CEO 88-43 -- June 9, 1988

CONFLICT OF INTEREST; VOTING CONFLICT

WATER MANAGEMENT DISTRICT BOARD MEMBER

OFFICER AND OWNER OF CORPORATION SUBCONTRACTING

WITH GENERAL CONTRACTOR ON DISTRICT PROJECT

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

SUMMARY:

No prohibited conflict of interest would be created were the paving company of which a water management district board member is president and an owner to subcontract with a general contractor on a district project. Section 112.313(3), Florida Statutes, would not be violated, as the board member's company would be providing services to the general contractor rather than to the district. Because the board member's employment is with the paving company rather than with the general contractor, he would not have any employment or contractual relationship with a business entity doing business with his agency, in violation of Section 112.313(7), Florida Statutes. However, the board member would be prohibited from voting on the selection of a contractor for the project if his company agrees to subcontract with a general contractor which has submitted a proposal for the project.

QUESTION:

Would a prohibited conflict of interest be created were the paving company of which a water management district board member is president and an owner to subcontract with a general contractor on a district project?

Your question is answered in the negative.

In your letter of inquiry you advise that .... serves as a member of the Governing Board of the St. Johns River Water Management District. You also advise that he is the president of and owns approximately one percent of the stock in a corporation which is in the paving business. You have advised that the business was incorporated in 1960 and has done work throughout the State.

You also advise that the District has decided to expand its headquarters building and has solicited proposals for the design and construction of new facilities. Certain specifications were developed by an ad hoc building committee on which the subject Board member served.

Rather than use a competitive bidding procedure, the District sought proposals from general contractors for the design and construction of the facility. One of the general contractors who submitted a proposal has contacted the subject board member about employing his company as a subcontractor to do the necessary paving work, you advise. We assume that there is no relationship between the general contractor and the Board member's company that would raise any question of whether the company in fact would be the contracting party with the District. You question whether the Board member's company may subcontract with this general contractor to participate in the construction of the District headquarters facility.

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 (1987).]

This provision prohibits a public officer from acting in his official capacity to purchase, directly or indirectly, any goods or services for his agency from a business entity of which he is an officer. However, in several previous opinions we have construed the term "indirectly" not to include goods or services provided by a subcontractor or wholesaler. See CEO 76-213, CEO 77-155, CEO 78-43, CEO 78-83, and CEO 86-54. The second sentence of Section 112.313(3) prohibits a public officer from acting in a private capacity to sell any goods or services to the political subdivision which he serves. We also have interpreted this provision not to prohibit an official from subcontracting to provide goods or services to a contractor doing business with his agency. See CEO 76-213, CEO 77-155, and CEO 78-43.

The Code of Ethics further 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 (1987).]

This provision prohibits a public officer from having any employment or contractual relationship with a business entity which is doing business with his agency. Under the circumstances presented, however, the Board member's employment or contractual relationship is with the paving company and would not be with the general contractor, the business entity which would be doing business with the District. See CEO 78-43, CEO 79-1, CEO 81-47, CEO 81-58, CEO 81-88, CEO 82-54, CEO 84-8, CEO 85-18, and CEO 86-2, in which we reached a similar conclusion. Nevertheless, as we have observed in these opinions, Section 112.313(7)(a) would prohibit the Board member from personally contracting with the general contractor on a District project. Since the paving work would be provided by the corporation in this instance, no prohibited conflict of interest would be created, although the situation would result in the appearance of such a conflict of interest. Finally, under the circumstances presented it does not appear that the Board member's relationship with the paving company is of such a nature as to present him with a continuing or frequently recurring conflict of interest or to impede the full and faithful discharge of his public duties.

Accordingly, we find that no prohibited conflict of interest would be created were the paving company of which the subject Board member is president and an owner to subcontract with a general contractor on a District project. We also would direct your attention to Section 112.3143(3), Florida Statutes, regarding voting conflicts. In accordance with CEO 79-76 and CEO 87-50, we are of the opinion that the Board member would be prohibited from voting on measures which would have the effect of selecting the general contractor or of eliminating the general contractor or others from consideration. If the general contractor with which the Board member's company may contract is eliminated as a candidate in the selection process, the Board member would not be prohibited from voting in subsequent selection proceedings.