CEO 74-50 -- November 7, 1974

CONFLICTS OF INTEREST

CLOSE BUSINESS RELATIONSHIPS AS CONSTITUTING POSSIBLE CONFLICTS OF INTEREST

To: W. D. Frederick, Jr., Chairman, Board of Pollution Control, Tallahassee

Prepared by: Gene L. "Hal" Johnson

SUMMARY:

Close personal friendship between Mr. Frederick, acting as head of an agency, and an attorney representing another before that agency does not present a conflict of interest based upon statutory provisions of part III, Ch. 112, F. S., as amended by Chs. 74-176 and 74-177, Laws of Florida. Mr. Frederick has violated none of the standards of conduct set forth in s. 112.313, supra, and his friendship could be construed as violating said provisions only if he corruptly used his position to secure special privileges, benefits, or exemptions for himself or others or if he disclosed information gained by reason of his position for personal gain or benefit of another. Similar benefits to the gain of Mr. Frederick would create a voting conflict of interest to be remedied as set forth in s. 112.314(2), supra. As of January 1, 1975, new statutory provisions will govern Mr. Frederick and other public officers in agency proceedings (s. 120.71, F. S., created by Ch. 74-310, Laws of Florida). Mr. Frederick may then identify causes affecting his objectivity and choose to recuse himself in favor of impartial service as his conscience dictates.

QUESTION:

Does the close business relationship that exists between myself and Mr. Robert P. Murray create a conflict of interest under provisions of part III, Ch. 112, F. S., as amended by Ch. 74-177, Laws of Florida, when Mr. Murray represents a client in a hearing before the Department of Pollution Control?

Specifically, you state that Robert P. Murray, a close personal friend and business associate of yours over many years, is an attorney and represents clients before the Board of the Florida Department of Pollution Control on which you serve as member and Chairman. You have provided more specific descriptions of your business relationship with Mr. Murray which in general indicate that you and Mr. Murray share ownership interests in real estate properties. Your ownership interests are varied but are generally characterized by a present income interest in some cases and a potential for future gain upon the future conveyance of your ownership interest. Your business relationship with Mr. Murray, therefore, is essentially one of common passive real estate holdings. It does not appear that any of the holdings are involved in cases before your board and it does not appear that any of Mr. Murray's clients have any business relationship with you.

The narrow legal question is whether there is an apparent conflict of interest under part III, Ch. 112, as amended by the 1974 Legislature. It is our opinion that under the facts as you state them, there is no conflict based upon these statutory provisions.

Chapters 74-176 and 74-177, Laws of Florida, rewrote virtually every section of part III, Ch. 112, F. S. Clearly you, as Chairman of the Florida Pollution Control Board, are a public officer. Section 112.312(7)(b), F. S., as amended by Ch. 74-177, supra. Section 112.313, F. S., establishes standards of conduct for public officers; however, none of these provisions apply to the facts stated.

Under subsection (1), s. 112.313, F. S., there is no question of your receiving a gift that would influence you in the discharge of your official duties. Under subsection (2), there is no indication that the Department of Pollution Control is doing business with any of the business entities in which you have an interest. Under subsection (3), none of the business entities listed by you appear to be doing business with the Department of Pollution Control and none are business entities which are "granted a privilege to operate" as those words are defined by s. 112.312(6), F. S. Thus, no disclosure is required. Under subsection (5), there is no situation of your "employment" by any of the mentioned business entities. Only subsections (4) and (6) have any potential impact upon you in your official capacity. Subsections (4) and (6) provide:

(4) No public officer or employee of an agency shall corruptly use or attempt to use his official position or perform his official duties to secure special privileges, benefits or exemptions for himself, or others.

* * * * *

(6) DISCLOSURE OR USE OF INFORMATION. -- No public officer or employee of an agency shall disclose information gained by reason of his official position for his personal gain or benefit, or personal gain or benefit for any other person.

In order for you to come within either section, you would have to corruptly use your official position to secure special privileges, benefits, or exemptions for yourself or others or disclose information gained by reason of your official position for personal gain or benefit or for the benefit of any other person, events that we do not assume, and which you should be on guard to avoid.

We would also call your attention to the section dealing with voting conflicts of interest, which states:

No public officer shall be prohibited from voting on any matter in his official capacity. However, when the matter being considered directly or indirectly inures to the public officer's particular private gain, as opposed to his private gain as a member of a special class or creates a conflict between such officer's private interests and his public duties he may abstain from voting on the matter and shall file a statement explaining the conflict with the appropriate officials. [Section 112.314(2), F. S.]

Abstentions from voting are thus anticipated under the circumstances stated and if you abstain you must file a statement explaining the conflict with "appropriate officials." No express guidance is given as to the meaning of "appropriate officials," but we would take this to mean your fellow board members who in turn would make the information available to the public and all parties having a special interest. Unless there is a conflict causing you to abstain, s. 286.012, F. S., requires you to vote in the matter.

For your additional information, on January 1, 1975, new statutory provisions will become effective governing disqualification to serve in an agency proceeding. At that time s. 120.71, F. S., created by Ch. 74-310, Laws of Florida (The Administrative Procedure Act), will become effective.

Section 120.71 will provide:

120.71 Disqualification of agency personnel.

(1) Any individual serving alone or with others as an agency head shall be disqualified from serving in an agency proceeding for bias, prejudice, interest or other causes for which a judge may be recused. If the disqualified individual holds his position by appointment, the appointing power may appoint a substitute to serve in the matter from which the individual is disqualified. If the individual is an elected official, the governor may appoint a substitute to serve in the matter from which the individual is disqualified.

(2) Any agency action taken by a duly appointed substitute for a disqualified individual shall be as conclusive and effective as if agency action had been taken by the agency as it was constituted prior to any substitution.

We do not feel called upon to express an opinion as to whether the facts that you have presented are "causes for which a judge may be recused" under this law. Bias, prejudice, interest, etc., are matters which rest in large measure within the knowledge and conscience of the public official himself. In any situation when an official has any reason to feel that he may be in a position which handicaps him in serving impartially and fairly, obviously he should take appropriate action to remove himself from authority. As a useful analogy, your attention is directed to Canon 3, Florida Code of Judicial Conduct, and in particular Paragraph C therein. See Florida Rules of Court, 1974, p. 825.

The Commission on Ethics must be guided by statutes enacted by the Legislature in determining the proper standard of conduct for public officials, and the foregoing has been limited largely to the content of the statutes we construe to be relevant to your circumstances.

Your action in bringing this matter to the attention of the commission indicates a desire to explore territory beyond the strict terms of the law and we therefore feel you desire additional comments and we are happy to provide them.

Public officers should not be grudging or miserly in their adherence to the Code of Ethics. Compliance with the strict letter of the law is not enough, and a generous attitude by public officers towards the full implementation of the Code of Ethics should be the standard. You and other public officers are encouraged to make full disclosure not only when required by law but also in those situations which may give the appearance of impropriety. You and other similarly situated individuals should recuse yourselves from the consideration of any public matter if for personal reasons you feel you cannot render impartial objective judgment in the matter.

In furtherance of the spirit of dialogue which you have demonstrated, we also suggest that the Pollution Control Board consider the adoption of in-house rules requiring disclosure by its members and others in the Department of Pollution Control in situations similar to the one you have placed before us.