CEO 82-77 -- September 20, 1982

CONFLICT OF INTEREST

PUBLIC SERVICE COMMISSION MEMBER SERVING AS DIRECTOR OF INSURANCE COMPANY SELLING DEFERRED COMPENSATION PLANS TO STATE EMPLOYEES

To: Mr. John R. Marks, III, Member, Florida Public Service Commission

SUMMARY:

No prohibited conflict of interest exists where a member of the Florida Public Service Commission is a director, but not a shareholder, officer, or employee, of an insurance company which acts as an agent of another insurance company to sell deferred compensation plans to State employees. As the insurance company is not selling to the Public Service Commission, but rather to employees of the Commission as individuals, Section 112.313(3), Florida Statutes, would not apply. Neither would Section 112.313(7), Florida Statutes, apply, since the insurance company is not doing business with the Public Service Commission and is not subject to the regulation of that agency; no continuing or frequently recurring conflict of interest would be created as the Commission member is not involved in selling to State employees or in promoting sales. CEO's 75-127 and 80-68 are distinguished on this ground.

QUESTION:

Does a prohibited conflict of interest exist where you, a member of the Florida Public Service Commission, are a director of an insurance company which acts as an agent of another insurance company to sell deferred compensation plans to state employees?

Your question is answered in the negative.

In your letter of inquiry and in a telephone conversation with our staff, you advise that you are a member of the Florida Public Service Commission and that recently you were elected as an outside director of an insurance company, for which service you receive some compensation. You also advise that you are not a shareholder in the company and are not an officer or employee of the company. The company, you advise, is acting as an agent for a second insurance company to sell deferred compensation plans to State and private employees. The latter company is one of several approved by the State to sell deferred compensation plans to State employees. Finally, you advise that you are not involved in selling deferred compensation plans or in promoting such sales.

The Code of Ethics for Public Officers and Employees provides in 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), Florida Statutes (1981).]

This provision would prohibit you from serving as a director of a business entity which is selling any goods or services to the Public Service Commission. However, the insurance company of which you are a director is not selling to the Commission, but rather to employees of the Commission as individuals.

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), Florida Statutes (1981).]

As you receive compensation for serving as a director of the insurance company, we find that you have a contractual relationship with that business entity. However, we also find that the insurance company is neither doing business with the Public Service Commission nor subject to the regulation of that agency. In addition, it does not appear that there is any reason to believe that your service as a director of the insurance company would present a continuing or frequently recurring conflict with the performance of your public duties or would impede the full and faithful discharge of those duties.

In particular, we note that your relationship with the insurance company is solely that of a director, and that you are not involved in selling to State employees or in promoting sales. By way of contrast, in CEO 75-127 we found that the Code of Ethics would prohibit a school board member from soliciting the sale of insurance to school personnel at their residences during their non-duty hours. Similarly, in CEO 80-68, we found that the Code of Ethics would prohibit a school board member from acting as an insurance broker to administer an insurance program offered privately to school district employees.

Accordingly, we find that no prohibited conflict of interest exists where you serve as a member of the Public Service Commission and as a director of an insurance company which is selling deferred compensation plans to State employees.