CEO 91-58 -- October 25, 1991

CONFLICT OF INTEREST

SCHOOL PRINCIPAL CONSULTANT TO COMPANY

SELLING TEXTBOOKS TO SCHOOLS

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

SUMMARY:

A prohibited conflict of interest would exist under Section 112.313(7)(a), Florida Statutes, where an elementary school principal is employed as a trainer for a company that publishes and sells textbooks and materials related to the "whole language" approach to reading instruction and where the principal signs purchase orders payable to the company for the purchase of its textbooks and materials for use at her school. Although the company holds exclusive representation and distribution rights to the products it sells, the "sole source" exemption provided for in Section 112.313(12)(e), Florida Statutes, would not apply, as the materials are not the only sources of whole language reading instruction. Where the State of Florida has utilized its book adoption process and placed some of the company's materials in the Florida School Book Depository, there would be no prohibited conflict of interest were the school to purchase the company's materials from the Florida School Book Depository. Nor would there be a prohibited conflict of interest were the principal to continue working as a trainer for the company and where the company sold materials to the school district, other schools within the district, or to other schools and districts outside of her school district. CEO's 87-20, 81-27, and 79-83, are referenced.

QUESTION:

Would a prohibited conflict of interest be created where you, an elementary school principal who signs purchase orders for textbooks, also are employed as a consultant to a company that publishes and sells textbooks to your school?

Your question is answered in the affirmative.

In your letter of inquiry you advise that you are the principal of Floresta Elementary School in Port St. Lucie. One of your many responsibilities as principal includes signing purchase orders for textbooks and other materials requested by the teachers at your school. You advise that the usual manner in which textbook funds are expended begins with teachers developing lists on which they describe the materials and vendors and set priorities for purchase as the budget allows. An administrative assistant, who may consult with you, then determines what purchases are possible according to budgetary restraints. Typed purchase orders thereafter are signed by you and sent to the school district offices for the signatures of the textbook manager and another county-based administrator.

In addition to your duties as principal, you advise that in April 1991 you became a trainer for a company which publishes and sells textbooks and educational materials emphasizing the "whole language" approach to learning to read. You advise that you were first introduced to this technique after visiting an elementary school in another county as a member of an accreditation team. You were so impressed with the process and the materials the teacher was using that you later contacted the publisher of the materials for more information. You shared this experience with staff members at your school and later purchased some of the materials to begin a whole language reading program at your school. You further advise that you have traveled at your own expense to New Zealand, which is considered to be the most literate country in the world, to study how the whole language method of teaching reading is utilized, and have instituted some of the ideas learned from this trip into your school's curriculum.

Upon your return from New Zealand, you had requests from several schools and organizations to present workshops about the whole language process and to share ideas learned during your New Zealand visit. A representative of the company contacted you and invited you to become a trainer for the company. As a trainer, you travel throughout the United States conducting workshops on the use of literature in reading programs for grades 2-6. Participants pay a fee to attend the workshop, and each participant receives as part of his registration a packet of the company's materials. You relate that during the presentation you demonstrate the use of many titles of classic children's literature in addition to titles published by the company. You do not sell any of the company's materials either during the workshops or at any other time, and you do not receive any payment from the company for the sale of their materials. You are paid on a per diem basis, which includes a flat fee per workshop and travel expenses. You question whether a prohibited conflict of interest exists in your serving as a trainer for the company, where, as principal, you sign purchase orders to purchase books and materials for your school from the company.

The relevant provisions of the Code of Ethics for Public Officers and Employees are 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 of 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 (1989).]

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 (1989).]

The first of these provisions prohibits you from acting as a purchasing agent to purchase materials and books from a business entity of which you or your spouse or child is an officer, partner, director, or proprietor or where you own a material interest in the business entity. It also prohibits you from acting in your private capacity to sell goods to your own agency. For purposes of the Code of Ethics, the "agency" of a school principal is the school at which he or she serves. CEO 79-83. You have advised that neither you nor any family members are officers, partners, directors, or proprietors of the company; nor do you own any interest in the company. You also have advised that you do not sell any textbooks or materials for the company. Therefore, there is no indication that your acting as a trainer for the company constitutes a conflict of interest under Section 112.313(3), Florida Statutes.

Section 112.313(7)(a), Florida Statutes, prohibits you from having an employment or contractual relationship with a business entity which is doing business with or is subject to the regulation of your agency. It also prohibits you from having an employment or contractual relationship which creates a continuing or frequently recurring conflict between your private interests and the performance of your public duties, or which impedes the full and faithful discharge of your public duties. By acting as a trainer for the company, it would appear that you have an employment or contractual relationship with a company which is doing business with your agency through the sale of textbooks and materials to the elementary school where you are principal. This would appear to be a violation of the first portion of Section 112.313(7)(a), Florida Statutes. Were you to delegate to your supervisor the signing of purchase orders made payable to the company, we would consider that delegation as an impediment to the full and faithful discharge of your public duties, as prohibited by the second portion of Section 112.313(7)(a), Florida Statutes. See CEO 87-20, Question 1.

Although Section 112.313(12), Florida Statutes, contains a number of exemptions which may absolve the existence of a conflict under Section 112.313(7)(a), Florida Statutes, the only one which appears to have any applicability to your situation is Section 112.313(12)(e), which provides:

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.

You have advised that the company has exclusive rights for the representation and distribution of all items shown in its catalog. In CEO 81-27, we discussed the applicability of this provision to a situation where a school psychologist owned a company which sold copyrighted educational testing and remediation materials which it manufactured to the school district and to individual schools within the district. This exemption was found to apply as there were no similar materials available on the market other than the copyrighted materials sold by the employee's company. In your situation, however, although the textbooks and materials sold by the company are available only from the company, it does not appear that the company is the only source of materials for teaching the whole language approach to reading. Therefore, Section 112.313(12)(e), Florida Statutes, would not absolve a conflict of interest under Section 112.313(7)(a), Florida Statutes, in the situation you have described.

You also describe the process whereby the State of Florida adopts materials presented by various publishers and then makes the materials available to schools through the Florida School Book Depository. The State purchases the books in quantity from the selected publishers, and then the books are made available to schools at a somewhat lower purchase price. You advise that some of the company's materials were presented during the most recent State adoption period and were accepted. You question whether the purchase of the company's materials through the Florida School Book Depository would qualify as a sole source purchase. As the company's materials are not the only ones listed in the State Directory under the heading "Language Arts - Reading," we would not consider Section 112.313(12)(e), Florida Statutes, to be applicable. However, where schools purchase books through the Florida School Book Depository, we would not consider the school to be doing business with the publisher. Instead, it appears to us that in that situation, the schools would be doing business with the Florida School Book Depository, which, in turn, contracts with the selected publishers for the purchase of their books in quantity. Therefore, where your school purchases materials through the Book Depository, there would be no prohibited conflict of interest under Section 112.313(7)(a), Florida Statutes, because while you have a contractual or employment relationship with the company, you would not be doing business with the company but, instead, would be doing business with the Florida School Book Depository.

In CEO 79-83, we discussed situations in which a school principal could be a partner in or a consultant to a company doing business with his school. There we opined that no prohibited conflict of interest would be created were the business entity employing the principal to sell educational materials to the school board, to schools other than the one at which he was principal, or to school districts other than his own. We consider this rationale to be equally applicable to your situation. Therefore, no prohibited conflict of interest would exist under Section 112.313(7)(a), Florida Statutes, were you to be employed by the company as a trainer where the company sells textbooks and materials to the school board, to schools in the district other than the one which you serve, and to school districts other than your own.

Accordingly, we find that a prohibited conflict of interest would exist where you, an elementary school principal, are employed as a trainer for a company that publishes and sells textbooks and materials related to the "whole language" technique of teaching reading, and where you sign purchase orders payable to the company for the purchase of its textbooks and materials for use at your school. However, no conflict would be created where the school purchases the company's materials through the Florida School Book Depository, or where the company sells textbooks and materials to other schools in the school district, to the district school board, or to schools or districts outside of your school district.