CEO 76-148 -- September 13, 1976

(Revoked by CEO 76-148A )

CONFLICT OF INTEREST

CITY COUNCILWOMAN OWNER OF MATERIAL INTEREST IN WRECKER BUSINESS ON CITY'S ROTATION LIST

To: Matias Blanco, Jr., Assistant City Attorney, City of Tampa

Prepared by: Gene Rhodes

SUMMARY:

A prohibited conflict of interest is created where a city councilwoman owns a material interest in a wrecker business which accepts wrecker rotation list calls from the police department for the towing of impounded vehicles, at city expense, as a public officer is prohibited from acting in a private capacity to sell services to any agency of his political subdivision. Fla. Stat. s. 112.313(3) (1975). Although Florida Statute s. 112.316 provides that it is not the intention of the Code of Ethics to preclude private pursuits which do not interfere with the discharge of public duty, this provision is inapplicable in the instant case, as the rotation list does not contain the names of all licensed wreckers in the city. Rather, the chief of police has the authority to establish requirements for wrecker services appearing on the list. Inasmuch as the police chief is employed by and is subject to the supervision of the city council, the potential for interference with public duty is not precluded.

QUESTION:

Would a prohibited conflict of interest be created were a wrecker service in which a city councilwoman owns a material interest to accept wrecker rotation list calls from the police department where the city pays for such wrecker service?

This question is answered-in the affirmative.

Your letter of inquiry advises us that the subject City Councilwoman and her husband jointly own a plot of land and the commercial buildings thereon. From these buildings the Councilwoman and her husband operate a wig outlet and a wrecker service. It appears to us that the Councilwoman is a joint owner of the wrecker business. As evidence of this, we refer to your letter of inquiry which points out that the Councilwoman actively and fully participates in the operation of the wrecker business. Additionally, both businesses have one set of account books and have one common business checking account. The employees of both businesses are fully shared, and the employees' FICA and withholding taxes are on a common account. Further, the office facilities and utilities of both businesses are shared, and all insurance policies cover both businesses. As a joint owner of the wrecker business, the Councilwoman owns a material interest in said business for purposes of the disclosure law. See Fla. Stat. s. 112.312(10) (1975).

You have described in detail the operation of the City's wrecker rotation system. Simply stated, wreckers are called by the City on a rotation basis. These calls are made both for disabled vehicles, where the individual automobile owner pays for the wrecker service, and for impounded vehicles, where the City pays for such service. The wrecker business in which the Councilwoman owns a material interest is on the rotation list and accepts calls on disabled vehicles, but has not accepted any service calls on impounded vehicles pending determination of whether such business would constitute a conflict of interest on the part of the Councilwoman.

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. . . . 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.

[Emphasis supplied. Fla. Stat. s. 112.313(3) (1975).]

The emphasized portion of the above-quoted provision prohibits a public officer from acting in a private capacity to sell services to any agency of his political subdivision. We have previously held that ownership per se of a material interest in a business entity constitutes acting in a private capacity to sell when that business entity sells. See CEO 75-196. Accordingly, as a material interest holder in the wrecker business, the Councilwoman would be prohibited from holding her seat on the City Council were said business to tow impounded vehicles for the City.

Please note that s. 112.313(3), quoted above, must be read in light of another provision of the Code of Ethics 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. [Fla. Stat. s. 112.316 (1975).]

The above-quoted statute provides that the Code of Ethics shall not be construed to prohibit a public officer from following any private pursuit which does not interfere with the full and faithful discharge of his public duties. Were the subject wrecker rotation list to contain the names of all licensed wreckers in the City we would consider employing the above provision to find no conflict of interest in the situation you describe. We understand, however, that the Chief of your City's Police Department has the power and authority to establish additional requirements for those wrecker services to be placed on the rotation list. Inasmuch as the Police Chief is employed by and is subject to the supervision of the City Council, we cannot say that the situation you describe would not interfere with the full and faithful discharge of the Councilwoman's public duties.