CEO 76-2 -- January 16, 1976

CONFLICT OF INTEREST

PUBLIC OFFICERS DOING BUSINESS WITH THEIR AGENCIES OR EMPLOYED BY COMPANIES DOING BUSINESS WITH THEIR AGENCIES

To: T. Richard Hagin, Sumter County Attorney, Bushnell

Prepared by: Gene Rhodes

SUMMARY:

No conflict of interest is created where a member of a county planning and zoning commission is employed by an electric utility company that sells electricity to the county through the board of county commissioners. Although Fla. Stat. s. 112.313(7)(1975) prohibits a local officer from holding employment with any business entity which does business with his public agency, the planning and zoning commission is an agency separate and distinct from the board of county commissioners pursuant to the definition of the term "agency" as found in Fla. Stat. s. 112.312(1)(1975). Similarly, no conflict exists where a planning and zoning commission member is employed by a wholesale supplier who sells material to the county through the county commission. A county commissioner, however, may not hold employment with a mining company that contracts with the county, for such contracts must be approved by the board of county commissioners, the subject commissioner/employee's own agency.

Florida Statute s. 112.313(3)(1975) prohibits a local officer from doing business privately with his own agency or with any agency within his agency's political subdivision. It would therefore appear that members of a county competency-licensing board and/or county planning and zoning commission would be prohibited from contracting with the county to perform maintenance or repair work. However, in construing the provisions of the Code of Ethics as they apply to outside employment, primary importance is placed on s. 112.316(1975) which provides that the intent of the code is not to prevent a public officer or employee from holding private interests which do not interfere with the full and faithful discharge of public duty. Whereas members of the above-mentioned boards neither supervise nor regulate the board of county commissioners in any way, and whereas neither board's responsibilities include the giving of advice or recommendations as to maintenance contracts made by the county commission, the public responsibility of the board members is not deemed to be affected by their private employment with the county. Accordingly, no conflict is found to be created under s. 112.313(3).

Although Fla. Stat. s. 112.313(7), dealing with conflicting employment, would prohibit an attorney for a public agency from holding a material interest in a title company which does business with his agency, exception is made where such title company possesses records unavailable elsewhere, the county courthouse once having been destroyed by fire.

A bank president who is a member of the county planning and zoning commission, the county school board advisory committee, the county hospital authority, and a municipal park and recreation committee does not hold conflicting business interests where his bank does business with the board of county commissioners, the county school board, the subject city, and the county hospital authority. For reasons stated in paragraph one above, no conflict exists in the bank's business transactions with the county commission, the county school board, and the subject municipality; i.e., none of the three is the subject officer's own agency. Business transactions with the hospital authority, on whose board the subject officer serves, is prohibited by s. 112.313(3). However, a more specific statute, s. 136.02(5), (1975), creates a partial exception to s. 112.313(3) in providing that a bank of which a public officer is a stockholder or officer may serve as a depository of funds for that officer's public agency so long as it is made a matter of public record that investigation determined that the bank was not favored over other qualified banks. Accordingly, the hospital authority may use its board member's bank as a depository, subject to the conditions of s. 136.02(5), but any other type of business between the authority and the bank is prohibited. It should also be noted that the prohibition set forth in s. 112.313(3) does not affect contracts entered into prior to the effective date of the act (October 1, 1975), prior to qualification for elective office, prior to appointment to public office, or prior to the beginning of public employment.

No conflict exists under the Code of Ethics where a director of and attorney for a bank serves on the county hospital authority and the county board of public instruction, both of which do business with the bank. The issue as to the bank directorship is addressed in the preceding paragraph. Extending the exception provided by Fla. Stat. s. 136.02(5) (providing that subject to certain conditions there is no interference with public duty where an officer is a stockholder in or officer of a bank serving as a depository of funds for his agency), and again placing emphasis on s. 112.316 (providing that the Code of Ethics is not intended to prohibit private employment which does not interfere with the full and faithful discharge of public duty), no violation is found in the bank's director/attorney serving also as the attorney for or member of other boards which use the bank as a depository of funds. Similarly, no conflict is created where the attorney for a bank also represents the county hospital authority and the board of county commissioners, both of which do business with said bank.

It is deemed that a county attorney's concomitant representation of either the county planning and zoning commission or a county hospital authority, though seemingly prohibited by s. 112.313(7), does not, in fact, constitute private employment which interferes with the discharge of public duty pursuant to s. 112.316. Where the county attorney also represents a municipality within the county, s. 112.313(7) is not deemed to be violated inasmuch as intergovernmental agreements do not constitute "doing business" for purposes of the Code of Ethics. Rather, s. 112.313(7) is intended to prohibit business relationships which would result in private gain other than remuneration provided by law. See Fla. Stat. s. 112.311(1)(1975).

A conflict of interest is created, however, where a county engineer and member of a county subdivision advisory committee is engaged privately in drawing plans he must later approve in his public capacity. Such conflict falls within the scope of Fla. Stat. s. 112.311(1)(1975), providing that "[it] is essential to the proper conduct and operation of government that public officials be independent and impartial . . . ." This independence envisioned by the Code of Ethics is breached where one is cast in the role of judging his own work.

QUESTIONS:

1. Does a prohibited conflict of interest exist where a member of the county planning and zoning commission is an employee of an electric utility company that sells electricity to the county?

2. Does a prohibited conflict of interest exist where a member of the county planning and zoning commission is an employee of a wholesale supplier who sells materials to the county?

3. Does a prohibited conflict exist where a county commissioner is employed by a mining company that contracts with the county?

4. Does a prohibited conflict of interest exist where the members of the county competency-licensing board and/or the county planning and zoning commission contract with the county to perform maintenance or repair work?

5. Does a prohibited conflict of interest exist where the attorney of a public agency owns a material interest in a title company which does business with the public agency which he represents?

6. Does a prohibited conflict of interest exist where the bank of which the subject local officer is president does business with the board of county commissioners, the county school board, the subject city, and the county hospital authority where that local officer is a member of the county planning and zoning commission, a county school board advisory committee, the subject city's park and recreation committee, and the county hospital authority?

7. Does a prohibited conflict of interest exist where a bank's director is also a member of the local hospital authority and serves as attorney for the local board of public instruction, both of which do business with the bank with which he is affiliated?

8. Does a prohibited conflict of interest exist where I as a bank's attorney additionally represent the local hospital authority and the board of county commissioners, both of which do business with the bank which I represent?

9. Does a prohibited conflict of interest exist where I as county attorney additionally represent the county planning and zoning commission, a city located within the county, and the local hospital authority?

10. Does a prohibited conflict of interest exist where a county engineer and member of the county subdivision advisory committee is engaged privately in drawing plans he must later approve?

Question 1 is answered in the negative.

Your letter of inquiry states that the board of county commissioners is served with electrical power by the subject utility company.

The Code of Ethics for Public Officers and Employees provides in relative 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 excluding those organizations and their officers who enter into or negotiate a collective bargaining contract with any state, county, municipal, or other political subdivision of the state when acting in their official capacity; 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 . . . . [Fla. Stat. s. 112.313(7), as created by Ch. 75-208, Laws of Florida.]

This section clearly prohibits the chairman from holding his public position on the planning and zoning commission while being employed by a business entity doing business with said commission. In this situation, however, the utility company is doing business with the board of county commissioners, for it is this board which pays for electrical services for county agencies. Pursuant to Fla. Stat. s. 112.312(1), as amended by Ch. 75-208, the board of county commissioners constitutes an agency separate and distinct from the planning and zoning commission. Accordingly, the subject chairman of the planning and zoning commission creates no conflict of interest in holding employment with a utility company which does business with the county commission.

Question 2 is answered in the negative.

Your letter of inquiry advises us that the planning and zoning commissioner is employed by a wholesale supplier who occasionally bids on fencing, culverts, and other materials needed by the county. The county commission enters into these sales contracts on behalf of the county.

This question is substantially the same as question 1 above, and the same rationale is applicable. Inasmuch as the county planning and zoning commission is an agency distinct from the county commission for purposes of the Code of Ethics, and since it is the county commission which contracts with the wholesale supplier, no conflict of interest is created in the situation you describe.

Question 3 is answered in the affirmative.

Your letter of inquiry advises us that the employer mining company occasionally bids for the annual limerock supply needed by the county.

Florida Statute s. 112.313(7), cited in question 1 above, clearly prohibits a county commissioner from being employed by a company that is contracting with the county commission. Accordingly, the commissioner in question is prohibited from concurrently holding that office while holding employment with the mining company so long as the company contracts for business with the county commission.

Question 4 is answered in the negative.

You inform us that six members of the county competency-licensing board are sole proprietors of their individual businesses. Two of these members are general contractors, one is an electrician, one a plumber, one a sheet metal worker, and one an air-conditioning repairman. The seventh member is a landscape architect and is an employee of a corporation of which he owns at least 50 percent of the stock, a "material interest" within the meaning of Fla. Stat. s. 112.313(3). The members of this board occasionally bid privately on maintenance and repair contracts with the county. The member who is also on the county planning and zoning board additionally bids for construction projects with the local school board.

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

DOING BUSINESS WITH ONE'S AGENCY. -- No employee of an agency acting in his official capacity as a purchasing agent or public officer acting in his official capacity shall either directly or indirectly for his own agency purchase, rent, or lease any realty, goods, or services from any business entity of which he, his spouse, or child is an officer, partner, director, or proprietor, or in which such officer or employee, his spouse or child, or any combination of them, has a material interest. Nor shall a public officer or employee, acting in a private capacity, rent, lease, or sell any realty, goods, or services to his own agency if he is a state officer or employee, or, if he is serving as an officer or employee of any political subdivision, to that subdivision or to any agency thereof. The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator's place of business. This subsection shall not affect nor be construed to prohibit contracts entered into prior to:

(a) The effective date of this act;

(b) Qualifications for elective office;

(d) Beginning public employment.

[Emphasis supplied; Fla. Stat. s. 112.313(3)(1975).]

The emphasized portion of the above-quoted provision clearly prohibits officers of a political subdivision from selling goods or services to agencies of that subdivision. Accordingly, it would appear that the subject local officers are prohibited from entering into contracts with the county while simultaneously being a member either of the county planning and zoning commission or the county competency-licensing board. However, in construing the provisions of this code as they apply to outside employment, we must place primary importance on that provision of the Code of Ethics which states:

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 duties to the state or the county, city, or other political subdivision of the state involved. [Fla. Stat. s. 112.316(1975).]

The above-quoted provision makes it clear that the Code of Ethics shall not be construed to prohibit a public officer from accepting employment which does not interfere with the full and faithful discharge of his duties. The members of the subject board and commission are not in positions either to supervise or regulate the county commission, which must contract for the county in this case. Nor do their public duties in any way involve approval of or the giving of advice or recommendations as to such contracts entered into by the county. This being the case, the above-described situation does not, in our view, "interfere with the full and faithful discharge" of public duties by the subject officials and is therefore permissible under the Code of Ethics.

Question 5 is answered in the negative.

You have informed us that the school board's attorney owns 12-1/2 percent of the title company and that the title company occasionally does title searches for the board of public instruction. We understand that this title company is the only such company in your county and that it has records not on file with the county, the courthouse having once been destroyed by fire.

Application of s. 112.313(7), quoted in question 4 of this opinion, renders this situation a prohibited conflict of interest; however, we must make an exception where the business entity is the only place that particular services can be obtained. In this instance it is impossible to obtain an abstract from another source as this title company has records that are unavailable elsewhere. Accordingly, the school board's attorney is not prohibited from holding that position while concurrently holding a material interest in the title company pursuant to Fla. Stat. 112.316, quoted in question 4 above.

You have advised us that you are president of and own 12-1/2 percent of the interest in the aforementioned title company and that said company does not do business with any of the public agencies you represent. We perceive no conflict of interest presented by this situation.

Question 6 is answered in the negative.

Your letter of inquiry advises us that each agency doing business with the bank of which the subject local officer is president has at least one account with the bank. As to the subject bank doing business with the county commission, the county school board and the subject city, we see no prohibited conflict for the reasons stated in question 4 of this opinion.

As to the bank doing business with the hospital authority, we must look to the provision of the Code of Ethics quoted in question 4 above, s. 112.313(3), which prohibits a public officer from acting in his official capacity to purchase services from a business entity of which he is an officer. In a recent opinion of this commission, CEO 75-201, we advised that membership on a city commission constituted "acting in one's official capacity" for purposes of s. 112.313(3). By analogy, membership on the hospital authority constitutes acting in one's official capacity whenever official action is taken by the group. Accordingly, the opening sentence of this provision clearly prohibits a member of a hospital authority from holding that office while the authority does business with a bank of which said member is president. However, we believe that consideration must also be given to another chapter of the Florida Statutes which creates a partial exception to s. 112.313(3). That chapter states in relevant part:

The fact that a county or municipal officer or member of a public board or body, including a county school officer and an officer of any district within a county is a stockholder or an officer or director of a bank will not bar such banks from qualifying as a depository of funds coming under the jurisdiction of any such county or municipal officer, provided it shall appear in the records of the state or county agency that the governing body of such agency has investigated and determined that such county officer or member of a public board or body as aforesaid has not favored such bank or banks over other qualified banks and that there is no violation of subsection (1). [Fla. Stat. s. 136.02(5)(1975).]

This language, in its specificity, must control over s. 112.313(3), which is only a general prohibition against conflicting business transactions. See 82 C.J.S. Statutes s. 34(b),(1953). The exemption of s. 136.02(5) applies only to a bank's serving as a depository of funds, and then only when the governing body of the agency has made an investigation and has determined that there has been no favoritism on the part of the public officer or body in the placement of funds in the bank with which the public officer is affiliated. Accordingly, we conclude, subject to the conditions in s. 136.02(5), the hospital authority may use the subject bank as a depository of funds (including checking accounts) but is prohibited from transacting other business with said bank. It should also be noted that the prohibition set forth in s. 112.313(3) does not affect contracts entered into prior to the effective date of this act (October 1, 1975), prior to qualification for elective office, prior to appointment to public office, or prior to the beginning of public employment. Your question is answered accordingly.

Question 7 is answered in the negative.

Your letter of inquiry advises us that the local hospital authority and the local board of public instruction do business with the bank which the attorney represents and of which he is a director.

The inquiry, as it relates to the attorney's position as bank director, is substantially the same as question 6 above, the rationale of which is equally applicable to this aspect of the inquiry. However, this is not to say that an independent conflict does not exist by virtue of his legal representation of the bank while it is doing business with the public agencies on which he serves or by which he is employed.

The provision of the Code of Ethics quoted in question 1 of this opinion, s. 112.313(7), clearly prohibits a public officer or employee from having employment or a contractual relationship with a business entity with which his agency is doing business. This provision appears to prohibit the attorney from holding his public positions while concurrently representing a bank doing business with his public agencies. However, another provision of the Code of Ethics states:

This provision requires that the Code of Ethics not be construed to prohibit a public officer or employee from accepting other employment or following a pursuit which does not interfere with the full and faithful discharge of his duties.

In enacting Fla. Stat. s. 136.02(5), previously quoted in question 6 of this opinion, the Florida Legislature apparently felt that subject to certain conditions there is no interference with the full and faithful discharge of a public officer's duties where he is a stockholder, officer, or director of a bank acting as a depository of funds for his agency. In accordance with this view, we feel that s. 112.316 must be deemed to provide the same exemption to those employed by a bank subject to the conditions stated in s. 136.02(5). This being the case, the rationale used in answering question 6 of this opinion is equally applicable here. This question is answered accordingly in the negative.

Question 8 is answered in the negative.

Your letter of inquiry advises us that the board of county commissioners and the hospital authority do business with the bank you represent. This question is substantially the same as question 7 above, the rationale of which is equally applicable to this inquiry. Your question is answered accordingly in the negative.

Question 9 is answered in the negative.

You inform us that your representation of the planning and zoning commission is not automatic by virtue of your being county attorney. Rather, there is a specific expenditure allocated in the county budget for the planning and zoning commission's attorney, and the members have some input in deciding who their attorney will be.

Florida Statute s. 112.313(7), cited in question 1 above and relating to conflicting employment, is applicable to your situation. This provision would prohibit the situation you describe were it not for the construction provision of the code cited in question 7 above. As previously stated above, this provision requires that the Code of Ethics not be construed to prohibit a public officer or employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge of his duties.

In most counties the county attorney represents the planning and zoning commission as a matter of course with no prohibited conflict resulting. The conflict in your situation is a technical one and does not appear to present any interference with the full and faithful discharge of your duties. Accordingly, pursuant to Fla. Stat. s. 112.316, quoted above, you are not prohibited from representing the county planning and zoning commission while concurrently representing the county commission.

We understand that the city you represent is within the county and occasionally contracts with the county. The contracts are agreements providing for the fulfillment of governmental services. For instance, city prisoners are kept in the county jail; the county issues building permits for construction within the city; and the city provides fire protection in a portion of the unincorporated county. This situation would be prohibited only if we view these intergovernmental agreements as "doing business" for purposes of s. 112.313(7). In our view s. 112.313(7) is not to be employed to restrict that business which is transacted among governmental entities but to prohibit private gain other than remuneration provided by law. See Fla. Stat. s. 112.311(1)(1975).

This being the case, you are not prohibited from concurrently representing the county and the subject city. Nor do we find a conflict of interest in your concurrent representation of the hospital authority since this agency is not regulated by the county and does not do business with the county.

Question 10 is answered in the affirmative.

We understand that, as a member of the county subdivision advisory committee and as county engineer, the subject person must approve all subdivision plats, roads, and drainage. He is engaged, meanwhile, in providing the same types of services to private individuals and companies.

We find a prohibited conflict of interest to exist where the county engineer, who also is a member of the county subdivision advisory committee, is in the position of approving plans which he was previously employed privately to draw. This conflict falls within the scope of Fla. Stat. s. 112.311(1)(1975) which provides in pertinent part that "[i]t is essential to the proper conduct and operation of government that public officials be independent and impartial . . . ." One who is cast in the role of approving his own plans cannot evaluate such plans with impartiality or with the independence and detachment envisioned by the Code of Ethics. Accordingly, the firm owner is prohibited from holding either the position of county engineer or membership on the county subdivision advisory committee while concurrently drawing such plans for private individuals and corporations.