CEO 81-88 -- December 18, 1981

CONFLICT OF INTEREST

COUNTY EMPLOYEE ENGAGING IN BUSINESS PERTAINING TO PROPERTY TAX REFUNDS

To: David L. Larsen, Job Developer I, Tallahassee

SUMMARY:

No prohibited conflict of interest would exist were a county employee with the responsibility of placing CETA participants with private employers to be an officer and shareholder of a company which contracts with private businesses to assist them in reducing their property taxes. Section 112.313(7), F. S., would prohibit the subject employee from having a contractual relationship with local business entities which are doing business with his county agency by virtue of their CETA contracts. The provision, however, would not prohibit the employee's interest in a corporation having contracts with such business entities. No continuing or frequently recurring conflict of interest would be created because provisions in CETA contracts are set by CETA guidelines, and because it is unlikely that the employee's corporation would contract to provide tax reduction services to businesses participating in the CETA training program.

QUESTION:

Would a prohibited conflict of interest exist were you, a county employee with the responsibility of placing CETA participants with private employers, to be an officer and shareholder of a company which contracts with private businesses to assist them in reducing their property taxes?

Your question is answered in the negative.

In your letter of inquiry you advise that you are employed with the Leon County Department of Human Resources as a Job Developer I under a County CETA grant. You also advise that you are responsible for placing qualified CETA participants with private, for-profit employers who provide on-the-job training with the objective that the trainee will become a permanent employee. In a telephone conversation with our staff, you advised that the Board of County Commissioners then enters into a contract with the employer and the trainee to reimburse the employer for the on-the-job training that the trainee receives. This is a standard form contract, you advise, with the County paying 50 percent of the trainee's wages during the period of time necessary for his training, a period uniformly set by a standard dictionary of occupational titles. In fulfilling your responsibilities, you solicit private businesses and attempt to match a qualified CETA participant with appropriate positions in private business.

You also write that you anticipate becoming a shareholder and president of a corporation which will contract with private businesses to assist them in reviewing their property taxes, primarily their tangible property taxes, in order to obtain refunds from the County Tax Office for overpayments. The company would receive a percentage of any refund it has been able to obtain. You intend to contact businesses during your lunch hour, or before or after your hours of work with the County, in order to obtain new business.

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

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), F. S.]

This provision prohibits you from having any employment or contractual relationship with a business entity which is doing business with your agency or which is subject to the regulation of your agency. Under the circumstances you have presented, it appears that the corporation you intend to form neither will be doing business with, nor be subject to the regulation of, the County Department of Human Resources.

As to local business entities which are doing business with your agency by virtue of their CETA contracts, Section 112.313(7)(a) would prohibit your having any contractual relationship with them. However, should any of these businesses contract with your corporation for assistance in property tax reduction, it would be your corporation and not you, personally, which would have a contractual relationship with the business. See CEO 79-1, CEO 81-47 and CEO 81-58 for similar examples of this principle.

Section 112.313(7)(a) also prohibits a public employee from having any employment or contractual relationship that will create a continuing or frequently recurring conflict of interest or that would impede the full and faithful discharge of his public duties. We are of the opinion that this provision also would not prohibit the private endeavor that you contemplate. In a telephone conversation with our staff, you advise that it is unlikely that your private corporation would contract to provide services to any business which has contracted with the County under the CETA program. Most of the businesses with CETA contracts, you advise, are small businesses which pay relatively little in tangible property taxes. The large companies, which pay larger amounts in taxes and which therefore are the most likely clients of your private corporation, generally have established their own training programs and therefore are not interested in participating in the CETA training program.

In addition, it does not appear that as a public employee you are in a position to obtain any special benefit for a business which might contract for the services of your private corporation. In particular, we note that County CETA contracts contain standard clauses with amounts which cannot be increased under CETA guidelines.

Accordingly, we find that no prohibited conflict of interest would exist were you to serve as an officer and shareholder of a company which contracts with private businesses to assist them in reducing their property taxes. However, we feel obligated to point out that were you, personally, rather than your corporation, to contract to provide such services with a business employing CETA workers, you would have a contractual relationship with a business entity doing business with your agency, in violation of Section 112.313(7)(a), F. S. As a result, we are of the view that there would be at least an appearance of a conflict of interest which you may wish to consider before your corporation engages in work for a business which employs CETA workers.