CONFLICT OF INTEREST

EMPLOYEE OF AGENCY FOR PERSONS WITH DISABILITIES OPERATING GROUP HOME FOR DEVELOPMENTALLY DISABLED

To: Name withheld at person's request

SUMMARY:

A prohibited conflict of interest would be created under Section 112.313(7), Florida Statutes, were a member of a Medical Case Management Team to be employed by and part owner of a group home for the developmentally disabled. The employee's agency regulates such group homes, and the employee's job responsibilities involve inspections of group homes, cost plans for residents, and investigation of complaints. While responsibilities with respect to the group home owned by the employee could be assigned to another team member, such an arrangement would impede the full and faithful discharge of the public employee's duties. However, no conflict of interest would be created were the employee's wife to own and operate the group home independently. As the employee would have no employment or contractual relationship outside his public employment, Section 112.313(7) would not apply.

QUESTION 1:

Would a conflict of interest exist were a member of a Medical Case Management Team in the Agency for Persons with Disabilities to be employed by and part owner of a group home for the developmentally disabled?

Your question is answered in the affirmative.

In your letter of inquiry and additional materials supplied to and conversations with this office, you advise that you are a Registered Nurse Specialist with the Agency for Persons with Disabilities ("APD"). The APD is an entity established by Chapter 2004-267, Laws of Florida, and housed for administrative purposes, but not under the control of, the Department of Children and Family Services (DCF). The agency essentially took over the developmental disabilities program which was formerly part of the DCF, and is "responsible for the provision of all services provided to persons with developmental disabilities pursuant to chapter 393, including the operation of all state institutional programs and the programmatic management of Medicaid waivers established to provide services to persons with developmental disabilities."

The APD is organized into districts generally following those established for the DCF, and you state that you are employed in District 8. As a Registered Nurse Specialist, you are a member of a Medical Case Management Team, which is essentially comprised of yourself and another nurse, with input from a consulting psychologist and social worker. As part of your job responsibilities, you provide health and safety oversight for the services provided under the Home and Community Based Medicaid Waiver Program in District 8. This involves conducting at least one nursing inspection annually in all licensed group and foster homes^[1] for the developmentally disabled in your District, review and investigation of incident reports, technical assistance and training to consumers, providers, family members and guardians, and review of cost plans and medical necessity of treatment.^[2]

You would like to open a group home in District 8 with your wife, who is also a nurse. The two of you would co-own the home, and you would provide direct care to the residents, for which you would be compensated. You state that the home would be licensed by the APD and that the licensing application would be handled by a Regulatory Specialist in District 8. You would apply for certification as a Medicaid Waiver Services Provider.^[3] Through this approval you would bill the Medicaid program through the Agency for Health Care Administration.

The Code of Ethics 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, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; 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.]

Section 112.313(7) prohibits you from having a contractual relationship with any business entity which is subject to the regulation of, or is doing business with, your agency. As the APD is a newly created entity^[4] we must determine for the first time what the "agency" of an employee of the APD is.

Section 112.312(2), Florida Statutes defines "agency" as

"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."

In CEO 03-10, we addressed the issue of whether entities assigned for administrative purposes to the Department of Management Services but not under its jurisdiction or control constituted separate "agencies" from the Department for purposes of the post-employment restrictions contained in Section 112.313(9), Florida Statutes. We noted that "since the Supreme Court has recognized that independent agencies can be created and assigned to another agency for administrative purposes, we conclude that the so-called 'dotted line' agencies that are housed within DMS but are not subject to its supervision or control would not be considered your former agency for purposes of Section 112.313(9)(a)4, Florida Statutes." In keeping with that analysis, we conclude that although the APD is housed within the Department of Children and Families, the DCF would not be considered your agency for purposes of Section 112.313(7).

The question then becomes whether your "agency" for purposes of Section 112.313(7) is the entire APD or some smaller subset of the entity. In a number of opinions involving the DCF or its predecessor agency, the Department of Health and Rehabilitative Services, we observed that the department did not conform to the "department, division, bureau" structure contemplated in Section 112.312(2), and we engaged in a comparison of HRS positions with those enumerated in the Code of Ethics to determine the applicability of its provisions. See, for example, CEO 78-50, CEO 79-48, and CEO 87-20. Such an analysis is not available to us here, though, because although the APD follows an organizational structure similar to that of the DCF, unlike the DCF, the structure is not statutorily prescribed. In the absence of any formalized structural separation, we have found that differing functional units in an agency are still part of that same agency. See, CEO 76-15. Thus, we find here that for purposes of Section 112.313(7), your "agency" is the entire APD.

As your group home will be operated as a corporation, you will have an employment or contractual relationship with a "business entity."^[5] Because your company will be licensed and inspected by the APD, you will have a contractual relationship with a business entity regulated^[6] by your agency. Accordingly, the first part of Section 112.313(7) would prohibit you from owning or being employed by a group home in District 8.

The second part of Section 112.313(7) prohibits a public officer or employee from having any contractual relationship which would 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 the officer's public duties. This provision establishes an objective standard which requires an examination of the nature and extent of the public officer's duties together with a review of his private employment to determine whether the two are compatible, separate and distinct, or whether they coincide to create a situation which "tempts dishonor." Zerweck v. Commission on Ethics, 409 So.2d 57 (Fla. 4th DCA 1982).

You advise that it is part of your job responsibility to inspect group homes and to follow up on incident reports involving residents, and that you spend about 50 percent of your time engaged in such activities. Usually, a group home is made aware of a planned site visit, but occasionally they are unannounced. You state that any deficiencies in a group home are reported to the District's licensing counselor.

You recognize that it would create a conflict of interest were you to inspect and report on a group home in which you have an ownership interest. You have indicated that should this business endeavor come to fruition, the other nurse on your Medical Case Management Team would perform all inspections at your group home, as well as handle any incident reports and cost plans for the residents.

In CEO 87-20, we said the Code of Ethics would be violated were a Department of Health and Rehabilitative Services District Screening Coordinator responsible for caretaker background checks to lease property to an organization which would establish a group home. We noted that applicants for employment in the group home would be required to undergo the screening which the employee coordinated and said, "In our view, regard for your interests as a landlord of the group home would tend to lead to disregard of your duties regarding the screening of all applicants for employment at the home." Further, we stated, "While applicants for the positions in the group home could be screened by a neighboring district, such an arrangement would impede the full and faithful discharge of the public employee's duties in violation of Section 112.313(7)(a), Florida Statutes." Similarly, here, we believe that transferring part of your public responsibilities to another employee would itself indicate that your interest in the group home would impede the full and faithful discharge of your duties. You have asked whether a conflict would still exist in the event your job description were to change so that you would "have no involvement with any of the group homes in district 8," but too many facts are in doubt at this time about how this would be accomplished for us to render an opinion. We invite you to contact us (or our staff) for further advice if and when a more concrete proposal is under consideration.

Accordingly, we find that a conflict of interest would exist were you, an employee of District 8 of the Agency for Persons with Disabilities, to own or be employed by a group home operating in District 8.

QUESTION 2:

Would a prohibited conflict of interest exist if your wife independently were to own and operate a group home in District 8, where you would have no ownership interest and would not be employed by the corporation?

Your question is answered in the negative.

Section 112.313(7)(a) prohibits you from having certain employment or contractual relationships. As we have not considered the marital relationship to constitute an "employment or contractual relationship" within the meaning of this prohibition, and as the statute by its terms addresses only employment or contractual relationships of the official, and not those of his or her spouse, we have advised that Section 112.313(7) does not apply to situations where a public official may be presented with a conflict of interest on the basis of the activities or interests of his or her spouse. For example, in CEO 88-33, we found that no prohibited conflict of interest would be created were the spouse of a Department of Health and Rehabilitative Services foster care counselor to provide day care services which were regulated and partially subsidized by the Department, where the employee did not have an employment or contractual relationship with the day care center.

However, we caution that you also are governed the following provisions within the Code of Ethics for Public Officers and Employees:

DISCLOSURE OR USE OF CERTAIN INFORMATION. -- No public officer, employee of an agency, or local government attorney shall disclose or use information not available to members of the general public and gained by reason of his or her official position for his or her personal gain or benefit or for the personal gain or benefit of any other person or business entity. [Section 112.313(8), Florida Statutes.]

MISUSE OF PUBLIC POSITION.--No public officer, employee of an agency, or local government attorney shall corruptly use or attempt to use his or her official position or any property or resource which may be within his or her trust, or perform his or her official duties, to secure a special privilege, benefit, or exemption for himself, herself, or others. This section shall not be construed to conflict with s. 104.31. [Section 112.313(6), Florida Statutes.]

For purposes of this provision, the term "corruptly" is defined as follows:

Corruptly means done with a wrongful intent and for the purpose of obtaining, or compensating or receiving compensation for, any benefit resulting from some act or omission of a public servant which is inconsistent with the proper performance of his or her public duties. [Section 112.312(9), Florida Statutes.]

These provisions prohibit you from using any public resources or any information not available to the general public to further your wife's private business activity, and from imparting information gained through your official position and not available to the general public.

Accordingly, we find that a prohibited conflict of interest would not be created under Section 112.313(7)(a), Florida Statutes, were your wife to own and operate a group home facility in which you would have no ownership or employment interest.

ORDERED by the State of Florida Commission on Ethics meeting in public session on April 21, 2005 and RENDERED this 26th day of April, 2005.

__________________________

Joel Gustafson, Chair

^[1]Group home facilities serve at least four but not more than 15 residents; foster care facilities serve three or fewer. Section 393.063(17) and (20), Florida Statutes.

^[2]You state that this function will be contracted out by the agency after March 2005.

^[3]"Under authority of section 2176 of Public Law 97-35, Florida obtained waivers of federal Medicaid requirements to enable the provision of specified home and community-based (HCB) services to persons at risk of institutionalization. Through the administration of several different federal waivers, Medicaid reimburses enrolled providers for services that eligible recipients may need to avoid institutionalization. Waiver program participants must meet institutional level of care requirements. The HCB waiver services are designed to allow the recipients to remain at home or in a home-like setting." Rule 59G-8.200, Florida Administrative Code.

^[4]Chapter 04-267 became effective July 1, 2004.

^[5]Section 112.312(5), Florida Statutes, defines "business entity," to mean "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." [E.S.]