CEO 81-2 -- January 22, 1981
CONFLICT OF INTEREST
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES EMPLOYEE PROVIDING CONSULTING SERVICES TO DEPARTMENT
To: David Housel, Gainesville
A prohibited conflict of interest under the Code of Ethics for Public Officers and Employees would be created were an employee of the Department of Health and Rehabilitative Services at a regional evaluation and treatment center to provide consulting services to the district of the department within which the center is located through a consulting firm of which he is an officer. Section 112.313(3), F. S., prohibits a public employee from acting in a private capacity to sell to his public agency; one is deemed to be acting in his private capacity to sell when a company of which he is an officer sells goods or services. As the director of the center is supervised directly by the District Administrator rather than by the Subdistrict Administrator, the employee's "agency" is the District, pursuant to the definition of that term contained in Section 112.312(2), F. S. The subject employee thus would be acting in his private capacity to sell to his public agency, in violation of Section 112.313(3) of the Code of Ethics.
Would a prohibited conflict of interest be created were an employee of the Department of Health and Rehabilitative Services at the North Florida Evaluation and Treatment Center to provide consulting services to District III of the Department through a consulting firm of which he is an officer?
This question is answered in the affirmative.
In your letter of inquiry we are advised that you, William Baxter, and Michael McAnaney are employees of the Department of Health and Rehabilitative Services at the North Florida Evaluation and Treatment Center. You advise that you are a Rehabilitation Therapy Standards Specialist in the Quality Control Unit of the Center, with responsibility for program monitoring and evaluation for the Center. Mr. Baxter and Mr. McAnaney are both Unit Treatment and Rehabilitation Directors at the Center; such administrative positions carry direct responsibility for the treatment of 45 residents referred to the Center from the courts or the Department of Corrections for treatment. You also advise that the responsibilities of all three positions lie exclusively within the Center, which is a forensic hospital providing evaluation and treatment for 90 sex offenders referred from the Department of Corrections and 135 residents referred from the courts as being incompetent to stand trial or not guilty by reason of insanity.
You further advise that the three of you have formed and are officers of a consulting firm which proposes to contract with District III Staff Development and Training of the Department of Health and Rehabilitative Services to provide stress management and burnout treatment for 360 social service workers in the District. The purpose of the training is to help those workers cope more effectively with stress and to prevent burnout.
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), F. S.]
This provision prohibits a public employee from acting in a private capacity to sell any goods or services to his own agency. In previous advisory opinions we have found that a person who is an officer, director, or owner of more than 5 percent of a corporation acts in a private capacity to sell to his public agency where the corporation sells goods or services to that agency. See CEO 76-65. Therefore, under this provision, the only remaining question is whether your consulting firm would be contracting with your "agency." The term "agency" is defined within the Code of Ethics to mean
. . . any state, regional, county, local or municipal government entity of the state, whether executive, judicial, or legislative; any department, division, bureau, commission, authority, or political subdivision of this state therein; or any public school, community college, or state university. [Section 112.312(2), F. S.]
As the Department of Health and Rehabilitative Services is not structured on the department-division-bureau model, but rather is structured by units called "offices," in previous advisory opinions we have determined an employee's "agency" by analogizing the structure of the Department to the department-bureau model. CEO's 78-50, 80-1, and 80-76. In CEO 78-50, we found that a district of the Department is the equivalent of a division within other state departments and that a subdistrict within a district is the equivalent of a bureau. District III is divided into Subdistricts A and B. Section 20.19(4)(a), F. S. The North Florida Evaluation and Treatment Center is located in Gainesville, which is within the geographic area encompassed by District III. However, you have advised, and the District III office has confirmed, that the Director of the center is supervised directly by the District Administrator and not by a Subdistrict Administrator. Therefore, as the direct responsibility over the Center lies with the District and not with a Subdistrict, we find that your "agency" is District III of the Department.
As your consulting firm proposes to sell consulting services to District III, your situation would come within the prohibition of Section 112.313(3), F. S., above. In addition, Section 112.313(7)(a) prohibits a public employee from being employed by a business entity which is doing business with his agency. This provision also would prohibit the contract which you propose.
There are several exemptions to the application of s. 112.313(3) and (7) which are provided in subsection (12) of that section. One exemption is created when:
The business is awarded under a system of sealed, competitive bidding to the lowest or best bidder and:
1. The official or his spouse or child has in no way participated in the determination of the bid specifications or the determination of the lowest or best bidder;
2. 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
3. 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. [Section 112.313(12)(b), F. S.]
You have advised that, in awarding the grant for stress management and burnout training, the department sent requests for proposals to potential vendors. From the responses received by the department, the grant was awarded on a competitive basis. However, we find that this procedure is not the type contemplated by the exemption as it does not appear that sealed, competitive bids were used. Also, it does not appear that the required disclosure statements were filed with the Department of State.
Accordingly, we find that a prohibited conflict of interest would be created were you to provide consulting services to District III of the Department of Health and Rehabilitative Services through a consulting firm of which you are an officer while being an employee of the department at the North Florida Evaluation and Treatment Center.