CEO 77-58 -- April 21, 1977

CONFLICT OF INTEREST

INDUSTRIAL RELATIONS COMMISSIONER JOINING IN BUSINESS VENTURE WITH MEMBERS OF LAW FIRM, OTHER MEMBERS OF WHICH PRACTICE BEFORE THE COMMISSION

To: Arthur C. Canaday, Commissioner, Industrial Relations Commission, Tallahassee

Prepared by: Phil Claypool

SUMMARY:

No prohibited conflict of interest is created where a member of the Industrial Relations Commission owns shares of stock in a land trust, other shares of which are owned by members of a law firm, other members of which firm practice before the commission. Section 112.313(7)(a), F. S. 1975, prohibits a public officer from having a contractual relationship with a business entity which is subject to the regulation of or is doing business with his agency or which will create a frequently recurring conflict with public duty. Even if the commissioner were deemed to have a contractual relationship with the other persons holding stock in the trust, they are not subject to the regulation of, nor are they doing business with, the commission. Moreover, the proposed business venture is not deemed to create a frequently recurring conflict with public duty, particularly because the commissioner will not have a business relationship with persons who engage in practice before the commission. Finally, s. 112.311(2) of the Code of Ethics specifically provides that it is "essential that government attract those citizens best qualified to serve" and, therefore, that "the law against conflict of interest must be so designed as not to impede unreasonably or unnecessarily the recruitment and retention by government of those best qualified to serve. . . ."

QUESTIONS:

1. Would a prohibited conflict of interest exist were I, a member of the Industrial Relations Commission, to purchase shares of stock in a land trust, other shares of which are owned by members of a law firm, other members of which firm practice before the commission?

2. Would it be necessary for me, a member of the Industrial Relations Commission, to recuse myself on matters before the commission which are presented by members of a law firm, other members of which have joined a business venture with me?

Question 1 is answered in the negative.

In your letter of inquiry you have stated that you are a member of the Industrial Relations Commission. That commission is responsible for reviewing orders of judges of industrial claims in workmen's compensation proceedings and orders of appeals referees in unemployment compensation proceedings. Section 20.17(6)(b)1., F. S. 1975. You have also stated that, in order to preserve the environment surrounding a lake on which you have purchased a lot, you plan to join with several people to form a land trust with shares of stock issued in order to purchase property around the lake when it becomes available and to sell it to people with similar interests, in lot sizes sufficient to accomplish the environmental purpose.

In addition, two of the persons who contemplate becoming shareholders with you are attorneys who do not themselves practice before the commission, but who are members of a large law firm, other members of which do practice before the commission.

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

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. -- 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 . . . ; 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. [Section 112.313(7)(a), F. S. 1975.]

This provision prohibits a public officer from having a contractual relationship with a business entity which is subject to the regulation of or is doing business with his agency; in addition, it prohibits a public officer from having a contractual relationship that will create a frequently recurring conflict between his private interests and the performance of his public duties.

In your situation, even if you were deemed to have a contractual relationship with the other persons who would hold shares of stock in the trust, they are not subject to the regulation of or doing business with the Industrial Relations Commission, your agency. Moreover, we are of the opinion that your proposed business venture would not create a frequently recurring conflict between your private interests and the performance of your public duties, particularly because you will not have a business relationship with persons who engage in practice before the commission.

In its statement of legislative intent and declaration of policy, the Code of Ethics provides that:

It is also essential that government attract those citizens best qualified to serve. Thus, the law against conflict of interest must be so designed as not to impede unreasonably or unnecessarily the recruitment and retention by government of those best qualified to serve. Public officials should not be denied the opportunity, available to all other citizens, to acquire and retain private economic interests except when conflicts with the responsibility of such officials to the public cannot be avoided. [Section 112.311(2), F. S. 1975.]

Accordingly, we find that the Code of Ethics for Public Officers and Employees does not prohibit your entering into the venture you have described.

We are unable to answer question 2 because we have no jurisdiction to issue advisory opinions concerning the Administrative Procedure Act, including s. 120.71 of that act, which specifies the grounds for disqualification of an individual serving as an agency head. However, in past opinions we have addressed the relationship of ss. 286.012 and 112.3143, F. S. 1975; in this regard a copy of CEO 76-23 is enclosed for your guidance. In our view, the situation you have described would not present a voting conflict of interest under s. 112.3143, for substantially the same reasons that we found no voting conflict present in CEO 76-51, a copy of which also is enclosed.