CEO 75-157 -- July 9, 1975

CONFLICT OF INTEREST

MEMBER OF PENSION BOARD OF TOWN COUNCIL AS ACCOUNT EXECUTIVE ADVISING PENSION BOARD

To: Burton B. Loebl, City Attorney, North Miami Beach

Prepared by: Carol Ann Turner

SUMMARY:

Where a member of a town council serves on the council's pension board, no conflict is created where the company retained as investment counsel to the pension board subsequently contracts with the firm by which the council board member is employed as an account executive. Section 112.313(5), F. S. (1974 Supp.), prohibits a public officer from holding employment with a business entity which does business with the officer's agency. In this case, however, the officer's firm contracts not with his agency but with the business entity retained by his agency. The nature of the work, further, is that of an independent contractor rather than an employee. However, the revised standards of conduct provisions which go into effect on October 1, 1975, prohibit both employment and contractual relationships with any business entity doing business with the agency of which one is an officer.

QUESTION:

Does a conflict of interest exist where Mr. Sy Howard, a member of the Pension Board of the Town Council of the Town of Surfside and an employee of Bache & Company, serves as account executive for the investment counsel to the pension board involving business which Bache & Company may have with the pension board?

Your question is answered in the negative.

As you have stated in your letter of inquiry, the factual situation is as follows. Mr. Howard, as an elected member of the Town Council of the Town of Surfside ("council"), serves on the pension board ("board") of that council. The pension board has retained The Boston Company of the South East ("Boston") as investment counsel to the board. Boston desires to hire Bache & Company, Mr. Howard's employer, as stockbrokers, with the possibility that Mr. Howard will serve Boston (and thereby the board) as account executive.

Section 112.313(5), F. S. (1974 Supp.), states in pertinent part:

No public officer or employee of an agency shall accept other employment with any business entity subject to the regulation of, or doing business with, an agency of which he is an officer or employee nor shall an officer or employee of an agency accept other employment that will create a conflict between his private interests and the performance of his public duties, or will impede the full and faithful discharge of his public duties.

Mr. Howard is not an employee of a business entity "doing business" with Boston in the manner contemplated by the above-quoted section. Rather, he will be performing services as an independent contractor. See CEO 75-17, a copy of which is enclosed, which expresses our opinion as to the distinction between an employee and an independent contractor. The fact that Mr. Howard is an employee of Bache & Company further attenuates the relationship between Mr. Howard as account executive and Mr. Howard as member of the pension board. We therefore are of the opinion that, under the current law, no prohibited conflict of interest exists between Mr. Howard's private and public interests as described above.

We would like to point out, however, that the provision dealing with conflicting employment was substantially amended by the 1975 Legislature. Section 112.313(5), F. S., which takes effect on October 1, 1975, states in pertinent part:

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 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 private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties . . . . [Chapter 75-208, Laws of Florida; emphasis supplied.]