CEO 77-114 -- July 21, 1977

CONFLICT OF INTEREST

CITY EMPLOYEES RECEIVING FREE CHECKING ACCOUNTS FROM LOCAL BANK DOING BUSINESS WITH CITY

To: Robert P. Summers, Assistant City Attorney, Stuart

Prepared by: Phil Claypool

SUMMARY:

As a checking account is a contractual relationship, a city employee seemingly is prohibited by s. 112.313(7)(a), F. S., from having a checking account with a bank which does business with the city. However, as city employees have no part in the city's decisions to deal with particular banks, no conflict is deemed to exist based on the language of s. 112.316, which provides that the Code of Ethics not be construed so as to prohibit a public employee from holding private interests which do not interfere with the full and faithful discharge of his duties. Where such checking accounts are offered city employees free of charge, however, one must look to s. 112.313(2)(b), captioned "Solicitation or Acceptance of Gifts," and s. 112.313(4), "Unauthorized Compensation." As there is no evidence that free checking accounts have been offered to city employees with the understanding or agreement that their public duties would be performed to the benefit of the bank, these provisions are not deemed to be applicable. The bank's offer appears to be a gesture of good will intended to encourage the employees to do business with the bank in their private capacities, as evidenced by the bank's having made the same offer to all local teachers.

QUESTION:

Does a prohibited conflict of interest exist where city employees receive free checking accounts from a local bank which does business with the city?

Your question is answered in the negative.

In your letter of inquiry you have advised that a local bank provides free checking accounts to employees of the City of Stuart. In a telephone conversation with our staff you also have advised that this is one of two banks in the city, both of which serve as depositories of city funds and have made loans to the city.

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

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 employee from having a contractual relationship with a business entity which is doing business with his agency. Thus, a city employee apparently is prohibited from having a checking account, which constitutes a contractual relationship, with a bank which is doing business with that city.

However, in construing the Code of Ethics, we must also consider another provision, which states:

Construction. -- It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his duties to the state or the county, city, or other political subdivision of the state involved. [Section 112.316, F. S. 1975.]

The above-quoted provision makes it clear that the Code of Ethics is not intended to be construed so as to prohibit a public employee from holding private interests which do not interfere with the full and faithful discharge of his duties; in effect, this section imposes a "rule of reason" upon the application of the Code of Ethics to any particular set of circumstances.

You have informed our staff in a telephone conversation that it is the city commission which makes the final decision as to banks with which the city will do business. As city employees do not make final decision in these matters, we fail to see that having a checking account with a particular bank could interfere with the full and faithful discharge of the duties of a public employee. Accordingly, we find that city employees are not prohibited from having checking accounts, free or otherwise, with a bank which does business with the city.

Nor do we find that the Code of Ethics prohibits a city employee from receiving a free checking account from a bank which is doing business with the city where free checking accounts are offered to all employees of the city. With respect to gifts, the Code of Ethics provides as follows:

SOLICITATION OR ACCEPTANCE OF GIFTS. -- No public officer or employee of an agency or candidate for nomination or election shall solicit or accept anything of value to the recipient, including a gift, loan, reward, promise of future employment, favor, or service:

(b) That is based upon any understanding that the vote, official action, or judgment of the public officer, employee, or candidate would be influenced thereby. [Section 112.313(2)(b), F. S. 1975.]

UNAUTHORIZED COMPENSATION. -- No public officer or employee of an agency or his spouse or minor child shall, at any time, accept any compensation, payment, or thing of value when such public officer or employee knows, or with the exercise of reasonable care, should know, that it was given to influence a vote or other action in which the officer or employee was expected to participate in his official capacity. [Section 112.313(4), F. S. 1975.]

In addition to the fact that you have provided us with no evidence that free checking accounts have been offered to city employees with the understanding or agreement that their public duties would be performed to the benefit of the bank, we are of the view that no such intent could be proven when free checking accounts are offered to all city employees. That offer seems to be an attempt not so much to influence the official actions of city employees, as to establish good will with them in the hope that in their private capacities they will do business with the bank. In this regard, we note that you have stated that the particular bank involved also offers free checking accounts to local teachers.

Accordingly, we find that the Code of Ethics does not prohibit a city employee from accepting a free checking account with a bank which does business with the city when free checking accounts are offered to all employees of that city.