CEO 88-25 -- April 28, 1988

CONFLICT OF INTEREST

DISTRICT MEDICAL EXAMINER CONTRACTING

WITH BUSINESSES IN WHICH HE HAS AN INTEREST

FOR OFFICE SPACE AND SUPPORT SERVICES

To: W. Pearson Clack, M. D., Medical Examiner, District 12, Sarasota

SUMMARY:

A prohibited conflict of interest exists under the Code of Ethics for Public Officers and Employees where a district medical examiner, who contracts to provide a county with total medical examiner services for a fee, subcontracts with his professional association or another business entity in which he has an interest for office space and support services. Section 112.313(3), Florida Statutes, prohibits a public officer from acting in a private capacity to rent, lease, or sell any realty, goods, or services to the political subdivision in which he serves, and Section 112.313(7)(a), Florida Statutes, prohibits a public officer from having any employment or contractual relationship with a business entity which is doing business with his agency. CEO's 74-82, 78-55, 84-112, 82-28, 88-19, and 81-76 are referenced.

An associate medical examiner also is a "public officer" for the purposes of the Code of Ethics and, therefore, is subject to its provisions. However, as the law does not presently designate associate medical examiners (or district medical examiners) as "local officers," they are not subject to the requirement of filing statements of financial interests annually under Section 112.3145, Florida Statutes. While the Code of Ethics contains no prohibition which uniformly would prohibit a district medical examiner from appointing an individual who is a member of his professional association as an associate medical examiner, a district medical examiner is cautioned that his interest in keeping the private professional relationship harmonious, productive, and profitable could impede his duty to impartially evaluate an associate medical examiner's job performance and lead to a frequently recurring conflict between those interests. Also, although Section 112.313(3) would not be violated were a county to contract with a district medical examiner's professional association to provide complete medical examiner services to the district medical examiner, such an arrangement would violate Section 112.313(7) unless one of the exemptions contained in Section 112.313(12), Florida Statutes, applied, as the district medical examiner thereby would have a contractual relationship which would create a continuing or frequently recurring conflict between his private interests and the performance of his public duties.

QUESTION 1:

Does a prohibited conflict of interest exist where a district medical examiner who contracts to provide a county with total medical examiner services for a fee subcontracts with his professional association or some other business entity in which he has an interest for office space and support services?

This question is answered in the affirmative.

In your letter of inquiry you advise that you serve as the District Medical Examiner for District 12. District medical examiners are appointed by the Governor pursuant to Section 406.06(1)(a), Florida Statutes, for each medical examiner district from nominations submitted by the Florida Medical Examiners Commission. Nominees are required to be practicing physicians in pathology. In performing the duties specified in Chapter 406, Florida Statutes, the principal medical examiner service is the expression of a professional opinion as to the cause and manner of death. A medical examiner must utilize autopsy, laboratory, staff, and other support services in order to reach his opinion.

According to a recent study provided by the Medical Examiners Commission, the Florida Medical Examiners System is served by 24 districts. Each district operates as an independent organizational unit and is designed to meet the needs of the district's constituent groups, including the general public and the judicial, law enforcement, and county government systems. Four of the districts are operated by county governments; 14 of the districts are managed by pathologist groups which contract with county governments where the group's employees perform the required medical examiner functions; five of the districts are managed by pathologist groups, staffed by county employees, and provided with operational expenses by the counties; one of the districts is not staffed and currently is served by another district.

Thirteen of the district medical examiner offices are located in centralized facilities. The remaining offices operate out of multiple sites. The most frequent arrangement is for the office to be associated with the pathologist's practice or with a government facility. Morgue and autopsy space generally are located at separate sites and are contracted for through local hospitals. The majority of the offices contract with hospitals or other outside laboratory services for forensic toxicology services. The remainder maintain varying levels of in-house capacity for conducting laboratory analysis.

In a telephone conversation with our staff, the Medical Examiners Commission staff advised that funding for the medical examiner districts currently is provided in two ways. First, funds are distributed to the various counties from the allocation for Aid to Local Governments for Medical Examiner Services, which appears as an annual line item in the General Appropriations Act. These payments are made to the counties on the basis of a population formula. Also, supplemental funds are provided to the counties from the Local Government Criminal Justice Trust Fund.

You advise that you exercise your responsibilities within a three-county district. You have entered into a contract with one of the counties to provide "[your] services, labor, and all equipment . . . necessary for the complete performance of the work of District Medical Examiner . . . ." Under this contract, you are paid on a monthly basis a fixed fee, regardless of the number of cases handled by your office. You have entered into a similar contract with one of the other counties in your district and you charge the third county a fee for each case which you handle.

You obtain services for your office through professional associations or corporations in which you are a partner or stockholder. The use of these services, you maintain, is an asset to the function of your office and is cost effective for the counties involved, as alternative arrangements would be logistically difficult and much more expensive.

For example, you use your private histology laboratory for the preparation of microscopic slides from small portions of tissue. The tissue is processed overnight through a series of chemicals, embedded in parafin, cut into thin slices on a microtome, and then mounted on slides and stained. You state that the cost of providing these services would increase significantly if you were prohibited from using your private laboratory. You also advise that you use this laboratory because you can maintain control over the quality of the sections and the stains within your own facility which would not be obtainable from another operation. You further advise that sections prepared by your laboratory are available the following day, while turn-around time in any other laboratory would be at least several days. Additionally, as tissue slides and other items are important evidentiary material, they may be subpoenaed for review in both criminal and civil cases and must be retained indefinitely. It is the duty and responsibility of a medical examiner to ensure the security of these materials, and you feel that you can only provide for this security within your own laboratory.

You also advise that your laboratory is located in the same building as your administrative and investigative medical examiner's office. The current administrative and investigative functions of the District Medical Examiner require 700 to 1,000 square feet of office space which must be located reasonably near your hospital offices. Office space consisting of 662 square feet has been leased by the office since 1983, at the current cost of $14 per square foot, from a corporation of which you are a stockholder. The office space is totally furnished by the corporation, while comparable unfurnished office space in the area goes for $13 to $16 per square foot, you advise. The office utilizes the services of your private switchboard and switchboard operator, without any direct or indirect cost to the counties which you serve. If the office were located elsewhere, it would have to be equipped with a telephone system and an additional full-time employee to answer the telephone. The office also utilizes, without any direct or indirect cost to the counties, the services of your private clerical employees. Without these services, the office would be required to hire an additional secretary. The services of your courier system, comprised of three cars and drivers, are also available to the office, at no cost to the counties. A car and a driver would have to be obtained at county cost if those services were not provided by your professional association. Also, assuming that other histology laboratories would be willing to process your tissue, a courier system would be necessary to transport the tissue to neighboring cities.

Transcription services also are provided to the office from the typing pool of your professional association. This work requires a specially trained medical transcriptionist who understands the terminology of medicine and forensic pathology. Your reports generally require 3 to 15 pages of typing. Because these reports are legal documents, their accuracy and neatness is crucial. Your professional association charges $5 for each report, regardless of the length of the report or number of required revisions. In addition, these transcriptionists type much of the correspondence required by you and your associates in your duties as medical examiners. There is no cost to the counties for these services. The counties would incur significant costs if you were required to obtain these services from some other transcription pool or to hire a full- time transcriptionist on the medical examiner office staff.

You have contacted a number of other medical examiners throughout the State and have determined that they follow similar practices within their offices. They also believe that these measures are beneficial rather than detrimental to the best interests of the public; they contend that the State Legislature and Medical Examiners Commission deliberately designed the system to be a flexible one which allows the individual medical examiner to make efficient use of the resources available in his own locale. The Medical Examiners Commission never has issued guidelines, either directly or through its own ethical advisory committee, which suggest that such arrangements are inappropriate. You question whether the Code of Ethics for Public Officers and Employees prohibits a district medical examiner who contracts to provide a county with total medical examiner services for a fee from subcontracting with his professional association or another business entity in which he has an interest for office space and support services.

In CEO 74-82 we advised that district medical examiners were not public officers within the meaning of the Code of Ethics for Public Officers and Employees as they were not listed in the exclusive and explicit categories of public officers designated in Part III, Chapter 112, Florida Statutes. However, the following year the Code of Ethics was amended by Chapter 75-208, Laws of Florida, and presently is codified, without change, to define a "public officer" as "any person elected or appointed to hold office in any agency, including any person serving on an advisory body." See Section 112.313(1), Florida Statutes. The term "agency" was defined that year 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 therein; or any public school, community college, or state university." See Chapter 75-196, Laws of Florida, and Section 112.312(2), Florida Statutes. Section 1.01, Florida Statutes, provides that, as used in the Florida Statutes where the context permits, the words "political subdivision" include "all other districts in this state." Section 406.05, Florida Statutes, provides that the Medical Examiners Commission "shall establish medical examiner districts within the state." Therefore, given the duties and authority of a medical examiner as provided in Chapter 406, Florida Statutes, we are of the opinion that a district medical examiner is a "public officer" within the contemplation of the Code of Ethics and that the "agency" of a district medical examiner is the medical examiner district which he serves.

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.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (1987).]

This provision prohibits a public officer from acting in his official capacity to purchase, rent, or lease any realty, goods, or services for his own agency from a business entity of which he is an officer, partner, director, or proprietor or in which he owns more than a five percent interest. The subsection also prohibits a public officer from acting in a private capacity to rent, lease, or sell any realty, goods, or services to the political subdivision in which he serves. In addition, the following provision prohibits a public officer from having any employment or contractual relationship with a business entity which is doing business with his agency:

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 (1987).]

These provisions of the Code of Ethics prohibit you from subcontracting with your professional association or another business entity in which you have an interest to secure office space and support services for your district.

The Code of Ethics contains several exemptions to these prohibitions, including the following three, where:

The business is awarded under a system of sealed, competitive bidding to the lowest or best bidder and:

1. The official or his spouse or child has in no way participated in the determination of the bid specifications or the determination of the lowest or best bidder;

2. The official or his spouse or child has in no way used or attempted to use his influence to persuade the agency or any personnel thereof to enter such a contract other than by the mere submission of the bid; and

3. The official, prior to or at the time of the submission of the bid, has filed a statement with the Department of State, if he is a state officer or employee, or with the Clerk of the Circuit Court of the county in which the agency has its principal office, if he is an officer or employee of a political subdivision, disclosing his, or his spouse's or child's, interest and the nature of the intended business. [Section 112.313(12)(b), Florida Statutes (1987).]

An emergency purchase or contract which would otherwise violate a provision of subsection (3) or subsection (7) must be made in order to protect the health, safety, or welfare of the citizens of the state or any political subdivision thereof. [Section 112.313(12)(d), Florida Statutes (1987).]

The business entity involved is the only source of supply within the political subdivision of the officer or employee and there is full disclosure by the officer or employee of his interest in the business entity to the governing body of the political subdivision prior to the purchase, rental, sale, leasing, or other business being transacted. [Section 112.313(12)(e), Florida Statutes (1987).]

However, from the circumstances you have presented, it does not appear that any of these exemptions presently would apply.

Chapter 406, Florida Statutes, the "Medical Examiners Act," provides that district medical examiners shall be entitled to compensation and such reasonable salary and fees as are established by the board of county commissioners in the respective districts. See Section 406.06(3), Florida Statutes. Section 406.08, Florida Statutes, further provides that the district medical examiner shall submit an annual budget to the board of county commissioners and that fees, salaries, and expenses may be paid from the general funds or any other funds under the control of the board. That subsection also provides that autopsy and laboratory facilities utilized by the district medical examiner or his associates may be provided on a permanent or contractual basis by the counties within the district and that payment for services to the district medical examiner may be made by the State in part or on a matching basis. Another provision allows for the removal or suspension of a medical examiner by the Medical Examiners Commission for the misuse or misappropriation of public funds or property. See Section 406.075(1)(a), Florida Statutes.

Section 406.17, Florida Statutes, provides that the "Medical Examiners Act" supersedes all parts of statutes, general laws, and special acts with which it is in conflict. However, while the language contained within Chapter 406 appears to allow great latitude within the medical examiner system, it does not expressly provide that a district medical examiner may contract to provide realty, goods, or services to his district from any business entity in which he holds a private interest.

We acknowledge the fact that the practices which you have been following commonly have been employed by various members of the medical examiner community. We also believe that you and other medical examiners have engaged in these practices without corrupt intent. However, unless and until a legislative solution is devised, we conclude that your current practices are in violation of the Code of Ethics.

Accordingly, we find that a prohibited conflict of interest exists where you, a district medical examiner who contracts to provide a county with total medical examiner services for a fee, subcontract with your professional association or another business entity in which you have an interest for office space and support services.

QUESTION 2:

Are associate medical examiners, all of whom are appointed by the district medical examiner and serve at his pleasure, public officers for purposes of the Code of Ethics for Public Officers and Employees, and subject to the requirement of filing statements of financial interests annually?

Section 406.06(2), Florida Statutes, provides that a district medical examiner may appoint as many associate medical examiners as may be necessary to provide service at all times and all places within the district. Associate medical examiners serve at the pleasure of the district medical examiner. In accordance with the rationale of Question 1, above, we find that an associate medical examiner is a "public officer" for purposes of the Code of Ethics and, is therefore, subject to its provisions.

Pursuant to Section 112.3145(2)(b), Florida Statutes, certain State and local officers and specified State employees are required to file statements of financial interests each year. For purposes of that subsection, the term "local officer" means:

Every person who is elected to office in any political subdivision of the state, and every person who is appointed to fill a vacancy for an unexpired term in such an elective office. [Section 112.3145(1)(a)1, Florida Statutes (1987).]

Any appointed member of a board, commission, authority, including any expressway authority or transportation authority established by general law; community college district board of trustees, or council of any political subdivision of the state, excluding any member of an advisory body. A governmental body with land-planning, zoning, or natural resources responsibilities shall not be considered an advisory body. [Section 112.3145(1)(a)2, Florida Statutes (1987).]

Any person holding one or more of the following positions: mayor; county or city manager; chief administrative employee of a county, municipality, or other political subdivision; county or municipal attorney; chief county or municipal building inspector; county or municipal water resources coordinator; county or municipal pollution control director; county or municipal environmental control director; county or municipal administrator, with power to grant or deny a land development permit; chief of police; fire chief; municipal clerk; district school superintendent; community college president; or purchasing agent having the authority to make any purchase exceeding $1,000 for any political subdivision of the state or any entity thereof. [Section 112.3145(1)(a)3, Florida Statutes (1987).]

As the law presently does not designate associate medical examiners (or district medical examiners) as local officers, they are not subject to the requirement of filing statements of financial interests annually under Section 112.3145, Florida Statutes. See CEO 78-55, Question 2, in which we also reached this conclusion.

QUESTION 3:

Does a prohibited conflict of interest exist where a district medical examiner appoints as an associate medical examiner a member of a professional association of which the district medical examiner is a member?

The Code of Ethics contains no prohibition which uniformly would prohibit a public officer from appointing an individual with whom he has a private professional relationship as a subordinate public officer. In previous advisory opinions we have advised, for example, that while Section 112.313(7)(a), Florida Statutes, prohibits a public employee from having a contractual relationship that would create a continuing or frequently recurring conflict between his private interests and the performance of his public duties, no such conflict of interest generally would arise from a private contractual relationship between a public employee and a subordinate employee. Nevertheless, we have recognized that when a public employee has an ongoing private business relationship with a subordinate that relationship and the employee's interest in keeping that relationship harmonious, productive, and profitable could impede the employee's duty to impartially evaluate the subordinate's job performance and lead to a frequently recurring conflict between those interests. See CEO's 84-112 and 82-28. We further have advised that no such possibility for conflict existed in the context of a particular business relationship between two public officers who operated independently and on an equivalent level. See CEO 88-19. The present circumstances appear to be more analogous to a relationship between a public employee and a subordinate who have an ongoing private association, however, and such a relationship should be approached with caution.

As noted in Question 1, above, if the professional association of an associate medical examiner were under contract to provide realty, goods, or services to the medical examiner district in which he served, this relationship would be prohibited by Section 112.313(3) and (7)(a), Florida Statutes, by virtue of his membership in the professional association, unless an exemption applied to the transaction between the professional association and the medical examiner district.

QUESTION 4:

Would a prohibited conflict of interest be created were a county to contract with a professional association to provide complete medical examiner services for a district medical examiner if the district medical examiner is a stockholder in the professional association?

Under this type of arrangement, a district medical examiner could not be said to be acting in his official capacity to purchase, rent, or lease any realty, goods, or services for his own agency, or acting in a private capacity to rent, lease, or sell any realty, goods, or services to the political subdivision in which he serves, in violation of Section 112.313(3), Florida Statutes.

The first portion of Section 112.313(7)(a), Florida Statutes, which prohibits a public officer from having a contractual relationship with a business entity which is doing business with his agency also would not be violated. While the district medical examiner's ownership of stock in the professional association would create a contractual relationship with the professional association, the professional association would be doing business with the County rather than the medical examiner district.

However, the second portion of Section 112.313(7)(a) prohibits a public officer from having a contractual relationship that would create a continuing or frequently recurring conflict with his public duties. In the case of Zerweck v. State Commission on Ethics, 409 So. 2d 57 (Fla. 4th DCA 1982), the court stated that this statute required "an examination of the nature and extent of the public officer's duties together with a review of his private employment to determine whether the two are compatible, separate and distinct or whether they coincide to create a situation which 'tempts dishonor.'"

The phrase "conflict of interest" is defined in the Code of Ethics to mean "a situation in which regard for a private interest tends to lead to disregard of a public duty or interest." We previously have advised that Section 112.313(7)(a) does not require proof that a public officer has failed to perform his responsibilities, has not acted impartially, or otherwise has acted corruptly. In CEO 81-76, for example we stated:

The statute is entirely preventive in nature and is intended to maintain the respect and confidence of the people in their government by preventing certain situations in which private economic considerations may override the faithful discharge of public responsibilities. Thus, the statute is directed at potential conflict of interest and thus is more concerned with what might happen in a given situation than with what actually happens.

We are of the opinion that such a conflict would exist in the described situation, unless one of the exemptions contained in Section 112.313(12), Florida Statutes, applied. While the county rather than the medical examiner district would be doing business with the professional association, any realty, services, or goods purchased from the professional association in actuality would be provided to the medical examiner district. In our view the district medical examiner's private interest in the professional association could impede his responsibility as district medical examiner to assure that the county, and the district, received the best services possible as a result of the contract.

With reference to the exemptions discussed here and in Questions 1 and 3, above, it should be noted in particular that within the context of the competitive bid exemption a district medical examiner would be prohibited from participating in the determination of any bid specifications. While it is possible that county officials would not have the expertise to perform this function, they conceivably could receive assistance from an independent consultant or the Florida Medical Examiner's Commission. Also, determinations as to the appropriateness of an emergency purchase, or as to whether the business entity involved is the sole source of supply within the medical examiner district, would need to be made by the agency making the purchase.

Your questions are answered accordingly.