STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
IN RE: ROBERT ZAHNER, )
) CASE NO. 93-3909EC
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Susan B. Kirkland, held a formal hearing in this case on March 9, 1994, in Miami, Florida.
Advocate: Virlindia Doss, Esquire
Department of Legal Affairs
The Capitol, PL-01
Tallahassee, Florida 32399-1050
For Respondent: Raoul G. Cantero, Esquire
2601 South Bayshore Drive, Suite 1600
Miami, Florida 33133
STATEMENT OF THE ISSUES
Whether Respondent violated Section 112.313(4), Florida Statutes, and, if so, what penalty should be imposed.
On April 28, 1993, the State of Florida Commission on Ethics (Commission) issued an Order Finding Probable Cause against Respondent, Robert Zahner (Zahner), for violations of Section 112.313(4), Florida Statutes, for accepting a complimentary membership in the Country Club of Coral Gables (Country Club) and in the Coral Gables Executive Club (Executive Club), when he knew or should have known it was given to influence his vote or official actions. Zahner requested a public hearing, and the case was forwarded to the Division of Administrative Hearings on July 14, 1993 for assignment to a hearing officer. The case was originally assigned to Hearing Officer David Maloney but was transferred to Hearing Officer Susan B. Kirkland. The case was scheduled for hearing on November 16, 1993, and on November 10, 1993, the Advocate filed a Motion for Continuance. The motion was granted, and the hearing was rescheduled for March 9, 1994.
The parties stipulated to the facts contained in Section "D" of the parties' Prehearing Stipulations filed on March 4, 1994. At the final hearing, the Advocate called one witness, Albert Sakolsky. Advocate's Exhibits 1-18 were admitted into evidence. Advocate's Exhibits 1-12 were also admitted into evidence in In Re: James Barker, DOAH Case No. 93-3911EC and in In Re: Robert Hildreth, DOAH Case No. 93-3908EC. Respondent testified on his own behalf and presented the testimony of Edwin Brownell, which was taken in Hildreth, supra. Respondent's Exhibits 1-4 were admitted into evidence.
The parties agreed to file the proposed recommended orders within ten days of the filing of the transcript. The transcript was filed on April 7, 1994. The parties timely filed their proposed recommended orders. The parties' proposed findings of fact are addressed in the Appendix to this Recommended Order.
FINDINGS OF FACT
1. Respondent, Robert Zahner (Zahner), has been the city attorney for the City of Coral Gables (City) since 1967.
2. The Country Club of Coral Gables (Country Club) was established by City founder George Merrick, prior to the City's incorporation. Since 1929, the City which owns the land and buildings from which the Club operates, has leased the property to private entities.
3. Since 1935, the lessee of the property has been the Country Club, a non-profit corporation run by a board of directors elected by the Country Club membership.
4. Between 1935 and 1958, the lease underwent various modifications and extensions. In 1958, the City Commission voted to extend the lease to July 31, 1990. Under the terms of the lease, the Country Club paid three percent of its gross annual income, but in no case less than $5,000 per year, to the City as rent.
5. In 1977, the Country Club again came before the City Commission requesting a lease extension, this time to the year 2002. There was no change in the rent amount. The request for extension was to allow the Country Club to borrow money for construction, and the request was approved.
6. In 1978 the Country Club asked the City Commission for rezoning so that it could expand its tennis courts. This request was approved.
7. In May, 1980, the Country Club asked the City Commission for a $23,000 loan to repair its roof. The City Attorney advised that the City could not lawfully make such a loan, and no further action was taken on the matter.
8. In 1981 the Country Club asked to expand its tennis club facilities, and this request was approved.
9. In 1983 a significant portion of the Country Club burned down.
10. A request by the Country Club to support its efforts to raise funds from citizens for the Country Club, was on the July 26, 1983, City Commission agenda, but was not taken up. A discussion of the status of the building was held on that date, but no action was taken.
11. Instead of rebuilding the burned section with the insurance money, the Country Club decided to construct an already planned new section. On November 22, 1983, representatives of the Country Club presented a plan for restoration to the City Commission, which on motion of Commissioner Kerdyk approved the plan.
12. On March 27, 1984, the City Commission authorized the City Manager to sign an affidavit needed by the Country Club to obtain a building permit.
13. In April 1984, the Country Club requested extension of its lease to the year 2020. On motion of Commissioner Kerdyk, the City Commission agreed to the extension.
14. In September 1984, the Country Club asked that the lease be reworded in order to satisfy the lending institutions from which the Country Club was borrowing money for renovations. The request was approved.
15. When the Country Club initially undertook its restoration and remodeling plan, the Country Club leadership believed that there would be sufficient funds to accomplish both the rebuilding and the new construction. Cost overruns, diminishing membership, and other factors combined, however, to leave the Country Club with a new section, an old, burned-out section, and a significant debt. In 1987, the Country Club asked the City Commission to assist it, by contributing funds or otherwise, in overcoming that debt.
16. On November 24, 1987, the City Commission met and discussed the problem. The only action taken was to invite the Country Club leadership to an up coming City Commission meeting to discuss proposed improvements.
17. On January 26, 1988, the City Commission met with the Board of Directors of the Country Club to discuss the Country Club's request. The City Commissioners were informed that the Country Club's rent payments had been generating approximately $40,458.64 per year in income to the City. The Country Club vice-president proposed that the City rebuild the outside shell of the building, at a cost of $1,000,362 and the Country Club finance the remainder of the construction, about $1,900,000. The City Attorney advised that the City could not loan funds to the Country Club, because it was a private club. However, he opined that the City could participate in the rebuilding because it was the owner of the property. Action was postponed until the next meeting.
18. On February 3, 1988, the Country Club made an offer to the City to increase its rent payment from three percent to six percent, if the City would rebuild the shell.
19. The matter was raised at the February 9, 1988, meeting of the City Commission. Mayor Corrigan proposed that the City finance the rebuilding, but made no motion. Commissioner Wolff proposed that the City obtain funds from the Sunshine State Governmental Financing Commission and lend that money to the Country Club. The motion was seconded by Commissioner Kerdyk, and ultimately the City Commission resolved to refer the matter to the acting city manager to "work out financing without using taxpayer dollars."
20. At the February 9 meeting, discussion was had on the issue of whether the City Commissioners had conflicts of interest, since they all had complimentary memberships to the Country Club. Mr. Zahner, the City Attorney, advised that they had no conflict. The issue of conflict of interest was again raised in subsequent meetings.
21. Alternative proposals identified by the City Manager for funding the Country Club's rebuilding were discussed at the City Commission's March 8, 1988 meeting, but no action was taken.
22. On June 30, 1988, the Country Club proposed that the City forgive lease payments until the year 2000.
23. On August 30, 1988, the City Commission voted to suspend the lease payments, with the funds going instead to the maintenance and reconstruction of the facility.
24. Membership in the Country Club is open to any person, provided they can pay the initiation fee and membership dues.
25. At all times pertinent to this proceeding, the initiation fee was $1,000, although it sometimes was reduced to $500 during membership drives. The annual fee was $750.
26. Membership entitles the member and his or her family to use the swimming pool, health club, tennis courts, and bar and restaurant. Members must pay for their meals.
27. For more than twenty years the Country Club traditionally has awarded memberships to city officials and various other persons. The Country Club bylaws provide for such memberships. The bylaws provide for honorary memberships and complimentary memberships. Only one honorary membership has been given. The only difference between what the Country Club calls a complimentary membership and an honorary membership is the duration of the membership.
28. Complimentary memberships run from year to year. Persons awarded complimentary memberships include the City Commissioners, Mayor, City Manager, Assistant City Managers, the City Clerk, City Attorney, Director of Public Works, Finance Director, City Architect, Fire and Police Chief, the University of Miami President, Football Coach, and Assistant Athletic Director, the Golf Pro at the City golf course, and the editor of the local social magazine. The complimentary memberships are reviewed each year and are not renewed after the recipient leaves his or her office.
29. The Coral Gables Executive Club (Executive Club) is located in an office building at 550 Biltmore Way. The building and the Executive Club are owned by Albert Sakolsky, a local real estate developer.
30. The Executive Club, which opened in the late 1980's, consists of a dining room and health club. Membership costs $700.00 initiation, and $50.00 per month dues.
31. Mr. Sakolsky hired a public relations firm to promote the Executive Club. The firm recommended that complimentary memberships be given to community leaders and developed a list of persons who would receive the memberships. Over a hundred free memberships were granted.
32. In February, 1989, Mr. Sakolsky wrote to Coral Gables City Manager Jack Eads, presenting the City with a "permanent corporate membership." Although the letter appeared to infer that the use of the health facilities would be free to those applying through the City's corporate membership, the practice was to charge holders of complimentary memberships such as Zahner $30 a month for the use of the health facilities if they desired to use them.
33. With his letter, Mr. Sakolsky included membership applications for all the City Commissioners, as well as the Mayor the City Attorney, and Mr. Eads.
34. Mr. Sakolsky and the City had had numerous disputes over the years on various issues. His presentation of the free corporate membership was an effort to, in his words, "bury the hatchet."
35. A complimentary membership entitled the member to use the dining facilities. Soon after its inception, the Executive Club was opened to the public. The only privilege members received over non-members was a discount on their meals. A non-member could be given a complimentary membership after his first visit, thereby entitling him to receive a discount on subsequent visits.
36. In September, 1989, the City Commission voted to lease space in the 550 Building. The rental rate was $20 per square foot. When the lease expired, the owner of the builder proposed a higher rate, which the City did not accept. The City vacated the building and rented space elsewhere.
37. Zahner has been a member of the Country Club for more than 35 years and served as city attorney for the City for 26 years.
38. Subsequent to his appointment as city attorney, Mr. Zahner's membership was changed by the Country Club to a complimentary membership.
39. Under the terms of the complimentary membership, Zahner was not allowed to vote in Country Club elections or hold an office in the Country Club, but continued to retain all the other benefits he had been entitled to as a paying Country Club member.
40. Zahner paid for his initiation fees to the Country Club, and paid his own dues until he became city attorney.
41. Zahner used the Country Club for meetings of the Tenth Holder's Club, which is a golf social club. In order to belong to the Tenth Holder's Club, a person must also belong to the Country Club. About once a month, he went to dinner at the Country Club.
42. Zahner had always considered the complimentary Country Club memberships honorary. As City Attorney, he advised several City Commissioners that receiving the Country Club membership created no conflict and that the membership did have to be reported on the financial disclosure forms.
43. Zahner has no vote on the City Commission.
44. No vote concerning the Country Club was pending before the City Commission when Zahner received his complimentary membership.
45. Zahner was not involved in negotiating or drafting the lease with the Country Club, or any of the amendments to the lease; however, he did approve the amendments.
46. Zahner understood that the complimentary memberships were a tradition in the City. He thought that the Country Club wanted more members from the city. No one from the Country Club ever asked him for any favors.
47. No vote regarding the Executive Club was pending before the Commission at the time he was given the membership. Zahner believed that the complimentary membership was given to him to generate business for the Executive Club. No one connected with the Executive Club or the 550 Biltmore Building has ever asked Zahner for any favors.
48. Zahner was not involved in negotiating the lease with the 550 Biltmore Building; however, he did approve the final draft.
CONCLUSIONS OF LAW
49. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.
50. Section 112.322, Florida Statutes, and Rule 34-5.0015, Florida Administrative Code, authorize the Florida Commission on Ethics (Commission) to conduct investigations and make public reports on complaints concerning violations of Part III, Chapter 112, Florida Statutes (the Code of Ethics for Public Officers and Employees).
51. The burden of proof, absent a statutory directive to the contrary, is on the party asserting the affirmative of the issue of the proceeding. Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981) and Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977). In this proceeding it is the Commission, through the Advocate, that is asserting the affirmative: that Zahner violated Section 112.313(4), Florida Statutes. Therefore the burden of establishing by a preponderance of the evidence the elements of Zahner's alleged violations is on the Commission.
52. Section 112.313(4), Florida Statutes, provides:
No public officer or employee of an agency or
his spouse or minor child shall, at any time,
accept any compensation, payment, or thing of
value when such public officer or employee
knows, or, with the exercise of reasonable
care, should know, that it was given to
influence a vote or other action in which the
officer or employee was expected to
participate in his official capacity.
53. In order to conclude that Zahner violated Section 112.313(4), Florida Statutes, the Advocate must have proved the following elements:
a. The Respondent must have been a public
officer or employee of an agency; and
b. The Respondent (or his minor child) must
have accepted compensation, payment, or
something of value which was:
(1) Accepted by the Respondent with
actual knowledge that the compensation,
payment or thing of value was given to
influence a vote or other action in which
Respondent was expected to participate in
his official capacity; or
(2) Accepted by the Respondent when he
should have known (with the exercise of due
diligence) that the compensation, payment or
thing of value was given to influence a vote
or other action in which Respondent was
expected to participate in his official capacity.
54. The parties have stipulated that Zahner was a public officer or employee subject to the Code of Ethic for Public Officers and Employees.
55. Zahner received a "thing of value" from the Country Club and from the Executive Club. The annual fee for a membership in the Country Club is $750. The initiation fee for the Executive Club was $700, and the monthly dues were $50.00.
56. The Country Club membership was given with the intent to influence official action in which Zahner was expected to participate in his capacity as City Attorney. It was Zahner's job to provide legal advice to the City Commission concerning issues that came before the City Commission. The evidence clearly shows that issues concerning the Country Club came before the City Commission several times. Zahner had the responsibility to approve the leases which the City Commission entered, including the amendments to the Country Club lease. The Country Club membership was given to Zahner because of his position as City Attorney. The membership was given to Zahner on a year-to-year basis as long as he held the position of City Attorney. When Zahner's position as City Attorney ended so would his free membership to the Country Club.
57. The Executive Club corporate membership was given to the City as a means of trying to "bury the hatchet." In other words the owner of the Executive Club, who was also the owner of the 550 Building, was trying to generate favorable feelings on the part of City officials. As City Attorney, it was Zahner's responsibility to provide legal advice to the City and to approve leases entered into by the City, including the lease for space in the 550 Building.
58. The evidence shows that Zahner should have known that the free membership to the Country Club was given in an effort to influence him in his official actions. The issue of conflict of interest had been raised at City Commission meetings concerning the free memberships being given to the City officials and the fact that the Country Club was appearing before the City Commission for help. As City Attorney Zahner should have been aware of the applicable Ethics Commission Opinions concerning the acceptance of such gifts. No reasonable person could believe that the free Country Club membership was given to Zahner for any reason except to influence him.
59. The parties have stipulated that the City's corporate membership to the Executive Club was an attempt by Mr. Sakolsky to "bury the hatchet." The membership was not for all city employees but only those designated, which were the City Commissioners, the Mayor, the City Attorney, and the City Manager. In other words, the memberships were for persons who would be in a position to help Mr. Sakolsky. As City Attorney, Zahner should have been aware of the applicable Ethics Commission Opinions concerning the acceptance of gifts. No reasonable person could believe that the free membership was given to Zahner for any reason except to influence him.
Based on the foregoing Findings of Fact and Conclusions of Law, it is
RECOMMENDED that the Commission on Ethics enter a final order and public report finding that Robert Zahner violated Section 112.313(4), Florida Statutes, by accepting a free membership to the Coral Gables Country Club and by accepting a free membership to the Executive Club. I therefore recommend a civil penalty of $1,000 and restitution of $750 for the violation involving the Coral Gables Country Club and a civil penalty of $1,000 and restitution of $600 for the violation involving the Executive Club for a total penalty of $3,350. The restitution in both cases is the amount a member of the general public would have had to pay for one year's dues.
DONE AND ENTERED this 23rd day of May, 1994, in Tallahassee, Leon County, Florida.
SUSAN B. KIRKLAND
Division of Administrative Hearings
The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
Filed with the Clerk of the
Division of Administrative Hearings
this 23rd day of May, 1994.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3911EC
To comply with the requirements of Section 120.59(2), Florida Statutes, (1993), the following rulings are made on the parties' proposed findings of fact:
Petitioner's Proposed Findings of Fact
1. Paragraphs 1-18: Accepted.
2. Paragraph 19: The first sentence is rejected as unnecessary. The remainder of the paragraph is accepted in substance.
3. Paragraph 20: The first sentence is accepted. The second sentence is accepted in substance.
4. Paragraph 21: Accepted.
5. Paragraph 22: The first sentence is accepted. The second sentence is accepted in substance.
6. Paragraphs 23-26: Accepted.
7. Paragraph 27: Accepted in substance.
8. Paragraphs 28-33: Accepted.
9. Paragraph 34: The first sentence is rejected as constituting a conclusion of law. The second sentence is accepted. The third sentence is rejected as constituting argument. The fourth sentence is accepted in substance.
10. Paragraphs 35-36: Rejected as constituting argument.
11. Paragraphs 37-40: Accepted.
12. Paragraph 41: The first and second sentences are accepted in substance. The third sentence is accepted in substance to the extent that the city officials who were receiving complimentary memberships through the City's corporate membership could use the health facilities for an additional fee of $30 per month but rejected to the extent that it implies that the city officials could use the health facilities at no cost.
13. Paragraphs 42-44: Accepted.
14. Paragraph 45: The first sentence is rejected as constituting a conclusion of law. The second sentence is accepted. The third sentence is rejected as constituting argument.
15. Paragraphs 46-47: Rejected as constituting argument.
Respondent's Proposed Findings of Fact
1. Paragraphs 1-4: Accepted.
2. Paragraph 5: Rejected as subordinate to the facts actually found.
3. Paragraph 6: Rejected as unnecessary.
4. Paragraph 7: Accepted.
5. Paragraph 8: The last sentence is rejected as unnecessary. The remainder of the paragraph is accepted.
6. Paragraphs 9-12: Accepted.
7. Paragraph 13: The last sentence is rejected as constituting a conclusion of law. The remainder of the paragraph is accepted in substance.
8. Paragraph 14: Accepted in substance.
9. Paragraphs 15-16: Accepted.
10 Paragraphs 17-19: Accepted in substance.
11. Paragraphs 20-21: Accepted.
12. Paragraphs 22-29: Accepted in substance.
Raoul G. Cantero, Esquire
2601 South Bayshore Drive
Miami, Florida 33133
Virlindia Doss, Esquire
Department of Legal Affairs
The Capitol, PL-01
Tallahassee, Florida 32399-1050
Florida Commission On Ethics
Post Office Drawer 15709
Tallahassee, Florida 32317-5709
Phil Claypool, Esquire
2822 Remington Green Circle, Suite 101
Post Office Drawer 15709
Tallahasee, Florida 32317-5709
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions to this recommended order. All agencies allow each party at least ten days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.