CEO 92-38 -- September 3, 1992

CONFLICT OF INTEREST

CANDIDATE FOR COUNTY PUBLIC HOSPITAL BOARD EMPLOYED BY CORPORATION PARTICIPATING IN JOINT VENTURE WITH NONPROFIT CORPORATION DEVELOPED BY HOSPITAL

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

SUMMARY:

No prohibited conflict of interest would be created were a member of the public hospital board to be employed by a corporation which built and operates a nursing home as a joint venture with a corporation created to support the public hospital board. Although the hospital board member would have an employment relationship with a business entity which is doing business with a business entity which is doing business with the hospital board, such relationships are not prohibited by the first portion of Section 112.313(7)(a), Florida Statutes. Inasmuch as the hospital board has no involvement in the day-to-day operations of the nursing home and the hospital board would rarely, if ever, take any official action regarding the nursing home, there is no indication that the hospital board member's employment relationship would create a continuing or frequently recurring conflict between her private interests and the performance of her public duties or would impede the full and faithful discharge of her public duties as prohibited by the second portion of Section 112.313(7)(a), Florida Statutes. CEO 89-36 and CEO 85-59 are referenced.

QUESTION:

Would a prohibited conflict of interest be created were you to serve as a member of a county hospital board and be employed by a corporation operating two nursing homes, one of which is a joint venture undertaken with the public hospital's side-by-side corporation?

Your question is answered in the negative.

In your letter of inquiry and in a discussion with our staff, you advise that you are a candidate for an at-large seat on the Sarasota County Public Hospital Board. You also advise that you are employed as the community relations coordinator for a corporation which operates two nursing homes in Sarasota County. You relate that one of these nursing homes is a joint venture with a side-by-side corporation developed by the Hospital Board to further the interests of the Hospital. You inquire whether your employment would create a prohibited conflict of interest with your service on the Hospital Board.

Section 112.313(7)(a), Florida Statutes, 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.

The first part of this provision prohibits a member of the Hospital Board from having an employment or contractual relationship with a business entity which is doing business with or is subject to the regulation of the Hospital Board. The second portion of Section 112.313(7)(a), Florida Statutes, prohibits a member of the Hospital Board from having an employment or contractual relationship which creates a continuing or frequently recurring conflict between her private interests and the performance of her public duties, or which impedes the full and faithful discharge of her public duties.

From the information you have provided, you clearly have an employment relationship with the corporation operating the two nursing homes, but there is no indication that the corporation which employs you does business with or is subject to the regulation of the Hospital Board. Instead, the corporation is doing business with the side-by-side corporation, which in turn would be considered to be doing business with the Hospital Board. See CEO 89-36 and CEO 85-59. Although we are aware of the ruling in Sarasota Herald-Tribune Company v. Community Health Corporation, Inc., 582 So.2d 730 (Fla. 2d DCA 1991), in which the court held that the side-by-side corporation was subject to the Public Records Act as a business entity acting on behalf of the Hospital Board in at least some of its functions, we do not believe that the law allows us to ignore its corporate status for purposes of the Code of Ethics and presume that CHC and the Hospital Board are one and the same public agency. Moreover, inasmuch as we have not previously interpreted the first portion of Section 112.313(7)(a), Florida Statutes, to prohibit a public officer from having an employment relationship with a business entity which is doing business with a business entity which does business with her public agency, we find that no prohibited conflict of interest exists under that provision.

Nor do we believe that a conflict exists under the second portion of Section 112.313(7)(a), Florida Statutes. You have advised that the Hospital Board has no involvement in the day-to-day operations of the nursing home, and would rarely, if ever, be required to take any official action concerning the joint venture. While you recognize that you could not vote on matters which inure to the special private gain of your employer pursuant to Section 112.3143(3), Florida Statutes, there is no indication that you would need to frequently abstain from voting, which might be considered an impediment to the performance of your public duties under the second portion of Section 112.313(7)(a), Florida Statutes.

Accordingly, we find that Section 112.313(7)(a), Florida Statutes, would not be violated were you to serve on the Hospital Board while employed by a corporation participating in a joint venture with the Hospital Board's side-by-side corporation. If the circumstances change regarding the ownership or operation of the nursing home, we suggest that you seek another opinion.