CEO 74-61 -- November 15, 1974
CONFLICT OF INTEREST
MEMBER OF THE POLLUTION CONTROL BOARD PROFITING FROM AN INSURANCE PROGRAM WITH A LABOR UNION CONNECTED WITH A REGULATED COMPANY
To: John Robert Middlemas, Florida Pollution Control Board, Panama City
Prepared by: Gene L. "Hal" Johnson
As a member of the Pollution Control Board, Mr. Middlemas is a public officer subject to the provisions of the Code of Ethics. Mr. Middlemas is a partner in a general insurance agency which, through an agency salesman, has established a life insurance program with a labor union. Members of that union are employees of International Paper Company, which is regulated by the Pollution Control Board. Such a situation is not a violation of the Code of Ethics since the dealings are between the insurance firm and the employees of the paper company, not the regulated company itself. Too, the paper company does not control, contract, or in any wise influence insurance dealings for the union; nor did the union give consideration to Mr. Middlemas' agency. However, Mr. Middlemas is reminded that s. 120.09, F. S. 1973, requires public officers to consider voluntary recusal in circumstances in which the officer may exercise bias, prejudice, or interest.
Does a conflict of interest exist where a salesman of my insurance agency establishes a life insurance program with a labor union whose members are employed by International Paper, a company subject to the regulation of the Florida Pollution Control Board, of which I am a member?
Your question is answered in the negative.
You state in your letter of inquiry that you are a partner in a general insurance agency. In addition to this position, you acknowledge that, as a member of the Florida Pollution Control Board, you are a public officer and therefore are subject to the provisions of the Code of Ethics.
The possible conflict of interest you wish resolved results from the fact that a life insurance salesman in your agency has established a life insurance program with a labor union. The members of this labor union are employees of the International Paper Company, a corporation regulated by the Pollution Control Board. While International Paper neither influenced the initiation of this insurance program nor contributes to it, it will deduct premiums from the employees' checks if they decide to participate. Otherwise, International Paper is not involved in the program. Furthermore, the labor union gave no consideration to your salesman for its agreement to recommend the program to their members who work for International Paper.
It is our opinion that, as the dealings of your insurance agency are with the labor union and employees of the paper company, rather than with the regulated company itself, such transactions are too remote and indirect to come within the letter of any of the conflict of interest laws under our jurisdiction. However, we call your attention to s. 120.09, F. S. 1973, prescribing circumstances under which state officials should consider recusal. You should note also that this law will be superseded on January 1, 1975, by a revision which will read as follows:
120.71 Disqualification of agency personnel.
(1) Any individual serving alone or with others as an agency head shall be disqualified from serving in an agency proceeding for bias, prejudice, interest or other causes for which a judge may be recused. If the disqualified individual holds his position by appointment, the appointing power may appoint a substitute to serve in the matter from which the individual is disqualified. If the individual is an elected official, the governor may appoint a substitute to serve in the matter from which the individual is disqualified.
(2) Any agency action taken by a duly appointed substitute for a disqualified individual shall be as conclusive and effective as if agency action had been taken by the agency as it was constituted prior to any substitution.
As we recently advised the Chairman of the Pollution Control Board with reference to this law:
Bias, prejudice, interest, etc., are matters which rest in large measure within the knowledge and conscience of the public official himself. In any situation when an official has any reason to feel that he may be in a position which handicaps him in serving impartially and fairly, obviously he should take appropriate action to remove himself from authority. [CEO 74-50; emphasis supplied.]
We therefore conclude that, although a conflict of interest does not appear to us to exist under the provisions of the Code of Ethics, you should consider recusal in matters involving International Paper Company if for personal reasons you feel that you cannot render an impartial and objective judgment.
In conclusion, we caution you that if at some time in the future International Paper should participate or contribute to the insurance program, your position would have to be reassessed in light of the altered circumstances.