CEO 81-43 -- June 18, 1981

CONFLICT OF INTEREST

CHIEF OF STATE ELEVATOR INSPECTION BUREAU STOCKHOLDER IN ELEVATOR COMPANY BIDDING FOR WORK WITH FEDERAL GOVERNMENT

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

SUMMARY:

No prohibited conflict of interest exists where the chief of the Bureau of Elevator Inspection, Division of Hotels and Restaurants, Department of Business Regulation, is a stockholder in an elevator consulting and inspection company which bids on consultant work and inspection of elevators located in federal buildings, over which elevators the Bureau has no regulatory authority. As the company neither does business with nor is regulated by the Bureau, Section 112.313(7)(a), Florida Statutes, would not apply. Nor would a continuing or frequently recurring conflict of interest be created under the circumstances presented, despite the fact that the company might be in the position of bidding for work against elevator companies regulated by the Bureau.

QUESTION:

Does a prohibited conflict of interest exist where you, the Chief of the Bureau of Elevator Inspection, Division of Hotels and Restaurants, Department of Business Regulation, are a stockholder in an elevator consulting and inspection company which bids on consultant work and inspection of elevators located in federal buildings, over which elevators your bureau has no regulatory authority?

Your question is answered in the negative.

You advise in your letter of inquiry that you are Chief of the Bureau of Elevators within the State Department of Business Regulation, Division of Hotels and Restaurants. In that capacity, you write, you have regulatory authority over the permitting and inspection of all elevators in the State with the exception of those located in private residences and in federal government installations. This information is confirmed by the provisions of Chapter 399, Florida Statutes, and by Mr. Harold Purnell, General Counsel, Department of Business Regulation.

Your further advise in your letter of inquiry that you are a stockholder in an elevator consulting and inspection company which submits bids for such work relative to elevators in federal government buildings. In a telephone conversation with a member of our staff, you advised that the type of consulting work performed by your company is analysis of elevator needs within particular structures, i. e., studies of traffic flows, number of people per floor, and other factors affecting elevator usage. The company does not construct or install elevators, you related, but only consults and inspects.

The Code of Ethics for Public Officers and Employees provides in relevant part as follows:

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.

(c) Appointment to public office.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (1979).]

This provision does not apply to your situation because, although you advise that you do own a material interest in the company, the company does not sell any services to your agency or to any other State agency.

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), Florida Statutes (1979).]

As the company neither does business with nor is regulated by your agency, the Bureau of Elevator Inspection, the first clause of the above-quoted provision clearly is not applicable, despite your contractual relationship (through the ownership of stock) with the company. Thus, a conflict of interest exists only if your association with the company presents a continuing or frequently recurring conflict between your private interests and public duties or impedes the discharge of those duties.

In this regard you confirmed, in a telephone conversation with Commission staff, that the company might be in the position of bidding for work against elevator companies regulated by the Bureau of which you are Chief. You advised, however, that the federal government prefers not to contract for consultative work with elevator installation and maintenance companies, as its interests are best served in keeping separate the planning and implementing of elevator projects. Moreover, you related, your regulatory authority over elevator companies is limited to enforcement of requirements prescribed by Chapter 399, Florida Statutes, and the Elevator Safety Code required by that Chapter and promulgated by Departmental rule. Inspection of elevators is accomplished by field inspectors, you said, and permitting, a relatively ministerial function once compliance with the Safety Code is established, by subordinates in your office. You also noted that four supervisors work under you, and you therefore become involved in particular cases only when substantial problems develop. In such cases, you advised that you most often deal with architects, engineers, or builders about the safety of their designs, rather than with elevator installation companies.

The likelihood of a frequently recurring conflict is further diminished by the fact that the business is located in Apopka, while you are based in Tallahassee. You advise that your brother serves as resident agent for the company, and it is he who handles routine business matters, submits bids, etc., while one employee handles most of the inspection and other field work. Your participation is limited, by and large, to telephone consultations with your brother when substantial policy questions arise, you advise.

Under these circumstances, it does not appear that your holding an interest in the company presents a continuing or frequently recurring conflict or one which impedes the full and faithful performance of your public duties. Accordingly, based on the above described situation, we find that no prohibited conflict of interest is created in your holding stock in the company.