibited conflict of interest unless your insurance agency is awarded this business as the lowest or best bidder pursuant to s. 112.313(2), supra.