CEO 89-22 -- June 14, 1989

CONFLICT OF INTEREST

AFFORDABLE HOUSING STUDY COMMISSION MEMBER

EMPLOYED BY CORPORATION DOING BUSINESS

WITH HOUSING FINANCE AGENCY

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

SUMMARY:

No prohibited conflict of interest exists where a member of the Affordable Housing Study Commission is employed as president of a corporation created pursuant to Section 420.101, Florida Statutes, which has contracted with the Florida Housing Finance Agency to provide underwriting and mortgage services in connection with a housing program which had been recommended by the Study Commission. As the corporation has not contracted with the Study Commission, but rather with the Housing Finance Agency, neither Section 112.313(3) nor Section 112.313(7), Florida Statutes, would prohibit the Commission member's employment with the corporation. Nor would a continuing or frequently recurring conflict of interest be created in violation of Section 112.313(7), given the legislatively mandated role of the quasi-public corporation in financing low and moderate income housing.

QUESTION:

Does a prohibited conflict of interest exist where you, a member of the Affordable Housing Study Commission, are employed as president of a corporation which has contracted with the Florida Housing Finance Agency to provide underwriting and mortgage services in connection with a housing program which has been recommended by the Study Commission?

Your question is answered in the negative.

In your letter of inquiry you advise that you have been appointed by the Governor to serve as a member of the Affordable Housing Study Commission. The Commission has been created by Section 420.609, Florida Statutes, in order to make recommendations to the Governor and the Legislature regarding programs for low and moderate income housing. In 1987 the Commission recommended a new program called the State Apartment Incentive Loan Program, which was funded in 1988 and is administered by the Florida Housing Finance Agency and the Department of Community Affairs. The Housing Finance Agency solicited proposals for underwriting and mortgage servicing and awarded contracts to two firms.

You advise that you serve as president of one of these firms, a quasi-public housing development corporation which was established in 1978 in accordance with Section 420.101, Florida Statutes. That law authorizes the creation of a housing development corporation for the purposes of mobilizing capital and financing housing for low and moderate income persons in the State. The stock of the corporation is held by 18 banks and savings and loans associations. In addition to corporate directors representing the stockholders, five non-voting directors include a Senator, a State Representative, and representatives of the Departments of Community Affairs, Banking and Finance, and Insurance.

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 of 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.

(c) Appointment to public office.

(d) Beginning public employment

[Section 112.313(3), Florida Statutes (1987).]

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).]

Section 112.313(3) prohibits you from acting in a private capacity to sell services to your agency, and Section 112.313(7)(a) prohibits you from being employed by a business entity which is doing business with your agency.

The term "agency" is defined as follows:

"Agency" means any state, regional, county, local, or municipal government entity of this state, whether executive, judicial, or legislative; any department, division, bureau, commission, authority, or political subdivision of this state therein; or any public school, community college, or state university. [Section 112.312(2), Florida Statutes (1987).]

Under this definition, your "agency" is the Affordable Housing Commission on which you serve. As the housing development corporation has not contracted with the Study Commission, but rather with the Housing Finance Agency (created by Section 420.504, Florida Statutes), it is apparent that the corporation is not doing business with or selling services to your agency.

Section 112.313(7)(a) also prohibits a public official from having any employment that will create a continuing or frequently recurring conflict of interest or impede the full and faithful discharge of his public duties. Under the circumstances presented, however, we find this prohibition not applicable to your situation. Given the role of the quasi-public housing development corporation in financing low and moderate income housing, it appears that your employment with the corporation presents more of a unity of interests with the purposes of the Housing Study Commission than a conflict of interest. Moreover, you have not indicated that the Study Commission had any responsibilities regarding the award of the contract by the Housing Finance Agency to the corporation.

Accordingly, we find that no prohibited conflict of interest exists between your service on the Affordable Housing Study Commission and your employment with a housing development corporation which has contracted with the Housing Finance Agency to provide services in connection with a housing program recommended by the Study Commission.