CEO 84-88 -- August 30, 1984

CONFLICT OF INTEREST

D.H.R.S. EMPLOYEE EMPLOYED AS REAL ESTATE SALESMAN FOR REALTOR

To: Mr. Robert V. Peirce, Medicaid Program Supervisor, Office of Program Integrity, Office of Medicaid, Department of Health and Rehabilitative Services, Tallahassee

SUMMARY:

No prohibited conflict of interest would be created were a Medicaid Program Supervisor in the Office of Program Integrity, Office of Medicaid, Department of Health and Rehabilitative Services, to work during his off-duty hours as a real estate salesman for a real estate firm, so long as he is not involved in any real estate services concerning the Department or any medicaid provider. With these conditions, the employee's private employment would not constitute doing business with his agency, in violation of Section 112.313(3), Florida Statutes, and would not present a continuing or frequently recurring conflict of interest in violation of Section 112.313(7), Florida Statutes.

QUESTION:

Would a prohibited conflict of interest be created were you, a Medicaid Program Supervisor in the Office of Program Integrity, Office of Medicaid, Department of Health and Rehabilitative Services, to work during your off-duty hours as a real estate salesman for a real estate firm?

Your question is answered in the negative, subject to the conditions noted below.

In your letter of inquiry you advise that you are employed by the Department of Health and Rehabilitative Services as a Medicaid Program Supervisor in the Office of Program Integrity, Office of Medicaid. You also advise that the principal functions of the unit which you supervise are to detect and investigate instances of provider fraud or abuse in the medicaid program, to initiate recovery of overpayments, to make referrals of providers to other agencies such as the Medicaid Fraud Control Unit in the Office of the Auditor General, and to recommend administrative sanctions against providers when appropriate. Medicaid providers include physicians, pharmacists, hospitals, nursing homes, and other persons and organizations in or related to the health care field.

You question whether you may be employed part-time as a real estate salesman with a real estate firm. You advise that your real estate activity usually would occur outside of your regular working hours, although occasionally you may request annual or compensatory leave in order to engage in this work.

You advise that it is possible that the real estate firm might have a relationship with the Department on occasion, but that you will not be involved in any real estate services concerning the Department. In addition, you advise that the president of the firm is a member of the board of trustees of a hospital which has an agreement with the Department to provide medicaid services. You state that you will not be involved in any real estate services with respect to that hospital or with respect to any other medicaid provider of services.

The Code of Ethics for Public Officers and Employees provides in relevant 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.

(c) Appointment to public office.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (1983).]

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 (1983).]

Section 112.313(3) prohibits you from acting in a private capacity to rent, lease, or sell any realty to your agency. However, you have stated that you will not be involved in any real estate services involving the Department. Therefore, so long as you are not involved as a real estate salesman in any transaction involving the Department, we find that this provision of the Code of Ethics would not be violated.

The first portion of Section 112.313(7)(a) prohibits you from having any contractual relationship with a business entity, such as the real estate firm, which is doing business with your "agency." In accordance with our reasoning in CEO 83-85 and in the opinions cited there, we find that your "agency" for purposes of the Code of Ethics is the Office of Program Integrity, a unit of the Department analogous to a bureau within other State departments. In a telephone conversation with our staff, you advised that neither the Office of Program Integrity nor the Office of Medicaid would be involved in real estate matters; if the real estate company were to do business with the Department, you advised, the firm probably would deal with an office under the Assistant Secretary of Administration. As the Office of Medicaid is under the supervision of the Assistant Secretary for Program Planning, we find that the real estate firm would not be doing business with your agency.

We also are concerned with the possibility that your acting as a real estate salesman in behalf of medicaid providers could lead to a frequently recurring conflict of interest or could impede the full and faithful discharge of your duties as Medicaid Program Supervisor, in violation of Section 112.313(7)(a). However, you have advised that you will not be involved in any real estate services regarding any medicaid provider. Similarly, as your private employment would be with the real estate firm rather than with the hospital which the firm's president serves as a trustee, we are of the opinion that Section 112.313(7)(a) would not prohibit you from working as a real estate salesman for the firm.

Accordingly, we find that no prohibited conflict of interest would be created were you to work during your off-duty hours as a real estate salesman for the real estate firm, subject to the conditions that you not be involved in any real estate services concerning the Department or any medicaid provider.