CEO 85-89 -- December 11, 1985

CONFLICT OF INTEREST

COUNTY HEALTH DEPARTMENT DIRECTOR SERVING AS DIRECTOR OF NONPROFIT FOUNDATION ESTABLISHED BY LOCAL HOSPITAL

To: Dr. Mark J. Magenheim, Director, Sarasota County Public Health Unit, Department of Health and Rehabilitative Services

SUMMARY:

No prohibited conflict of interest would be created were the director of a county public health unit to serve as a compensated director of a nonprofit research and educational foundation which has been established by a private, psychiatric hospital located within the county. Here the foundation, as opposed to the private hospital, is not regulated by the county health unit and the director's interest in the foundation would be professional rather than financial.

QUESTION:

Would a prohibited conflict of interest be created were you, the director of a county public health unit, to serve as a compensated director of a nonprofit research and educational foundation which has been established by a private, psychiatric hospital located within the county?

Your question is answered in the negative.

In your letter of inquiry you advise that you serve as the Director of the Sarasota County Public Health Unit of the Department of Health and Rehabilitative Services. You also advise that you have been asked to serve as a board member of a private, nonprofit educational and research foundation which has been established by a private psychiatric hospital within the County.

As Director of the Public Health Unit, you have the ultimate responsibility for public health in the County, including those aspects of public health pertaining to hospital facilities and operations. The Public Health Unit has inspection and regulatory authority regarding food service operations, general sanitation and hygiene, public health engineering, communicable disease control, and general environmental health at the private hospital. Aside from public health matters, your position has no licensure control or direct regulatory authority concerning the operation of the hospital, as licensure, inspection, and compliance monitoring of the facility is controlled by the D.H.R.S. Office of Licensure and Certification. Your position has no direct regulatory relationship with the educational or research activities of the hospital.

The hospital mainly serves adolescents with substance abuse problems, chronically mentally impaired geriatric patients, and persons experiencing acute disabling psychiatric conditions. The foundation has been established to conduct mental health and substance abuse related educational and research activity. Contributions from the hospital initially will fund the foundation, which eventually will be financed through donations and grants from both the private and public sectors. Although the work of the foundation will be related to the overall mission of the hospital, its projects will not be directed specifically to programs offered at the hospital. Two of the eleven directors of the foundation are employees of the hospital, three members are affiliated with the hospital's parent corporation, and the remaining six members have no organizational or financial ties to the hospital or its parent company. You have been asked to serve on the board of directors of the foundation due to your geriatric training and practice and your experience in medical education and clinical research. You would receive compensation for your services as a director of the foundation.

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), Florida Statutes (1983).]

The first portion of this provision prohibits a public employee from having any employment or contractual relationship with a business entity which either is doing business with, or is subject to the regulation of, his agency. As a compensated director of the nonprofit foundation, we find that you would have an employment or contractual relationship with the foundation. See CEO 80-71. However, it is apparent that the foundation is not doing business with the public health unit. Nor is the foundation, as opposed to the private hospital, subject to the regulation of the health unit.

Finally, we conclude that your service as a director of the foundation would not present you with a continuing or frequently recurring conflict of interest or impede the full and faithful discharge of your public duties as director of the Public Health Unit, in violation of the second portion of Section 112.313(7)(a). In reaching this conclusion, we note that the Public Health Unit has no direct authority over the foundation. In addition, it appears that your interest in the foundation would be primarily professional, as opposed to financial.

Accordingly, we find that no prohibited conflict of interest would be created were you to serve as a member of the board of directors of the foundation while being employed as Director of the County Public Health Unit.