CEO 76-88 -- May 17, 1976

CONFLICT OF INTEREST

CITY COUNCILMAN EMPLOYING ONE DOING BUSINESS WITH THE CITY

To: (Name withheld at the person's request.)

Prepared by: Gene Rhodes

SUMMARY:

No conflict of interest is created where an individual sells privately owned property to a municipality in spite of the fact that the individual is employed on a commission basis in a real estate office owned by a city councilman. In the sale of privately held property, the individual is acting not in his capacity as a real estate salesman, but as a self-employed individual, and therefore as a "business entity" pursuant to the definition contained in s. 112.312(3)(1975). The councilman holds no interest in the property and will realize no gain from its sale to the city. Furthermore, his contract with the individual is in the latter's capacity as an employee, not as a business entity. Thus, no prohibited conflict is created pursuant to the prohibition contained in s. 112.313(7).

QUESTION:

Would a prohibited conflict of interest be created were a city council to purchase real property from one whom a city councilman privately employs?

Your question is answered in the negative.

Your letter of inquiry advises us that the subject city councilman is secretary and owner of 48 percent of the stock of a local real estate and insurance office. He has in his employ a registered real estate salesman who works solely on a commission basis. The subject salesman and his wife own approximately two acres of land which the city wishes to purchase for the purpose of expanding the sewage disposal plant, located on property contiguous to the salesman's two acres. The city councilman has no interest in the land and will neither directly nor indirectly receive any funds from the contemplated sale.

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

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. --

(a) 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, excluding those organizations and their officers, who when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; 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. [Emphasis supplied; Fla. Stat. s. 112.313(7)(1975).]

The emphasized portion of the above-quoted provision prohibits a public officer from having a contractual relationship with a business entity which is doing business with the public officer's agency. The code further defines the term "business entity" to mean

any corporation, partnership, limited partnership, proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust, whether fictitiously named or not, doing business in this state. [Fla. Stat. s. 112.312(3)(1975).]

We understand that the subject real estate salesman additionally is self-employed in selling real estate owned by himself and his wife. However, when the subject salesman is acting as a self- employed individual doing business in this state, he is acting in his role as a business entity. In our view the city councilman did not contract with the salesman in his role as a business entity but rather contracted with him in his role as a real estate salesman and employee. We see these two roles as separate and distinct.

Moreover, even if s. 112.313(7) were construed to prohibit the situation you describe, we would similarly find that no conflict exists as each provision of the standards of conduct must be read in light of the following provision.

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 holding private interests which do not interfere with the full and faithful discharge of his duties. Here we are faced with a case in which the city is not considering an on-going business relationship with the salesman, but is interested only in purchasing a particular piece of property which is necessary for the extension of the sewage disposal plant. Additionally, the city councilman stands to privately gain nothing from the transaction. We fail to see how the contemplated sale could interfere with the full and faithful discharge of the councilman's duties.

Consequently, we hold that no prohibited conflict of interest would be created were the city council to purchase real property from the subject salesman.