CEO 77-160 -- October 24, 1977

CONFLICT OF INTEREST

SCHOOL BOARD MEMBER SERVING AS BROKER ON BOND ISSUED ON BEHALF OF ANOTHER SCHOOL BOARD MEMBER

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

Prepared by: Phil Claypool

SUMMARY:

A school board member seemingly is prohibited by s. 112.313(3), F. S., from being president of an insurance agency which serves as broker on a bond issued on behalf of another school board member, as that statute prohibits a public officer from acting in a private capacity to sell any services to his public agency. However, Ch. 77-349, Laws of Florida, enacted during the 1977 Legislative Session, provides several exemptions to the application of s. 112.313(3), one of which occurs where the total amount of the transaction does not exceed $500. As the amount of the premium paid by the school board is $27, no prohibited conflict is created where the school board member's agency serves as broker of such bond.

QUESTION:

Does a prohibited conflict of interest exist where I, a school board member, am president of an insurance agency which is serving as broker on a bond issued on behalf of another school board member?

Your question is answered in the negative.

In your letter of inquiry and in a telephone conversation with our staff, you advise that you are a member of the Manatee County School Board and that you are president and one-third owner of an insurance agency. You also advise that a recent appointee to the school board, in order to obtain her bond, went to a former agent of your firm who presently owns his own agency. That agent issued the bond, going through your agency as a broker, just as he has done with every bond he has issued in the past. The $27 premium for the bond was paid by the school board, and your agency paid the full commission of $9.25 to the agent. The bond will be effective for the remainder of the school board member's term, which is slightly longer than a year.

The Code of Ethics for Public Officers and Employees provides 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 . . . . [Section 112.313(3), F. S. 1975.]

This provision prohibits a public officer acting in a private capacity from selling any services to his agency. We have previously advised that a public officer acts in a private capacity whenever a corporation of which he is an officer or director, or of which he owns more than 5 percent, takes action. CEO's 76-23 and 76-65.

However, Ch. 77-349, Laws of Florida, enacted during the most recent legislative session, provides several exemptions to the application of s. 112.313(3), above. One of those exemptions occurs where "[t]he total amount of the subject transaction does not exceed $500." Section 1, Ch. 77-349. Here the amount of the premium paid by the school board for a period of slightly more than a year was $27, from which your agency received no commission.

Accordingly, we find that there is no prohibited conflict of interest where your agency serves as broker on the subject bond.