CEO 81-67 -- September 17, 1981

CONFLICT OF INTEREST

CITY POLICE OFFICERS BUYING AND SELLING PRECIOUS METALS WITHIN CITY

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

SUMMARY:

Chapter 81-121, Laws of Florida, effective October 1, 1981, contains strict record-keeping and other regulations over precious metals dealers, enforceable by law enforcement agencies. Section 112.313(7), Florida Statutes, prohibits a public officer or employee from owning a business entity which is subject to the regulation of his agency. As in CEO 79-81, we find that the power of a law enforcement officer to arrest for violations of the criminal laws does not constitute a regulatory power within the contemplation of this provision. However, should a municipal police officer engage in the business of buying and selling precious metals within the municipality on or after October 1, 1981, a continuing or frequently recurring conflict between the officer's private interests and the performance of his public duties would be created, in violation of Section 112.313(7), Florida Statutes.

QUESTION:

Would a prohibited conflict of interest be created were a municipal police officer to engage in the business of buying and selling precious metals within the municipality, given the requirements of Chapter 81-121, Laws of Florida?

Your question is answered in the affirmative.

In your letter of inquiry and in a telephone conversation with our staff you advise that .... and .... of the Lake Worth Police Department have operated as individual dealers, traders, purchasers, and sellers of second-hand gold, silver, coins, and other items. Both of the officers maintain their businesses within the City limits, although they may go outside the City to purchase items.

Chapter 81-121, Laws of Florida, as effective on October 1, 1981, requires persons engaging in the business of buying and selling precious metals to keep records of purchases, including personal information about the seller, a description of the items sold, and the date of purchase. These records must be retained for a three- year period and are subject to inspection at all times by all law enforcement officers. In addition, within twenty-four hours after a purchase, the record of that purchase must be submitted to the sheriff of the county and to the municipal police department of the municipality in which the business is operated. Articles containing precious metals are not to be disposed of until at least 15 days after the sheriff or the police department has received the record of purchase, and the articles are required to be made available for inspection by any law enforcement officer upon request. In addition, the Act prohibits the purchase of precious metals from any person under the age of 18. Violation of these requirements is punishable as a first degree misdemeanor.

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, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; 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 (1979).]

In previous opinions, we have advised that ownership of a business entity constitutes employment or a contractual relationship with that entity. See CEO 78-93 and CEO 79-16, copies of which are enclosed. However, we are of the opinion that the businesses of the subject police officers are not subject to the regulation of their Department.

The requirement that records be filed with the Police Department does not indicate that the filer is subject to the regulation of the Department. Nor does the power of inspection of the records and of items containing precious metals constitute "regulation," in our view. Finally, we do not believe that the power of a law enforcement officer to arrest for violations of the criminal laws constitutes a regulatory power.

In CEO 79-81, a copy of which is enclosed, we found that no prohibited conflict of interest would be created were a highway patrol trooper to provide privately an escort service for the movement of oversized loads on Florida highways. The Florida Highway Patrol, we advised, does not "regulate" persons or businesses by virtue of its duty and authority to enforce criminal laws which are generally applicable to everyone. If we were to interpret the Code of Ethics otherwise, we would prohibit all law enforcement officers from having any outside employment, since all persons and businesses are subject to the criminal laws of the State.

Earlier, in CEO 78-10 and CEO 78-93, copies of which are enclosed, we found that a police officer with the sheriff's office could not own a pawn outlet located within the city. There, however, the municipal code required pawn shops to hold a permit issued by the sheriff and set forth grounds and procedures under which the sheriff could grant, deny, renew, suspend, and revoke permits. Despite the fact that the municipal code required pawnbrokers to keep certain records, to provide them to the sheriff, and to remain subject to inspection by the sheriff at any time, we believe the sheriff's "regulatory" authority was based upon his authority to grant and deny permits. Under Chapter 81-121, the Police Department has no authority to license or grant permits to precious metals businesses.

Nevertheless, we find that should the subject officers continue to deal in precious metals after the effective date of Chapter 81- 121, they will be engaging in employment that will create a continuing or frequently recurring conflict between their private interests and the performance of their public duties. It is apparent from the language of Chapter 81-121 that the Legislature intended to reduce opportunities for the sale of stolen property containing precious metals by imposing certain requirements upon those who are in the business of purchasing items containing precious metals. When faced with the possibility of purchasing an item suspected to be stolen, a police officer also is faced with the dilemma of advancing his business interests by purchasing the item and not reporting it (or reporting it incompletely) or of ignoring his business interests and following his suspicions as a police officer. Also, a conflict of interest may arise if other persons assist him in the business, persons whom he would be authorized to arrest for violations of Chapter 81-121.

Accordingly, we find that if the subject police officers engage in the business of buying and selling precious metals on or after October 1, 1981, they will be doing so in violation of Section 112.313(7)(a), Florida Statutes.