CEO 81-24 -- April 2, 1981

CONFLICT OF INTEREST; SUNSHINE AMENDMENT

STATE SENATOR OWNER OF COMPANY PROVIDING SERVICES TO STATE HOSPITAL AND TO HOSPITAL EMPLOYEES

To: John A. Hill, Senator, 33rd District, Hialeah

SUMMARY:

No prohibited conflict of interest would be created were a company owned by a State Senator to provide fringe benefits, statements, and employee attitude surveys for a State hospital in exchange for the opportunity to sell insurance coverage to hospital employees. The company owned by the Senator would not be selling its services to the Legislature, which would be prohibited by Section 112.313(3), F. S. Under the circumstances presented, Section 112.313(7)(a), F. S., would not be violated, as the Senator would not be employed by or have a contractual relationship with an agency which is subject to the regulation of his agency, and because of the exemption contained in Section 112.313(7)(a)2. Nor would a continuing or frequently recurring conflict of interest be created, since a member of the Legislature does not have such direct and immediate authority over State employees that they would feel compelled to purchase insurance through the Senator's company. Compare CEO 80-68. Article II, Section 8(e), Florida Constitution, would not prohibit a person other than the subject Senator from representing his corporation in contacting a State hospital in seeking to have the corporation provide services to the hospital and to hospital employees, as the Senator would not be "personally" involved in such representation.

QUESTION 1:

Would a prohibited conflict of interest be created under the Code of Ethics for Public Officers and Employees were a company owned by you, a State Senator, to provide services to a State hospital and to employees of that hospital?

This question is answered in the negative.

In your letter of inquiry you advise that you are a life and health insurance agent and business owner. You further advise that you have formed a corporation for the purpose of providing a service to employers by producing fringe benefit statements for their employees. In addition, as part of its services, the company surveys employees' attitudes to their work and provides a breakdown of its survey to the employer. The costs of these actions, you advise, are paid by your corporation, which requests from the employer only a payroll deduction slot and the time to talk to employees. The employees then are offered insurance coverage on a voluntary acceptance basis. Finally, you advise that you would like to attempt to provide this service to the South Florida State Hospital, located in Broward County.

The Code of Ethics provides in part:

DOING BUSINESS WITH ONE'S AGENCY. -- No employee of an agency acting in his official capacity as a purchasing agent, or public officer acting in his official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his own agency from any business entity of which he or his spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or his spouse or child, or any combination of them, has a material interest. Nor shall a public officer or employee, acting in a private capacity, rent, lease, or sell any realty, goods, or services to his own agency, if he is a state officer or employee, or to any political subdivision or any agency thereof, if he is serving as an officer or employee of that political subdivision. The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator's place of business. This subsection shall not affect or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(d) Beginning public employment.

[Section 112.313(3), F. S.]

This provision prohibits a public officer from being an officer or director of, or owning more than five percent of, any business entity which is doing business with his agency. However, since your "agency," as that term is defined in Section 112.312(2), F. S., is the Legislature, and since your corporation does not propose to do business with the Legislature, this prohibition is not applicable.

The Code of Ethics also 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 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), F. S.]

This provision prohibits a public officer from being employed by or having a contractual relationship with an agency which is subject to the regulation of his public agency. We find that you would not have employment or a contractual relationship with the State Hospital both because it is your corporation that would be working with the Hospital and because it appears that the corporation would be providing its services to the Hospital without charge. In addition, the exemption for members of legislative bodies contained in Section 112.313(7)(a)2, F. S., would exclude your situation from this prohibition.

Section 112.313(7)(a), above, also prohibits a public officer from having any employment or contractual relationship that will create a continuing or frequently recurring conflict of interest or that would impede the full and faithful discharge of his public duties. In CEO 80-68 we found that this provision would prohibit a school board member from acting as an insurance broker to administer an insurance program offered privately to school district employees through a teachers' union and through an association of administrative personnel. In our view, the situation which you propose is distinguishable from the situation in that opinion. Unlike the authority of a school board member over school district personnel, a member of the Legislature does not have such direct and immediate authority over the State employees who might be contacted by your company. Thus, Hospital employees would not feel compelled to purchase insurance through your company when solicited by the company. Nor do we feel that considerations of retaining and increasing the business done by your corporation with these employees would tend to lead to disregard of your responsibility as a legislator to act independently and impartially.

Accordingly, we find that no prohibited conflict of interest would be created under the Code of Ethics for Public Officers and Employees were a company owned by you, a State Senator, to provide services to a State hospital and to hospital employees.

QUESTION 2:

Would Article II, Section 8(e) of the Florida Constitution prohibit a person other than yourself representing your corporation from contacting a state hospital in seeking to have the corporation provide services to the hospital and to hospital employees?

This question is answered in the negative.

In a telephone conversation with our staff, you advised that if your corporation contacts the South Florida State Hospital, you will not be involved personally in any dealings between the corporation and the Hospital or its staff. However, you question whether some other person may contact the hospital in behalf of your company.

Article II, Section 8(e), Florida Constitution, provides in relevant part:

No member of the legislature shall personally represent another person or entity for compensation during term of office before any state agency other than judicial tribunals.

As we advised in CEO 77-168 the purpose of this provision appears to be to secure the public trust against abuse by prohibiting a legislator from using the influence of his office over State agencies in order to gain benefits for a private client, as well as by prohibiting situations which would give the appearance of improper influence even in the absence of intentional efforts to misuse the power of legislative influence. If you, personally, were to negotiate with the Hospital in behalf of your corporation, we recognize that you would not be representing a "client" as an attorney would, but you nevertheless would be representing your corporation. The constitutional prohibition is not phrased in terms of representation of a "client," but rather in terms of representation of persons or entities. We understand this choice of language to indicate that the people of this State intended to prohibit a broader range of representation than that only of "clients" before State agencies.

However, Article II, Section 8(e) addresses only those situations where a member of the Legislature "personally" represents another person or entity before certain State agencies. As we noted in CEO 77-168, we find nothing in this constitutional provision which would prohibit your corporation from being represented by another person in contacting a State hospital or other State agency regarding the provision of services by the corporation.

Accordingly, it is our opinion that Article II, Section 8(e) of the Florida Constitution does not prohibit persons other than yourself from contacting a State hospital for the purpose of seeking to provide services, through a corporation owned by you, to the hospital and to hospital employees.