CEO 02-7 -- March 19, 2002
CONFLICT OF INTEREST; VOTING CONFLICT
ENVIRONMENTAL REGULATION COMMISSION MEMBER WORKING AS ENVIRONMENTAL CONSULTANT ASSOCIATED WITH LAW FIRM
To: Mr. Mark Herron, Esquire (Tallahassee)
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 also a consultant for environmental issues associated with a law firm specializing in environmental, land use, and administrative matters. The appointee's positions on boards of directors for several organizations do not constitute contractual relationships as they are not compensated. Her compensated position on the board of directors for a petroleum company would not create a conflict of interest under Section 112.313(7)(a), as it is not anticipated that the company would appear before the ERC except indirectly through a trade association.
It is not possible to give specific advice about the voting conflicts law applicable to State-level officers--Section 112.3143(2), Florida Statutes--except for matters involving those organizations on whose boards the appointee serves as a non-compensated director. In those situations, the organizations would not be considered principals retaining the appointee. The appointee is encouraged to seek further guidance at the time actual situations arise in matters involving the law firm and its clients, or involving her clients.
QUESTION 1:
Would a prohibited conflict of interest be created were a member of the Environmental Regulation Commission to be associated with a law firm as a senior consultant for environmental issues and where the law firm specializes in environmental, land use, and administrative matters?
Question 1 is answered in the negative, under the circumstances described herein.
In your letter of inquiry, you relate that this opinion is sought on behalf of Victoria J. Tschinkel, who has been appointed to the Environmental Regulation Commission by the Governor and is awaiting Senate confirmation. In your letter, you write that the Environmental Regulation Commission (ERC) is a seven-member body created pursuant to Section 20.255(7), Florida Statutes, as part of the Department of Environmental Protection (DEP). By law, membership on the ERC must be representative of agriculture, the development industry, local government, the environmental community, lay citizens, and members of the scientific and technical community having substantial experience in the areas of water pollution, toxicology, epidemiology, geology, biology, environmental sciences, or engineering. The appointee has been named as a representative of the environmental community due to her long-standing involvement in environmental organizations. Presently, she serves without compensation as a Director of 1000 Friends of Florida and the Florida Audubon Society, as well as of the Center for Clean Air Policy and of Resources for the Future. She is a former Secretary of the Department of Environmental Regulation, the predecessor to DEP, and previously was confirmed by the Florida Senate as a member of the Florida Communities Trust.
You advise that the DEP Secretary has rulemaking responsibility under Chapter 120, Florida Statutes, but most proposed rules containing standards[1] are required to be submitted by the Secretary to the ERC for approval, modification, or disapproval. More specifically, the ERC exercises standard-setting authority in the following areas: pollutant discharge prevention and removal; use of wetlands to receive and treat domestic wastewater; establishment of water quality criteria for wetlands; delineation of the extent of wetlands; phosphorous criteria for the Everglades Protection Area; evaluation of existing water quality standards in the Everglades Protection Area; and evaluation of existing State water quality standards and classifications applicable to Everglades Agricultural Area canals. Additionally, the ERC is responsible for establishing priorities and has final State approval on applications for, and disbursements of, federal and State grants for the construction of wastewater or water treatment works.
You further relate that the appointee is a Senior Consultant for Environmental Issues with a law firm that specializes in environmental, land use, and administrative matters. You explain that she does not serve as a consultant to the firm; instead, she offers her expertise to entities that may benefit from her knowledge, she represents clients before state and federal agencies and the Legislature, and she specializes in advising clients on strategic planning in environmental matters.
You further advise that the appointee is not an attorney, has no ownership or equity interest in the law firm, and does not have an employment contract with the firm defining her relationship with it. Although associated with the firm, you explain, her compensation is solely dependent on collections from her billings to her clients. She utilizes the firm's billing system to bill and collect her fees, and she pays her share of the overhead, including rent and insurance. She also pays taxes on her income and makes contributions to a separate retirement plan.
You write that a substantial majority of her clients are not otherwise represented by the law firm. Further, at the present time, none of her clients appear before the ERC or are represented by the law firm in appearances before the ERC. You acknowledge the possibility that the firm could appear before the ERC on behalf of a client or clients that the appointee does not represent or has no contractual relationship with as a consultant, but if this were to occur, it would be infrequent.
You advised staff that the law firm represents sugar companies that are likely to be interested in Everglades Protection Area matters but that the appointee does not represent those clients. Nor does the appointee represent any client on Everglades restoration matters.
We are advised that the standards to be established by the ERC involve highly complex and detailed issues. With respect to a particular standard, there may be scores of issues that would need to be addressed. It is possible that a member of the law firm may represent a client of the firm not otherwise represented by the appointee on one issue within the context of standards being established by the ERC. It is also anticipated that 1000 Friends of Florida and the Florida Audubon Society will participate in proceedings before the ERC and are likely to have positions on Everglades issues. It is not anticipated that Phillips Petroleum Company will appear before the ERC, but you acknowledge that it or one of its subsidiaries may be a member of a trade association which appears before the ERC.
Within this context, the appointee seeks the Commission's guidance on whether her service on the ERC would create a conflict of interest prohibited by the Code of Ethics.
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 (2001).]
The first part of Section 112.313(7)(a) would prohibit a member of the ERC from having a contractual relationship with a business entity that is doing business with, or regulated by, the ERC. The second clause of the statute prohibits an ERC member from having a contractual relationship which creates a continuing or frequently recurring conflict or which impedes the full and faithful discharge of public duties.
With regard to the appointee's serving as a director for 1000 Friends of Florida and the Florida Audubon Society as well as non-compensated positions with other entities, these relationships would not implicate Section 112.313(7)(a) as she is not compensated for her service on these organizations' boards. See CEO 92-45. Therefore, under our precedent, she does not have a contractual relationship with these organizations for purposes of Section 112.313(7)(a), Florida Statutes. Her position as a compensated director for Phillips Petroleum Company would constitute a contractual relationship for purposes of Section 112.313(7)(a), but where it or a subsidiary only appears before the ERC as a member of a trade organization, that attenuated relationship also would not create a conflict of interest prohibited by Section 112.313(7)(a), Florida Statutes.
Turning to the more significant issue--her relationship with the law firm and its clients--in CEO 95-30 we opined that a prohibited conflict of interest would be created were the law firm of which an ERC member was a partner were to represent a client before the ERC, but that the firm would not be prohibited from representing DEP or representing clients with interests that were adverse to DEP. As you advise that the appointee will not represent clients before the ERC, the question becomes whether it will create an impediment to her public duties such that she should be disqualified from serving altogether if a member of the firm with which she is associated (but of which she is not a member or employee) occasionally represents a client before the ERC.
In nearly all of our previous opinions examining this issue, the public officer was an attorney in a law firm, and we relied on case law reflecting that an attorney has a professional obligation to each client in the firm. See CEO 80-79, Question 1, and subsequent opinions citing to it. However, in CEO 94-41, we were asked to determine whether a prohibited conflict of interest would be created where a city commissioner was employed as a paralegal by a law firm that infrequently represented clients before the city. In that opinion, we concluded that although she had an employment relationship with the firm, she did not have a contractual relationship with the firm's clients. Therefore, no conflict was found to exist under the factual situation examined in that opinion. Applying this rationale to the appointee's situation, we do not conclude that a prohibited conflict of interest would be created by the law firm's infrequent representation of clients before the ERC, as the appointee is not an employee of the law firm and does not have a contractual relationship with its clients.
Thus, we are of the view that the appointee's private interests as an environmental consultant are sufficiently separate from the interests of the law firm and its clients for us to find that regard for those private interests would not impede the full and faithful discharge of her public duties or lead to a frequently recurring conflict of interest.
Accordingly, we conclude that Section 112.313(7)(a), Florida Statutes, would not be violated by the heretofore described circumstances.
QUESTION 2:
Would a voting conflict of interest be created were matters concerning various entities with whom the appointee has a relationship to come before the ERC?
Your question is discussed as follows.
You have listed six different scenarios in your opinion request and asked whether they would create a voting conflict of interest for the appointee. As a State-level officer, the ERC member would be subject to Section 112.3143(2), Florida Statutes, which provides:
No state public officer is prohibited from voting in an official capacity on any matter. However, any state public officer voting in an official capacity upon any measure which would inure to the officer's special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom the officer is retained or to the parent organization or subsidiary of a corporate principal by which the officer is retained; or which the officer knows would inure to the special private gain or loss of a relative or business associate of the public officer shall, within 15 days after the vote occurs, disclose the nature of his or her interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes.
This provision does not require State-level officers to abstain from voting when faced with a conflict, but it does require them to disclose the conflict and file a memorandum of voting conflict--CE Form 8A.
With regard to whether a voting conflict of interest would be created where 1000 Friends of Florida or the Florida Audubon Society appear before the ERC, in CEO 87-49, we advised a state representative who was vice president of a non-profit orchestra organization that she did not have a voting conflict when voting on funding for a concert hall. We concluded that the orchestra organization did not "retain" her, as she was not compensated for her service as an officer in the organization. Similarly, the appointee would not have a voting conflict when voting on matters of concern to those organizations on whose boards she serves as a non-compensated director.
The other situations in your letter cannot be conclusively answered in this opinion, given the absence of specific facts about the matter being voted on and how they would affect any of the entities listed in your letter. For each scenario, the question which must be addressed is whether the matter being voted upon by the ERC inures to the special private gain or loss of the appointee, her principal, or her business associates, and we cannot determine this from the information in the opinion request. In CEO 81-12, we advised a state legislator who was a partner in a law firm that represented a housing authority that he did not have a voting conflict of interest when he voted on general legislation affecting all housing authorities but that he would have a voting conflict of interest when he voted on special legislation affecting his firm's client. See also CEO 90-10. The latter opinion also noted that the question of whether or not the public officer needed to file a memorandum is better addressed in the context of the specifics of a particular vote since the facts and circumstances surrounding each measure may differ. Here, where it is unclear how a standard being considered by the ERC could affect the entities named in your opinion request, we suggest that if the appointee is in doubt as to whether she may need to file a memorandum of conflict in regard to a particular vote, she should contact our staff for guidance or seek a further opinion.
Question 2 is answered accordingly.
ORDERED by the State of Florida Commission on Ethics meeting in public session on March 14, 2002 and RENDERED this 19th day of March, 2002.
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Ronald S. Spencer, Jr., Chair
[1] Proposed rules containing standards for total maximum calculations and allocations are not required to be submitted to the ERC.