CEO 78-74 -- October 20, 1978

VOTING CONFLICT OF INTEREST

SCHOOL BOARD MEMBER VOTING ON SCHOOL AUDIT REPORT RELATING TO BANK OF WHICH HE IS STOCKHOLDER AND CHAIRMAN OF BOARD OF DIRECTORS

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

Prepared by: Phil Claypool

SUMMARY:

Section 112.3143, F. S. 1977, requires the filing of a memorandum of voting conflict whenever a public officer votes upon a measure in which he has a personal interest and which inures to his special private gain or the special gain of a principal by whom he is retained. Where a school board member voted to remove from the board's consent agenda a school audit report critical of the transfer of a certificate of deposit to a bank of which said board member is a stockholder and director, and further voted to defer acceptance of the report pending a reexamination of the interest rate paid by the bank, no voting conflict was created because there was no gain on anyone's part as a result of either vote. The motion to remove the report from the consent agenda constituted a procedural move, while the vote to defer acceptance of the report had the effect only of postponing the matter in order to clarify an issue.

QUESTION:

Was a voting conflict of interest created when I, a school board member, voted to remove a school audit report from the board's consent agenda and to defer acceptance of the report, which was critical of the transfer of a certificate of deposit to a bank in which I am a stockholder and of which I am the chairman of the board of directors?

Your question is answered in the negative.

In your letter of inquiry you advise that you are a member of the school board of ____ County and that you also are a stockholder in and chairman of the board of directors of a local bank. At a recent meeting of the school board, you write, the audit report of a high school and an elementary school was on the board's consent agenda to be received as information. The audit report criticized the high school for transferring a certificate of deposit without proper authorization from one bank to the bank of which you are chairman of the board. According to the audit report, the high school would receive less interest from the certificate of deposit at your bank than it would have received at the other. You report further that you felt the audit report must have been incorrect, as the two certificates of deposit bore the same interest rate. Therefore, you moved that the audit report be taken off the consent agenda and taken up for discussion. Subsequent to that discussion you moved to defer acceptance of the audit report until the board's staff could recheck the amount of interest paid by your bank. Finally, you advise that you were correct, resulting in your bank having to pay more interest than that shown on the audit report.

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

Voting conflicts. -- No public officer shall be prohibited from voting in his official capacity on any matter. However, any public officer voting in his official capacity upon any measure in which he has a personal, private, or professional interest and which inures to his special private gain or the special gain of any principal by whom he is retained shall, within 15 days after the vote occurs, disclose the nature of his interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes. [Section 112.3143, F. S. 1977.]

This provision requires the filing of a memorandum of voting conflict whenever a public officer votes upon a measure in which he has a personal interest which inures to his special private gain or the special gain of a principal by whom he is retained. We are of the opinion that, under the circumstances you have described, no such disclosure is required because there was no gain on anyone's part as a result of either vote. The first measure which you voted upon required that the audit report be taken off the school board's consent agenda and be taken up for discussion.

As you have advised our staff in a telephone conversation, when the school board receives its agenda for an upcoming meeting, if an item is not requested to be placed on the discussion agenda by a board member, it is placed on the consent agenda. Usually, then, the board approves the entire consent agenda with one motion. Therefore, the motion to remove the audit report from the consent agenda was merely a procedural move, resulting in no gain or loss either to you or to your bank.

The second motion, to defer acceptance of the audit report until the school board staff could look into the amount of interest paid by your bank, would have the effect only of postponing the matter in order to clarify what had been represented by the administration. You advised our staff that the further investigation revealed that the bank had miscalculated the interest to be paid on the certificate of deposit, an error which was corrected subsequently by the bank. Acceptance of the audit report would not have resulted in the transfer of the certificate of deposit from your bank; an additional motion would have been necessary to accomplish this. Therefore, it is apparent that the motion to defer similarly did not result in any gain or loss to yourself or your bank.

Accordingly, we find that no voting conflict of interest was created by your vote to remove the audit report from the consent agenda and to defer acceptance of the audit report pending investigation of the interest which would be paid by your bank.