CEO 77-184 -- December 14, 1977

CONFLICT OF INTEREST

SCHOOL BOARD MEMBER DIRECTOR AND SHAREHOLDER OF BANK WHICH IS DEPOSITORY OF SCHOOL BOARD FUNDS AND LENDER OF FUNDS TO SCHOOL BOARD

To: Herschel C. King, Chairman, Flagler County School Board, Bunnell

Prepared by: Phil Claypool

QUESTIONS:

1. Would a prohibited conflict of interest exist were a school board member to serve as director of or to hold shares in a bank which is a depository of school board funds?

2. Would a prohibited conflict of interest be created were a school board member also to serve as a director of and own stock in a bank which is lending money to the board?

Your first question is answered in the negative.

In your letter of inquiry and in telephone conversations with our staff, you and Mr. Roy W. Likins advise that you are members of the Flagler County School Board. In addition, Mr. Likins advised that he is not a director of the bank in question and that, although he does own stock in the bank, he does not own more than 5 percent of the total stock of the bank. You have advised that you are a director of the bank and that you own more than 5 percent of its stock.

Based on the rationale of a previous opinion, CEO 76-20, a copy of which is enclosed, this question is answered in the negative. Please note that s. 136.02(5), F. S. 1975, which forms the basis of that opinion, requires that

it shall appear in the records of the state or county agency that the governing body of such agency has investigated and determined that such county officer or member of a public board or body as aforesaid has not favored such bank or banks over other qualified banks and that there is no violation of subsection (1).

Question 2 is answered in the affirmative, based upon the rationale of CEO 76-115, a copy of which is enclosed.