CEO 75-201 -- November 5, 1975

CONFLICT OF INTEREST

CITY COMMISSIONER DIRECTOR OF CORPORATION DOING BUSINESS WITH CITY

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

Prepared by: Gene Rhodes

SUMMARY:

A conflicting situation is created where a city commissioner is a member of the board of directors of a corporation which does business with the city. Section 112.313(3), F. S., as amended by Ch. 75-208, Laws of Florida, prohibits a public officer from acting in his official capacity to do business with any business entity of which he, his spouse, or his child is an officer, partner, director, or proprietor or in which any of them own a material interest. The commissioner is deemed to be acting in his official capacity where the commission of which he is a member transacts such business.

QUESTION:

Would a prohibited conflict of interest exist where a city commissioner is a member of the board of directors of a corporation which does business with the city?

This question is answered in the affirmative.

You have advised us that Mr. ____ is a ____ City Commissioner. He owns 6 percent of the outstanding stock in ____ and is one of six directors on that company's board of directors. This corporation is in the business of paving streets but is not presently doing any work for the City of ____. However, it may, at some future date, decide to bid on city projects.

The recently revised Code of Ethics for Public Officers and Employees states 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 for his own agency purchase, rent, or lease any realty, goods, or services from any business entity of which he, his spouse, or child is an officer, partner, director, or proprietor, or in which such officer or employee, his 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 his own agency if he is a state officer or employee, or, if he is serving as an officer or employee of any political subdivision, to that subdivision or to any agency thereof . . . . [Section 112.313(3), as amended by Ch. 75-208, Laws of Florida.]

On January 1, 1976, another recent revision of the Code of Ethics will take effect which defines the term "material interest" to mean "direct or indirect ownership of in excess of 5% of the total assets or capital stock of any business entity." Section 112.312(8), F. S., as amended by Ch. 75-196, Laws of Florida.

By virtue of the city commissioner's directorship on the company's board, and by virtue of his ownership of a material interest in the company (after January 1, 1976), he is prohibited from acting in his official capacity to directly or indirectly for his own agency purchase goods or services from the company. We are of the view that membership on the city commission constitutes acting in one's official, as opposed to private, capacity. Accordingly, we feel that under any circumstances Mr. ____ as a city commissioner, is prohibited from concurrently holding that office and being a director of, or owning a material interest in, a street-paving business which enters into contracts with the city commission for the sale of materials and services to the city.