CEO 96-32 -- December 3, 1996

 

CONFLICT OF INTEREST; VOTING CONFLICT

 

DISTRICT SCHOOL BOARD MEMBER EMPLOYED BY

CORPORATION DOING BUSINESS WITH DISTRICT

 

To:      Mr. Richard S. Fitzpatrick, Attorney for Citrus County School District (Inverness)

 

SUMMARY:

 

A prohibited conflict of interest would not exist under Sections 112.313(3) and 112.313(7)(a), Florida Statutes, were a corporation (which employs a school board member) and a photocopy equipment company to do business with the school district, provided the business is Agrandfathered,@ comes within an exemption contained in Section 112.313(12), Florida Statutes, or is entered into pursuant to a State bid/contract list without the member=s acting in a private capacity to sell or lease to the district.  However, the member must abstain from voting and comply with the other requirements of Section 112.3143(3)(a), Florida Statutes, regarding board measures which would inure to the special private gain or loss of her corporate employer or her relative.  CEO=s 95-13, 94-3, 84-84, and 76-124 are referenced.

 

QUESTION:

 

Does a prohibited conflict of interest exist where a district school board member is employed by a corporation  that is selling office supplies and marketing photocopy machines to the district?

 

Your question is answered as set forth below.

 

By your letter of inquiry, we are advised that Sandra Sam Himmel (hereinafter Athe member@) was elected as a member of the Citrus County District School Board on November 5, 1996, with her term of office beginning November 19, 1996.  In addition, we are advised that the member is an employee of a corporation owned entirely by her father that does business as an office supply and equipment store.  You further advise that she has worked thirteen years as a salesperson and, later, as manager of the corporation=s office supply store.  In addition to her functions as store manager, you advise, the member participates in the marketing of photocopy machines through a contract between a major photocopy company and the corporation.  Further, you advise that the member does not own, and has never owned, any interest in the corporation or had any right to vote the stock of the corporation.

You advise that the District in the past has purchased office supplies from the corporation and that it may desire to continue the practice of purchasing supplies from the corporation in the future.  Further, you advise that the District has entered into contractual lease agreements with the photocopy company for the lease of copy machines throughout the District, based on the State bid list[1].  In addition, you advise that as a result of the lease agreements with the photocopy company, the corporation receives a commission for photocopy equipment placed within the geographical area assigned to the corporation by the photocopy company.  You advise that no payments are made directly to the member by the District or by the photocopy company as a result of photocopy lease agreements, the member functioning only as an employee of the corporation.

In addition, via a telephone conversation with our staff, you advise that the member, after her assumption of office, will have no personal contact in her private capacity with the District regarding its business with the photocopy company and that the contracts for the photocopy equipment are between the District and the photocopy company rather than between the District and the corporation owned by the member=s father.

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 or her official capacity as a purchasing agent, or public officer acting in his or her official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his or her own agency from any business entity of which the officer or employee or the officer's or employee's spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or the officer's or employee's 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 the officer's or employee's own agency, if he or she is a state officer or employee, or to any political subdivision of any agency thereof, if he or she 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 or when such offices are on property wholly or partially owned by the legislator.  This subsection shall not affect or be construed to prohibit contracts entered into prior to:

(a)  October 1, 1975.

(b)  Qualification for elective office.

(c)  Appointment to public office.

(d)  Beginning public employment.

[Section 112.313(3), Florida Statutes.]

 

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 or she 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 or her private interests and the performance of his or her public duties, or that would impede the full and faithful discharge of his or her public duties. [Section 112.313(7)(a), Florida Statutes.]

 

Subject to applicable Agrandfathering@ and certain exemptions which will be discussed below, we find that a prohibited conflict would exist under the second part[2] of Section 112.313(3) were the District to purchase goods or services from the corporation which employs the member, after the member assumes her public office, if the member acts in a private capacity to provide office supplies or copying equipment to the District.  In order to avoid Aacting in a private capacity,@ the member must, in regard to District sales and leases, have no client/buyer contact and must not engage in business solicitation.  See CEO 94-3.  Also, assuming that the member does not act in a private capacity to provide copying equipment to the District, CEO 76-124 and CEO 84-84 buttress our finding of no conflict based upon the photocopy company=s renewal of business with the District after the member=s assumption of public office.  In CEO 76-124, we found that no prohibited conflict existed where a city councilman employed by an electrical equipment manufacturers= sales agent received a bonus based, in part, upon the commission received by his employer for sales made in a particular geographical area by the manufacturers.[3]  In CEO 84-84, we recognized that Section 112.313(7)(a) would not be violated were a business which employed a member of the Florida High Speed Rail Transportation Commission to sell or lease equipment to that Commission pursuant to a State contract awarded by the former Department of General Services= (now Department of Management Services) Division of Purchasing.[4]

Also, subject to grandfathering and certain exemptions, we find that a prohibited conflict would be created under Section 112.313(7)(a) were the District to purchase goods or services from the corporation, by virtue of the member=s holding employment with a business entity that is doing business with her public agency (the District).  However, we do not find that a prohibited conflict would be created under Section 112.313(7)(a) regarding the photocopy equipment, because the member, while holding employment with the corporation owned by her father, does not hold employment or a contractual relationship with the photocopy company that is doing business with the District.

As to grandfathering, we find that any contracts between the member=s father=s corporation or the photocopy company and the District, entered into prior to the member=s assumption of public office, will not be violative of either Section 112.313(3) or Section 112.313(7)(a), due to the language of Section 112.313(3)(b) and Section 112.316, Florida Statutes.[5]  See, for example, CEO 95-13.  However, renewals of the contracts taking place after the member takes office are not grandfathered, and thus will violate Section 112.313(3) and/or Section 112.313(7)(a), if the elements of these prohibitions (discussed above) are met and if the renewals do not come within one of the exemptions contained within Section 112.313(12), Florida Statutes.[6]

Additionally, as you recognize in your letter of inquiry, the member would be subject to the requirements of Section 112.3143(3)(a), Florida Statutes, regarding District Board measures which would inure to the special private gain or loss of her principal (her father=s corporation that employs her) or her relative (her father)[7], such as measures to purchase from the corporation or measures which generate commissions to the corporation via the photocopy company=s geographical sales.  These requirements include abstention from voting, public statement of interest, and proper filing of CE Form 8B.  Section 112.3143(3)(a) provides:

 

No county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure to his or her special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(3); or which he or she knows would inure to the special private gain or loss 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 the officer's interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her 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.

 

Further, the member should be aware of Sections 112.313(6) and 112.313(8), Florida Statutes, and take care that she does not violate them by misusing her public position or using Ainside information@ to further her private interests or those of her father, his corporation, the photocopy company, or others.  These two statutes provide respectively:

 

MISUSE OF PUBLIC POSITION.--No public officer, employee of an agency, or local government attorney shall corruptly use or attempt to use his or her official position or any property or resource which may be within his or her trust, or perform his or her official duties, to secure a special privilege, benefit, or exemption for himself, herself, 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 or her public duties.  [Section 112.312(9), Florida Statutes.]

 

DISCLOSURE OR USE OF CERTAIN INFORMATION.--No public officer, employee of an agency, or local government attorney shall disclose or use information not available to members of the general public and gained by reason of his or her official position for his or her personal gain or benefit or for the personal gain or benefit of any other person or business entity. [Section 112.313(8), Florida Statutes.]

 

Accordingly, we find that a prohibited conflict of interest would not exist were the corporation, which employs the subject School Board member, and the photocopy company to do business with the School District, subject to the limitations set forth above.

 

ORDERED by the State of Florida Commission on Ethics meeting in public session on December 3, 1996 and RENDERED this 5th day of December, 1996.

 

 

_________________________________

Mary Alice Phelan

Chair

 


[1] By way of a telephone conversation with our staff, you advised us that the State bid list specifies providers and products which can be purchased by governmental entities without the need for individualized competitive bidding, due to the State=s prior approval and acceptance of certain products at certain prices.

[2] Notwithstanding that a member of a public board acts in her official capacity to obtain items for her public agency by virtue of the collegial actions of her public body, the first part of Section 112.313(3) would not be violated in the situation described in your letter because the member is not an officer, partner, director, proprietor, or material interest holder of the corporation or of the photocopy company.  Further, while you represent that the member=s father is the sole owner of the corporation, the first part of Section 112.313(3) only addresses the business ownership/control status of the public officer and that of her spouse and child, not that of her father.

[3] We note that the member that is the subject of this opinion is not even receiving such a bonus from the photocopy company.

[4] Section 287.042(2)(a), Florida Statutes (Supp. 1996), provides, in pertinent part, that a function of the Division is A[t]o plan and coordinate purchases in volume and to negotiate and execute purchasing agreements and contracts for commodities and contractual services under which a . . . county, municipality, . . . or other local public agency may make purchases.@

[5] While Section 112.313(3)contains an express grandfather clause, grandfathering under Section 112.313(7)(a) derives from the Commission=s recognition of the meaning of Section 112.316, Florida Statutes, which provides: AIt is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his duties to the state or the county, city, or other political subdivision of the state involved.@

[6] The exemptions that could possibly be applicable appear to be the competitive bidding exemption and the rotation exemption.  Note that the competitive bidding exemption requires, inter alia, the member=s filing of CE Form 3A prior to or at the time of the submission of the bid.

[7] Unlike Section 112.313(3), Section 112.3143, Florida Statutes, includes one=s Afather@ within its prohibitions.