CEO 76-31 -- February 13, 1976

CONFLICT OF INTEREST

CITY COUNCILMAN SELLING GOODS TO CITY

To: W. C. Fowler, City Clerk, Mount Dora

Prepared by: Gene Rhodes

SUMMARY:

Florida Statute s. 112.313(3)(1975) prohibits a public officer from acting in his official capacity to do business with any business entity in which he owns a material interest and from acting in a private capacity to sell to his own agency. Likewise, a public officer is prohibited by s. 112.313(7) from holding employment with any business entity which does business with his public agency. Therefore, where a city councilman is employed by and owns a material interest in a stationery and printing company, such company may not transact business with the city so long as said councilman holds that public office.

QUESTION:

Does a prohibited conflict of interest exist where a city councilman owns a material interest in a company selling office supplies and printing services to the city?

This question is answered in the affirmative.

Your letter of inquiry advises us that the subject city councilman owns 49 percent of and works in a stationery and printing company which is the only office supply house in your community. The company sells to each individual agency in the city.

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 purchase, rent, or lease any realty, goods, or services for his own agency from any business entity of which he or his spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or 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 to any political subdivision or any agency thereof, if he is serving as an officer or employee of that political subdivision. 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 or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(c) Appointment to public office.

(d) Beginning public employment.

[Fla. Stat. s. 112.313(3)(1975).]

The first sentence of the above-quoted provision prohibits a public officer from acting in his official capacity to purchase goods for his agency from a business entity in which he holds a material interest. The code defines the term "material interest" as the "direct or indirect ownership of more than 5 percent of the total assets or capital stock of any business entity." Fla. Stat. s. 112.312(10)(1975). In a former opinion of this commission, CEO 75-201, we advised that being a member of a voting body constitutes acting in one's official capacity relative to action taken by the body as a whole. Under this interpretation, the subject city councilman is prohibited from holding that public position and concurrently owning a material interest in the office supply house while the city council purchases goods or services from said company.

The second sentence of the above-quoted provision prohibits a public officer from acting in a private capacity to sell goods or services to his own political subdivision or any agency thereof. The code defines the term "agency" to mean "any state, regional, county, local, or municipal government entity of this state, whether executive, judicial, or legislative; any department, division, bureau, commission, authority, or political subdivision of this state therein; or any public school, community college, or state university." Fla. Stat. s. 112.312(2)(1975). In our view one is acting in his private capacity to sell where he owns a material interest in a business entity. See CEO 75-196. Consequently, the subject city councilman is prohibited from holding that public position and concurrently owning a material interest in the supply house if said company sells goods or services to the city council or to any agency of the city.

The Code of Ethics further provides:

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 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 occurring 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)(1975).]

This provision prohibits a public officer from being employed by a business entity doing business with that public officer's agency. Thus, the subject city councilman is prohibited from holding that position while concurrently being employed by the office supply house if said company does the contemplated business with the city council.