CEO 80-1 -- January 17, 1980
CONFLICT OF INTEREST
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES EMPLOYEE OWNER OF TRAVEL AGENCY BOOKING RESERVATIONS FOR DEPARTMENTAL EMPLOYEES
To: (Name withheld at the person's request.)
Prepared by: Phil Claypool
A public employee is prohibited from owning more than 5 percent of a business entity which is selling its services to his agency. See s. 112.313(3), F. S., and CEO 78-7. Accordingly, the Employer/Employee Relations Administrator for the Department of Health and Rehabilitative Services is prohibited from owning more than 5 percent of a travel agency which sells its services to employees of Employer/Employee Relations, either through direct billing of the department as an account receivable or through the use by such employees of a state air travel card, for which the department also would be billed directly. Although s. 112.313(12)(c) provides an exemption to the prohibition contained in s. 112.313(3) when the purchase or sale is for passage on a common carrier, such exemption is not deemed to be applicable when the travel arrangements are made through a travel agency.
Section 112.313(7)(a), F. S., further prohibits a public employee from having any employment or contractual relationship which would impede the full and faithful discharge of his public duties. This provision would be violated were the Employer/Employee Relations Administrator to become part owner of a travel agency selling to employees of the Department of Health and Rehabilitative Services because such administrator's responsibilities include employee and labor relations activities throughout the department; therefore, he enjoys potential contact with all department employees. Accordingly, the Code of Ethics is found to prohibit such administrator's ownership of a travel agency which makes reservations for employees of the department.
Would a prohibited conflict of interest be created were I, an employee of the Department of Health and Rehabilitative Services, to own a travel agency which would book reservations for departmental employees?
Your question is answered in the affirmative.
In your letter of inquiry you advise that you are the Employer/Employee Relations Administrator for the Department of Health and Rehabilitative Services, in which capacity you generally are responsible for employee and labor relations activities within the department. You also advise that you are contemplating investing in a travel agency to be established in Tallahassee which would offer a full range of travel services to customers.
You question whether the travel agency may sell its services to employees of the department. In this regard, you have stated that the agency will not sell its services directly to the department. There would be no direct contact with the department at the point of sale, and there would be no attempt to solicit employees' business through the department. In addition, you state that, since you have direct control over approximately $7,000 budgeted for travel by yourself and your staff, you will assure that your business travel and that of your staff is purchased elsewhere.
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. 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 to any political subdivision or any agency thereof, if he 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. 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), F. S.]
This provision prohibits a public employee from owning more than 5 percent of a business entity which is selling its services to his agency. See CEO 78-7. In a telephone conversation with our staff, you advised that, as Employer/Employee Relations Administrator, you report directly to the Personnel Management Director, who heads the Office of Personnel Management. In turn, the Personnel Management Director reports to the Assistant Secretary for Administrative Services. You further advised that the department has requested that your position be exempted from the Career Service System, as analogous to that of a bureau chief, with the Office of Personnel Management comparable to a division of the department. Therefore, we find that your "agency," for purposes of the Code of Ethics for Public Officers and Employees, is "Employer/Employee Relations," analogous to a bureau within other state departments. See s. 112.312(2), F. S., and CEO 79-70. Section 112.313(3), above, accordingly prohibits you from owning more than 5 percent of a business which is selling its services to Employer/Employee Relations.
In a previous advisory opinion, CEO 76-175, we advised that this provision would not prohibit a public officer from booking his official travel through a travel agency owned by him when he personally incurred the expense of travel and was reimbursed later by his state agency for travel expenses. When the official traveled on a state air travel card, so that his travel expenses were billed directly to the state agency, we found that no prohibited conflict of interest would be created because at that time no commission was paid to a travel agency for air travel card bookings. At the present time, you have advised our staff that commissions are paid to travel agencies for bookings handled with state air travel cards.
Since that opinion was rendered, the Code of Ethics was amended to provide several exemptions to s. 112.313(3), F. S. One of these exemptions occurs when
[t]he purchase or sale is for legal advertising in a newspaper, for any utilities service, or for passage on a common carrier. [Section 112.313(12)(c); emphasis supplied.]
We are of the opinion that this provision was not enacted to provide an exemption in situations such as the instant one, but rather in those situations in which passage on the common carrier would be purchased directly from the carrier and not from an agent for the carrier. Reading this provision in its entirety indicates a legislative intent that an agency should not be foreclosed from receiving services essential to its proper functions, such as legal advertising, utilities service, and travel on a reasonable schedule, because one of its members owns an interest in or is employed by a newspaper, utility company, or common carrier. An agency would not be foreclosed from making reasonable travel arrangements if one of its members were to own an interest in or be employed by a travel agency, since the same arrangements could be made directly with the common carrier. We also note that neither in the case of legal advertising nor in the case of utilities service would an agent be involved in the ordinary purchase of services.
As the exemption in s. 112.313(12)(c), F. S., is not applicable, we must apply s. 112.313(3), as interpreted in CEO 76-175, to your situation. Under the rationale of that opinion, a direct sale by your travel agency to any employee of the department who is traveling on department business would not be prohibited, even though the employee is reimbursed by the department, since the travel agency would not be doing business with the department.
However, we perceive two types of situations in which the travel agency would be selling its services directly to your public agency, in violation of s. 112.313(3), F. S. The first of these would exist if the travel agency were to bill the department as an account receivable for travel by employees within Employer/Employee Relations, your agency. Similarly, the second of these situations would exist if the employee were to use a state air travel card, as the department would be billed directly, with the travel agency receiving its commission from department funds. See CEO 77-110, in which we advised that a real estate firm's selling property for a commission to a public agency falls within the prohibition contained within s. 112.313(3).
The Code of Ethics also 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 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 private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), F. S.]
This provision prohibits your having any employment or contractual relationship which would impede the full and faithful discharge of your public duties. Your proposed ownership of a travel business would constitute "employment," in the general sense of the word. See CEO 78-93.
We are of the opinion that this provision would be violated were your travel agency to sell its services to any employee of the department. In support of this view, we note that your public duties include the responsibility for employee and labor relations activities within the department, which responsibility is department wide rather than limited to the confines of your "agency." Because of the nature of your position, you are afforded the opportunity for potential contact with all department employees.
Accordingly, we find that the Code of Ethics prohibits your ownership of a travel agency which makes reservations for employees of the Department of Health and Rehabilitative Services.