CEO 78-7 -- January 19, 1978
CONFLICT OF INTEREST
EMPLOYEE OF PUBLIC SERVICE COMMISSION OWNING MATERIAL INTEREST IN COMPANY PUBLISHING OPINIONS OF PSC AND SELLING PUBLICATION TO PSC
To: Richard A. Belz, Attorney, Gainesville
Prepared by: Phil Claypool
No provision of the Code of Ethics for Public Officers and Employees prohibits a company in which a Public Service Commission employee holds an interest and of which he is a director from publishing a compilation of the orders of the PSC. However, s. 112.313(3), F. S. 1975, prohibits a public employee from acting in a private capacity to sell any goods or services to his own agency and thus appears to prohibit a PSC employee from serving as a director of or owning a material interest in the company if it sells its publication to the PSC. Exceptions to this prohibition were established by Ch. 77-349, Laws of Florida, however. One such exception occurs where "[t]he total amount of the subject transaction does not exceed $500." The Ethics Commission has interpreted this $500 exemption to exempt only a total of not more than $500 worth of business between the agency and the business entity within any given 12-month period. See CEO 77-182. Provided that the company's selling of the publication to the PSC would be for an amount of not more than $500, no prohibited conflict of interest would be created by such sale.
1. Would a prohibited conflict of interest exist under the Code of Ethics for Public Officers and Employees were a company in which I own an interest and of which I am a director to publish a compilation of the orders of the Public Service Commission, by which I am employed?
2. Would a prohibited conflict of interest exist under the Code of Ethics for Public Officers and Employees were the Public Service Commission, which employs me, to purchase copies of a publication of its opinions from a company in which I hold a material interest and of which I am a director?
Question 1 is answered in the negative.
In your letter of inquiry you advise that you will begin employment with the Public Service Commission (PSC) in the near future and that you own two-fifteenths of and are a director of a corporation which compiles, digests, and publishes recommended and final orders of the Division of Administrative Hearings. Early in this year, the corporation also will begin publishing a compilation of the orders of the PSC, together with headnotes, a digest, and a citator.
We find that no provision of the Code of Ethics for Public Officers and Employees directly applies to the situation you have described. There is no question here of the business entity selling any goods or services to what will be your agency, the PSC, as is generally prohibited under s. 112.313(3), F. S. 1975. Nor is there a question presented under s. 112.313(7)(a), F. S. 1975, which prohibits a public employee from having any employment or contractual relationship with a business entity which is subject to the regulation of or is doing business with his agency. Similarly, because the business entity will be publishing public records, there will be no question of a violation of s. 112.313(8), F. S. 1975, which prohibits the disclosure or use of information not available to members of the general public and gained by reason of one's official position for one's personal gain.
Accordingly, we find that the Code of Ethics does not prohibit you from owning an interest in a company which publishes a compilation of orders of the PSC while you are employed by the PSC.
Question 2 is answered in the affirmative, subject to certain exceptions specified later in this opinion.
In your letter of inquiry, you also advise that your duties as an employee of the PSC will not involve purchasing decisions which would allow you to order the publication planned by your corporation. The Code of Ethics 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), F. S. 1975.]
This provision prohibits a public employee from acting in a private capacity to sell any goods or services to his own agency. We have previously advised that a person acts in a private capacity whenever a business entity of which he is a director or in which he owns a material interest acts. See CEO's 75-196 and 76-12. A material interest is defined as ownership of more than 5 percent of the stock of a business entity. Section 112.312(11), F. S. (1976 Supp.). Thus, it appears that you are prohibited from serving as director of or owning a material interest in the corporation if it is to sell its publication to the PSC.
However, there are several exemptions to the general prohibition contained in s. 112.313(3), above, which may apply to your situation. The first of these is the grandfather clause appearing in s. 112.313(3), which would permit a contract between the PSC and your corporation if it is entered into prior to the beginning of your employment with the PSC.
The remaining exemptions appear in Ch. 77-349, Laws of Florida, which provide six exemptions to the general prohibitions contained in s. 112.313(3) and (7), F. S. Of these six, the following two will apply, if:
The business is awarded under a system of sealed, competitive bidding to the lowest or best bidder and the official or his spouse or child have in no way participated in the determination of the bid specifications or the determination of the lowest or best bidder; and the official or his spouse or child has in no way used or attempted to use his influence to persuade the agency or any personnel thereof to enter such a contract other than by the mere submission of the bid; and the official, prior to or at the time of the submission of the bid has filed a statement with the Department of State if he is a state officer or employee, or with the Clerk of the Circuit Court of the county in which the agency has its principal office if he is an officer or employee of a political subdivision, disclosing his, or his spouse's or child's, interest and the nature of the intended business; or . . . [t]he total amount of the subject transaction does not exceed $500. [Section 1, Ch. 77-349, Laws of Florida.]
We have previously interpreted the $500 exemption, above, only to exempt a total of not more than $500 worth of business between the agency and business entity within any given 12-month period. See CEO 77-182. With that limitation in mind, please be advised that it would be your responsibility to see that no more than the exempted amount of business be transacted between the PSC and the corporation, whether by notifying the PSC, the corporation, or both.
In response to your inquiry by letter dated January 9, 1978 as to the potential applicability of the exemption contained in s. 112.313(1)(e) relating to a sole source of supply, we note that such exemption is applicable only where the subject official is an officer or employee of a political subdivision.