CEO 06-9 -- June 14, 2006

MEMBER OF FLORIDA REAL ESTATE COMMISSION EMPLOYED AS INSTRUCTOR AT REAL ESTATE SCHOOL

A prohibited conflict of interest would be created under Section 112.313(7), Florida Statutes, were a member of the Florida Real Estate Commission to be employed as an instructor at a real estate school.

Would a conflict of interest exist were a member of the Florida Real Estate Commission to be employed as an instructor at a real estate school?

Through your letter of inquiry and additional information supplied to this office, you advise that you are an appointed member of the Florida Real Estate Commission (FREC). You relate that you are also employed as a real estate broker-associate and as an instructor at a real estate school. You inquire whether your employment as an instructor would conflict with any provision of the Code of Ethics.

Chapter 475, Florida Statutes, sets forth various requirements for real estate brokers, sales associates, and schools, and allows the FREC make rules to administer these provisions. Those rules are found in Chapter 61J2 of the Florida Administrative Code. You advise that to become an instructor, you had to meet the requirements of Sections 475.17(1) and 475.451, Florida Statutes, and that pursuant to Rule 61J2-17.016, F.A.C., you must obtain continuing education as a condition of renewing [your] instructor license every two years.

You write that in your capacity as a real estate instructor, you are responsible to provide students with approved information on real estate licensing law, principles and practices and real estate math and to assure their attendance and submit a final class exam and qualifying score. You indicate that you are compensated by an hourly salary not dependent on the number of students and that you are neither an officer nor owner of the school and do not share in its profits.

You advise that the real estate school by which you are employed is approved by the Department of Business and Professional Regulation (DBPR) and that its books and course materials are also approved by DBPR pursuant to a delegation of authority from the FREC which may be revoked at any time. You state that course materials must meet criteria established by the FREC, that schools are required, as a condition of obtaining a permit to operate, to meet the requirements of FREC rule 61J2-17.009, Florida Administrative Code, including the requirement that the course of study to be offered covers the material in the applicable FREC prescribed course, that other provisions in Chapter 61J2-17 restrict or prohibit certain conduct at real estate schools, and that the examinations used by the school must meet the criteria set forth in FREC rule 61J2-3.008. You write that the licensing exam for which students are eligible following course completion is developed by the DBPR, but you indicate that the FREC may reject any question which does not reliably measure the general areas of competency specified in the FREC rules (a task which you indicate is usually assigned to one member of the FREC). You also inform us that Section 455.217(1), Florida Statutes, provides that the FREC will advise the DBPR in providing services, development, preparation, administration, scoring, score reporting, and evaluation of all examinations. This language, you state, suggests that FREC members will or may have access to confidential examination materials.

Finally, you write that pursuant to Section 475.045, Florida Statutes, the FREC is required to administer the Florida Real Estate Commission Education and Research Foundation and that the purposes, objectives, and duties of the Foundation include assisting the teaching program in real estate schools registered pursuant to Chapter 475 Florida Statutes, and developing and from time to time revising and updating materials for use in courses in real estate schools.

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. (a) 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.

The first part of Section 112.313(7)(a) prohibits you from having a contractual relationship with any business entity which is subject to the regulation of, or is doing business with, the FREC. The second part prohibits you from having any contractual or employment 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. This part of the statute establishes an objective standard which requires an examination of the nature and extent of a public officer's duties together with a review of his or her private interests 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).

In CEO 01-10, we addressed a question from a member of the Florida Building Commission who was interested in teaching courses developed or caused to be developed by the Building Commission. In that case, the Building Commission had contracted with various other entities to develop the curriculum and was in the process of retaining an administrator for the Building Code Training Program, who would be responsible for the development of advanced specialized modules, certification of courses developed by other entities, and overall coordination of training. We said that, whether the Board member was teaching her course through a corporation or other entity created by her or someone else, or was teaching her course(s) as a self-employed individual, she would have a contractual relationship with a business entity regulated by the Building Commission, in violation of Section 112.313(7), Florida Statutes. We made this finding even though the core new Florida Building Code curriculum may have been developed through contracts other entities or persons, finding that the Building Commission had ultimate responsibility for development of the courses.

Our reasoning in CEO 01-10 was based on a series of opinions in which we made similar findings. In CEO 96-17, we found that a prohibited conflict of interest would be created under Section 112.313(7)(a) were a member of the State Board of Architecture and Interior Design to become a provider and instructor of continuing education courses. We found that in light of his board's authority to establish criteria for the approval of continuing education courses and providers and to approve such courses, providers, and instructors, were the member to submit his application to his board for its approval of him or an entity created by him to be a provider or instructor, he would have a prohibited contractual relationship with a business entity which was regulated by his agency, the Board. We also found that a continuing or frequently recurring conflict between the Board member's private interests and the performance of his public duties or an impediment to the full and faithful discharge of his public duties would be created by his seeking approval of himself as a provider and/or instructor for purposes of teaching continuing education courses due to the Board's authority over and role in the development of administrative rules regarding such courses and the requirements for the renewal of architect's licenses and its approval of providers and instructors.

Similarly, in CEO 87-61, Question 2, we found that a Criminal Justice Standards and Training Commission member who also was a law enforcement training center director would be prohibited from acting as a consultant to persons involved in the training of law enforcement and corrections personnel in the State. We advised that because the Criminal Justice Standards and Training Commission is responsible for certifying law enforcement officers, correctional officers, and correctional probation officers, as well as instructors, and for establishing training standards and curricular requirements and adopting a program regarding mandatory continuing training or education, his employment as a consultant to persons involved in the training of law enforcement and correctional personnel would impede the full and faithful discharge of his public duties.

Finally, in CEO 77-28, we found that to the extent that accountancy professional organizations sponsored professional development courses that had to be approved for credit by the State Board of Accountancy, such organizations were regulated by that board, and were the Accountancy Board's Executive Director to teach for compensation a course sponsored by a professional organization, he would have employment or a contractual relationship with a business entity which was subject to the regulation of his agency, in violation of the first part of Section 112.313(7). We also found that a conflict would be created under the second part of the statute because of his role in designing and implementing all board decisions, procedures, and programs, in drafting proposed rules implementing and interpreting the Florida Accountancy Law, and in guiding and administratively assisting the board's Committee on Continuing Professional Education, which evaluates and determines the credit to be granted for continuing education courses, subject to the approval of the board.

We adhere to our reasoning in those opinions and find here that by serving as an instructor in a real estate school, you would have employment with a business entity regulated by your agency, the FREC. The information you have provided us and the applicable statutes and rules make clear that the FREC has significant regulatory authority over licensees as well as real estate schools and their course materials, curriculum, examinations, and instructors. Although you state that the FREC prepares their core curriculum through the Department of Business and Professional Regulation, neither that nor the delegation by FREC to DBPR of the ability to approve course materials divests the FREC of its ultimate authority.

In addition, we find that a continuing or frequently recurring conflict between your private interests and the performance of your public duties as a member of the FREC, or an impediment to the full and faithful discharge of your public duties as an FREC member, under the second part of Section 112.313(7)(a), would be created by your employment at a real estate school. As indicated above, this is due to the FREC's authority over such schools and their curriculum and instructors. As we have noted in the past, the second clause of Section 112.313(7)(a) does not require that a public officer or employee actually misuse his or her public position, and this opinion does not make such a finding of misuse or intent to misuse regarding your conduct. The existence of temptation for a public officer or employee to forsake the objective performance of his or her public duty in favor of his or her own private interests is sufficient to create a prohibited conflict. Thus, we find that a prohibited conflict of interest exists.

You have suggested that the exemption of Section 112.313(7)(b), Florida Statutes applies to permit your proposed activities as an instructor,¹ arguing that course providers and instructors can be better served by having one of their peers on the Commission. Section 112.313(7)(b) states:

This subsection shall not prohibit a public officer or employee from practicing in a particular profession or occupation when such practice by persons holding such public office or employment is required or permitted by law or ordinance.

Typically, as we noted in CEO 95-27, we have discussed Section 112.313(7)(b) relative to situations where a public officer sits on a board that regulates himself or his interests and where, by law, persons holding those interests are required or permitted to sit on that board. See, for example, CEO 94-45 and CEO 84-63. However, neither Section 475.021(1) nor any other provision of Chapter 475 requires that an FREC member also be a compensated instructor of pre- or post-licensing education courses. Accordingly, we find that a prohibited conflict of interest is created by your being employed as an instructor at a real estate school while at the same time serving as a member of the FREC.

ORDERED by the State of Florida Commission on Ethics meeting in public session on June 9, 2006, and RENDERED this 14th day of June, 2006.

^[1]You do not inquire, and we do not address in this opinion, whether your employment as a real estate broker-associate would create a conflict of interest with your service on the FREC. We note that the FREC is a seven member board, and that four of the members must be licensed brokers who have held an active license for the five years preceding appointment, and one member must be a licensed broker or a sale associate who has held an active license for the two years preceding appointment. You state that one of the reasons you qualify for appointment to the FREC is because[you] held a sales associates for two years.