CEO 88-23 -- March 16, 1988

CONFLICT OF INTEREST

D.H.R.S. FOOD STAMP SUPERVISOR

OWNING STORE ACCEPTING FOOD STAMPS

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

SUMMARY:

A prohibited conflict of interest would be created under Section 112.313(7)(a), Florida Statutes, were a public assistance specialist supervisor in food stamps employed by a district of the Department of Health and Rehabilitative Services to own or be employed by a store which accepts food stamps. Although the store would not be regulated by or doing business with the Department, a continuing or frequently recurring conflict of interest with the employee's duties would be created were the employee to own an interest in or be employed by the store.

QUESTION:

Would a prohibited conflict of interest be created were you, a public assistance specialist supervisor in food stamps with a district of the Department of Health and Rehabilitative Services, to own or be employed by a convenience store which accepts food stamps?

Your question is answered in the affirmative.

In your letter of inquiry and a telephone conversation with our staff you have advised that you are employed within District I of the Department of Health and Rehabilitative Services as a Public Assistance Supervisor in Food Stamps. In that position you are responsible for the application and eligibility processes for individuals seeking food stamps by reviewing the information provided by applicants to ensure that the appropriate information is submitted and the proper eligibility determination is made. You advise that another supervisor in the office is responsible for the security of food stamps located in the office.

You further advise that you and your husband are in the process of purchasing a small convenience store; you either would own the store or be employed by the business. The store currently accepts USDA food stamps and receives on the average $20 in food stamp coupons weekly.

You advise that the food stamp program is a federal program administered by the State. Coupons are paid for from federal funds; the program's administrative expenses are paid jointly by the State and the federal government. Your office is responsible for obtaining appropriate information from applicants and making eligibility determinations. When an applicant is approved, the client is notified how many stamps he is eligible to receive and is issued an identification card. Stamps are issued in the office and can be used to purchase food and certain other items. You stated that you believe that a store takes coupons it has received to its bank, which is responsible for obtaining reimbursement for the coupons from the USDA with the appropriate paperwork. You advise that the USDA authorizes stores to accept the food stamp coupons and that stores accepting stamps for improper items can lose the right to accept stamps through USDA enforcement. You stated that DHRS has no control over stores, although violations of the law reported to your office would be forwarded to the USDA for investigation. We note also that food stamp fraud is a criminal violation of Florida law under Section 409.325, Florida Statutes.

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 (1987).]

The first part of this provision prohibits a public employee from having any employment or contractual relationship with a business entity which is subject to the regulation of, or doing business with, her agency. We previously have advised that ownership of a business entity is "employment" for purposes of this provision. See CEO 83- 84. As an employee of District I of DHRS, we find that your "agency" is that District of the Department. See CEO 83-84, CEO 81-2, and CEO 79-48. However, we find that the convenience store which you anticipate purchasing is not doing business with DHRS, although it might be considered to be doing business with some Department clients and with the USDA. Similarly, under the circumstances you have presented we do not find that the store would be regulated by your agency, although it could be considered to be regulated by the USDA.

The second portion of Section 112.313(7)(a) prohibits you from having any employment or contractual relationship that would create a continuing or frequently recurring conflict with your duties as a State employee. In the case of Zerwick v. State Commission on Ethics, 409 So.2d 57 (Fla. 4th DCA 1982), the Court stated that this statute "requires 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.'" In our view, your responsibilities as a Food Stamp Supervisor are not separate and distinct from your interests as an owner or employee of a store accepting food stamps. Rather, they coincide in a manner which would tend to lead to a disregard of your public duties. The Code of Ethics defines the term "conflict of interest" as "a situation in which regard for a private interest tends to lead to disregard of a public duty or interest." Section 112.312(6), Florida Statutes. In reaching this conclusion, we do not mean to imply that you would disregard your public duties for a private benefit, but we do view the situation as one where private interests and public duties would overlap.

Accordingly, we find that a prohibited conflict of interest would be created were you to own an interest in or be employed by a store accepting food stamps while being employed as a Public Assistance Specialist Supervisor in Food Stamps. For your information, we previously have advised in CEO 85-52 that Section 112.313(7), Florida Statutes, applies only to employment or contractual relationships of a public officer or employee and not to those relationships of the officer's or employee's spouse.