CEO 87-3 -- January 29, 1987

CONFLICT OF INTEREST

STATE UNIVERSITY INSTRUCTOR OWNING

COMPUTER CONSULTING BUSINESS

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

SUMMARY:

As a general matter, no prohibited conflict of interest exists where an instructor and director of a computer laboratory at a state university owns a business which consults with private businesses regarding computer usage and which sells computer hardware and software to clients. However, Section 112.313(7)(a), Florida Statutes, may be violated if the employee does business with a business entity which is doing business with the university.

QUESTION:

Does a prohibited conflict of interest exist where you, an instructor and director of a computer laboratory at a state university, own a business which consults with private businesses regarding computer usage and which sells computer hardware and software to clients?

In your letter of inquiry you advise that you are employed by Florida Atlantic University as an instructor of computer systems and as director of a computer laboratory for the use of students, faculty, and staff. You also advise that from time to time you are requested to recommend equipment and software for purchase by the University for use in the College of Business. You play no part in the decision of whether these recommendations should be submitted for purchasing, and you do not participate in the selection of any of the items purchased.

Further, you advise that you are an employee and a 50 percent shareholder of a corporation which acts as a consultant to private businesses on questions relating to computer systems analysis and design. This business advises its clients on using computers, from the evaluation of the need for a computer to the design of the computing system, including recommendations for hardware and software.

In the course of this business, you advise, the corporation occasionally will sell hardware and software to a consulting client, as an independent reseller of these goods. The business has the permission of a number of wholesalers of computer hardware and software to purchase their products for resale to clients. The business is permitted, as an authorized reseller, to purchase hardware and software at wholesale prices and to resell to the user. The qualifications for the status of "authorized reseller" are determined by the manufacturer or vendor. The corporation receives no compensation from any wholesaler as a result of any resales or any other transactions; all purchases of equipment and software are made at published wholesale prices that are available to any other authorized reseller, and the corporation receives no extra discounts, rebates, or lower prices than any other authorized reseller. Finally, you advise that the corporation does not do business with the State or any of its agencies, and does not participate in any transactions between the University and any seller of equipment or software.

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 (1985).]

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 (1985).]

Section 112.313(3) prohibits you, as a public employee, from acting in a private capacity to sell any goods or services to the University, which is your "agency" as that term is defined in Section 112.312(2), Florida Statutes. However, you have advised that your business does not do business with the State or any of its agencies and does not participate in any transactions between the University and any seller of equipment or software.

Section 112.313(7), Florida Statutes, prohibits you from having any employment or contractual relationship with a business entity which is doing business with the University. In light of this prohibition, problems may arise if you do business with a wholesaler or a client which is doing business with the University, especially if you are in a position to recommend that wholesaler's product to the University for purchase. If it appears that one of these situations may occur, we would suggest that you seek a further opinion.

Your question is answered accordingly.