CEO 76-189 -- October 25, 1976

CONFLICT OF INTEREST

COMMUNITY COLLEGE ATTORNEYS LEASING BUILDING TO COLLEGE

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

Prepared by: Roger Merriam

SUMMARY:

The Code of Ethics prohibits a public officer or employee from acting in a private capacity to lease realty to his public agency. Fla. Stat. s. 112.313(3)(1975). Where a law firm represents a community college for a monthly retainer plus $40 per hour, members of that firm are deemed to constitute employees of the community college for purposes of the standards of conduct provisions of the Code of Ethics. Their duties are analogous to those of a general counsel to a college, and the monthly retainer evidences a continuing relationship between the firm and the college. Additionally, compensation on a "per hour" rather than "job" basis indicates that the firm's relationship to the college is more nearly that of an employee than of an independent contractor. Accordingly, members of the law firm are prohibited from leasing realty to the community college.

QUESTION:

Would a prohibited conflict of interest be created were I and another member of my law firm to lease realty which we individually own to the community college which my firm represents?

Your question is answered in the affirmative.

Your letter of inquiry advises that your law firm represents the local community college for a monthly retainer plus $40 per hour. You further inform us that you and another member of your law firm own an office building in which you wish to lease space to the community college for use in administering its continuing education programs in the area.

The Code of Ethics for Public Officers and Employees provides in pertinent part:

DOING BUSINESS WITH ONE'S AGENCY. -- No employee of an agency acting in his official capacity as 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. [Fla. Stat. s. 112.313(3)(1975); emphasis supplied.]

The italicized language above provides that a public employee is precluded from privately leasing realty to the agency which employs him.

For purposes of the standards of conduct provisions of the Code of Ethics, we are of the opinion that members of your firm are employees of the community college. You have informed our staff that the firm serves as general counsel to the college on a variety of matters. The Code of Professional Responsibility states that the term "general counsel" denotes that an attorney or firm so designated "devotes a substantial amount of his or its professional time in the representation of that client." DR 2-102(A)(4). Although your firm devoted a relatively small amount of time to college business during the past year (approximately 72 hours, you inform us), you have further advised that you anticipate at least twice that amount next year. Moreover, the fact that the firm receives a monthly retainer from the college evidences a continuing relationship between the two. In our view, the above facts indicate that the firm's relationship to the college is more nearly that of an employee than of an independent contractor. See Restatement of Agency s. 220(2)(f).

In addition to the retainer, your firm is compensated for its services to the college on a "per hour" basis. This is the typical mode of compensating employees, whereas an independent contractor generally is paid on a "job" basis without regard for actual working time spent. See Id. at s. 220(2)(g).

We also note that many state colleges and universities employ "in house" counsel who, as employees of the schools, are subject to the standards of conduct provisions of the code. Because the services provided the community college by your firm are analogous to those performed by such in house counsel, to deem your firm an independent contractor for purposes of the Code of Ethics would not be within either the spirit or intent of the law.

For the foregoing reasons, we are of the opinion that, for purposes of the Code of Ethics, you and other members of your firm constitute employees of the community college and, accordingly, are prohibited by s. 112.313(3) from privately leasing realty to that college.