CONFLICT OF INTEREST

COUNTY COMMISSION MEMBER
EMPLOYED BY COMPANY
WHOSE PARENT ORGANIZATION HAS SUBSIDIARY WHICH
SEEKS TO DO BUSINESS WITH COUNTY

To: Name withheld at person's request, Assistant Osceola County Attorney (Kissimmee)

SUMMARY:

A prohibited conflict of interest would be created under the second part of Section 112.313(7)(a), Florida Statutes, were a county commission member employed by a subsidiary of a waste management company to act for a different subsidiary doing business with his county. However, the conflict of interest would be negated if the member ceases to have duties for the subsidiary doing business with the county. CEOs 85-31, 86-12, 89-48, 91-19, 93-26, 01-9, 01-15, and 12-9 are referenced.¹

QUESTION:

Would a prohibited conflict of interest be created were a subsidiary of a company, another subsidiary of which employs a county commissioner, to contract with the county, where the commissioner acts for the subsidiary contracting with the county?

Under the circumstances presented, your question is answered in the affirmative.

In your amended request for an advisory opinion and in additional information provided to our staff, you indicate that as Assistant County Attorney you are requesting this opinion on behalf of the Chairman (member) of a Board of County Commissioners (County Commission). You state that the member currently acts as a marketing sales representative with WCA of Florida, LLC, a corporate subsidiary of WCA Waste Corporation, a national corporation providing waste collection, recycling, and disposal services to commercial, industrial, and residential customers. You explain that the member is not an officer of, nor does he possess any ownership interest in, either WCA Waste Corporation or any subsidiary thereof. You indicate that all WCA Waste Corporation personnel are employees of but one subsidiary, WCA Management Company, L.P. You state that in his private position the Commission member is assigned to handle affairs for a number of counties in Central Florida, but he currently possess no responsibilities in the County where he serves as a Commissioner. Rather, you indicate that the Commissioner currently is tasked with assisting the corporate subsidiary, WCA of Florida, LLC, in matters outside the County, although you state that he may be delegated responsibilities with other WCA subsidiaries at any time.

You state that the County Commission is preparing to issue a Request for Qualifications (RFQ) concerning a 10-year contract for the provision of waste-related services to residential customers located within the County. You relate that WCA of Florida, LLC, has indicated that it may respond to the RFQ. Once all the responses are received, you indicate that a committee will be formed to review the responses and assign points and rankings to each responder and ultimately make a recommendation to the County Commission. You explain that the County Commission is not required to select a particular responder recommended by the committee, such as the one with the highest points or the lowest price. Rather, the County Commission will select a service provider of its choosing and form a contract with it. You relate that the member has indicated that he intends to abstain from voting on any WCA-related matter to come before the County Commission. Thus, you inquire whether the member's employment with WCA Management Company, L.P., and his ongoing or future work responsibilities with WCA of Florida, LLC, would give rise to a conflict of interest under the Code of Ethics for Public Officers and Employees (Code of Ethics) were WCA of Florida, LLC, to seek, and potentially engage in, a contractual relationship with the County.

Section 112.313(7)(a), Florida Statutes, relevant to your inquiry, provides:

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, has two parts. The first part would prohibit the member from having employment or a contractual relationship with another public agency or with a business entity if the agency or entity is subject to the regulation of, or is doing business with, his public agency (i.e., the County Commission). In previous decisions, we have found that different corporate subsidiaries are separate business entities for purposes of the statute. See, among many, CEO 85-31, 86-12, and 09-2. In the instant matter, the Commission member is employed by WCA Management Company, L.P., a subsidiary of WCA Waste Corporation. Although the Commission member currently is tasked with assisting WCA of Florida, LLC, this corporation does not employ him. Thus, were WCA of Florida, LLC, to engage in a contract for waste-removal services with the County, no conflict of interest would be implicated under the first part of Section 112.313(7)(a) because the corporation employing the member is not the business entity which would be doing business with the County.

However, the second part of Section 112.313(7)(a), Florida Statutes, prohibits the Commissioner from holding employment or a contractual relationship that would create a continuing or frequently recurring conflict between the Commissioner's private interests and the performance of his public duties or would impede the full and faithful discharge of his public duties, regardless of the particular identity of the company, or natural person, employing the member. This portion of the statute requires an examination of the "nature and extent of the public officer's duties together with a review of his private employment to determine whether the two are compatible, separate and distinct or whether they coincide to create a situation which 'tempts dishonor.'" Zerweck v. State, Commission on Ethics, 409 So. 2d 57, 61 (Fla. 4th DCA 1982). The Commissioner's position as a marketing sales representative, albeit for a different subsidiary, currently requires that he represent and assist the corporate subsidiary WCA of Florida, LLC. Were WCA of Florida, LLC, to bid on the multi-year contract for waste-related services in Osceola County, the ultimate selection of the service provider would fall upon the member's agency, the County Commission. Were WCA of Florida, LLC, to be selected for the exclusive 10-year contract, the County Commission will have oversight or ultimate authority with respect to the company's performance pursuant the contract; essentially, the member (County Commission) would have, in a public capacity, at least some review or oversight of his activities or performance in his private capacity. Therefore, we find that a prohibited conflict would exist under the second part of the statute.  It is imperative for the County Commission to be able to objectively evaluate the services the County receives from its vendors and that objectivity would be compromised if the member is, in his private capacity, actually working for a company selected to provide those services pursuant to contract. Further, in such a scenario the ongoing private employment responsibilities of the member would likely require him to act as a sales representative of WCA of Florida, LLC, (a vendor of the County) in Osceola County. Such a situation is inherently compromising of the objectivity of the officer in performing his public duties. Our finding in this regard is in accord with our finding in CEO 01-9 (city mayor contracting to promote charter schools with subsidiary of company doing business with city). See also CEO 91-19(city commissioner employed by affiliate of corporation contracting with city for third party administration of health insurance plan).

However, in your letter you further inquire whether a potential conflict of interest may be negated by the member electing to change his job responsibilities such that he is tasked with assisting a WCA subsidiary other than the entity bidding on the contract (such that his tasks do not include work in his County). You relate that although the member currently assists WCA of Florida, LLC, the delegation of responsibilities is not predicated upon a formal delegation and may be subject to re-assignment to another corporate subsidiary of WCA Waste Corporation. Were the member to continue his employment with WCA Management Company, L.P., and have his job responsibilities reassigned from WCA of Florida, LLC, to another subsidiary of WCA Waste Corporation which is not doing business with the County, then no prohibited conflict of interest would be created under either part of Section 112.313(7)(a). Under such a scenario, the corporate subsidiary employing the member would not be the business entity doing business with the County and no continuing or frequently recurring conflict or impediment would be present under the second part of the statute, as the member would not have any private employment responsibilities with the corporate subsidiary contracting with the County.

You also inquire about the potential applicability of any exemption set forth in Section 112.313(12), Florida Statutes, to negate the conflict of interest. Section 112.313(12), Florida Statutes, provides exemptions from the conflicts under Section 112.313(7)(a) for situations in which the business between the private entity and the public agency is awarded under a system of sealed, competitive bidding, to the lowest bidder or in which the business entity involved is the only source of supply within the political subdivision of the public officer.  However, neither of these exemptions would appear to be applicable to the facts in this scenario.

In the instant matter, WCA of Florida, LLC, clearly is not the only company qualified to provide waste-removal services to the County. Therefore, the "sole source" exemption set forth in Section 112.313(12)(e),² Florida Statutes, is inapplicable. Moreover, the County Commission is selecting the waste management services provider pursuant to an RFQ process. We have not found RFQs, or similar procurement mechanisms sometimes loosely referred to as "bidding," meet the requirements of the sealed competitive bid exemption of Section 112.313(12)(b).³ See CEO 89-48 and 01-15. Further, the facts set forth in this matter indicate that following the RFQ the County Commission is not required to select a particular bidder recommended by the selection committee nor is it required to select the lowest or best bidder. As the exemption of Section 112.313(12)(b), Florida Statutes, requires sealed, competitive bidding to the lowest or best bidder, it also is inapplicable to obviate the conflict of interest involved herein.

You further inquire whether Section 112.316, Florida Statutes, may apply to negate the application of Section 112.313(7)(a). We find that it would not. Section 112.316, Florida Statutes, provides:

CONSTRUCTION.—It 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 or her duties to the state or the county, city, or other political subdivision of the state involved.

We previously have applied Section 112.316 to negate conflicts under Section 112.313(7)(a) in situations where a public officer or employee was completely removed from any public responsibility regarding the intersection of the interests of his private employer and the interests of his government entity. See CEO 93-26 and the opinions cited therein. We do not find such a complete removal in the instant situation. Here, were WCA of Florida, LLC, to be selected by the County Commission as the County's waste removal service provider, it could not be said that the Commission member lacks responsibility on behalf of the County and its citizens toward the company. The member serves as Chairman of the County Commission and his objectivity as to a major vendor of services to the County is critical to the County and the public. As such, the application of Section 112.316, Florida Statutes, to negate the conflict of interest would not be appropriate in the instant matter. This determination comports with our finding in CEO 12-9 wherein we found application of Section 112.316 was not appropriate to negate the conflict of a mayor employed by a waste management company contracting with his city, because the company was a major vendor of services to the city, and the mayor's very high office made his actions and views particularly influential and compelling.

Accordingly, we find that a prohibited conflict would be created for the member were any company or corporation to do business with the County, if the member continues to have duties for the company or corporation.

ORDERED by the State of Florida Commission on Ethics meeting in public session on July 27, 2018, and RENDERED this 1st day of August, 2018.

____________________________________

Guy W. Norris, Chair

^[1]Prior opinions of the Commission on Ethics can be viewed at www.ethics.state.fl.us.

^[2]Section 112.313(12)(e), Florida Statutes, provides:

The business entity involved is the only source of supply within the political subdivision of the officer or employee and there is full disclosure by the officer or employee of his or her interest in the business entity to the governing body of the political subdivision prior to the purchase, rental, sale, leasing, or other business being transacted.

^[3]The sealed-competitive bidding exemption contained in Section 112.313(12)(b), Florida Statutes, provides:

The business is awarded under a system of sealed, competitive bidding to the lowest or best bidder and:

1. The official or the official's spouse or child has in no way participated in the determination of the bid specifications or the determination of the lowest or best bidder;

2. The official or the official's spouse or child has in no way used or attempted to use the official's influence to persuade the agency or any personnel thereof to enter such a contract other than by the mere submission of the bid; and

3. The official, prior to or at the time of the submission of the bid, has filed a statement with the Commission on Ethics, if the official is a state officer or employee, or with the supervisor of elections of the county in which the agency has its principal office, if the official is an officer or employee of a political subdivision, disclosing the official's interest, or the interest of the official's spouse or child, and the nature of the intended business.