CEO 99-11 -- September 8, 1999

CONFLICT OF INTEREST

DCF DISTRICT HEALTH & HUMAN SERVICES BOARD MEMBER EMPLOYED

BY INSTITUTION PROVIDING SERVICES TO DISTRICT

TO: Daniel L. Austin, Chairman, District 10 Health & Human Services Board, Department of Children and Family Services (Ft. Lauderdale)

SUMMARY:

Section 112.313(7)(a), Florida Statutes, prohibits a member of a district health and human services board for the Department of Children and Family Services from being employed by a private university that is providing services to the district. The Aagency@ of the advisory board member is the district, and the district is obtaining services from the university=s school of psychology. Although under the exemption for advisory board members in Section 112.313(12), Florida Statutes, the appointing authority could waive the existence of a conflict under Section 112.313(7)(a), Florida Statutes, the Commission is unable to conclude that the exemption would also apply to waive the prohibition that appears to exist under Section 20.19(8)(d)2, Florida Statutes (1998 Supp).

QUESTION:

Is a prohibited conflict of interest created where you, a member of a District Health and Human Services Board for the Department of Children and Family Services, are employed by a private university providing services to the district?

Your question is answered in the affirmative, subject to the exemption discussed below.

Through your letter of inquiry, we are advised that you are Chairman of the Health & Human Services Board for District 10 of the Department of Children and Family Services (DCF). You further relate that you are employed by Nova Southeastern University as Director and a professor in the Division of Public and Health Services Administration within the School of Business and Entrepreneurship. You relate that Nova Southeastern is a provider of mental health services to District 10 though its School of Psychology, but you are not associated with in-line or staff responsibilities in that School; nor are you associated with managing or overseeing the funds the University receives from the Department. You further advise that the Board has not been involved with the selection and award of contracts to the University, as the Board, by statute, is an advisory body to the District Administrator. You question whether these circumstances create a prohibited conflict of interest with your service on the Board.

The Code of Ethics provides in relevant part:

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), Florida Statutes, prohibits a public officer from having an employment relationship with a business entity which is doing business with his agency. It also prohibits the public officer from having an employment relationship which creates a continuing or frequently recurring conflict between his private interests and the performance of his public duties, or which impedes the full and faithful discharge of his public duties.

The first question we must resolve is what is your Aagency@ for purposes of the Code of Ethics. In numerous opinions, we have opined that an advisory board to a governing body is considered part of that body in determining an individual=s Aagency.@ See CEO 89-41, CEO 87-69, and CEO 91-26. Section 112.312(1), Florida Statutes, defines Aadvisory body@ as

any board, commission, committee, council, or authority, however selected, whose total budget, appropriations, or authorized expenditures constitute less than 1 percent of the budget of each agency it serves or $100,000, whichever is less, and whose powers, jurisdiction, and authority are solely advisory and do not include the final determination or adjudication of any personal or property rights, duties, or obligations, other than those relating to its internal operations.

You have advised that the District 10 Health and Human Services Board has no budget and is staffed by a District 10 employee. Further, it was related that the Board has not exercised any responsibilities concerning the final determination or adjudication of any personal or property rights, duties, or obligations, and that pursuant to Section 20.19(8)(o)9, Florida Statutes (1998 Supp.), it only makes recommendations to the District Administrator. Based upon your representations, we conclude that the District 10 Health and Human Services Board is an Aadvisory body.@ In keeping with our precedent, your Aagency@ for purposes of the Code of Ethics is District 10 of the Department of Children and Family Services.

Our inquiry next focuses on whether you have an employment relationship with a business entity--Nova Southeastern University--which is doing business with DCF District 10. ABusiness entity@ is defined in Section 112.312(5), Florida Statutes, to mean

any corporation, partnership, limited partnership, proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust, whether fictitious named or not, doing business in this state.

Our staff=s review of corporate records maintained by the Department of State confirms that Nova Southeastern University is a registered, nonprofit corporation. Therefore, it does appear that for purposes of the first part of Section 112.313(7)(a), Florida Statutes, you have an employment relationship with a business entity that is doing business with your agency.

We recognize that it is a different school--the School of Psychology, and not your school--the School of Business and Entrepreneurship--that is actually providing services to DCF District 10. We also understand from your correspondence that you, as a Board member, had no involvement in the District=s decision to obtain services from your institution. However, in previous opinions we have not viewed internal separations within a business entity as a distinction for purposes of Section 112.313(7)(a). In this regard, see CEO 88-80, where we concluded that a prohibited conflict of interest was created where a county commissioner was employed as a financial consultant for a brokerage firm and where another unit of the firm provided bond underwriting services for the county. Notwithstanding the internal division within the brokerage firm and the fact that the county commissioner neither directed county business to the firm nor benefited personally from the county=s business with the firm, we concluded there that the situation violated Section 112.313(7)(a). In our view, this rationale is applicable here too.

However, we do not believe that a conflict is created under the second clause of Section 112.313(7)(a), Florida Statutes, as the information submitted by you does not suggest that a continuing or frequently recurring conflict or impediment to duty is created by your employment with Nova and your position on the Board. Apparently, it has not been the practice of the District 10 Board to review contract provider performance reports, and you indicate that your Board had no involvement in the District=s decision to enter into a Memorandum of Negotiation with Nova Southeastern University. Therefore, it is our view that no conflict is created under the second clause of Section 112.313(7)(a), Florida Statutes.

Returning to the conflict created under the first clause of Section 112.313(7)(a), there is an exemption in Section 112.313(12), Florida Statutes, that may be applicable to waive the conflict. It provides:

The requirements of subsections (3) and (7) as they pertain to persons serving on advisory boards may be waived in a particular instance by the body which appointed the person to the advisory board, upon a full disclosure of the transaction or relationship to the appointing body prior to the waiver and an affirmative vote in favor of waiver by two-thirds vote of that body. In instances in which appointment to the advisory board is made by an individual, waiver may be effected, after public hearing, by a determination by the appointing person and full disclosure of the transaction or relationship by the appointee to the appointing person.

We have noted the applicability of this provision in many other instances. See, for example, CEO 84-113, rendered to a member of the State Board of Administration=s Investment Advisory Council who was president of a financial institution issuing certificates of deposit purchased by the Board. The required disclosure is made by using our CE Form 4A.

However, we cannot render an opinion about whether this provision would also waive the prohibition that appears to be present under Section 20.19(8)(d)2, Florida Statutes (1998 Supp.), which provides in relevant part:

Individual providers or employees of provider agencies, other than employees of units of local or state government, may not serve as health and human services board members but may serve in an advisory capacity to the board.

We do not have the authority to render advisory opinions on statutes outside of the Code of Ethics and, here, it would appear that the Attorney General=s Office would be the appropriate entity to construe Section 20.19, Florida Statutes. You also have advised that recent legislation (Chapter 99-219, L.O.F.,) effectively waives the provisions of Section 20.19(8)(l), (m), (n), and (o), Florida Statutes (1998 Supp.), until July 1, 2000. However, we note that the provision at issue--Section 20.19(8)(d)2--appears to be unaffected by this newly-enacted waiver, as does the provision (Section 20.19(8)(h)) that subjects Health and Human Service Board appointees to the Code of Ethics.

Accordingly, we find that a prohibited conflict of interest is created under the first clause of Section 112.313(7)(a), Florida Statutes, where you are a member of the District 10 Health and Human Services Board and are employed by a private university contracting with District 10 of the Department of Children and Family Services. However, the exemption in Section 112.313(12), Florida Statutes, would be applicable to waive the conflict under Section 112.313(7)(a).

ORDERED by the State of Florida Commission on Ethics meeting in public session on September 2, 1999 and RENDERED this 8th day of September, 1999.

__________________________

Peter M. Dunbar

Chair