STATE OF FLORIDA
COMMISSION ON ETHICS
In re DONALD SANDERS, )
) DOAH Case Nos. 93-0161EC
Respondent. ) 93-0162EC
) Complaint Nos. 90-251, 90-254,
) and 91-41
) COE Final Order No. 94-02
On October 27, 1993, a Hearing Officer from the Division of Administrative Hearings (DOAH) submitted to the parties and the Commission her Recommended Order, a copy of which is attached hereto. On November 15, 1993, the Commission's Advocate filed exceptions to the Recommended Order. The matter thereafter came before the Commission on Ethics for final agency action.
This matter began with the filing of complaints by William J. Griffin, III, Randy Lifshotz, and Robert Pearlman, alleging that Donald Sanders had violated the Code of Ethics for Public Officers and Employees. The allegations were found to be legally sufficient to allege possible violations of Section 112.313(7)(a), Florida Statutes, and Commission staff undertook preliminary investigations to aid in the determination of probable cause. On October 25, 1991 and December 11, 1991, the Commission on Ethics issued orders finding probable cause, and thereafter forwarded these matters to the Division of Administrative Hearings for conduct of formal hearings and entry of recommended orders. By order dated February 4, 1993, the hearing officer consolidated the matters for hearing. Thereafter, the parties jointly moved that the cases be determined on a stipulated record, which motion was granted. The parties then filed proposed recommended orders with the Hearing Officer. The Recommended Order was transmitted to the Commission and the parties on October 27, 1993, and the parties were notified of their right to file exceptions to the Recommended Order in accordance with Rule 34-5.022(2), Florida Administrative Code. The Respondent did not file exceptions, and the Commission's Advocate filed Exceptions on November 15, 1993.
The Advocate filed an exception to the final clause of the last sentence of Finding of Fact No. 22, and to a portion of the Hearing Officer's recommended Conclusion of Law No. 29.
Under Section 120.57(1)(b)10, Florida Statutes, an agency may reject or modify the conclusions of law and interpretations of administrative rules contained in the recommended order. However, the agency may not reject or modify findings of fact made by the Hearing Officer unless a review of the entire record demonstrates that the findings were not based on competent, substantial evidence or that the proceedings on which the findings were based did not comply with the essential requirements of law. See, e.g., Freeze v. Dept. of Business Regulation, 556 So.2d 1204 (Fla. 5th DCA 1990); and Florida Department of Corrections v. Bradley, 510 So.2d 1122 (Fla. 1st DCA 1987). Competent, substantial evidence has been defined by the Florida Supreme Court as such evidence as is "sufficiently relevant and material that a reasonable mind would accept it as adequate to support the conclusions reached." DeGroot v. Sheffield, 95 So.2d 912, 916 (Fla. 1957).
The agency may not reweigh the evidence, resolve conflicts therein, or judge the credibility of witnesses, because those are matters within the sole province of the hearing officer. Heifetz v. Dept. of Business Regulation, 475 So.2d 1277, 1281 (Fla. 1st DCA 1985). Consequently, if the record of the DOAH proceedings discloses any competent, substantial evidence to support a finding of fact made by the Hearing Officer, the Commission is bound by that finding.
The Commission's Advocate takes exception to the last sentence of the Hearing Officer's Finding of Fact 22, which states: "A creature of the employer corporation, the plan and trust nonetheless had a life of its own." The Advocate submits that there is no evidence to support the finding that the plan "had a life of its own," and further, that the hearing officer's conclusion "is directly contrary to the recitation of evidence which precedes it, as well as the evidence summarized in Finding of Fact 17."
Our review of the entire record supports the Advocate's assertion, that there is no evidence to support the hearing officer's conclusion that the profit sharing plan had a life of its own. Instead, the record, and, indeed, the hearing officer's own findings, support the ultimate finding that the plan was dependent upon the corporation, and that without the corporation's continued existence, the plan itself would also cease to exist. Accordingly, the Advocate's first exception is granted, and the findings of fact contained in the Recommended Order are modified to the extent that they conflict with this finding.
Exception No. 2 takes issue with the Hearing Officer's Recommended Conclusion of Law 29, which states,
Although less clearly distinct, the profit sharing plan and trust is also considered to be a separate entity. Federal prohibitions against self-dealing and other limitations described at length in the plan summary compel that conclusion. The first elements of proof are not met. No prior Commission on Ethics Opinion (CEO) is found addressing profit sharing plans as entities and the opinions cited by the Advocate which relate to wholly owned subsidiaries or separate bank trust departments are readily distinguished. Section 112.312(5), F.S. defines "business entity" to include a trust. See also CEO 91-31.
The Advocate argues, in essence, that since the profit sharing plan and trust could not survive without the corporation (R. L. LaRoche, Inc.), it clearly is not a separate business entity. Also, the Advocate submits that CEO 91-31 is inapposite, since it was concerned only with the issue of continuing or frequently recurring conflicts under the second part of Section 112.313(7)(a), Florida Statutes.
The Advocate correctly points out that CEO 91-31 dealt with a conflict of interest under the second part of Section 112.313(7)(a), Florida Statutes. There, we concluded that for purposes of the Code of Ethics, that trust should be considered to be a "business entity," as it was a trust that was "doing business in this state." Here, the issue is whether the Respondent had a contractual relationship with a business entity which was doing business with his agency, a violation of the first part of Section 112.313(7)(a), Florida Statutes. Because we have found as an ultimate finding of fact--that the plan was not an entity separate from the corporation--we accept the Advocate's second exception and to the extent necessary, modify the hearing officer's conclusion of law to conclude that the Respondent had a contractual relationship with a business entity which was doing business with his agency, a violation of the first part of Section 112.313(7)(a), Florida Statutes.
Except as modified herein by our granting of the Advocate's Exception to Finding of Fact No. 22, the findings of fact set forth in the Recommended Order are approved, adopted, and incorporated herein by reference.
1. Except as modified herein by our granting of the Advocate's Exception to Conclusion of Law No. 29, the Conclusions of Law set forth in the Recommended Order are approved, adopted, and incorporated herein by reference.
2. Accordingly, the Commission on Ethics finds that the Respondent did violate Section 112.313(7)(a), Florida Statutes, and hereby dismisses these complaints.
The Advocate has requested that the Commission recommend the imposition of a civil penalty in the amount of $2,500.
Respondent, naturally, argues against the imposition of a monetary penalty, and we find his arguments to be persuasive. It appears that the mortgage was entered into almost two years before the company was awarded the City contract, the firm was the low bidder, the mortgage was an arms-length transaction, and there is nothing in the record to suggest that the Respondent's contractual relationship with LaRoche had any impact on the City's bid award or affected the various matters of contract adjustment which later came before the Commission. Therefore, we conclude that under the circumstances present here, no penalty is warranted other than the finding of a violation.
ORDERED by the State of Florida Commission on Ethics meeting in public session on Thursday, January 27, 1994.
Joel K. Gustafson
YOU ARE NOTIFIED THAT YOU ARE ENTITLED PURSUANT TO SECTION 120.68, FLORIDA STATUTES, TO JUDICIAL REVIEW OF AN ORDER WHICH ADVERSELY AFFECTS YOU. REVIEW PROCEEDINGS ARE COMMENCED BY FILING A NOTICE OF ADMINISTRATIVE APPEAL WITH THE APPROPRIATE DISTRICT COURT OF APPEAL, AND ARE CONDUCTED IN ACCORDANCE WITH THE FLORIDA RULES OF APPELLATE PROCEDURE. THE NOTICE OF ADMINISTRATIVE APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
cc: Mr. Hilliard Moldoff, Attorney for Respondent
Ms. Virlindia Doss, Commission's Advocate
Mr. William J. Griffin, III, Complainant
Mr. Randy Lifshotz, Complainant
Mr. Robert Pearlman, Complainant
Division of Administrative Hearings