CEO 87-55 -- July 30, 1987

CONFLICT OF INTEREST

COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY MEMBER

ACTING AS REALTOR TO SELL PROPERTY TO BOAT MANUFACTURER

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

SUMMARY:

No prohibited conflict of interest would be created under Section 112.313(7)(a), Florida Statutes, were a county industrial development authority member to serve as a real estate agent to sell property to a boat manufacturer locating within the county, if that company is not regulated by or doing business with the authority. However, the authority member is cautioned against misusing her public position in violation of Section 112.313(6), Florida Statutes, by contacting companies which are doing business with the authority. Also, the use of information not available to members of the general public and gained by reason of her official position would violate Section 112.313(8), Florida Statutes.

QUESTION:

Would a prohibited conflict of interest be created were you, a member of a county industrial development authority, to receive a commission for acting as a realtor to sell property to a boat manufacturer locating within your county?

Your question is answered in the negative, under the circumstances presented.

In your letter of inquiry you advise that you serve as the Chairman of the Gilchrist County Industrial Development Authority. You also advise that you are a realtor. The Authority has five members, and two of the other members are also real estate brokers. Authority members are appointed by the Gilchrist County Board of County Commissioners.

County industrial development authorities are created pursuant to Section 159.45(1), Florida Statutes, for the purpose of financing and refinancing certain projects so as to foster the economic development of a county. Each industrial development authority is required to study the advantages, facilities, resources, products, attractions, and conditions within the county, and to publicize facts and material in order to encourage desirable economic development in the county. In carrying out this purpose, industrial development authorities are encouraged to cooperate and work with industrial development agencies, chambers of commerce, and other local, state, and federal agencies having responsibilities in the field of industrial development. Such authorities also are empowered to enter into certain contracts, to issue revenue bonds or other debt obligations, to acquire real and personal property for use as sites for the location of projects as defined in the Florida Industrial Development Financing Act, and to make expenditures for reasonable and necessary items and services in connection with the performance of promotional and other duties of the authority. See Section 159.47, Florida Statutes (1985).

You advise that the Authority's involvement with a client generally occurs when someone within the county such as the Clerk of the Circuit Court or an Authority member becomes aware of a business which wants to relocate in your area or a new business which needs the assistance of the Authority. Your county is quite small, and the Authority has not been instrumental in securing a new business or assisting in the expansion of a business, you advise.

Recently, a boat manufacturer came into your county and acquired a building and land on a six month lease. The Clerk of the Circuit Court spoke to an Authority member and suggested that the Authority meet with this individual to determine if the Authority could assist him in any way and to discern whether the Authority could induce him to settle in the county. When the Authority met with the boat manufacturer, he stated that two cities had expressed interest in the local establishment of his business. He also advised that he was looking for a permanent location and would be willing to look at any property which the Authority had in mind.

While the boat manufacturer was shown real estate by at least one other member of the Authority and looked at other properties in the area, he was not satisfied with any of these options. You had a piece of property listed on an open listing in your office which you thought might suit his needs. You showed him the property, and he now is interested in trying to negotiate a purchase. You question whether you can receive a commission on the sale of this property. The individual selling the property will be paying the commission.

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

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 (1985).]

This provision prohibits a public officer from having an employment or contractual relationship with a business entity which is subject to the regulation of, or doing business with, her agency. We previously have determined that the question of whether a conflict of interest exists does not turn on which party to the transaction is responsible for paying a brokerage commission. See CEO 86-42. Thus, you would be prohibited from selling any real estate to a business entity which was subject to the regulation of, or doing business with, your agency. As it does not appear that the Authority has any regulatory responsibilities, and you have not indicated that the boat manufacturer is doing business with your agency, this provision seemingly would not be violated by the proposed sale.

Although it does not appear from the information you have provided that you have done so, we are concerned about the possibility that an Authority member might benefit himself by using information not available to the general public but gained by reason of his position with the Authority. Section 112.313(8), Florida Statutes, clearly prohibits the use of "inside" information in that way:

DISCLOSURE OR USE OF CERTAIN INFORMATION. -- No public officer or employee of an agency shall disclose or use information not available to members of the general public and gained by reason of his official position for his personal gain or benefit or for the personal gain or benefit of any other person or business entity.

In addition, the use of one's position in such a manner would violate Section 112.313(6), Florida Statutes, which provides:

MISUSE OF PUBLIC POSITION. -- No public officer or employee of an agency shall corruptly use or attempt to use his official position or any property or resource which may be within his trust, or perform his official duties, to secure a special privilege, benefit or exemption for himself or others. This section shall not be construed to conflict with s. 104.31.

Therefore, we would suggest that you and the other members of the Authority take all possible steps in the future to avoid even the appearance that you are using "inside" information, that is, information not available in the community at large, or are using a position on the Authority to gain a competitive advantage or other private benefit.

Accordingly, under the circumstances presented, we find that no prohibited conflict of interest would be created were you, a member of a county industrial development authority, to receive a commission for acting as a realtor to sell property to a boat manufacturer locating within your County.