CEO 94-47 -- December 1, 1994

 

CONFLICT OF INTEREST

 

STATE COMMISSION EXECUTIVE DIRECTOR

OWNING INTEREST IN TRAVEL AGENCY

 

To:      (Name withheld at the person's request.)

 

SUMMARY:

 

No prohibited conflict of interest would exist under Sections 112.313(3) and 112.313(7), Florida Statutes, were a travel agency partly owned by the executive director of a State commission to make travel arrangements for and do business with State departments and agencies other than the Commission, because the agency of the executive director for purposes of the Code of Ethics is the Commission and because the executive director's public duties are not substantially related to agencies other than the Commission.  The travel agency would be prohibited from providing services for the members of the Commission and its staff traveling on official Commission business, regardless of whether the travel is paid for directly by the commission or paid for initially by the individual staff and Commission members and later reimbursed by the Commission.

 

QUESTION:

 

Would a prohibited conflict of interest be created were you, the executive director of a State commission, to become a part-owner of a local travel agency and the agency to do business with State agencies, as long as the travel agency does not do any business with the Commission?

 

Your question is answered in the negative.

 

In your letter of inquiry, you advise that you are concerned about the possible existence of a prohibited conflict of interest were you to become a part-owner in a local travel agency.

You advise that you are the Executive Director of the Florida Commission on the Status of Women ("Commission"), which was established in the Office of the Attorney General pursuant to Section 14.24, Florida Statutes.  You advise that the Commission, which is made up of appointees of the Governor, the President of the Senate, the Speaker of the House, and the other Cabinet members, is relatively independent of the Office of the Attorney General.

You further advise that the Commission's funding comes through specific requests and awards from the Legislature but is administered by the Department of Legal Affairs through its Finance Department.  Your salary is awarded specifically through Legislative appropriation for the Commission.  You also advise that all of the Commission's purchases and travel are paid for through the Commission's budget.  Additionally, although the Department of Legal Affairs does not provide any staff support to the Commission, it does provide office space.

Finally, you write that you report directly to the Deputy Attorney General, who has the authority to hire and fire you, but that the Commission assists him with your annual evaluations.  Recently, the Commission also hired an Administrative Assistant to process all travel for the Commission.

You advise that, if you become a part-owner of the travel agency, the travel agency would not do business with the Commission.  We agree that this would be prohibited under the following provisions of the Code of Ethics for Public Officers and Employees:

 

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 of 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.

(c)  Appointment to public office.

(d)  Beginning public employment.

[Section 112.313(3), Florida Statutes.]

 

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), Florida Statutes.]

 

The first part of Section 112.313(3) prohibits you from acting in a private capacity to purchase goods or services for your agency from any business entity of which you are an officer, partner, director, or proprietor or in which you have a "material interest," a term which is defined at Section 112.312(15), Florida Statutes, to mean "direct or indirect ownership of more than five percent of the total assets or capital stock of any business entity."  The second part of Section 112.313(3) prohibits you, while acting in your private capacity, from selling services to your own agency.  In previous opinions, we have advised that one who owns a material interest in a business acts in a private capacity to sell when that business sells.  See CEO 75-196 and CEO 87-41.

In CEO 87-2, we found that Section 112.313(3) would be violated were a State Representative to be a partner in a travel agency which made travel arrangements for members and employees of the Legislature traveling on official business.  There, we reversed CEO 76-175, CEO 80-1, CEO 80-13, and CEO 85-71, which found that a travel service would not be doing business with a public agency when officials and employees of that agency personally paid for their official travel and were reimbursed later by their agency, reasoning that such a view allows a public official to do indirectly what he is prohibited from doing directly and thereby circumvents the intent of Section 112.313(3).  Consequently, we are of the opinion that Section 112.313(3) would prohibit a travel agency in which you owned more than a five percent interest from making travel arrangements for you, your administrative assistant, and members of the Commission, who are traveling on official Commission business, whether the travel is paid for directly by the Commission or is paid for directly by you, your administrative assistant, and the Commission members and later reimbursed by the Commission.

With respect to Section 112.313(7)(a), Florida Statutes, the first part prohibits you from having a contractual or employment relationship with a business entity which is doing business with or is regulated by your agency, while the second part prohibits you from having any employment or contractual relationship that will create a continuing or frequently recurring conflict of interest or  impede the full and faithful discharge of your public duties.  Your part-ownership of the travel agency would constitute a contractual relationship with that business.  See CEO 82-65, CEO 86-36, and CEO 93-35.  Thus, you would be prohibited by the first part of this provision from being a part-owner in the travel agency if it is doing business with the Commission.  See CEO 94-3 for a discussion of what constitutes "doing business" for purposes of this prohibition in the context of a travel agency.  However, assuming that the travel agency would not do business with the Commission, which would be prohibited by the first part of Section 112.313(7), we see no reason to believe that your involvement with the travel agency would present a continuing or frequently recurring conflict of interest or impede the full and faithful discharge of your public duties, in violation of the second part of Section 112.313(7).

We do not find that either Section 112.313(3) or 112.313(7) would prohibit your involvement with the travel agency if it does business with State agencies other than the Commission.  Both of these prohibitions are phrased in terms of prohibiting conflicts of interest relating to one's "agency."  As used in the Code of Ethics, the term "agency" is defined at Section 112.312(2), Florida Statutes, to mean

 

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 previous opinions we have said that the Legislature intended by this definition to define a State employee's agency as the lowest departmental unit within which his influence might reasonably be considered to extend.  See, for example CEO 91-49, CEO 82-75, and CEO 77-83.  Notwithstanding the statutory assignment of the Commission for administrative purposes to the Office of the Attorney General and your ultimate supervision by the Deputy Attorney General, we find that, because your position is assigned to the Commission and the Commission is relatively independent of the Office of the Attorney General, your agency for purposes of  the Code of Ethics is the Commission, rather than the Office of the Attorney General.

As we noted above, Section 112.313(3) prohibits you from acting in a private capacity to sell services to your own agency.  Because the travel agency would be selling services to the Department of Legal Affairs or another State department or agency other than the Commission, no prohibited conflict of interest would be created under this provision were the travel agency to do business with the Department of Legal Affairs or other State department or agency.  Similarly, because the travel agency with which you would have a contractual relationship would not be doing business with the Commission, we find that it would not be prohibited by the first part of Section 112.313(7)(a) from doing business with the Department of Legal Affairs or any other State department or agency.  We also find that because your public duties do not relate substantially to the Department of Legal Affairs, the second part of Section 112.313(7)(a) would not prohibit your travel agency from doing business with the Department of Legal Affairs, as no continuing or frequently recurring conflict of interest or impediment to the full and faithful discharge of your public duties would exist.

Please note that Section 112.313(6), Florida Statutes, provides:

 

MISUSE OF PUBLIC POSITION.--No public officer or employee of an agency shall corruptly use or attempt to use his official position or any property or resource which may be within his trust, or perform his official duties, to secure a special privilege, benefit, or exemption for himself or others.  This section shall not be construed to conflict with s. 104.31

 

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 public duties.  [Section 112.312(9), Florida Statutes.]

 

You should take care that none of your conduct could be interpreted as a use or attempted use of your official position or an attribute thereof in order to specially benefit yourself or your travel agency.  For example, as we noted in CEO 87-2 and CEO 87-41, solicitation of private travel business from Commission members, your administrative assistant, or any of the various other women's organizations and agencies that you work with in your official capacity, could constitute a violation of this provision.

Accordingly, we find that no prohibited conflict of interest would be created under Sections 112.313(3) and 112.313(7)(a), Florida Statutes, were a travel agency which owned in part by you to do business with the Department of Legal Affairs or any State department or agency other than the Commission and its officers and employees traveling on official business, as described above.