CONFLICT OF INTEREST

DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION
EMPLOYEE HOLDING LICENSE ISSUED BY THE DEPARTMENT
AND WORKING FOR ENTITY LICENSED BY THE DEPARTMENT

To: Name withheld at person’s request (Margate)

SUMMARY:

Under the circumstances presented, no prohibited conflict of interest exists under Section 112.313(7)(a), Florida Statutes, where an employee of the Department of Business and Professional Regulation (DBPR) holds a license issued by DBPR and has private employment with an entity licensed by DBPR. The mere fact that the employee holds the license does not create an employment or contractual relationship, and the employee is not in a position at DBPR to influence the licensing process for his own benefit. The employee’s secondary employment with an entity holding DBPR-issued licenses does not create a prohibited conflict under Section 112.313(7)(a), because the employee’s “agency,” namely his bureau at DBPR, does not issue the licenses, and the employee is not in a position to influence the licensing process to benefit his employer or to convey any confidential information concerning licensing to his employer. Referenced are CEO 98-1, CEO 92-48, CEO 92-17, CEO 91-56, CEO 91-34, CEO 90-50, and CEO 82-75.

QUESTION:

Does a prohibited conflict of interest exist under Section 112.313(7)(a), Florida Statutes, where an employee of DBPR holds a DBPR-issued license and has outside employment with an entity licensed by DBPR through bureaus other than the one in which he works?

Under the circumstances presented, your question is answered in the negative.

Through your letter of inquiry and correspondence with our staff, you state you are employed as a Senior Tax Audit Administrator at the Department of Business and Professional Regulation (DBPR). In particular, you indicate you work within the Division of Alcoholic Beverages and Tobacco, which is one of approximately thirty-eight different units at DBPR regulating professional and business disciplines. You relate that the Division of Alcoholic Beverages and Tobacco, in turn, has three bureaus—Auditing, Licensing, and Enforcement—each of which are separate and independent from the other. You indicate that your employment is in the Auditing Bureau and that you are assigned to its Margate location.

You write that as a Senior Tax Audit Administrator, you perform audits and inventories on businesses which manufacture, distribute, or import/export alcohol or tobacco products. You indicate the Auditing Bureau also collects excise and surcharge taxes from these businesses.

You emphasize that the Margate office of the Auditing Bureau (your bureau) handles audits related to alcohol and tobacco products only in the Margate region,¹ and that audits related to these items in other areas of the state would fall beyond your office’s responsibility. Specifically, you indicate an audit of any business licensed to provide alcoholic beverages or tobacco products in Dade County would be performed by the Auditing Bureau’s Miami office, not by the Auditing Bureau at the Margate location. Moreover, you state that your work in the Auditing Bureau gives you no influence over the Licensing or Enforcement Bureaus, and your access to the records of the Licensing or Enforcement Bureaus is no greater than that of any other member of the public.

Additionally, you relate that just as your influence within the Division of Alcoholic Beverages and Tobacco is limited, your influence over other Divisions within DBPR is limited as well. For instance, you state that in your public capacity, you have no interface with the Division of Pari-Mutuel Wagering or the Division of Hotels and Restaurants. You state that you have no access to recommendations concerning whether to grant or deny license applications submitted to these Divisions, and that your access to licensing information concerning these Divisions is no greater than that of any member of the general public.

You write that you hold a DBPR-issued license and have secondary employment with an entity holding DBPR-issued licenses, and ask whether either creates a prohibited conflict of interest.

You state that you are employed by Fronton Holdings, LLC,² as the Director of Internal Audit. This position requires you to prepare audits of various pari-mutuel, cardroom, and casino operations within Casino Miami, and present reports of such audits to ownership and senior management. You relate that these audit reports are intended primarily for internal use within Fronton Holdings, but that certain reports may be submitted to the Division of Pari-Mutuel Wagering as well.³ In addition, you state that Fronton Holding requires each employee working on the grounds of its casino facility to hold a Slot Combo Professional License. Because of this policy, you currently hold such a license, issued through the Division of Pari-Mutuel Wagering’s Miami office. You further advise that Fronton Holdings holds various licenses from DBPR which are necessary for its casino operations. In particular, you state it has a liquor license issued through the Division of Alcoholic Beverages and Tobacco’s Licensing Bureau in Miami, as well as several licenses from both the Division of Pari-Mutuel Wagering and the Division of Hotels and Restaurants.⁴

The provision relevant to your inquiry is Section 112.313(7)(a), Florida Statutes, which 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 . . .; 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 interest 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 the statute prohibits employment with an entity regulated by, or doing business with, your public agency. Therefore, as a threshold matter, we must identify your “agency.”

“Agency” is defined in Section 112.312(2), Florida Statutes, 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 herein; or any public school, community college, or state university; or any special district as defined in s. 189.012.

We have found the Legislature intended this definition to encompass the lowest departmental unit within which an employee’s influence might reasonably be considered to extend. See CEO 98-1, CEO 91-56, and CEO 82-75, Question 1. Accordingly, we have found that when a particular State department has different divisions, it is the bureaus within these divisions—not the divisions themselves—which should be considered the employee’s agency. In CEO 92-48 we found the agency of an employee with the Department of Transportation to be the Bureau of Motor Carrier Compliance, which was within the Division of Facilities and Systems; in CEO 92-17, Question 1, we considered bureaus within the Department of Natural Resources’ Division of Law Enforcement to be separate agencies; and in CEO 91-56 we found the agency of a Florida Department of Highway Safety and Motor Vehicles employee was the Bureau of Driver Improvement, which was within the Division of Driver’s Licenses. Applying that reasoning here, we find your “agency” within DBPR to be the Auditing Bureau of the Division of Alcoholic Beverages and Tobacco.

We find the fact that you have a Slot Combo Professional license does not create a prohibited conflict under the first part of the statute. Simply having a license issued by a state agency does not constitute an employment or contractual relationship. See CEO 92-17, Question 2 and CEO 91-34, Question 3. Further, while the DBPR does regulate the entities or individuals to which it issues licenses (CEO 90-50), your Slot Combo Professional license was issued by the Licensing Bureau of the Division of Pari-Mutuel Wagering, a separate “agency"—for purposes of Section 112.313(7)(a)—from the Auditing Bureau of the Division of Alcoholic Beverages and Tobacco, where you work.

Similarly, your employment by Fronton Holdings does not create a prohibited conflict under the first part of Section 112.313(7)(a), even though Fronton Holdings possesses several DBPR-issued licenses. Your agency—the Auditing Bureau of the Division of Alcoholic Beverages and Tobacco—did not issue any of Fronton Holding’s licenses; rather, they were issued by the Division of Pari-Mutuel Wagering, the Division of Hotels and Restaurants, and the Licensing Bureau of the Division of Alcoholic Beverages and Tobacco. Accordingly, your agency is not regulating or doing business with Fronton Holdings.

The second part of Section 112.313(7)(a), prohibits you from having any employment or contractual relationship that will create a continuing or frequently recurring conflict between your private interests and the performance of your public duties or that would impede the full and faithful discharge of your public duties. A conflict of interest is defined in Section 112.312(8) as “a situation in which regard for a private interest tends to lead to disregard of a public duty or interest.” Neither your holding of a Slot Combo Professional license or your related employment with Fronton Holdings creates a prohibited conflict under the second part of the statute.

Regarding your Slot Combo Professional license, your position at DBPR is unrelated to the issuance or renewal of this particular license, and the Licensing Bureau of the Division of Pari-Mutuel Wagering—an agency separate and independent from your own—issues this license. Moreover, you indicate that your position with the Auditing Bureau of the Division of Alcoholic Beverages and Tobacco does not require you to have any official interactions with the Division of Pari-Mutuel Wagering or provide you with privileged access to evaluations or recommendations which the Division of Pari-Mutuel Wagering might prepare while evaluating applications for Slot Combo Professional Business licenses.

Regarding the several DBPR licenses held by Fronton Holdings, these licenses are each issued and regulated by DBPR agencies separate from your own and over which you exercise no influence. Only Fronton Holdings’ liquor license was issued through your Division, and it was issued through the Licensing Bureau in Miami, not the Auditing Bureau in Margate, where you work. As you have indicated you have no influence over the other Divisions or bureaus through which Fronton Holdings is licensed and have no access to any privileged information compiled by these Divisions or bureaus, it does not appear your public duties would be subject to potential compromise if you continue working at Fronton Holdings while it holds these licenses.

Nor does it appear your responsibilities as a Fronton Holdings employee will create a conflict with your public duties. Although your responsibilities at Fronton Holdings require you to prepare audits for review by the Division of Pari-Mutuel Wagering, as well as for internal use, you advise that these audits are reviewed by Division of Pari-Mutuel Wagering employees in Tallahassee, not by the Division of Alcoholic Beverages and Tobacco Auditing Bureau. Therefore, none of the audits which you prepare for Fronton Holdings will come before you in your public capacity at DBPR. You state you have no contact in any capacity with the Division of Pari-Mutuel Wagering employees who review the audits because Fronton Holding’s Director of Regulatory Compliance—a position distinct and separate from your own—releases all documents to the Division of Pari-Mutuel Wagering, and you do not even know the names or titles of the state employees who review the audits. You also indicate you do not deal in any way with DBPR employees in your capacity as Fronton Holdings’ Director of Internal Audit.

Accordingly, under the circumstances presented, we find that no prohibited conflict of interest exists under Section 112.313(7)(a), Florida Statutes, if you maintain your position at DBPR while holding a Slot Combo Professional license and continuing in your employment with Fronton Holdings.

ORDERED by the State of Florida Commission on Ethics meeting in public session on June 5, 2015, and RENDERED this 10th day of June, 2015.

____________________________________

Linda McKee Robison, Chair

^[1]You state that the Division of Alcoholic Beverages and Tobacco has six offices which handle auditing (Tallahassee, Jacksonville, Tampa, Orlando, Margate, and Miami), each of which has responsibility only over its respective geographical area.

^[2]You indicate Fronton Holdings is currently doing business as Casino Miami and Miami Jai-Alai.

^[3] also state that as the Director of Internal Audit, you are responsible for conducting reviews and inspections to ensure casino operations are comporting with company policy, developing and revising internal controls at the casino, and developing and revising the casino’s audit programs to reduce the risk of theft.

^[4]In particular, you indicate it has Permanent Food Service licenses from the Division of Hotels and Restaurants and Slots, Jai-Alai, and Cardroom licenses from the Division of Pari-Mutuel Wagering.