CEO 81-50 -- July 16, 1981

CONFLICT OF INTEREST

LAW FIRM OF SCHOOL BOARD ATTORNEY PROVIDING LEGAL SERVICES TO SCHOOL BOARD

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

SUMMARY:

Section 112.313(3), Florida Statutes, prohibits a public employee from acting in a private capacity to sell any services to his agency. Here, the school board attorney entered into a written employment contract with the school board under which he is required to be on call at all times to serve the board on a priority basis, although he is permitted to continue in the general practice of law with his law firm. As part of the same agreement with the school board, the law firm of which he is a partner has contracted to provide legal services to the school board in exchange for a fixed annual sum as compensation. Therefore, the attorney is acting in a private capacity as a partner in the firm to sell the services of the firm to the school board.

QUESTION:

Does a prohibited conflict of interest exist where you, an employee of a School Board serving as School Board Attorney, are a partner in a law firm which also has contracted to provide legal services to the School Board?

Your question is answered in the affirmative.

In your letter of inquiry you advise that you have entered into an annual employment agreement with the .... School Board under which you are paid a salary as School Board Attorney responsible for the handling of all the legal matters of the School Board. Under the agreement, you hold a regularly established position, are designated as a permanent employee in personnel records, and are paid a salary from the Board's regular salaries and wages account. Deductions from your salary are made for federal income taxes, social security contributions, and group insurance. In addition, the Board has made retirement contributions on your account to the Florida Retirement System. Under the employment contract, you are required to be on call at all times to serve the Board on a priority basis, although you are permitted to continue in the general practice of law with your law firm.

In addition, you advise that as part of the same agreement with the School Board, your law firm has contracted to provide legal services to the School Board in exchange for a fixed annual sum as compensation. The firm receives no other or additional compensation from the Board, aside from reimbursement of costs. Pursuant to the contract, the necessity for and extent of services to be performed by the law firm are to be determined by you, as the Board attorney.

Finally, you advise that it is your position that you are and have been personally an employee of the School Board, that the law firm is an independent contractor with the Board, and that under the contractual arrangement and the circumstances of their approval by the Board no prohibited conflict of interest exists.

We agree that under the circumstances you have presented you are an employee of the School Board. See CEO 77-76, CEO 78-65, and CEO 79-24, copies of which are enclosed. In addition, we agree that your law firm is an independent contractor with the School Board.

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. The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator's place of business. This subsection shall not affect or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (1979).]

This provision prohibits you, as a public employee, from acting in a private capacity to sell any services to your "agency," which is the School Board under the definition of "agency" contained in Section 112.312(2), Florida Statutes.

In previous opinions, we have advised that one acts "in a private capacity" to sell realty, goods, or services when he is an officer or director of, or owns more than five percent of, the business entity which is selling such realty, goods, or services. See, for example, CEO 78-39, a copy of which is enclosed. We also have advised that a partner is "acting in a private capacity" when his partnership acts. See CEO 79-83, Question 2, a copy of which is enclosed. Thus, we have interpreted Section 112.313(3), Florida Statutes, to apply not only where a public officer or employee is selling his personal services in a private capacity to his agency, but also where the officer or employee is acting in a private capacity to sell the services of another. In this regard, we note that the language of the statute is not couched in terms of prohibiting a public officer or employee from acting in a private capacity to sell his services to his agency, but rather in terms of prohibiting him from acting in a private capacity to sell any services to his agency.

Here, in addition to the services you are providing to the School Board as an employee, the law firm of which you are a partner has contracted to sell its services to the School Board. We also note that you have signed the firm's contract with the School Board as a partner in behalf of the firm, and that you have advised that you share as a partner in the retainer which is paid to the firm by the School Board. These circumstances provide a further indication that you have acted and are acting in a private capacity to sell the services of your law firm to the School Board.

Section 112.313(3) does contain a "grandfather" clause, which would exempt contracts entered into prior to October 1, 1975. However, we find that this provision would not apply to exempt the services provided to the School Board by your law firm, since the contract between the firm and the School Board has been entered into annually.

Accordingly, we find that a prohibited conflict of interest exists where you are an employee of a School Board serving as School Board Attorney and you are a partner in a law firm which also has contracted to provide legal services to the School Board.