CEO 83-70 -- September 22, 1983

CONFLICT OF INTEREST; VOTING CONFLICT OF INTEREST

CITY COMMISSION MEMBER SERVING AS VICE PRESIDENT OF NONPROFIT CORPORATION RECEIVING IN-KIND SERVICES FROM CITY

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

SUMMARY:

No prohibited conflict of interest exists where a city commission member serves as vice president, without compensation, of a nonprofit corporation receiving in-kind services from the city in order to promote and present a beauty pageant. CEO's 77-55, 80-32, and 82-10 are referenced.

No voting conflict of interest would be created were a city commissioner to vote on matters affecting a nonprofit corporation which he serves as vice president without compensation. Under the circumstances presented, it does not appear that city commission action regarding the corporation would inure to private gain of the commissioner, or that he been "retained" by the corporation. CEO's 79-65 and 79-66 are referenced.

QUESTION 1:

Does a prohibited conflict of interest exist where a city commission member serves as vice president, without compensation, of a nonprofit corporation receiving in-kind services from the city?

This question is answered in the negative.

In your letter of inquiry you advise that Mr. J. Larry Durrence, a member of the Lakeland City Commission, also serves as vice president of a nonprofit corporation which was formed to provide a vehicle to bring a beauty pageant to the City. All of the officers and directors of the nonprofit corporation either are employed by or do extensive volunteer work for the area chamber of commerce. The position of vice president is uncompensated and entails no specific duties other than whatever voluntary work he may choose to do to promote the City.

You also advise that the nonprofit corporation has solicited sponsorships for the pageant from area industries and has received $125,000 of in-kind services from the City, including the use of the City's civic center, use of lighting equipment, and use of civic center staff. The corporation will retain no funds, you advise; any surplus resulting from the promotion of the pageant either will be contributed to the City Advertising Board or will be used by the corporation to sponsor other events promoting the City.

The Code of Ethics for Public Officers and Employees provides in 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 (1981).]

This provision prohibits a City Commissioner from acting in an official capacity to purchase, rent, or lease any realty, goods, or services for the City from a business entity of which he is an officer and prohibits a City Commissioner from acting in a private capacity to rent, lease, or sell any realty, goods, or services to the City. However, the nonprofit corporation here is not renting, leasing, or selling any realty, goods, or services to the City. Rather, the City is providing services and facilities to the nonprofit corporation.

The Code of Ethics also provides:

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. -- No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he is an officer or employee . . . ; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), Florida Statutes (1981).]

This provision prohibits a public officer from having certain types of employment and contractual relationships which present him with a conflict of interest. We find this prohibition also to be inapplicable, as noncompensated service as an officer of a nonprofit corporation does not constitute employment or a contractual relationship. See CEO 77-55, CEO 80-32, and CEO 82-10.

Accordingly, we find that no prohibited conflict of interest exists where the subject City Commissioner serves as vice president of a nonprofit corporation receiving in-kind services from the City.

QUESTION 2:

Would a voting conflict of interest be created were a city commissioner to vote on matters affecting a nonprofit corporation which he serves as vice president without compensation?

This question also is answered in the negative.

The Code of Ethics 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, Florida Statutes (1981).]

Under this provision, a public officer who votes on a measure in which he has a personal, private, or professional interest and which inures to his special private gain or the special gain of a principal by whom he is retained must file a memorandum disclosing the conflict. Under the circumstances you have presented, it does not appear that City Commission action regarding the nonprofit corporation would inure to the private gain of the subject City Commissioner, especially as he receives no compensation for his service as vice president of the corporation. Nor does it appear that he has been "retained" by the nonprofit corporation. See CEO 79-65 and CEO 79-66, in which we interpreted the term "retained" as "to keep in pay or in one's service; specifically, to employ by paying a retainer."

Accordingly, we find that no voting conflict of interest necessitating the filing of a memorandum of voting conflict under Section 112.3143, Florida Statutes, would be created were the subject City Commissioner to vote on a matter affecting the nonprofit corporation which he serves as vice president.