CEO 95-6 -- March 9, 1995
CONFLICT OF INTEREST
STATE DEPARTMENT BUREAU CONTRACTING WITH AND
REVIEWING APPLICATION FOR APPROVED APPRAISER
LISTING AND BID PROPOSALS SUBMITTED BY
BROTHER OF BUREAU CHIEF
To: Percy W. Mallison, Jr., Director, Division of State Lands (Tallahassee)
No prohibited conflict of interest would be created under Section 112.3185(6), Florida Statutes, were the brother of a State Department bureau chief to have his application for Approved Appraiser Listing and work reviewed by, and to contract with, the bureau, where the bureau chief has removed himself from all involvement with his brother's contracting with and application and work review by the bureau. Section 112.3185(6), which prohibits the bureau chief from acting in an official capacity to procure contractual services for the bureau from his brother's business, is not implicated where he plays no role in the process. CEO 86-67 is referenced.
Neither Sections 112.313(3) nor 112.313(7)(a), Florida Statutes, are applicable because there is no indication that anyone other than the bureau chief's brother owns any interest in the business and there is no indication that the bureau chief has any employment or contractual relationship with the business.
Does the Code of Ethics for Public Officers and Employees prohibit the brother of a bureau chief of a State Department from contracting with the bureau, when the bureau evaluates the brother's bid proposals and work and the bureau chief plays no role in either the evaluation or contracting process for his brother's work or bid proposals?
Under the circumstances presented, your question is answered in the negative.
You advise that in October 1988, the Division of State Lands, of which you are the Director, hired John Santangini as the Chief of the Bureau of Appraisal. Prior to this employment, he and his brother performed work for the Division as independent fee appraisers. You advise that because the Bureau Chief was concerned about the possible existence of a conflict of interest or at least the appearance of one, he sought advice from our staff concerning his brother's continuing to do appraisal work for the State while he served as Chief of the Bureau which would evaluate his work and be contracting with him.
The Bureau Chief was advised informally by our staff that Section 112.3185(6), Florida Statutes, prohibited him from participating in the award of an appraisal contract to his brother. With respect to the Bureau's reviewing work performed by his brother and submitted to other agencies, and based on the assumption that the Bureau Chief was not an officer, director, or owner of his brother's appraisal business and had no contractual or employment relationship with the business, he also was advised that Sections 112.313(6) and 112.313(8), Florida Statutes, prohibit public employees from misusing their official positions to benefit themselves or another and prohibit them from disclosing or using information gained through their official positions and not available to members of the general public for their benefit or the benefit of another. He was advised to keep in mind not only the actual restrictions of the law, but also the appearance the situation might have to the public in the event that he was faced with having to take some action with regard to his brother's appraisal work when submitted by or to other agencies.
After receiving our staff's informal opinion, you advise, the Division established a procedure for evaluating appraisal bid proposals. Initially, in order to be on the list of Approved Appraisers, the procedure requires a private sector appraiser to submit to the Division an application on which he or she lists his or her qualifications. The application then is reviewed by a Division staff review appraiser, who assigns points pursuant to Department rule and Uniform Appraisal Standards for Board of Trustees Land Acquisition. Criteria listed in Rule 18-1.007(2)(c), F.A.C., and used by the Bureau in evaluating appraisers for purposes of awarding future contracts are as follows: (1) quality of previous work, if any, performed as a result of contracts through the Division; (2) attainment of professional appraisal designation awarded by approved appraisal organizations; (3) professional appraisal-related education or teaching experience; and (4) previous fee volume as a result of contracts through the Division for the twelve months prior to submitting a proposal. Thereafter, the appraiser is required annually to update the application by submitting additional information in order that the base points can be recalculated. Rule 18-1.007(2)(b)5, F.A.C., indicates that a private sector appraiser's name can be removed from the approved list at his or her request, by failure to submit an annual affirmation of interest, for unsatisfactory performance, and for non-compliance with contract terms.
We are advised further that the procedure for Request for Proposal (RFP) begins with the Bureau's receipt of a request for an appraisal. The project is then reviewed by a staff review appraiser, who prepares an advertisement to solicit bids for appraisal and sends it to all appraisers on the Division's Approved Appraiser List who are willing to work in the area. All incoming proposals, we are advised, are given to the Bureau's review appraiser for determining the proposal's points and ranking. With the exception of a proposal received from the Bureau Chief's brother, the ranking then is given to and discussed with the Bureau Chief for his recommendation to a Selection Committee which is composed of you, as the Director of the Division of State Lands, and the Bureau Chiefs of the Bureau of Appraisal and the Bureau of Land Acquisition, or their designated representatives.
If a proposal is received from the Bureau Chief's brother, the Division's procedure requires the review appraiser to prepare the recommendation for the Selection Committee. The review appraiser also is the designee on the Selection Committee for the Bureau Chief, and any contract that is awarded to the Bureau Chief's brother, which normally would be signed by the review appraiser and the Bureau Chief, is signed by the review appraiser and the Deputy Director of the Division of State Lands.
Of concern to you is a recent audit of the Division conducted by the Auditor General, who recommends that the Division take appropriate action to eliminate the appearance of a conflict of interest in the awarding of contracts for appraisal services. Consequently, in addition to obtaining this opinion, you advise that the Division now has placed Appraiser Administrator positions between the Bureau Chief and the Bureau's employees who evaluate proposals received by the Division when the Bureau Chief's brother makes application. You write that with the creation of these supervisory positions, the staff appraiser reports to the Appraiser Administrator, who reports to the Bureau Chief. You ask us to determine whether the procedures in place prior to the audit, those in place after the audit, or any other alternative procedures are appropriate to avoid either an actual or an appearance of a conflict of interest.
Upon our review of the written position description of the Bureau Chief requested by our staff, we note that the Bureau Chief is responsible for, among other things, the administration of the Appraisal Bureau, selection of fee appraisers, performing and reviewing the more complex appraisals related to disposition of State-owned real property, and appraisals of environmentally endangered, outdoor recreation, and other real property for possible acquisition by the Board of Trustees of the Internal Improvement Trust Fund. Additionally, he reviews complex appraisals related to real property acquisitions with title vesting in the Board of Trustees of the Internal Improvement Trust Fund, and those submitted with applications for various permits to determine validity. He also is responsible for the following:
(1) Directing and supervising the review of, approval of, or rejection of appraisal reports prepared by contract fee appraisers to facilitate the land acquisition program of the Board of Trustees;
(2) Planning, directing, and coordinating policies for selection and employment of contract fee appraisers to assist the Department and other cabinet agencies in their land acquisition program; and
(3) Directing and coordinating the appraisal and appraisal review of State-owned real property so that the State realizes the maximum from disposition.
The written position description for an Appraiser Administrator indicates that he or she is responsible for administering planning, coordination, and supervision of, among other things, State lands acquisition/appraisal laws and rules, staff and review appraisal activities, policies, and procedures and other administrative responsibilities pertaining to the section he or she supervises. His or her supervisory responsibilities also include, among other things:
(1) direction of fee, staff, and review appraisal activities, policies, and procedures;
(2) preparation and review of fee and staff appraisal reports for Bureau use;
(3) development and review of contracts;
(4) monitoring the progress of projects and setting priorities of workload; and
(5) developing reports and recommendations for high-level management.
He or she also is responsible for representing the Bureau Chief at various meetings.
Finally, we are advised that in 1994, the Chief's brother submitted five proposals and was awarded contracts on two of them. There also were two updates for which he contracted with the Bureau in 1994 of previous jobs that he had done for the Bureau. The Bureau also reviewed three appraisals that he had done for a private non-profit organization. During 1994, the Bureau handled appraisals for 142 new projects and approximately 1850 projects for disposition of property, we are advised.
Relevant to your inquiry are the following provisions of the Code of Ethics for Public Officers and Employees:
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 of 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.]
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.]
We find that Section 112.313(3), Florida Statutes, which prohibits a public employee from acting in his or her official capacity to purchase services for his or her agency, from a business entity in which he or she, his or her spouse, or his or her child is an officer, partner, director, or proprietor, or in which any of them or any combination of them own a material interest, is not applicable. Here, we have no indication that anyone other than the Bureau Chief's brother owns an interest in the brother's business.
Similarly, Section 112.313(7)(a), Florida Statutes, would prohibit the Bureau Chief from having any employment or contractual relationship with a business entity which is doing business with his agency. However, inasmuch as we have no indication that he has any ownership interest, employment, or contractual relationship with his brother's business, we find that this provision does not apply. See CEO 86-67.
The one provision of the Code of Ethics that would apply here is Section 112.3185(6), Florida Statutes, which provides as follows:
CONTRACTUAL SERVICES.--No agency employee acting in his official capacity shall directly or indirectly procure contractual services for his own agency from any business entity of which a relative is an officer or employee or his spouse or child, or any combination of them, has a material interest.
This provision prohibits the Bureau Chief from acting in an official capacity to procure contractual services for the Bureau from his brother's business.
We applied this provision in CEO 86-67 to find no prohibited conflict of interest where the acting director of a county public health unit which had contracted with a pharmacy owned by her husband to obtain drugs for primary care patients had been removed from any involvement in the contracting process. Similarly, here we find no prohibited conflict of interest where the Bureau Chief has been removed from all involvement in determining his brother's eligibility for future contracts with the Bureau, his brother's ranking on the Bureau's list of Approved Appraisers, the Bureau's evaluation of his brother's proposals, and the Bureau's decision whether to contract with him. While an appearance of a conflict of interest may still exist by virtue of the Bureau Chief's supervisory authority over the Appraiser Administrators and his role in contracting with appraisers who might be viewed as competing with his brother, we find that all that Section 112.3185(6) requires is that the Bureau Chief not be involved in the Bureau's procurement of contractual services with his brother. This requirement appears to be met by leaving such decision making in the Bureau's staff appraisers but placing supervisory authority over them in the Appraiser Administrators rather than the Bureau Chief, and by requiring that the Deputy Director of the Division rather than the Bureau Chief sign any contract between the Bureau and the Bureau Chief's brother.
With respect to the Bureau's evaluation of the Bureau Chief's brother's appraisals and those of appraisers who might be viewed as competing with his brother, we would be remiss if we did not caution the Bureau Chief about Sections 112.313(6) and 112.313(8), Florida Statutes, which provide:
MISUSE OF PUBLIC POSITION.--No public officer or employee of an agency shall corruptly use or attempt to use his official position or any property or resource which may be within his trust, or perform his official duties, to secure a special privilege, benefit, or exemption for himself or others. This section shall not be construed to conflict with s. 104.31. [Section 112.313(6), Florida Statutes.]
For purposes of this provision, the term "corruptly" is defined as follows:
'Corruptly' means done with a wrongful intent and for the purpose of obtaining, or compensating or receiving compensation for, any benefit resulting from some act or omission of a public servant which is inconsistent with the proper performance of his public duties. [Section 112.312(9), Florida Statutes.]
DISCLOSURE OR USE OF CERTAIN INFORMATION.--No public officer or employee of an agency shall disclose or use information not available to members of the general public and gained by reason of his official position for his personal gain or benefit or for the personal gain or benefit of any other person or business entity. [Section 112.313(8), Florida Statutes.]
In order to violate Section 112.313(6), it must be determined that the Bureau Chief used his position or the resources within his trust with wrongful intent to benefit his brother in a manner which was inconsistent with the proper performance of his public duties. Therefore, if it were shown that the Bureau Chief took some action with respect to causing the Bureau to contract with his brother, that such contract is not in the best interests of the Department, that he caused proper procedures not to be followed in awarding the contracts, that he caused special consideration or other privileges to be given by the Bureau to his brother which are not given to others seeking the same or similar contracts, or that he acted in some other manner which could be viewed as inconsistent with the proper performance of his public duties, then a violation may be indicated. See CEO 89-63. We bring this provision to your attention so that the Bureau Chief may be cautioned against using his position to assist his brother. Similarly, we would caution the Bureau Chief to remain cognizant of Section 112.313(8), which prohibits him from disclosing or using for the benefit or personal gain of his brother information not available to members of the general public and gained by reason of his official position.
Accordingly, under the circumstances, where the Bureau Chief has been removed from all involvement with the Bureau's contracting with his brother and evaluating his work, we find that no prohibited conflict of interest exists under Section 112.3185(6), Florida Statutes.
ORDERED by the State of Florida Commission on Ethics meeting in public session on March 9, 1995, and RENDERED this _____ day of March, 1995.
R. Terry Rigsby