CEO 77-42 -- March 9, 1977

CONFLICT OF INTEREST

ASSISTANT SUPERINTENDENT OF SCHOOLS OWNER OF MATERIAL INTEREST IN COMPANY DOING BUSINESS WITH THE SCHOOL DISTRICT

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

Prepared by: Bonnie Johnson

SUMMARY:

An officer or employee of a political subdivision is prohibited by s. 112.313(3), F. S. 1975, from acting in a private capacity to sell goods to that subdivision or to any agency thereof. As a school district constitutes a political subdivision pursuant to s. 1.01(9), and the term "agency" is defined within the Code of Ethics to include any public school, an assistant superintendent for a school district is prohibited from privately selling goods to the school board or to any school within the district. Reference is also made to previous opinions, CEO's 76-172 and 76-188.

QUESTION:

Does a prohibited conflict of interest exist where an assistant superintendent for a school district owns a material interest in a building supply company which does business with the school district?

Your question is answered in the affirmative.

You advise in your letter of inquiry that the Assistant Superintendent for Adult and Community Education of the District School Board of ____ County is also the major stockholder in ____. The school system has made purchases from this company after having contacted two other companies for competitive prices. You further advise that purchasing is handled by a central purchasing agent; you approve purchases of amounts up to $1,000, and the school board approves those in excess of $1,000.

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

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.

(d) Beginning public employment.

[Section 112.313(3), F. S. 1975; emphasis supplied.]

An officer or employee of a political subdivision thus is prohibited from acting in a private capacity to sell goods to that subdivision or to any agency thereof. A school district constitutes a political subdivision pursuant to s. 1.01(9), F. S. 1975, and the term "agency" is defined within the Code of Ethics to include any public school. Section 112.312(2), F. S. (1976 Supp.). Moreover, we have previously determined that one who owns a material interest in a business acts in his private capacity to sell when that business sells. See CEO 75-196.

Although we have ruled previously that no prohibited conflict of interest is created where a store in which a public school teacher owns a material interest sells goods to schools in the district other than the one in which he teaches (see CEO 76-172), we perceive a significant distinction in the instant case. In the aforementioned situation the teacher's agency is a public school rather than the school district, and he has no direct role in policymaking decisions by the school board. In the instant case, on the other hand, the assistant superintendent's agency is the entire school district and he serves at the pleasure of the agency head, the school board. By virtue of his position and rank in the district and his proximity to the governing board of that district, he has influence not enjoyed by employees of individual schools within the district. This distinction is incorporated within the definition of the term "agency," wherein a public school is listed as constituting an agency in its own right, distinct from the political subdivision of which it is a part. See also CEO 76-188.

Accordingly, we find that a prohibited conflict of interest is created where an assistant superintendent of a school district owns a material interest in a business entity which sells goods to the school district, either via sales to the school board or to individual schools within the district.