CEO 90-39 -- April 26, 1990

CONFLICT OF INTEREST

WATER MANAGEMENT DISTRICT BOARD APPLICANT EMPLOYED

WITH LABORATORY RECEIVING FUNDS FROM THE DISTRICT

To: Ernest D. Estevez, Applicant for appointment to the Southwest Florida Water Management District Governing Board (Sarasota)

SUMMARY:

A prohibited conflict of interest would be created were a member of the governing board of a water management district to be employed as a scientist with a nonprofit marine laboratory which receives funding to conduct projects for the district. Under Section 112.313(7)(a), Florida Statutes, the member would be employed with a business entity doing business with his agency.

QUESTION:

Would a prohibited conflict of interest be created were you, a scientist employed with a nonprofit marine laboratory, to be appointed to the governing board of the Southwest Florida Water Management District, where the laboratory receives funding to conduct research for the District?

Your question is answered in the affirmative.

In your letter of inquiry, you advise that you are considering applying for appointment to the Southwest Florida Water Management District Governing Board. You also are employed as a Senior Scientist at a nonprofit research and education laboratory. You advise that the laboratory conducts research projects funded by many sources, including the Water Management District. You note that of 250 projects worth about 12 million dollars conducted by the laboratory since 1980, four were funded by the District in an amount of $540,000. This constitutes about 1.6% of the projects and about 4.5% of the funding of the laboratory. You advise that you managed three of the four projects. You consider it likely that the laboratory will respond to future requests for proposals from the District. You inquire whether your appointment to the Governing Board of the Water Management District would create a prohibited conflict of interest.

The Code of Ethics for Public Officers and Employees contains two provisions which concern business relationships with one's agency. Section 112.313(3), Florida Statutes, provides:

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.

(d) Beginning public employment.

This provision would prohibit you from acting in a private capacity to sell services to your agency, and from acting in your public capacity to purchase services for your agency from a business with which you hold certain types of relationships. In CEO 81-2 and CEO 81-73, we advised that an individual is deemed to be selling where a business entity, of which he serves as officer, director, or owner of greater than a five percent interest, sells to his agency. You do not indicate that you have any status in the organization other than that of an employee. On this basis, we find this provision to be inapplicable.

In addition, Section 112.313(7)(a), Florida Statutes, 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.

This section would prohibit you from holding employment with a business entity which is doing business with your agency. In CEO 82-38, we advised that a nonprofit entity is a business entity for purposes of the Code of Ethics. On this basis, we find that your appointment to the Water Management District Board could lead to a violation of this provision were the laboratory to perform additional work for the District. Any current contracts existing at the time of your appointment would be permissible under the rationale of CEO 86-71 and CEO 83-7. These opinions advised that Section 112.316, Florida Statutes, creates the equivalent of a "grandfather clause" for Section 112.313(7)(a) for business relationships occurring prior to the date of appointment or employment.

Section 112.313(12), Florida Statutes, also provides several exemptions to this conflict of interest provision which could apply to the circumstances you describe. In particular, two exemptions appear potentially applicable. Section 112.313(12)(b), Florida Statutes, provides an exemption where the business is awarded under a system of sealed, competitive bidding to the lowest or best bidder, where the official has not participated in determination of the bid specifications or attempted to influence the agency, and where the official has made the required disclosures. In addition, Section 112.313(12)(e), Florida Statutes, provides an exemption where the business entity involved is the only source of supply in the political subdivision of the officer's agency. However, you note that the business is transacted under a request for proposal system, so it does not appear likely that your employer is the only qualified supplier. If you feel that one of these exemptions may apply, we suggest that you supply more specific information and seek additional guidance from this office.

Accordingly, we find that a prohibited conflict of interest would be created were you to be appointed to the Governing Board of the Southwest Florida Water Management District, where you are employed by a nonprofit marine laboratory which receives funding from the District to conduct research projects.