CEO 89-21 -- June 14, 1989

CONFLICT OF INTEREST

CITY COMMISSIONER RETAINING PUBLIC RELATIONS

FIRM DOING BUSINESS WITH CITY FOR ELECTION CAMPAIGN

To: Mr. Ben Z. Grenald, City Commissioner, City of Miami Beach

SUMMARY:

A prohibited conflict of interest exists under Section 112.313(7), Florida Statutes, where a city commissioner has retained in behalf of his campaign fund the services of a public relations firm which is under contract with the City to provide public relations services. Under these circumstances, the city commissioner has a contractual relationship with a business entity that is doing business with his agency.

QUESTION:

Does a prohibited conflict of interest exist where you, a city commissioner, have retained in behalf of your campaign fund the services of a public relations firm which is under a one-year contract with the city to provide public relations services?

Your question is answered in the affirmative.

In your letter of inquiry you advise that you serve as a member of the City Commission for the City of Miami Beach. You also advise that, based upon requests for proposals, the Commission recently awarded a one-year contract to a local public relations firm to provide public relations services to the City. You question whether a prohibited conflict of interest exists by virtue of your retaining the services of this firm through your campaign fund to assist in your reelection campaign. You state that your campaign committee used this firm for your successful campaign in 1987, but that you have had no contractual arrangement with either the firm or any of its members since the completion of that campaign.

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 (1987).]

This provision prohibits a public officer from having a contractual relationship with a business entity which is doing business with his agency.

Clearly the public relations firm is doing business with the City through its contract to provide services to the City. Therefore, the remaining question is whether you have a contractual relationship with the firm. You have provided a copy of the written agreement between the firm and your campaign fund, under which the campaign fund retains the firm to manage your campaign and to coordinate all public relations, advertising, and promotional efforts. As was the case with the prior contract with the firm, this agreement contemplates your signature as accepting the agreement for the campaign fund. We note also that because your request for this opinion was pending at the time this agreement was made, the agreement specifically provides that if we rule that a prohibited conflict of interest exists, the firm shall resign its account with the City.

A "contract" has been defined in the following terms:

An agreement between two or more persons which creates an obligation to do or not to do a particular thing. Its essentials are competent parties, subject matter, a legal consideration, mutuality of agreement, and mutuality of obligation. [Black's Law Dictionary, 5th Ed., pp. 291-292.]

Another definition provides:

The term 'contract' has been defined as a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Another definition is that a 'contract' is an agreement upon a sufficient consideration to do or refrain from doing a particular lawful thing. [11 Fla. Jur. 2d Contracts, Section 1.]

We have asked the Division of Elections, Department of State, for an opinion regarding whether a candidate can be held personally liable for a contract for services which is entered into in connection with the candidate's campaign. Counsel for the Division of Elections has replied that the Florida Election Code does not discuss personal liability for campaign debts. Section 106.11(3), Florida Statutes, prohibits deficit financing of a campaign, we have been advised, so that personal liability for a contract for services entered into in connection with the candidate's campaign is not contemplated. For violation of this requirement, Section 106.11(3) provides that a candidate or his agent who incurs a campaign obligation for which there are insufficient funds on deposit may be fined up to $1,000 per count by the Florida Elections Commission.

We are of the opinion that you have a contractual relationship with the public relations firm through its agreement to provide services for your campaign. It is an agreement between the firm and you, in behalf of your campaign fund, containing promises to provide services and to pay for those services. Regardless of whether the firm would have the right to a personal judgment against you in the event that it does not receive the described payment for its services, we believe that there is a contractual relationship between you and the firm. We are aware of no reason why you would not be able to seek enforcement of the agreement against the firm through the courts. In addition, in previous opinions we have found that persons who are third party beneficiaries to contracts have "contractual relationships" within the meaning of Section 112.313(7), Florida Statutes. See CEO 76-85 and CEO 79-18. Here, it appears that even if you were not considered to be a party to the contract, the contract has been entered into with the specific intent of benefiting you, thus making you a third party beneficiary to the contract.

There are a number of exemptions to the prohibition of Section 112.313(7) which are contained in Section 112.313(12), Florida Statutes. For example, these exempt certain conflicts of interest that may be based upon contracts entered into through a system of sealed competitive bidding or for amounts not exceeding $500. We have examined these exemptions and determined that none of them would be applicable to the contract between the public relations firm and the City.

Accordingly, we find that a prohibited conflict of interest exists where you have retained in behalf of your campaign fund the services of a public relations agency which is under contract with the City to provide public relations services.