CEO 80-68 -- September 19, 1980
CONFLICT OF INTEREST
SCHOOL BOARD MEMBER ACTING AS INSURANCE BROKER FOR INSURANCE COMPANY DOING BUSINESS WITH SCHOOL DISTRICT EMPLOYEES
To: William R. Siegel, Winter Haven
Prepared by: Phil Claypool
Reference is made to CEO 75-127, in which the commission advised that a school board member would violate s. 112.313(7)(a), F. S., were he to solicit the sale of insurance to school personnel at their residences during nonduty hours based on the school board's authority over its personnel. Similarly, a school board member who privately acts as an insurance broker to administer an insurance program offered to school personnel through a teachers' union and an association of school administrators would have a frequently recurring conflict of interest which would impede the full and faithful discharge of his public duties.
Would a prohibited conflict of interest be created were I to serve as a school board member while acting as an insurance broker to administer an insurance program offered privately to school district employees?
Your question is answered in the affirmative.
In your letter of inquiry you advise that you are a candidate for election to the Polk County School Board. You also advise that several years ago a local county teachers' union and a local association of school administrators and supervisors both made available to their members on a voluntary basis a program of insurance benefits through a particular insurance company. The school board does not endorse or administer the program, you advise, and it does not contribute toward premium costs, although it does allow salary deductions to be made by employees for premiums.
You further advise that you are an insurance broker who holds a license with that underwriting insurance company and that you have taken over the administration of this program for the insurance company. In this capacity you visit schools to meet with association and union members during annual periods of open-enrollment granted by the insurance company. In these visits you explain benefits and accept voluntary enrollments during off-school hours at the invitation of the organizations or their representatives. You also advise that you are responsible for coordinating monthly company billing with county payroll deduction registers, making available to members the necessary administrative forms, distributing insurance certificates and coverage booklets to participating members through the mail or through the associations, and advising the associations of other administrative details. For these duties you are compensated by the insurance company on a monthly group service-fee basis, determined partly by the total premiums remitted each month by the associations. Finally, you question whether, if a prohibited conflict is determined to exist under these circumstances, you may limit or eliminate your direct personal involvement with employees and the associations, with those duties being taken over by others in your office, by the insurance company directly, or by the insurance committees of the associations.
The Code of Ethics for Public Officers and Employees provides in relevant part:
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, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; 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.]
The first portion of this provision prohibits a public officer from having a contractual relationship with a business entity which is doing business with, or is subject to the regulation of, his agency. We find that this prohibition does not apply to your situation because your contractual relationship as a broker is with an insurance company which is not doing business with or subject to the regulation of the school board, which would be your agency should you be elected to the board. Rather, the insurance company is doing business with employees of the school board in their private, individual capacities. See our response to question 1 of CEO 75-127.
The second portion of the above-quoted provision prohibits a public officer from having a 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. In CEO 75-127, we advised that a school board member should not solicit the sale of insurance to school personnel at their residences during nonduty hours because of the school board's authority over its personnel.
Similarly, we are of the opinion that your administration of insurance programs offered to school personnel through a teachers' union and an association of school administrators would present a frequently recurring conflict of interest and would impede the full and faithful discharge of your duties as a school board member. It is not difficult to envision situations in which regard for your private interests in administering and seeking to enhance the insurance programs would tend to lead to your disregarding a school board member's administrative and personnel decisions. See the definition of "conflict of interest" contained in s. 112.312(6), F. S. In addition, as we observed in CEO 75-127, we feel that many school system employees would feel "pressured" to make a purchase when solicited personally by a school board member, thus placing employees in a position which would violate the intent of the Code of Ethics that "public office not be used for private gain other than remuneration provided by law." Section 112.311(1), F. S.
Nor do we feel that limiting your direct, personal involvement with school system employees would remedy this conflict of interest. Here, you are not merely dealing with a few employees as private citizens. Instead, you are responsible for coordinating and administering an insurance program with a teachers' union and an association of administrative personnel on a continuous basis. Even if you are not involved in the personal solicitation of business, you still stand to profit directly by the actions of these organizations and school employees, persons and groups who are immediately affected by decisions of the school board. Again, we feel that considerations of retaining and increasing the business done with these groups would tend to lead to disregard of a school board member's responsibility to act independently and impartially in making difficult administrative and personnel decisions.
Accordingly, we find that a prohibited conflict of interest would be created were you to serve as a school board member while acting as an insurance broker to administer an insurance program offered privately to school district employees through a teachers' union and an association of administrative personnel