CEO 00-3 -- March 10, 2000

 

POST-OFFICEHOLDING PROHIBITIONS; CONFLICTS OF INTEREST

 

FORMER MEMBER OF PUBLIC SERVICE COMMISSION AND CHAIR OF INFORMATION SERVICES TECHNOLOGY DEVELOPMENT TASK FORCE EMPLOYED BY LAW FIRM OR NONPROFIT CORPORATION

 

TO:      Mark Herron, Esquire (Tallahassee)

 

SUMMARY:

 

Sections 112.313(9)(a)3 and 350.0605(1), Florida Statutes, prohibit a former member of the Public Service Commission from representing any person or entity before the Public Service Commission for two years after leaving office.  However, this prohibition would not be violated where the former member joins a law firm or is employed by a nonprofit corporation as its national spokesperson, as long as she did not represent any person or entity before the PSC.  The post-officeholding bans only restrict the actions of the former PSC member, not partners or associates of a law firm or other persons employed by the same company employing the former member.

 

Section 350.0605(3) prohibits the former PSC member from being employed by or receiving compensation from certain specified entities for two years after leaving office. However, this provision would not be violated where the former PSC member is employed by a nonprofit corporation as its national spokesperson or by a law firm since, under the facts represented, neither opportunity would constitute employment by or the receipt of income from statutorily-restricted entities, so long as her compensation from the firm or the corporation is not derived from a restricted entity.

 

As Chair of the Information Service Technology Development Task Force, she is considered a "public officer" for purposes of the Code of Ethics.  However, Section 112.313(7)(a), Florida Statutes, would not be violated where she is employed by the nonprofit corporation or by a law firm, since the Task Force, whose function is primarily advisory, is not doing business with or regulating any entity.  Her employment or contractual relationships with entities interested in the work of the Task Force does not, in and of itself, create a conflict or impediment to her public duties since the Task Force is advisory in nature and is composed of individuals with various interests in the subject matter it is confronting.  Moreover, as long as the Task Force Chair does not personally represent the nonprofit corporation before the Task Force and is not involved in their decisions to lobby the Task Force, no violation of the second part of Section 112.313(7)(a), Florida Statutes, would be created.  With regard to the employment opportunity with a law firm, as long as the Task Force Chair refrains from representing clients before the Task Force and other members of the law firm do not appear before the Task Force on behalf of the firm's clients, no violation of Section 112.313(7)(a) would be created.

 

QUESTION 1:

 

Would the post-officeholding restrictions of Sections 112.313(9) and 350.0605, Florida Statutes, be violated where a former member of the Public Service Commission is employed by a nonprofit corporation as its national spokesperson or by a law firm?

 

Your question is answered in the negative based upon the factual circumstances presented, subject to the conditions noted below. 

 

In your letter of inquiry, you relate that this opinion is sought on behalf of your client, Julia Johnson, a former member of the Florida Public Service Commission (PSC) who now serves as Chair of the Information Services Technology Development Task Force (Task Force).  In contemplation of private sector employment, she seeks our guidance concerning the applicability of the Code of Ethics and Section 350.0605, Florida Statutes, to both her current and former public positions.

One employment opportunity she is considering is with a law firm that may represent public utilities regulated by the PSC, trade associations, internet service providers, or accounting firms that may have been associated with PSC proceedings.  Another opportunity she is considering involves serving as a national spokesperson for a nonprofit corporation that will advocate a free market non-regulatory approach to various issues relating to the internet.  The nonprofit corporation, you advise, will be funded by a national trade association that has not appeared in any PSC proceedings but that is funded by, among others, some entities that have appeared in PSC proceedings.  In addition, the nonprofit may receive funding from other entities, some of which appeared before the PSC while she served there or are regulated by the PSC.

With regard to post-officeholding restrictions, Section 112.313(9)(a)3, Florida Statutes, provides in part:

 

No member of the Legislature, appointed state officer, or statewide elected officer shall personally represent another person or entity for compensation before the government body or agency of which the individual was an officer or member for a period of 2 years following vacation of office.

 

This provision prohibits appointed State officers, like a member of the Public Service Commission, from personally representing another person or entity for compensation before the PSC for a period of two years after leaving office.  Although there are grandfathering provisions in the statute, Section 112.313(9)(a)6.e. states that the prohibition applies to appointed State officers who were reappointed to their office on or after January 1, 1995.  Since she was reappointed in 1997 to a second four-year term, she is not "grandfathered-in," and the post-officeholding provision in Section 112.313(9)(a)3 applies to her.

In addition, Section 350.0605, Florida Statutes, applies to former members of the Public Service Commission.  It states:

 

(1)  Any former commissioner of the Public Service Commission is prohibited from appearing before the commission representing any client or any industry regulated by the Public Service Commission for a period of 2 years following termination of service on the commission.  . . .[1]

(3)  For a period of 2 years following termination of service on the commission, a former member may not accept employment by or compensation from a business entity which, directly or indirectly, owns or controls a public utility regulated by the commission, from a public utility regulated by the commission, from a business entity which, directly or indirectly, is an affiliate or subsidiary of a public utility regulated by the commission or is an actual business competitor of a local exchange company or public utility regulated by the commission and is otherwise exempt from regulation by the commission under ss. 364.02(12) and 366.02(1), or from a business entity or trade association that has been a party to a commission proceeding within the 2 years preceding the member's termination of service on the commission. This subsection applies only to members of the Florida Public Service Commission who are appointed or reappointed after May 10, 1993.

 

Subsection 350.0605(1) prohibits a former member of the Public Service Commission from appearing before the Commission for a period of two years after leaving office on behalf of any client or industry regulated by the PSC.  Subsection 350.0605(3) is a prohibition on employment with or the receipt of income from certain specified entities.

Leaving aside for the moment considerations involving her current position on the Information Service Technology Development Task Force, Sections 112.313(9)(a)3 and 350.0605(1) together prohibit the former PSC member from personally representing any entity before the PSC for a period of two years.  Although there are slight differences in the wording between the two provisions,[2] the result is essentially the same:  the former PSC member is prohibited from personally representing any person or entity before the PSC for two years.  However, as we have noted in other opinions construing Section 112.313(9)(a), Florida Statutes (and Article II, Section 8(e), Florida Constitution), the prohibition is limited to the former public officer and would not extend to her partners or associates at the law firm, or other employees of the nonprofit.  See CEO 77-168, CEO 81-24, and CEO 96-18.  Similarly, Section 350.0605(1), Florida Statutes, on its face, is limited to only the former PSC member and does not extend to other members or associates of the law firm, or to other persons employed by the nonprofit corporation.

The prohibition in Section 350.0605(3) is different from the post-officeholding restrictions discussed above.  It is a two-year limitation on a former PSC member's being employed by or receiving compensation from:

 

1.         A business entity which, directly or indirectly, owns or controls a public utility regulated by the Commission;

2.         A public utility regulated by the Commission;

3.         A business entity which, directly or indirectly, is an affiliate or subsidiary of a public utility regulated by the Commission;

4.         A business entity which is an actual business competitor of a local exchange company or public utility regulated by the Commission and is otherwise exempt from regulation by the commission under ss. 364.02(12) and 366.02(1); and

5.         A business entity or trade association that has been a party to a commission proceeding within the 2 years preceding the member's termination of service on the Commission.

 

Clearly, these restrictions prohibit the former PSC member from being employed by or accepting compensation from any of the entities listed in Section 350.0605(3).  However, you have asked whether she may be associated with a law firm that may represent clients in these categories, or whether she can be employed by a corporation that may receive funding from entities in the restricted categories.  In our view, the use of the term "employment" in Section 350.0605(3) denotes a relationship like that discussed in Wright v. Commission on Ethics, 389 So.2d 662, 663 (Fla. 1st DCA 1980), where the court held:

 

An employee is one who for a consideration agrees to work subject to the orders and direction of another, usually for regular wages but not necessarily so, and, further, agrees to subject himself at all times during the period of service to the lawful orders and directions of the other in respect to the work to be done.

 

Section 350.0605(3) does not, on its face, prohibit ancillary contractual relationships, such as would exist where a law firm employing the former PSC member represents any of the restricted entities.  Thus, while the former PSC member is herself prohibited from being employed by or accepting compensation from any of the restricted entities, the law firm is not.  However, in order to accomplish the stated purpose of the statute--banning the former PSC member from receiving income from any of the restricted entities--we agree with your suggestion that she establish herself in an "of counsel" relationship or as a contract partner whose compensation is set by a specific agreement so that she would not share in the profits of the firm or any bonuses from client development or fees generated until after November 15, 2001, which is two years from the date she resigned the PSC.  This would be an appropriate way to ensure that she does not receive compensation from any of the restricted entities.

Concerning her possible role as a national spokesperson for the nonprofit corporation, you state that the corporation is not a "restricted entity," but you acknowledge that it may receive funding from entities that appeared in PSC proceedings as well as from other business entities, including regulated utilities.  Nevertheless, if the corporation with which the former PSC member is employed is not one of the entities listed in Section 350.0605(3), then Section 350.0605(3) would not be violated, notwithstanding whether the corporation receives funding from other trade associations or entities, including utilities, that are subject to Section 350.0605(3)'s restrictions.  The statute does not address the situation you describe--where the entity which employs or compensates the former PSC member receives funding from a restricted entity.[3]  However, consistent with our view that she can be employed by a law firm that represents restricted entities as long as she is not employed by a restricted entity and does not derive compensation from one, she could also be employed by the corporation as its national spokesperson so long as funding from non-restricted entities is used to pay her salary or other compensation.

Your post-officeholding questions are answered accordingly.

 

QUESTION 2:

 

Does the Code of Ethics prohibit the Chair of the Information Service Technology Development Task Force from being employed by the nonprofit corporation or by a law firm?

 

Based upon the circumstances presented, your question is answered in the negative.

 

You have also requested that we address the applicability of the Code of Ethics to her as Chair of the Information Services Technology Development Task Force.  Section 112.313(1), Florida Statutes, defines "public officer" broadly to include "any person elected or appointed to hold office in any agency, including any person serving on an advisory body."[4]  Thus, the members of the Task Force are subject to the Code of Ethics for Public Officers and Employees contained in Part III of Chapter 112, Florida Statutes. 

With regard to her potential private sector employment opportunities, you have indicated that the law firm she may join could represent clients with stakes in the policy issues confronting the Task Force, and the corporation which may employ her to serve as its national spokesperson advocates a free-market non-regulatory approach to various issues relating to the internet.  However, there is nothing to suggest that either the nonprofit corporation or the law firm and its clients seek to appear before the Task Force.  You ask whether Section 112.313(7)(a) would be violated if she were to pursue either of these opportunities while serving on the Task Force.

Section 112.313(7)(a), Florida Statutes, 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 or she 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 or her private interests and the performance of his or her public duties, or that would impede the full and faithful discharge of his or her public duties.  [Section 112.313(7)(a), Florida Statutes (1997).]

 

Section 112.313(7)(a) would prohibit the Task Force Chair from having an employment or contractual relationship with a business entity that is doing business with or regulated by the Task Force; it also would prohibit her from having an employment or contractual relationship which creates a continuing or frequently recurring conflict between her private interests and the performance of her public duties, or which impedes the full and faithful discharge of her public duties.

Our review of the legislation which created the Task Force reveals that the Task Force does not "regulate" any entity; nor is there any suggestion that the Task Force seeks to do business with any entity.  The Task Force was created to

 

develop overarching principles to guide state policy decisions with respect to the free-market development and beneficial use of advanced communications networks and information technologies, identify factors that will affect whether these technologies will flourish in Florida, and develop policy recommendations for each factor.

 

Section 11(3) of Chapter 99-354, Laws of Florida.  It is required to submit two reports to State leaders outlining principles, policy recommendations, and suggested legislation pursuant to Section 11(4) of Chapter 99-354, Laws of Florida.  Based upon our understanding of the Task Force's purpose and your representations about the Task Force Chair's employment opportunities, there do not appear to be any issues involving the first part of Section 112.313(7)(a), since the Task Force does not "regulate" any entity and there is no suggestion that it is seeking to "do business with" any entity associated with the Task Force Chair.  Therefore, there appears to be no conflict of interest under the first part of Section 112.313(7)(a) where the Task Force Chair is employed by a nonprofit corporation as its national spokesperson, or joins a law firm.

Under the second part of Section 112.313(7)(a), we must examine whether her proposed employment or contractual relationships create continuing or frequently recurring conflicts or impede the full and faithful discharge of her duties with regard to the Task Force.  You acknowledge that the issues the Task Force will confront are also of interest to the Chair's prospective employer as well as clients of the law firm she may join, and we must discern whether that potential overlap violates the second part of Section 112.313(7)(a).

In CEO 87-82, we noted that the second part of Section 112.313(7)(a) would not be violated where members of a city advisory committee were asked to make recommendations concerning the transfer and redevelopment of the city's equipment yard when they were officers or owners of businesses located near the property.  We did not view their involvement in the nearby businesses as such a substantial conflict of interest that it would disqualify them from serving, since the committee was advisory in nature and the purpose for its creation--to improve the property's use--would also benefit the nearby property owners.  Here, the Legislature recognized that it wanted individuals associated with the technology industry to serve on the Task Force, and the purpose for the Task Force was to serve in an advisory capacity to State policymakers.  Thus, as in CEO 87-82, we do not view the Code of Ethics or, more specifically, the second part of Section 112.313(7)(a), as being violated where the Task Force Chair accepts employment with the nonprofit corporation as its national spokesperson or with a law firm whose clients are interested in the issues confronting the Task Force.

In CEO 90-8, we opined that the second part of Section 112.313(7)(a) would not be violated where a state legislator served as president and CEO of a nonprofit corporation formed to promote private higher education in Florida, so long as the subject legislator had no role in the organization's efforts to lobby the Legislature and did not personally engage in lobbying activities on behalf of the corporation.  We went on to specify that the activities to be avoided

 

include not only actual contact with legislators through physical attendance at legislative meetings, submission of written materials, and personal contact with legislators in an effort to encourage the passage, defeat, or modification of any measure before the Legislature, as part of your employment responsibilities, but also directing the activities of those who will contact the Legislature, participating in setting the strategies of whom to contact and what to say, and assisting in preparing amendments to documents in support of the corporation's position.  In other words, it is our view that your employment with the corporation should be completely separated from the lobbying activities of your employer.

 

CEO 90-8.  Although there is no suggestion that the nonprofit corporation which may employ the Task Force Chair as its national spokesperson would be involved in or attempt to influence the work of the Task Force, we believe that restrictions similar to those imposed in CEO 90-8 would be appropriate for the Task Force Chair in order to avoid even the appearance that there is any conflict created between her activities as Task Force Chair and her private employment.

There is nothing to suggest that she, as an attorney with the law firm, or other members of the law firm on behalf of their  clients, would seek to influence the Task Force.  However, in past opinions, we have concluded that representing a client before the board of which one is a member violates Section 112.313(7)(a), as it interferes with the full and faithful discharge of one's public duties and, where such representations are frequent, presents a continuing or frequently recurring conflict.  See CEO 77-126 and CEO 78-86.  We also have concluded that the same conflict exists when another member or employee of the public officer's professional firm undertakes to represent a client before the officer's board. See CEO 78-86 and CEO 88-40.  This holding was also extended to situations where the public officer served in an "of counsel" relationship with the law firm.  See CEO 96-1.  Therefore, so long as neither the Task Force Chair nor other members of the law firm represent clients before the Task Force, the second part of Section 112.313(7)(a) would not be violated.  With these limitations, we believe that the public would remain confident that she is not using her position as Task Force Chair to advance the agendas of the nonprofit corporation or the law firm's clients.

 

ORDERED by the State of Florida Commission on Ethics meeting in public session on March 9, 2000 and RENDERED this 10th day of March, 2000.

 

 

__________________________

Peter M. Dunbar

Chair


[1]350.0605(2) applies only to former employees of the PSC.

[2]112.313(9)(a)3 prohibits the personal representation of another person or business entity for compensation before one's former agency.  Section  350.0605(1) does not include the notion of "for compensation" and appears to be limited to clients or industries "regulated by the PSC."

[3]We note that the nonprofit corporation does not appear to have been created by a restricted entity or by the former member in order to avoid the limitations of the statute, and do not mean to imply any particular result if such were the case in another situation.

[4]Similarly, Section 112.3143(1)(a), Florida Statutes, regarding voting conflicts, defines "public officer" to include any person serving on an advisory body.