CEO 95-18 -- August 31, 1995
CONFLICT OF INTEREST
COUNTY PUBLIC HEALTH UNIT DISEASE SURVEILLANCE
OFFICER EMPLOYED BY AND DIRECTOR OF CORPORATION
CONTRACTING WITH DHRS AND WITH UNIT, AND
CHAIR OF HIV DISEASE SERVICES CONSORTIUM
To: (Name withheld at the person's request.)
No prohibited conflict of interest existed where a county public health unit employee was a member of the board of directors of, and was briefly employed by, a nonprofit corporation that contracted with DHRS and with the unit. Under Section 112.313(3), Florida Statutes, the unit did not purchase services from the corporation, and the corporation did not sell services to the unit. While the corporation and the unit were "doing business" under Section 112.313(7)(a), Florida Statutes, by virtue of a contract between the corporation and the unit, Section 112.316, Florida Statutes, shields the employee from any prohibited conflict due to her lack of public duties in regard to the contract and the corporation.
Further, no prohibited conflict of interest exists under Sections 112.313(3) or 112.313(7)(a) due to the employee's chairmanship of a consortium the members of which are involved with the provision of HIV disease services. CEO's 81-2, 84-49, 85-16, and 86-24 are referenced and CEO 90-68 is distinguished.
Did a prohibited conflict of interest exist where a county public health unit disease surveillance officer was employed by, and was a member of the board of directors of, a corporation contracting with DHRS and with the county public health unit?
Under the facts set forth below, your question is answered in the negative.
By your letter of inquiry, materials accompanying your letter, telephone conversations between you and our staff, and other written information provided by you to our staff, we are advised that you have been employed by the Collier County Public Health Unit (hereinafter "Unit") since 1981, serving as the AIDS Surveillance Officer for Collier County for the six-year period prior to February 1995 and serving as the AIDS/TB Surveillance Officer since February 1995. In describing your public job duties, you state:
By Florida law, physicians are to report information on patients they diagnose with AIDS or Tuberculosis to the Public Health Unit, who then reports to Tallahassee, who then reports to the Federal Centers for Disease Control. But private physicians don't always report. My primary area of responsibility then is to see that anyone diagnosed with one of these diseases is reported by collecting the necessary information and completing the required report forms. The sources of my information are hospitals, laboratories, private physicians, death certificates, home medical care providers, AIDS clinics and private/public drug treatment centers, jails, etc. I then maintain demographic and statistical data that pertains to these two diseases. This kind of information is used to project disease trends, plan for future local health care needs, and target at risk individuals for prevention education. Also, because of my many years of experience, I am seen by public and private providers as a resource for information about AIDS issues and problems.
In addition, you advise that from October 1989 until July 1994 you served as an unpaid member of the board of directors of CARES (hereinafter "corporation"), and that in May and June 1995 you worked as a paid employee of the corporation (for 16 hours per week for approximately 4 weeks, at $20 per hour).
You advise that the corporation is "a 501, C-3 non-profit corporation," which from July 1, 1993 until June 30, 1995 contracted with DHRS's (the Florida Department of Health and Rehabilitative Services) District VIII Health Program Office to administer and monitor the use of Ryan White Title II funds (funds used to provide medical care and support services for people with HIV disease) allocated by the State.
Since 1992, you advise, you have been the chair (with no compensation and no vote) of SWAN (South West AIDS Network). SWAN (hereinafter "consortium") is, you advise further, the Ryan White Title II consortium for DHRS's District 8. You advise that the consortium is not a corporation and is not registered as any type of business entity but, rather, that it is an organization whose members are public and private health care and support service providers and community-based organizations that provide medical care, support, advocacy, and education to individuals affected by HIV disease in seven counties of southwest Florida. Further, you advise that the consortium is a mixture of public agencies and private for-profit businesses, such as county public health units and home health care providers, bound with a common thread of involvement with HIV care, support, or education. Also, concerning the consortium and related matters, you advise:
The Ryan White Title II funds are from the federal government, through the State of Florida (HRS) who then contracts with a lead agency to handle the disbursement of those funds to consortia service providers. The lead agency, [the corporation], was chosen by the [consortium] members. [The corporation], acting on [the consortium's] behalf, contracts with HRS to handle the funds for this district. Then [the corporation] contracts with the service providers and monitors their compliance with the use of those funds. [The consortium] itself does not have a contract with HRS or [the corporation]. I have no direct involvement with the handling or administration of the contracts for these funds . . . .
[The corporation] i[s] not, to my knowledge, regulated by HRS. [The corporation] is not regulated by the Collier County Public Health Unit in any way.
[The consortium] does not have a budget.
[The consortium] does not now [have], nor has [it] ever had, a contract with anyone. The contract to administer the Ryan White funds was between the HRS Health Program Office and [the corporation] from 7-93 till 6-95. The contract to administer the funds for fiscal year 95-96 is now in place between the HRS Health Program Office and the District 8 Health Planning Council. The Health Planning Council will now enter into subcontracts with the district's providers, including the Collier County Public Health Unit, to use the funds for clients['] services.
In addition, by a telephone conversation between you and our staff, your written responses to questions from our staff, and materials included with your written responses, we are advised that from July 1, 1994 until June 30, 1995 the corporation and the Unit were parties to a "Standard Contract." This contract, you advise, did not actually involve the buying and selling of goods or services between the parties but, rather, amounted in substance to the corporation's channeling of federal/State funds to the Unit in order for the Unit to be able to have a full-time nurse to provide care to people with HIV disease who are patients of the Unit. Further, you advise that the Federal/State money for the full-time nurse must be provided to the Unit in this manner (under a "Standard Contract" between the Unit and the corporation), and cannot be provided directly from DHRS, because the Federal act requires such a manner of provision, under the oversight of the consortium.
Also, you advise that your public job duty involvement with the corporation is, and was at the time you worked for the corporation, limited to ensuring, since the opening of the corporation's medical facility in the fall of 1994, that AIDS cases diagnosed at the facility are reported pursuant to Florida law. In regard to this public duty, you elaborated, in a telephone conversation with our staff, that your involvement amounts to your assisting physicians in completing, or completing by yourself alone where physicians do not personally complete the form, a CDC form with demographic data (age, sex, HIV infection risk factors, etc.), primarily gleaned from medical records, in relation to each diagnosed case of AIDS or TB. Further, you advise that you had no role in establishing the specifications or criteria for any contracts that were awarded to the corporation; that in your public job capacity you did not play any role in selecting the corporation or in awarding contracts to it; and that you had no role in the monitoring of the corporation's contract with the DHRS Health Program Office. Further, you advise that there is not any temptation for you or other public health personnel to favor the corporation over other providers or facilities when referring clients who are in need of HIV services because, as you state:
[The corporation] is the only community based organization in Collier County that provides services only to people with HIV disease, so there isn't any competition. [The corporation] was established to provide services that were not otherwise available here. For example, the Collier County Public Health Unit has a PAC case manager (Patient AIDS Care, Medicaid Waiver Program) for case management services for people with HIV who are on Medicaid. [The corporation] has funds to provide case management services for people with HIV who are not on Medicaid. That service is only available at [the corporation]; the Public Health Unit cannot provide that service, nor does any other agency in the county. Therefor [sic] someone with Medicaid receives case management from the Public Health Unit and someone without Medicaid is referred to [the corporation]. As another example, [the corporation] manages the HUD, HOPWA (Housing Opportunities for People with AIDS) funds in Collier County. So if someone called the Public Health Unit for rent assistance, and they were HIV infected, I, or another Health Unit employee[,] would refer them to [the corporation]. In Collier County, nonprofit providers have worked very hard to avoid duplication of services and use the limited funds we have in the most effective way possible.
You desire to know if your prior directorship and brief employment with the corporation created a prohibited conflict of interest. Sections 112.313(3) and 112.313(7)(a), Florida Statutes, are the provisions of the Code of Ethics for Public Officers and Employees which must be dealt with in responding to your inquiry. These provisions provide:
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 of 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 or when such offices are on property wholly or partially owned by the legislator. 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.]
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.]
The first part of Section 112.313(3) prohibits a public employee from acting in an official capacity as a "purchasing agent" to purchase goods for his "agency" from a "business entity" of which he is a director. "Purchasing agent," "agency," and "business entity" are defined as follows:
'Purchasing agent' means a public officer or employee having the authority to commit the expenditure of public funds through a contract for, or the purchase of, any goods, services, or interest in real property for an agency, as opposed to the authority to request or requisition a contract or purchase by another person. [Section 112.312(20), Florida Statutes.]
'Agency' means any state, regional, county, local, or municipal government entity of this state, whether executive, judicial, or legislative; any department, division, bureau, commission, authority, or political subdivision of this state therein; or any public school, community college, or state university. [Section 112.312(2), Florida Statutes.]
'Business entity' means any corporation, partnership, limited partnership, proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust, whether fictitiously named or not, doing business in this state. [Section 112.312(5), Florida Statutes.]
The second part of Section 112.313(3) prohibits a public employee from acting in a private capacity to rent, lease, or sell any realty, goods, or services to his own agency, if he is a State-level employee, or to his political subdivision or any agency of his political subdivision, if he is a local employee.
We find that you did not have a conflict under either part of Section 112.313(3) due to the corporation's contract with DHRS's District 8. In your public employment capacity, you did not act as a "purchasing agent" and, even if you had so acted, the contract was with DHRS's District 8 (a State-level agency) and not with your public agency (the County Health Unit). See CEO 90-68 and our opinions cited therein in which we determined that the "agency" of a county health unit employee is the county health unit and is not DHRS. Further, while by virtue of being a director of the corporation you would be deemed to have "acted in a private capacity" (see CEO 81-2) to rent, lease, or sell under the contract, the contract was not with your political subdivision (Collier County) but, rather, was with DHRS's District 8.
Regarding the "Standard Contract" between the corporation and the Unit (in which the corporation is referred to as the "department' and the Unit is referred to as the "provider"), we also find that you did not have a conflict under Section 112.313(3). Under the first part of Section 112.313(3), you did not act as a "purchasing agent." Further, while you did "act in a private capacity" regarding this contract, by virtue of your position as a director of the corporation, and while this contract may have been between the corporation and your political subdivision, we do not find that this contract amounted to a sale of any services. Rather, it appears that this contract merely constituted the provision of certain Federal funds to the Unit in a manner consistent with Title II requirements. In addition, even if this contract were viewed as a purchase of services, it would be a purchase by the corporation from the Unit, rather than the reverse. Section 112.313(3) does not address purchases from government by business entities.
The first part of Section 112.313(7)(a) prohibits a public employee from having employment with a business entity that is subject to the regulation of, or that is doing business with, his public agency. The contract between DHRS's District 8 and the corporation would not be relevant to our inquiry under the first part of Section 112.313(7)(a) because it was not between the Unit (your public agency) and the corporation. Therefore, our inquiry turns to the contract between the Unit and the corporation.
The fact that we found above that the contract between the corporation and the Unit did not constitute a sale of services from the corporation to the Unit in violation of Section 112.313(3) does not end our inquiry. A contract that is not a sale of services from a business entity to a public agency under Section 112.313(3) can nevertheless constitute "doing business" between the business entity and the agency under the first part of Section 112.313(7)(a). Our view is that a business entity is "doing business" with an agency where the parties have entered into a lease, contract, or other type of arrangement where one party would have a cause of action against the other in the event of a default or breach. See CEO 86-24. While we, unlike courts, are not empowered to interpret or adjudicate any disputes that might arise from the contract between the corporation and the Unit, we do view the relationship between the Unit and the corporation under the contract as one in which a cause of action would exist in the event of a breach of the contract. In this regard, we note that the contract provides, in a provision labeled "Termination for Breach":
Waiver of breach of any provisions of this contract shall not be deemed to be a waiver of any other breach and shall not be construed to be a modification of the terms of this contract. The provisions herein do not limit the department's right to remedies at law or to damages.
Therefore, based only upon the language of Section 112.313(7)(a), Florida Statutes, it would seem that your employment with the corporation constituted a conflict, inasmuch as you did hold employment with a business entity at a time when that business entity was doing business with your agency. However, the Code of Ethics also contains the following language:
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 duties to the state or the county, city, or other political subdivision of the state involved. [Section 112.316, Florida Statutes.]
In past opinions we have recognized that Section 112.316 operates to negate conflicts in situations where a public officer or employee did not have public duties that he would be tempted to compromise in favor of his private interests or the private interests of his secondary employer. See, for example, CEO 85-16 (county public health unit employee employed by business inspected by public health unit) and CEO 84-49 (county public health unit employee working privately for physician under contract with DHRS).
In your situation, you played no role in developing specifications or criteria for the DHRS and Unit contracts awarded to the corporation, played no role in awarding the contracts, and had no public responsibility regarding the corporation's performance under the contracts. Further, inasmuch as the corporation did not compete with other providers, you would not have been tempted to favor it over other providers in your referral of Unit HIV clients. In addition, your role in demographic HIV data reporting via the CDC form, inasmuch as it appears to amount to assisting physicians in their provision of information rather than constituting regulation of the corporation by the Unit, would not appear to have created a continuing or frequently recurring conflict between your private interests and the performance of your public duties, or impeded the full and faithful discharge of your public duties, during your brief employment with the corporation.
Thus, we find that you had no prohibited conflict of interest under Section 112.313(7)(a) by virtue of your four 16-hour weeks of employment with the corporation.
In making our findings under both Section 112.313(3) and Section 112.313(7)(a), we distinguish our decision in CEO 90-68 from that rendered in response to your inquiry. The cautionary language in CEO 90-68 regarding Section 112.313(3) was predicated on a corporation selling services to the local health unit, not the reverse, as is indicated by your inquiry. Further, for purposes of Section 112.313(7)(a), the public employee in CEO 90-68 did not, as you did, hold employment or a contractual relationship with a corporation, but merely served as a noncompensated member of its board of directors.
Accordingly, we find that a prohibited conflict of interest did not exist under Sections 112.313(3) and 112.313(7)(a), Florida Statutes, where you were employed by CARES.
Does a prohibited conflict exist because of your chairmanship of SWAN (a consortium of persons, agencies, and entities involved in the provision of services to persons with AIDS and/or HIV disease)?
Under the facts presented by you in requesting this opinion, this question is answered in the negative.
Since, under the facts you present, you are not acting as a purchasing agent to purchase services from the consortium and since the consortium is not selling services to the Unit, Section 112.313(3) would not be violated. Further, since you represent that you are not compensated for your services with the consortium, you would not have employment or a contractual relationship with the consortium, and thus Section 112.313(7)(a) would not be violated.
This question is answered accordingly.
ORDERED by the State of Florida Commission on Ethics meeting in public session on August 31, 1995, and RENDERED this _____ day of September, 1995.
William J. Rish