A $150,000 home loan paid for by a private benefactor could be accepted by a school superintendent without violating Section 112.3148, Florida Statutes, as long as neither the benefactor nor any other contributor to the loan are lobbyists or the partners, firms, employers or principals of lobbyists who lobby the school district.  The school superintendent would be required to disclose the receipt of the loan on his quarterly gift disclosure form - CE Form 9.

QUESTION:

Would the newly appointed Superintendent for the Miami-Dade County School District violate the Code of Ethics for Public Officers and Employees contained in Chapter 112, Part III, Florida Statutes, if he receives a home loan from a private benefactor where the loan will be forgiven over a four-year period?

Your question is answered in the negative based upon the circumstances discussed herein.

In your letter of inquiry, you write that you seek this opinion on behalf of Dr. Rudy Crew, who recently was appointed Superintendent of Schools for the Miami-Dade County School District.  The School Board and the new Superintendent have executed an Employment Agreement which contemplates the School Board's assistance in obtaining a home loan for the Superintendent from non-school resources.  You write that because his family will continue to reside in California in a home maintained by him, he is concerned about his ability to acquire a home in Miami-Dade County.  It further appears that similar offers were made by school districts in other states who were interested in obtaining his services and, for these reasons, the School Board subsequently agreed to assist the Superintendent in obtaining a loan as memorialized in the Employment Agreement executed on May 17, 2004.  The Employment Agreement evinces a mutual desire on the part of both parties to ensure that the loan in no way jeopardizes the public trust or violates the Code of Ethics and, to that end, you have asked us to review the matter and apply the Code of Ethics to the proposed arrangement.  In doing so, we decline to address any policy issues surrounding the proposed arrangement or whether loans of this nature should be encouraged by public institutions.

The Employment Agreement the Superintendent and the School Board executed on May 17, 2004, states in Paragraph 19:

Home Loan.  The Superintendent has advised and the Board acknowledges that the Superintendent is currently seeking a loan for purposes of purchasing a home in Miami-Dade County, Florida.  The principal amount of such loan, and any interest or fees thereon, shall be supported and paid by donations entirely from non-school revenues and/or sources, under terms and conditions acceptable to the Superintendent.  The Board agrees to assist the Superintendent in obtaining such loan, to the extent permitted by law, and the parties agree that in no instances shall this be interpreted to obligate the Board in any way legally or with respect to payment thereof.  The Board further acknowledges that this Agreement shall be subject to and conditioned upon the satisfaction of this provision and the confirmation of such loan within fourteen (14) days of the approval of the Board and the execution of this Agreement by the parties.  In the event that such loan is not obtained on terms and conditions acceptable to the Superintendent, and as permitted by law, either party may cancel this Agreement by written notice to the other party transmitted within fourteen (14) days of the date of this Agreement.

Section 112.312(12)(a), Florida Statutes, defines the term "gift" to mean

'Gift,' for purposes of ethics in government and financial disclosure required by law, means that which is accepted by a donee or by another on the donee's behalf, or that which is paid or given to another for or on behalf of a donee, directly, indirectly, or in trust for the donee's benefit or by any other means, for which equal or greater consideration is not given within 90 days, including:

1.  Real property.

2.  The use of real property.

3.  Tangible or intangible personal property.

4.  The use of tangible or intangible personal property.

5.  A preferential rate or terms on a debt, loan, goods, or services, which rate is below the customary rate and is not either a government rate available to all other similarly situated government employees or officials or a rate which is available to similarly situated members of the public by virtue of occupation, affiliation, age, religion, sex, or national origin.

6.  Forgiveness of an indebtedness.

... .

The "draft" Loan Agreement was provided to us along with the Employment Agreement in your correspondence requesting an opinion. It indicates that an individual who is described as a "friend of education in Miami-Dade County" (hereinafter referred to as "Benefactor") "agrees to provide, obtain, co-sign and/or guarantee a loan of $150,000" to the Superintendent. The proposed agreement reflects that the Benefactor "will make, or cause to be made, all payments . . . required under the loan" and that he "agrees that such loan will be repaid or forgiven at a rate of 25% per year" for each year that the Superintendent serves pursuant to his four-year contract with the School Board. Further, the Benefactor agrees to pay "any income tax liability" incurred by the Superintendent as a result of the loan.

There is no question but that the proposed loan arrangement meets the statutory definition of a "gift." It is either "intangible personal property" or "a preferential rate or terms on a debt or loan" or "forgiveness of an indebtedness" or a combination of all three types of gifts listed in Section 112.312(12)(a). Whether it can be accepted and, if so, the obligation to report it next becomes our focus. Section 112.3148(4), Florida Statutes, provides:

A reporting individual or procurement employee or anoth other person on his or her behalf is prohibuted from knowingly accepting, directly or indirectly, a gift from a political committee or committee of continuous existence, as defined in s. 106.011, or from a lobbyist who lobbies the reporting individual's or procurement employee's agency, or directly or indirectly on behalf of the partner, firm, employer, or principal of a lobbyist, if he or she knows or reasonably believes that the gift has a value in excess of $100; however, such a gift may be accepted by such person on behalf of a governmental entity or a charitable organization. If the gift is accepted on behalf of a governmental entity or charitable organization, the person receiving the gift shall not maintain custody of the gift for any period of time beyond that reasonably necessary to arrange for the transfer of custody and ownership of the gift.

Section 112.3148(4) prohibits the Superintendent from knowingly accepting, directly or indirectly, a gift from a lobbyist who lobbies the School District or from the partner, firm, employer or principal of a lobbyist if he knows or reasonably believes that the gift has a value in excess of $100. In addition, Section 112.3148(3) prohibits the Superintendent from soliciting any gift from these persons and entities.

The draft Loan Agreement contains the following language:

In all respects, the parties acknowledge and agree that this Agreement, and any actions required hereby, including the loan payments contemplated, is not entered into in exchange for any official vote, action or conduct by [the Superintendent]. [The benefactor] further represents that he is not a lobbyist, and was not in the preceding 12 months required to be registered as a lobbyist, who has sought or will seek to influence the governmental decision-making of [the Superintendent] or the School Board, nor will any portion of the loan be made pursuant to the Loan Commitment be paid by a political committee or committee of continuous existence, as defined in Section 106.011, Fla. Stat.

While you have represented that the Benefactor himself is not a "lobbyist," Section 112.3148(4) extends the list of prohibited donors to include the partner, firm, employer or principal of a lobbyist. Therefore, it is imperative that the Benefactor not be a partner, firm, employer or principal of a lobbyist who lobbies the School District during the life of the loan. Moreover, since Section 112.3148(4) also prohibits "indirect gifts" worth more than $100, if the Benefactor intends to solicit and accept contributions from other donors, the other donors must also not be lobbyists or the partners, firms, employers, or principals of lobbyists who lobby the School District. As long as none of the loan's contributors are prohibited donors, Section 112.3148(4) would not prohibit the Superintendent from accepting a loan which will eventually be forgiven if he fulfills the entire 4-year term of his Employment Agreement.

However, Section 112.3148(8), Florida Statutes, does impose a reporting obligation on the Superintendent. This section requires him to file a quarterly gift disclosure form—CE Form 9—listing those gifts he received during the previous calendar quarter that have a value in excess of $100. In our view, the loan should be disclosed throughout the period of its existence as four separate gifts that are made each time a portion of the loan is forgiven. Also, each time that the Benefactor makes a payment for the Superintendent's income tax liability, a separate, reportable gift would be made. Additionally, we believe that the Superintendent should list each contributor who has contributed more than $100, not just the Benefactor, even though the proposed Loan Agreement indicates that the Benefactor "will make, or cause to be made, all required loan payments." This requirement would be in keeping with our view that disclosure should be the goal for the reporting individual who receives any of the listed items contained in the definition of "gift." See CEO 91-57.

Finally, with regard to the other ethics statutes mentioned in your letter, Sections 112.313(2), 112.313(4), and 112.313(6), Florida Statutes, provide respectively:

SOLICITATION OR ACCEPTANCE OF GIFTS. No public officer, employee of an agency, local government attorney, or candidate for nomination or election shall solicit or accept anything of value to the recipient, including a gift, loan, reward, promise of future employment, favor, or service, based upon any understanding that the vote, official action, or judgment of the public officer, employee, local government attorney, or candidate would be influenced thereby.

UNAUTHORIZED COMPENSATION. No public officer, employee of an agency, or local government attorney or his or her spouse or minor child shall, at any time, accept any compensation, payment, or thing of value when such public officer, employee, or local government attorney 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, employee, or local government attorney was expected to participate in his or her official capacity.

MISUSE OF PUBLIC POSITION. No public officer, employee of an agency, or local government attorney shall corruptly use or attempt to use his or her official position or any property or resource which may be within his or her trust, or perform his or her 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.

There is nothing to suggest that the proposed Loan Agreement would violate these provisions. Section 112.313(2) prohibits the solicitation or acceptance of any thing of value—including a loan—based upon an understanding that the Superintendent's official action or judgment will be affected as a result. Section 112.313(4) prohibits the acceptance of any thing of value when the Superintendent knew, or with the exercise of reasonable care should know, that it was given to influence actions in which he is expected to participate. Section 112.313(6) prohibits the Superintendent from corruptly using his official position to obtain a special privilege or benefit for himself or others.

As has already been discussed, as long as none of the contributors are prohibited donors under Section 112.3148, Florida Statutes, it would seem unlikely that Sections 112.313(2), 112.313(4), or 112.313(6) would be implicated. In CEO 96-21, we opined that none of these provisions were violated where a newly-hired executive director of a county convention and visitor's bureau received complimentary lodging from a member of the tourist development council while he was relocating to the county. There were no circumstances present in that situation which indicated that the newly-hired executive director had violated these statutes or the gift law—Section 112.3148, Florida Statutes. Although the facts in CEO 96-21 are not directly analogous to those present here, there also is no indication here that the proposed Loan Agreement violates Sections 112.313(2), 112.313(4), and 112.313(6), Florida Statutes.

Accordingly, we find that the Superintendent's receipt of a loan which will be forgiven over a four-year period will constitute "gifts" which he can accept as long as none of the contributors are lobbyists or partners, firms, employers, or principals of lobbyists who lobby the School District. The loan itself should be disclosed pursuant to Section 112.3148(8), Florida Statutes, as directed above.

ORDERED by the State of Florida Commission on Ethics meeting in public session on June 3, 2004 and RENDERED this 8th day of June, 2004.

__________________________

Richard L. Spears

Chairman