CEO 78-83 -- November 15, 1978

CONFLICT OF INTEREST

CHILDREN OF AVIATION AUTHORITY MEMBER OWNING CONSTRUCTION COMPANY WHICH SUBCONTRACTS ON AUTHORITY PROJECT

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

Prepared by: Phil Claypool

SUMMARY:

A public officer is prohibited by s. 112.313(3), F. S. 1977, from acting in his official capacity to purchase, either directly or indirectly, goods or services for his own agency from a business entity in which his children own a material interest. However, it was found previously by this commission, in CEO 76-213, that a general contractor's subcontracting with a business entity owned by the spouse of a public officer did not constitute the agency's "indirectly purchasing" from that business. Based on this precedent, no prohibited conflict of interest is deemed to be created where a company which is owned in part by the children of an aviation authority board member subcontracts with the general contractor of an aviation authority project.

QUESTION:

Would a prohibited conflict of interest be created were a construction company which is owned in part by the children of an aviation authority board member to subcontract with the general contractor on an aviation authority project?

Your question is answered in the negative.

In your letter of inquiry and in a telephone conversation with a member of our staff, you advise that the children of an aviation authority board member own a minority interest in a construction company but that the subject board member has no interest in the company. The children, aged 21, 19, and 17, collectively own in excess of 5 percent of the company. However, they are strictly investors, with no management input into the company. Your question arises out of the potentiality that the construction company will become a subcontractor to a general contracting firm currently working on an aviation authority project. It is our understanding from the information you have provided that the authority deals directly with the general contractor but has no contractual relationship with the subcontractors, who are selected by the contractor.

DOING BUSINESS WITH ONE'S AGENCY -- No employee of an agency acting in his official capacity as a purchasing agent, or public officer acting is 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. . . . [Section 112.313(3), F. S. 1977.]

This provision prohibits a public officer acting in his official capacity from directly or indirectly purchasing any goods or services for his own agency from a business entity in which his children own a material interest. Section 112.312(11) defines "material interest" as ownership of more than 5 percent of a business entity.

In an analogous situation, we have found that a company owned by the spouse of a city councilman could subcontract with a general contractor working on a city project without directly or indirectly doing business with the city. See CEO 76-213. Based on this precedent, we find no violation of s. 112.313(3) in the instant situation.

Accordingly, we find that no prohibited conflict of interest would be created were a company which is owned in part by the children of an aviation authority board member to subcontract with the general contractor on an aviation authority project.