CEO 93-13 -- April 22, 1993
CONFLICT OF INTEREST; VOTING/PARTICIPATION CONFLICT
AIRPORT AUTHORITY MEMBER PRESIDENT AND
STOCKHOLDER OF COMPANY PROVIDING
SERVICES TO AIRPORT TENANT
To: William Zegel, Member of Gainesville-Alachua County Regional Airport Authority (Gainesville)
A prohibited conflict of interest exists under the second clause of Section 112.313(7)(a), Florida Statutes, where a member of an airport authority is president and a shareholder of a corporation providing environmental assessments to a fixed-base operator (FBO) leasing facilities from the authority. The member's employment or contractual relationship with the corporation would create a continuing or frequently recurring conflict or impediment to duty in that temptation would exist to place private interests ahead of the authority's or the public's interests regarding issues concerning litigation between the authority and the FBO and concerning the corporation's assessments or audits performed for the FBO.
In view of the conflict under Section 112.313(7)(a), the member's firm likely would not be a candidate for the FBO's environmental assessment business. Therefore, the member would not be prohibited from voting on whether to let the FBO choose its environmental auditor and would not be subject to participation disclosure and other requirements, under Sections 112.3143(3)(a) and 112.3143(4), Florida Statutes. CEO 91-32 and In re WALTER STOTESBURY, 14 F.A.L.R. 1017 (Fla. Comm. on Ethics 1991), are referenced.
Does a prohibited conflict of interest exist where you, a member of an airport authority, are also the president and a three percent shareholder of an environmental consulting company which is under contract to a tenant of the authority to provide environmental assessments of the tenant's authority leaseholds, where there is pending or future litigation or controversy between the authority and the tenant concerning the leaseholds and their environmental condition?
Your question is answered in the affirmative.
By your letter of inquiry and accompanying materials, we are advised that you serve as a member of the Gainesville-Alachua County Regional Airport Authority, a dependent special district created pursuant to Chapter 86-469, Laws of Florida. We are advised further that you also are president and a three percent stockholder of an environmental firm that has been retained recently to perform, and in fact has performed, some environmental consulting services for a corporation concerning its leasehold property leased from the Authority. The corporation is doing business with the Authority as the holder of two fixed-base operator (FBO) leases at the Gainesville Regional Airport, you advise. Additionally, you advise that you personally have not provided any services to the corporation, will not do so in the future, and that you are paid by salary set by the board of directors of your company.
Further, you advise that the issue of environmental inspections/audits of the leasehold facilities of the corporation currently is causing some controversy between the Authority and the corporation. Apparently, the Authority is concerned about its potential responsibility under Federal and State laws for any chemical or other environmental contamination resulting from the storage or presence of substances on Authority FBO leaseholds leased to the corporation and/or the portions of the leaseholds (hangars, etc.) subleased the corporation to others. Your correspondence and other materials indicate that proposals for dealing with the matter include the Authority directly hiring an environmental consulting firm to examine the property or the corporation having a firm of its choosing inspect the property and certify to the Authority the extent of contamination or lack of contamination of the property and any remedial measures instituted, with the Authority reimbursing the corporation for the cost of hiring the firm. You advise us further that the firm hired by the corporation likely would be your company.
You are concerned that the work done by your firm for the corporation may be at issue in the presently pending arbitration proceedings and/or in future litigation, that your firm's continuing relationship with the corporation and its present plans to conduct additional site visits may lead to additional work product that will lead to further involvement in pending or future litigation, and, therefore, that your contractual relationship with your company may constitute a continuing or frequently recurring conflict between your private interests and the performance of your public duties or an impediment to the full and faithful performance of your public duties under the second clause of Section 112.313(7)(a), Florida Statutes.
Section 112.313(7)(a), Florida Statutes, 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.
The first clause of this section would prohibit you from having employment or a contractual relationship with a business entity which is subject to the regulation of, or which is doing business with, your agency--the Authority. See In re WALTER STOTESBURY, 14 F.A.L.R. 1017 (Fla. Comm. on Ethics 1991), affirmed without opinion as Stotesbury v. State Commission on Ethics, 597 So. 2d 294 (Fla. 1st DCA 1992), a matter in which this first clause was found to have been violated by a member of the Gainesville-Alachua County Regional Airport Authority who had contracted with the FBO corporation. However, under the facts you present, since it is the business entity (environmental consulting corporation) with which you are affiliated which has the contractual relationship with the FBO, and not you personally, we find that you are not in violation of the first clause of this section. See, as examples of the many opinions in which we have made similar findings, CEO 91-42 and the opinions cited therein.
Nevertheless, your relationship with your company still must be considered in light of the prohibitions of the second clause of that section. The second clause would prohibit your serving on the Authority while simultaneously holding a contractual relationship with your corporation, if circumstances are such that you would be tempted to place your private interests ahead of the performance of your public duties.
We find your situation to be substantially similar to another aspect of the Stotesbury matter and to the scenario put forth in CEO 91-32. In Stotesbury, we also found the Authority member to be in violation of the second clause by virtue of his providing investment services to the owner of the corporation holding FBO leases at the Authority's airport. Even though the contractual relationship between the member and the FBO corporate owner only involved a one-time sale of interests in a bond fund to the owner and a resulting one-time commission to the member, we found that such a relationship between the member and "the owner of a business entity leasing facilities from the Respondent's agency placed the Respondent in a situation where his independent judgment and public duty on behalf of his agency, the Authority, could be compromised, that is, in a situation which tempted dishonor." We noted further in our decision that "[t]he Respondent could not fully and faithfully discharge his duty to the Authority regarding fixed-base leases at the same time he was generating income from private dealings between himself and the owner of a corporation which was a fixed-base leaseholder." In addition, we stated that "[r]elationships such as the ones between the Respondent and the [FBO] or the Respondent and [the corporate owner of the FBO] might not affect the discharge of duty to the Authority if, for example, the Respondent had been a janitor or secretary for the Authority," but that ". . . . such is not the case for a member of the Authority," since "[t]he very purpose of the Respondent's public position is to police, deal with, and make accountable, for the benefit of his public entity, fixed-base leaseholders and their owners . . . ."
In CEO 91-32, we found that a prohibited conflict of interest existed under the second clause of Section 112.313(7)(a) where a corporation owned by a county commissioner and his wife provided flight instructors to a fixed-base operator leasing facilities at a county-owned airport. Under the circumstances of that opinion, the county commission served as the airport governing board as there was no intervening airport authority. In that opinion, we found:
The Commissioner's receipt of private business and employment through his corporate entity from a fixed base operator whom he has a public duty to regulate objectively in the best interest of the County creates a situation which tempts dishonor. For example, the Commissioner might be tempted to overlook an apparent breach of a leasehold agreement between a fixed base operator and the County because the operator had hired or might hire the Commissioner's business to provide flight instruction. Additionally, the Commissioner's commitment to public duty would be further tested were a flight or flight-related accident to occur at the County airport and the quality of flight instruction provided to the fixed base operator became an issue in the resulting controversy.
In your situation, the temptation to place the private interests of yourself or your company ahead of your public duty to objectively deal with, on behalf of the public and the Authority, fixed-base operators holding leaseholds from the Authority is also present. We emphasize "temptation" because a violation of the second clause of Section 112.313(7)(a) does not require that you actually misuse your public position in favor of private interests, and this opinion does not make a finding of or intend to imply such a misuse. The temptation could concern issues you would be dealing with on behalf of the Authority, such as whether or how to pursue litigation against the FBO doing business with your company, whether to question the scope or quality of environmental assessments done for the FBO regarding Authority property leased to the FBO, and whether to investigate, publicize, or otherwise officially deal with claims or possibilities of contamination of FBO leaseholds assessed by your company. This temptation would not be remedied by your abstention from voting on matters concerning or related to the FBO because the duties of an Authority member are not limited to merely voting but include whether to initiate discussion on certain matters, whether to alert staff to certain issues, etc., and because frequent abstention or lack of participation because of a private relationship, in and of itself, can constitute a violation of the second clause of Section 112.313(7)(a).
Accordingly, we find that a prohibited conflict of interest exists under Section 112.313(7)(a), Florida Statutes, where you are president and a three percent shareholder of a corporation providing environmental consulting services to a fixed-base operator leasing sites from your agency (the Gainesville-Alachua County Regional Airport Authority).
Would you be prohibited from voting on, or be required to disclose your participation in, measures or matters coming before the Authority which would allow the fixed-base operator to hire the environmental firm which would conduct audits of its Authority leasehold, given the likelihood that your company would be the firm selected by the FBO?
The Code of Ethics provides in relevant part:
No county, municipal, or other local public officer shall vote in his official capacity upon any measure which would inure to his special private gain; which he knows would inure to the special private gain of any principal by whom he is retained or to the parent organization of subsidiary of a corporate principal by which he is retained, other than an agency as defined in s. 112.312(2); or which he knows would inure to the special private gain of a relative or business associate of the public officer. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of his interest in the matter from which he is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes. [Section 112.3143(3)(a), Florida Statutes.]
(4) No appointed public officer shall participate in any matter which would inure to his special private gain; which he knows would inure to the special private gain of any principal by whom he is retained or to the parent organization or subsidiary of a corporate principal by which he is retained; or which he knows would inure to the special private gain of a relative or business associate of the public officer, without first disclosing the nature of his interest in the matter.
(a) Such disclosure, indicating the nature of the conflict, shall be made in a written memorandum filed with the person responsible for recording the minutes of the meeting, prior to the meeting in which consideration of the matter will take place, and shall be incorporated into the minutes. Any such memorandum shall become a public record upon filing, shall immediately be provided to the other members of the agency, and shall be read publicly at the next meeting held subsequent to the filing of this written memorandum.
(b) In the event that disclosure has not been made prior to the meeting or that any conflict is unknown prior to the meeting, the disclosure shall be made orally at the meeting when it becomes known that a conflict exists. A written memorandum disclosing the nature of the conflict shall then be filed within 15 days after the oral disclosure with the person responsible for recording the minutes of the meeting and shall be incorporated into the minutes of the meeting at which the oral disclosure was made. Any such memorandum shall become a public record upon filing, shall immediately be provided to the other members of the agency, and shall be read publicly at the next meeting held subsequent to the filing of this written memorandum.
(c) For purposes of this subsection, the term 'participate' means any attempt to influence the decision by oral or written communication, whether made by the officer or at his direction. [Section 112.3143(4), Florida Statutes.]
Since, in view of our finding under Question 1, your firm cannot perform the FBO environmental site work without your running afoul of the Code of Ethics, it would appear that your firm would not be among those considered for selection (by the Authority or by the FBO) for the site work so long as you are a member of the Authority. Therefore, since your firm would not be in the running to benefit from such measures, Section 112.3143(3)(a) would not prohibit your voting on such measures and Section 112.3143(4) would not apply to your participation in such matters.
This question is answered accordingly.
The portion of your letter of inquiry stating ". . . .to what extent should I abstain from discussions dealing with enforcement of leasehold provisions regarding access to the site for the purpose of conducting environmental assessment, including but not limited to initiation, or a defense, of litigation involving this issue" is worded somewhat vaguely and is therefore difficult to answer. However, in view of our responses to Questions 1 and 2 of this opinion, Section 112.3143(4) would not require your abstention from such discussions. Nevertheless, you should be aware of Sections 112.313(6) and 112.313(8), Florida Statutes, and take care that you do not transgress their provisions regarding matters concerning leaseholds of the FBO which involved, or might in the future involve, your company. Those statutory sections provide:
MISUSE OF PUBLIC POSITION.--No public officer or employee of an agency shall corruptly use or attempt to use his official position or any property or resource which may be within his trust, or perform his official duties, to secure a special privilege, benefit, or exemption for himself or others. This section shall not be construed to conflict with s. 104.31. [Section 112.313(6), Florida Statutes.]
For purposes of this provision, the term "corruptly" is defined as follows:
'Corruptly' means done with a wrongful intent and for the purpose of obtaining, or compensating or receiving compensation for, any benefit resulting from some act or omission of a public servant which is inconsistent with the proper performance of his public duties. [Section 112.312(9), Florida Statutes (1991).]
DISCLOSURE OR USE OF CERTAIN INFORMATION.--No public officer or employee of an agency shall disclose or use information not available to members of the general public and gained by reason of his official position for his personal gain or benefit or for the personal gain or benefit of any other person or business entity. [Section 112.313(8), Florida Statutes.]