CEO 95-30 -- October 13, 1995

CONFLICT OF INTEREST

ENVIRONMENTAL REGULATION COMMISSION MEMBER PARTNER

IN LAW FIRM REPRESENTING CLIENTS IN ENVIRONMENTAL MATTERS

To: Mitchell W. Berger, Member, Environmental Regulation Commission (Fort Lauderdale)

SUMMARY:

No prohibited conflict of interest would be created under Section 112.313(7)(a), Florida Statutes, where a member of the Environmental Regulation Commission is an attorney in a law firm and other members of that firm, including a former Deputy Secretary with the Department of Environmental Protection, represent clients in matters with interests adverse to those of the Department. Although the Commission member would be deemed to have a contractual relationship with each client of his firm, those clients are not regulated by nor doing business with his agency, the Environmental Regulation Commission, and that contractual relationship would not create a continuing or frequently recurring conflict with his duties as a member of the Commission. However, his position on the Commission would preclude the firm from representing any clients before the Commission. Where the Department retains the Commission member's law partner, the former Deputy Secretary, to represent or consult with it in specific matters involving the Department's Everglades restoration efforts, that representation would not create a conflict of interest prohibited by Section 112.313(3), Florida Statutes, because the Commission member is not selling services to his agency. Additionally, no conflict would be created under the first part of Section 112.313(7)(a), because the Department is neither doing business with nor regulated by the Environmental Regulation Commission. Nor is an impediment to duty or continuing or frequently recurring conflict created for the Environmental Regulation Commission member since the Commission's approval of a numerical standard for phosphorus prior to the year 2001 is the only perceived overlap between the Commission member's public duties and his partner's representation of the Department, and it is not known when the matter will actually come before the Commission or how involved the Commission's participation in that process will be. Additionally, the Commission has no ability to direct the actions of the Department concerning its contract with the former Deputy Secretary or to oversee its actions in that regard. Although the Commission member's law firm would be precluded from representing the Department before the Commission, as long as the Commission member does not attempt to misuse his public position in violation of Section 112.313(6), the situation is deemed not to create a prohibited conflict of interest.

QUESTION 1:

Would a prohibited conflict of interest be created where you serve on the Environmental Regulation Commission and your law firm represents clients that may have interests adverse to those of the Department of Environmental Protection?

Your question is answered in the negative, under the specific circumstances presented.

Through your letter of inquiry and other communications with our staff, we are advised that you initially were appointed by the Governor to a four-year term on the Environmental Regulation Commission ("ERC") in 1991 and were reappointed to the ERC in 1995. The ERC meets regularly and is responsible for approving rules which establish environmental standards for the Florida Department of Environmental Protection ("Department") to enforce. See Sections 20.255(7) and 403.804(1), Florida Statutes, as amended by Chapter 95-295, Laws of Florida. Recently, the Department's Deputy Secretary left public employment and has become a colleague and member of your law firm. You wish to ascertain whether this situation creates an impermissible conflict of interest with your continued service on the ERC.

The applicable provision of the Code of Ethics for Public Officers and Employees is Section 112.313(7)(a), Florida Statutes, which states:

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 (1993).]

Section 112.313(7)(a) prohibits you from having a contractual relationship with a business entity or agency which is regulated by your agency, the Environmental Regulation Commission. It also prohibits you from having an employment or contractual relationship which creates a continuing or frequently recurring conflict between your private interests and the performance of your public duties, or which impedes the full and faithful discharge of your public duties.

With regard to the former DEP Deputy Secretary who is now your law partner, your contractual relationship with him would not implicate the first part of Section 112.313(7)(a) since he is neither a business entity nor an agency doing business with or regulated by the ERC. Nor is the second part of that provision implicated, as there is no indication that your public duties as a member of the ERC would be impeded as a result of your association with him through the law firm, or that your law practice with him in and of itself creates a continuing or frequently recurring conflict of interest with your public duties.

We have consistently adhered to the legal principle that every member of a law firm holds a contractual relationship with every client of the firm. See CEO 94-5 and the opinions cited therein. Therefore, whether or not you actually participate in a client's representation, you have a contractual relationship with that client. With that stated, the question then becomes whether your agency--the Environmental Regulation Commission--is regulating or doing business with a client of the firm, including those represented by this new firm member.

It is our understanding that the Environmental Regulation Commission does not directly "regulate." As noted previously, Section 403.804(1), Florida Statutes, as amended by Chapter 95-295, Laws of Florida, provides that the ERC "shall exercise the standard-setting authority of the department" and that the commission "shall not establish department policies, priorities, plans, or directives." Therefore, although the standards that the ERC promulgates may be applicable to (and enforced against) entities that are regulated by the Department, the ERC is not directly involved in that regulation and does not direct or oversee the Department's actions in that regard. Thus, this situation is akin to that of CEO 92-11, in which we opined that Section 112.313(7)(a) would not be violated where a member of the State Transportation Commission had an "of counsel" relationship with a law firm which represented clients in eminent domain proceedings involving the Department of Transportation. Based upon the rationale of that opinion, the only significant difference from which is that you would have a contractual relationship with your firm's clients, we do not believe that a prohibited conflict of interest would be created where your firm represents clients with interests adverse to the Department.

However, where your law firm represents a client before your agency, the Environmental Regulation Commission, we believe that such representation would constitute a prohibited conflict of interest. In numerous opinions we have concluded that representation of clients before one's agency, even by other members of one's firm, creates an impediment to the full and faithful discharge of one's duties as prohibited by the second clause of Section 112.313(7)(a), Florida Statutes. See CEO 88-8 and the opinions cited therein. Therefore, representation of clients whose interests are adverse to those of the Department necessarily precludes any appearances or representation by your firm before the ERC.

Additionally, we would point out that Section 112.3145(4), Florida Statutes, would require you to file our CE Form 2, Quarterly Client Disclosure, for those clients represented by your firm for a fee or commission at the State level of government. Under this provision, "representation" includes representation by any partner or associate of your law firm of which representation you have actual knowledge.

Accordingly, under the situation presented, no prohibited conflict of interest would be created where your partner, a former DEP Deputy Secretary, represents clients whose interests may be adverse to those of the Department of Environmental Protection so long as that representation does not include appearances before the Environmental Regulation Commission.

QUESTION 2:

Would a prohibited conflict of interest be created where you serve on the Environmental Regulation Commission and your law firm represents the Department of Environmental Protection in specific matters?

Your question is answered in the negative under the specific circumstances presented.

As mentioned previously, it is contemplated that the Department of Environmental Protection may retain your law firm, particularly your partner, the former DEP Deputy Secretary, to represent it in certain matters relating to the protection of the Everglades. In 1994, Chapter 94-115, Laws of Florida, was enacted. This legislation, known as the "Everglades Forever Act," amended Section 373.4592, Florida Statutes. Because of the former DEP Deputy Secretary's long-standing involvement in and familiarity with the complex issues surrounding the State's clean-up and restoration efforts involving the Everglades, the Department wishes to retain him to consult with and advise the Department in implementing the "Everglades Forever Act." The question which must be addressed is whether a contractual relationship between the Department and your law firm creates a conflict of interest for you as a member of the Environmental Regulation Commission.

First, we note that Section 112.313(3), Florida Statutes, which prohibits a public officer from acting in a private capacity to sell any services to his own agency if he is a State officer, is inapplicable. Your law firm does not propose to sell services to the Environmental Regulation Commission, your agency. Instead, it may be providing them to the Department of Environmental Protection, which we consider to be a separate agency from the ERC. See CEO 90-12. Therefore, Section 112.313(3), Florida Statutes, would not be implicated by the proposed representation.

With regard to Section 112.313(7)(a), we understand that the Department and the ERC enjoy a unique relationship. The ERC is administratively housed within the Department and essentially serves the Department in an advisory capacity. This is not to suggest that the ERC is an "advisory body" for purposes of the Code of Ethics. However, it is important that we recognize that the ERC does not "oversee" the Department or serve as that agency's collegial body head. We are advised that the autonomy and interplay between the Department and the ERC have been at issue in recent litigation and evidently provide the historical basis for recent amendments to Sections 20.255 and 403.804, Florida Statutes, during the 1995 legislative session. See Chapter 95-295, Laws of Florida. Based upon this relationship between the two agencies, we conclude that the Environmental Regulation Commission does not "regulate" the Department of Environmental Protection. Nor do we believe that the relationship between the Department and the ERC constitutes "doing business," as we generally have opined that intergovernmental agreements and dealings between governmental entities do not. See CEO 93-33 and the opinions cited therein. Therefore, we conclude that no prohibited conflict of interest would be created under the first part of Section 112.313(7)(a), should your law firm be retained to represent the Department in specific matters involving the Everglades restoration.

Under the second part of Section 112.313(7)(a), we have frequently cited the case, Zerwick v. State Commission on Ethics, 409 So. 2d 57 (Fla. 4th DCA 1982), for its holding that Section 112.313(7)(a) establishes an objective standard requiring an examination of the nature of the public officer's duties together with a review of his private interests to determine whether the two are compatible, separate and distinct, or whether they coincide to create a situation which "tempts dishonor." Here, we are advised that the one area for potential overlap between your duties as an ERC member and your law partner's representation of the Department could involve the ERC's approval of a numerical standard for phosphorus. It is our understanding that the "Everglades Forever Act" requires the Department to file a notice of rulemaking establishing a numerical criterion for phosphorus by December 31, 2001 and that it will be the ERC's responsibility to approve, disapprove, or modify any proposed Department rule in this regard. However, at this point it would seem speculative to suggest that the Department's efforts to meet this deadline will create a continuing or frequently recurring conflict for you as a member of the ERC because there is no way to determine now when or how frequently this issue will come before the ERC or even if you will still be serving on the ERC at the time it comes before your agency. Therefore, we do not believe that this potential necessarily creates a prohibited conflict of interest under the second part of Section 112.313(7)(a). Further, since the ERC's duties are strictly circumscribed by law, it would not have the ability to direct Department business to your firm or oversee its contract with the former Deputy Secretary. We view this as additional confirmation that the proposed relationship would not create a prohibited conflict of interest. However, we also would suggest that efforts by you, as a member of the ERC, to expand the scope of work between the Department and your partner could be perceived as a corrupt misuse of position in violation of Section 112.313(6), Florida Statutes, and you would be well-advised to avoid all situations which might be so construed.

Finally, while we conclude that Section 112.313(7)(a) would not be violated were the Department to retain its former Deputy Secretary to consult with and represent it in certain matters involving the Everglades, we cannot conclude that his permissible representation of the Department would allow him or any other attorney with your law firm to represent it before the Environmental Regulation Commission. As stated previously in our response to Question 1, Section 112.313(7)(a) would be violated were your law firm to represent clients, including public agencies, before the Environmental Regulation Commission. See CEO 88-8 and the opinions cited therein.

Question 2 is answered accordingly.

ORDERED by the State of Florida Commission on Ethics meeting in public session on October 12, 1995, and RENDERED this 13th day of October, 1995.

__________________________

William J. Rish

Chairman