CEO 76-137 -- July 26, 1976

CONSULTATION

COMPENSATION PAID TO CORPORATION RATHER THAN TO INDIVIDUAL CONSULTANT

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

Prepared by: Bonnie Johnson

SUMMARY:

A full-time state employee who consulted for compensation in excess of $250 during the disclosure period is deemed to constitute a specified employee pursuant to Florida Statute s. 112.3145(1)(b)8.(1975), even though such compensation was paid to a corporation in which the employee is a stockholder rather than to the employee personally. To take the opposite view would afford the opportunity for circumvention of the disclosure law through such incorporation of personal services. Too, the intent of the disclosure law appears to be that primary importance be placed on the consultation itself, not the method of payment or peculiarities of benefits received. Accordingly, the subject employee/consultant is deemed to be a specified employee subject to the filing of financial disclosure.

QUESTION:

Am I a specified employee subject to financial disclosure by virtue of my having consulted for compensation in excess of $250, even though such compensation was paid to a corporation in which I am a stockholder rather than to me personally?

Your question is answered in the affirmative.

You inform us in your letter of inquiry that you and several of your colleagues at the ____ performed consultation services for SONIC, an Algerian national company, during 1975. The contract for consultation, however, was not between the Algerian government and the individual consultants, but between that government and Tropical Agro Technology, Inc. (T.A.T.), formed by you and your colleagues in order to keep consultations separate from personal income for tax purposes. The earnings from the above-described consultations were paid to T.A.T., and none of these earnings were disbursed to stockholders in the company. Consequently, no individual benefited from consultation earnings, although corporate taxes were paid on these moneys.

The Code of Ethics for Public Officers and Employees requires that each specified employee annually file a statement of financial interests. Fla. Stat. s. 112.3145(2)(b)(1975). The term "specified employee" is defined to include

[a]ny full-time state employee who, in addition to his regular duties, accepts compensation which in the aggregate exceeds $250 for consultations with other state agencies or with other government or business entities. [Fla. Stat. s. 112.3145(1)(b)8.(1975).]

In our view, the incorporation by a state employee of his consulting services does not obviate his obligation to file financial disclosure if fees received for his personal consultation services were in excess of $250. To take the opposite view, in our opinion, would afford the opportunity for circumvention of the law through such incorporation of personal services. Too, the intent of the disclosure law is that specified public officers and employees make a matter of public record certain private financial interests. In defining those persons subject to such disclosure, the law enumerates various offices and positions, one of which is any full-time state employee who consults for compensation in excess of $250. Of primary importance is the consultation itself, in accordance with the monetary threshold, as a criterion in determining those subject to disclosure, not the method of payment or actual benefit received. Accordingly, by virtue of your having consulted for compensation in excess of $250, you are deemed to be a specified employee subject to the filing of a Statement of Financial Interests, CE Form 1.