CEO 92-49 -- October 15, 1992

CONFLICT OF INTEREST

PORT DIRECTOR HOLDING POSITIONS IN ORGANIZATIONS

DOING BUSINESS WITH PORT AUTHORITY

To: Joseph L. Valenti, Port Director, Tampa Port Authority

SUMMARY:

No prohibited conflict of interest is created where a port authority director serves as a director on the boards of four private, nonprofit corporations which are doing business with the port authority. Noncompensated service as a director for a private, nonprofit corporation is not an employment or contractual relationship for purposes of Section 112.313(7)(a), Florida Statutes. CEO 92-45 and CEO 92-31. Additionally, since the port authority is not purchasing or renting any goods, services, or realty from any of the business entities, Section 112.313(3), Florida Statutes, is inapplicable. CEO 86-14 and CEO 77-167.

QUESTION 1:

Would prohibited conflicts of interest be created were a port authority director to be a director in several nonprofit corporations doing business with the port authority?

Your question is answered in the negative for each of the four situations discussed herein.

We are advised through your letter of inquiry and its attachments that you serve as Port Director for the Tampa Port Authority. You indicate that you are involved in different capacities with four organizations, each which could be considered to be doing business with the Port Authority. You question whether your positions in these different organizations could constitute a conflict of interest prohibited by the Code of Ethics for Public Officers and Employees.

In the first situation, you relate that you serve as a director of Tampa Bay International Terminals, Inc. (TBIT), a nonprofit corporation which operates terminals for the Tampa Port Authority. TBIT has facilities on approximately 20 to 30 acres ofthe nearly 2,000 acres controlled by the Port Authority in Hillsborough County. You advise that you are not compensated for your service as a director, and that the Port Authority has directed you to serve as a member of the TBIT board of directors to safeguard the Port Authority's investment interest in TBIT. In addition to loaning TBIT $1.5 million, you advise, the Port Authority has guaranteed an outstanding $9.5 million loan for TBIT which the Port Authority would be obligated to repay should TBIT be unable to do so.

In the second situation, you relate that you serve as a member of the board of directors for the Florida Aquarium, Inc., a nonprofit corporation which plans to construct an aquarium facility on property leased from the Port Authority. The Port Authority has guaranteed a portion of the bonds sold by the City of Tampa to finance the project, and your service on the board, which is uncompensated, is intended to safeguard the Port Authority's position as a guarantor of the aquarium bond issue.

The third situation you have described involves the Tampa Marine Institute, Inc., a nonprofit corporation which operates programs for troubled youths. You indicate that the Marine Institute leases facilities from the Port Authority from which it operates its programs and is considered a s. 501(c)(3) tax exempt organization by the I.R.S. Your service as a director for the Institute is uncompensated, you relate.

The fourth situation involves a nonprofit corporation known as the Propeller Club of the United States Port of Tampa, Inc. This club promotes the interests of the Port Authority, from which it leases office space, and you receive no compensation from the club for serving as a member of the board of directors.

In each of these situations, you seek to ascertain whether your involvement constitutes a prohibited conflict of interest. The relevant provision of the Code of Ethics is Section 112.313(7)(a), Florida Statutes, which 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.

The first part of this provision prohibits a public officer or employee from having an employment or contractual relationship with a business entity which is doing business with, or is regulated by, his public agency, while the second portion prohibits a public officer or employee from having an employment or contractual relationship which creates a continuing or frequently recurring conflict between his private interests and the performance of his public duties, or which impedes the full and faithful discharge of his public duties.

Inasmuch as each of the four organizations would be considered "business entities" which appear to be transacting business with the Port Authority, the issue to be resolved is whether your service on their boards would be considered an employment or contractual relationship. However, this Commission has consistently taken the view that uncompensated service as an officer or director of a private, nonprofit corporation is not an employment or contractual relationship for purposes of Section 112.313(7)(a), Florida Statutes. See CEO 92-45 and CEO 92-31. Based upon that rationale, which we once again affirm, there does not appear to be a prohibited conflict of interest under Section 112.313(7)(a), Florida Statutes, where you serve as an uncompensated member of the boards of directors for the four entities discussed above.

Finally, although Section 112.313(3), Florida Statutes, prohibits an employee of an agency from acting in his official capacity to purchase, rent, or lease any realty, goods, or services for his own agency from any business entity of which he, his spouse or child is an officer, partner, director, or proprietor or owns a material interest, this provision does not prohibit an employee of an agency from serving on the board of directors of a nonprofit corporation which leases property from his agency. See CEO 77-167 and CEO 86-14.

Your inquiry is answered accordingly.