CEO 75-127 -- July 25, 1975

CONFLICT OF INTEREST

MEMBER OF SCHOOL BOARD AN AGENT FOR INSURANCE COMPANY DOING BUSINESS WITH SCHOOLS AND SCHOOL EMPLOYEES

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

Prepared by: Gene Rhodes

SUMMARY:

Where a school board member is employed by an insurance company which, along with other companies, has for years been authorized by, and is on payroll deductions with, the school board, no conflict exists under s. 112.313(5), F. S. (1974 Supp.), for the business transacted under this plan is between the school employee and his chosen insurance company rather than between the company and the school board. A conflict between the school board member's private interests and his public duties does exist under s. 112.313(5), however, where the school board member solicits the sale of insurance to school personnel at their residences during their nonduty hours, due to the regulatory nature of the school board in relation to school employees.

QUESTIONS:

1. Does a conflict of interest exist under the Code of Ethics where I serve as a member of the ____ County School Board while the insurance company by which I am employed is authorized by the board's finance department to accept, through payroll deductions, payment of insurance premiums from school employees?

2. Does a conflict of interest exist where I am a member of the ____ County School Board and solicit the sale of life and disability insurance to school personnel at their residences during their nonduty hours?

Question 1 is answered in the negative.

As you state in your letter of inquiry, you are a member of the ____ County School Board as well as a licensed agent of the Professional Insurance Corporation. For many years prior to your becoming a member of the school board, Professional Insurance had been authorized by, and was on payroll deductions with, the finance department of the school board, along with other insurance companies providing the same or comparable coverages.

As a member of the school board, you are clearly a public officer pursuant to s. 112.312(7)(i), F. S. (1974 Supp.). Therefore, you are subject to the standards of conduct prohibiting concurrent employment that conflicts with your official duties. Section 112.313(5), supra, states in relevant part:

No public officer or employee of an agency shall accept other employment with any business entity subject to the regulation of, or doing business with, an agency of which he is an officer or employee nor shall an officer or employee of an agency accept other employment that will create a conflict between his private interests and the performance of his public duties, or will impede the full and faithful discharge of his public duties.

We are of the opinion that "doing business with an agency of which [you are] an officer" involves more than authorizing an insurance company, along with several others, to accept, through payroll deductions, payment of insurance premiums from school employees. If a business transaction occurs, it is between the employee and his designated insurance company. The agency of which you are an officer, the school board, is not involved in the selection of which company or companies will be the recipients of the premiums.

Based upon the foregoing, we find no breach of the Code of Ethics dealing with concurrent employment or any other impediment to the full and faithful discharge of your duties.

Question 2 is answered in the affirmative.

As stated in response to your first question above, part III, Ch. 112, F. S. (1974 Supp.), prohibits a public officer from holding other employment that creates a conflict with his public duty. Such a situation arises, we feel, when a public officer does business with an individual over whom he has power to hire, to terminate, or to exert other significant influence upon.

In the present case the ____ County School Board has the power to reject for good cause the appointment of instructional and noninstructional personnel nominated by the superintendent. Additionally, the board is empowered to fill vacancies without the superintendent's nomination when three nominees have been rejected for good cause. See s. 230.23(5)(b) and (c), F. S. (1974 Supp.). Pursuant to s. 230.23(5)(g) the school board has the power to suspend, dismiss, or return to annual contract members of the instructional staff. Furthermore, the school board's power to formulate the school system budget determines the very existence of all instructional and noninstructional positions. The above-listed powers, coupled with the broad policymaking role of the school board (see s. 230.22, F. S.), lead us to conclude that a conflict between your private interests and public duties, as prohibited by s. 112.313(5), F. S., exists in business dealings of the nature you describe.

We feel that many principals and other school system employees would as a minimum feel "pressured" to make a purchase when solicited personally by a school board member. Some of a more timid nature might even feel compelled to buy in such situations. In either event, we find the placing of school personnel in this position to be violative of the legislative intent of the Code of Ethics for Public Officers and Employees, which provides in pertinent part "that public office not be used for private gain other than remuneration provided by law." Section 112.311, F. S.

Your attorney, ____ has suggested in a letter to our staff that an affirmative response to this second question would "if carried to extreme . . . forbid a school board member who operated a mercantile store from selling clothes, furniture, groceries or any other commodity to employees of the school board." While these facts are not at issue and therefore no binding position can be taken based upon them, we recognize a significant distinction between a retailer/customer relationship where a prospective buyer comes to the seller and business that is transacted on the basis of personal solicitation at the home of the potential customer. Where a public officer solicits business from persons over whom he exercises substantial authority, such business, we feel, is in conflict with his public duties.