CEO 76-77 -- April 16, 1976

CONFLICT OF INTEREST

DIRECTOR OF FOUNDATION A TRUSTEE OF BOARD DOING BUSINESS WITH FOUNDATION

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

Prepared by: Bonnie Johnson

SUMMARY:

No violation of the Code of Ethics for Public Officers and Employees exists where a historic board under the Division of Cultural Affairs, Department of State, purchases properties of historical significance from its sister organization, a private foundation dedicated to restoration of historic sites, even though two trustees of the board serve as directors of the foundation. A public officer is prohibited by Florida Statute s. 112.313(3)(1975) from acting in his official capacity to purchase realty from any business entity of which he is a director. In our opinion, however, the prohibition against doing business with one's agency is intended to preclude personal or private gain other than remuneration provided by law and acquired by virtue of one's public position. See Florida Statute s. 112.311(1)(1975). Inasmuch as the board and the foundation have similar aims and therefore cooperate with each other and coordinate their individual efforts, and because neither trustee director stands to personally gain from the sale of the subject properties, we do not perceive the transaction to constitute "doing business" for purposes of the standards of conduct provisions of the law.

QUESTION:

Would a prohibited conflict of interest be created were a historic board under the Division of Cultural Affairs, Department of State, to purchase properties of historical significance from its sister organization, a private foundation dedicated to restoration of historic sites, where two trustees of the board serve as directors of the foundation?

This question is answered in the negative.

You inform us in your letter of inquiry that the Historic ____ Preservation Board is in the process of releasing appropriated fixed capital funds in order to purchase historic properties from its private sister organization, ____ Restoration Foundation, Inc. The board currently rents most of the subject properties from the foundation, and it is our understanding that the foundation contemplates utilizing the purchase money to acquire other properties in the restoration area. Two trustees of the board also serve as directors of the foundation; neither holds any personal interest in the subject properties, however.

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 or his spouse or child, or any combination of them, has a material interest . . . . [Fla. Stat. s. 112.313(3)(1975).]

The subject trustees/directors clearly are "public officers" within the definition contained in Fla. Stat. s. 112.313(1). The above-quoted provision therefore prohibits them from acting in their official capacities as trustees to purchase any realty for the board from a business entity of which they are directors. We are of the view that membership on the board of trustees constitutes acting in one's official capacity where such board takes action.

The situation with which you present us is prohibited by s. 112.313(3) only if we view the described transaction between the board and the foundation to constitute "doing business" for purposes of the Code of Ethics. In our opinion, the prohibition against doing business with one's agency is intended to preclude personal or private gain other than remuneration provided by law and acquired by virtue of one's public position. See Fla. Stat. s. 112.311(1)(1975). Inasmuch as the board and the foundation have similar aims, i.e., the preservation and restoration of the historic area, and therefore cooperate with and coordinate their individual efforts, and because neither trustee/director stands to personally gain from the sale of the subject properties, we do not perceive the transaction to constitute "doing business" for purposes of the standards of conduct provisions of the code. Accordingly, we find no conflict of interest inherent in the proposed sale.