CEO 88-22 -- March 16, 1988

CONFLICT OF INTEREST

DEPARTMENT OF COMMUNITY AFFAIRS SECRETARY

TAKING ACTION REGARDING BROTHER'S COMPANY

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

SUMMARY:

No provision of the Code of Ethics for Public Officers and Employees was violated where the Secretary of the Department of Community Affairs took certain limited, preliminary actions in his official capacity regarding development proposed by a company of which his brother was the chairman of the board and chief executive officer, before he delegated the matter to staff of the Department. No relevant provision in the Code of Ethics expressly prohibits a public officer or employee from taking action in his official capacity affecting his brother's interests. Under the circumstances presented, the Secretary of the Department did not misuse his official position in violation of Section 112.313(6), Florida Statutes, as his brother's company received no special privilege, benefit, or exemption and as the Secretary's actions were not inconsistent with the proper performance of his public duties.

QUESTION:

Was any provision of the Code of Ethics for Public Officers and Employees violated where you, the Secretary of the Department of Community Affairs, took certain actions in your official capacity regarding development proposed by a company of which your brother is chairman of the board and chief executive officer, before you delegated the matter to staff of the Department?

Under the circumstances presented, your question is answered in the negative.

In your letter of inquiry you advise that you serve as Secretary of the Department of Community Affairs, the State agency responsible for determining whether a development is a development of regional impact (DRI). The Department issues binding letters of interpretation that determine whether proposed developments would constitute DRI's under Section 380.06, Florida Statutes. Numerical DRI guidelines and standards are specified in Section 380.0651, Florida Statutes, and in rules of the Administration Commission, Chapter 28-24, Florida Administrative Code. For example, the DRI guideline for office development is 300,000 square feet of floor area or office development on 30 acres. Section 380.0651(3)(d), Florida Statutes.

Under the law, a proposed development at or below 80 percent of a numerical DRI guideline cannot be found to be a DRI. Conversely, proposed developments which are at or above 120 percent of a DRI guideline are required to undergo DRI review, a lengthy process involving local, regional, and State review of the proposed development. The law presumes that a development that is between 80 percent and 100 percent of a guideline is not a DRI, but a development falling in the range between 100 percent and 120 percent of a guideline is presumed to be a DRI. Section 380.06(2)(d), Florida Statutes. Developments between 80 percent and 120 percent of the numerical guidelines may be found to be DRI's by the Department, through issuance of binding letters of interpretation.

As a matter of standard agency practice, the Department routinely has issued "clearance letters" to developers whose projects are clearly below 80 percent of any DRI guideline and therefore are not subject to the DRI law and the authority of the Department. In addition, the Department routinely has issued clearance letters for projects between 80 percent and 100 percent of the DRI threshold if staff determines that such projects are not DRI's and need not be pursued by the Department.

You advise that the matter in question involves DRI clearance letters from the Department to a publicly-owned company engaged in the construction of buildings and other business activities of which your brother is the chairman of the board and the chief executive officer. The company has total assets of approximately $90 million and has more than 11,000 shareholders. Your brother currently owns less than 3 percent of the company's stock. You advise that you own no stock in the company, have no financial interest of any kind in the company, and are not involved in any way with the company.

The company is the developer of an office building project in an area called Magnolia Grove in Tallahassee. You have no financial interest of any kind in that development, you advise. While practicing law prior to your appointment as Secretary of the Department, you personally represented the company on another matter, but you state that you never provided legal representation of any kind to the company concerning the Magnolia Grove project.

You further advise that on June 1, 1987, you received a telephone call from the general counsel for the company, who stated that he had sent you a letter requesting that the Department issue a letter that the proposed office building to be built by the company, containing approximately 57,000 square feet of floor space to be built on 2.56 acres of land, was not a DRI. According to the general counsel, the company needed the letter for a lender.

After receiving the letter you sent it, with a note, to the Chief of the Bureau of State Planning of the Department on June 2, 1987. At that time the position of Director of the Division of Resource Planning and Management, which handles DRI matters, was vacant, and you were serving as acting Division Director. The Bureau Chief was the next highest agency official responsible for DRI matters. Because the project described to you over the telephone was not a DRI under the numerical thresholds provided in State law, you advised the Bureau Chief, in the note, to review the letter and prepare a clearance letter. The note also advised the Bureau Chief to discuss the matter with you if he thought there was any problem. You also directed the Bureau Chief, in the note, to contact the general counsel of the company if additional information was needed.

On June 4, 1987, the Bureau Chief told you that staff had reviewed the company's plans for an office building and confirmed that the office building alone clearly was not a DRI. The Bureau Chief added, however, that the letter also inquired whether the proposed office building should be aggregated with other development in the Magnolia Grove area for DRI purposes. The Bureau Chief stated that there was a question about whether the proposed office building should be combined under the Department's aggregation rule (Chapter 28-11, Florida Administrative Code) with an existing motel on an adjacent parcel for purposes of applying the DRI guidelines. The Bureau Chief stated that staff would need more information in order to answer that question, and he recommended that you send a letter to that effect to the company. He presented you with a letter prepared by staff for your signature. You were not involved in any way in the staff review of the project or in the preparation of the letter, you advise.

The letter concludes that, based upon the information submitted, the office development proposed by the company would not be required to undergo DRI review. However, the letter also states that, based upon information provided, if the office development were aggregated with the remainder of Magnolia Grove, the development plan would be between 80 percent and 100 percent of the DRI threshold and, therefore, would be presumed not to be required to undergo DRI review. Without further information concerning the impacts of the development, the letter states, the Department could not determine whether Magnolia Grove in fact would constitute a DRI.

You advise that at that point it first appeared to you that a final Department decision might involve some agency discretion or judgment rather than being a routine, ministerial matter. Therefore, you told the Bureau Chief that you did not want to be involved in the matter any further because of your brother's association with the company, and you delegated the matter to the Bureau Chief. Subsequently, you told the company's general counsel to work with the Bureau Chief on the matter and that you did not want be involved with it in any way. The Department's file, a copy of which you provided, reveals that all further correspondence from the company to the Department was addressed to the Bureau Chief and that all agency letters to the company were from the Bureau Chief. After delegating the matter, you did not participate in any way in the handling of the company's request for clearance letters, and you were not involved in any way in the decision ultimately made by the Department, you advise. The Department's file contains a series of correspondence between the Department and the company discussing the Department's evaluation of the Magnolia Grove development and the company's plans for development of office space at that location as the company purchased additional parcels within the area. The file also contains copies of staff notes and computations relating to the development.

At the outset, we note that with one exception there is no provision in the Code of Ethics for Public Officers and Employees that expressly forbids a public officer or employee from taking action in his official capacity affecting his brother's interests. The exception, which is contained in Section 112.3185(6), Florida Statutes, relates to the procurement of contractual services for an agency by an agency employee from business entities involving relatives of the employee. It clearly is not applicable here. Other provisions in the Code of Ethics concerning situations involving relatives of a public officer or employee are limited in their effect to the spouse or children of that officer or employee. See Section 112.313(3) and (4), Florida Statutes.

However, the following provision of the Code of Ethics prohibits a public officer or employee from misusing his official position:

MISUSE OF PUBLIC POSITION. -- No public officer or employee of an agency shall corruptly use or attempt to use his official position or any property or resource which may be within his trust, or perform his 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. [Section 112.313(6), Florida Statutes (1987).]

For purposes of this provision, the term "corruptly" is defined as done with a wrongful intent and for the purpose of obtaining, or compensating or receiving compensation for, any benefit resulting from some act or omission of a public servant which is inconsistent with the proper performance of his public duties. [Section 112.312(7), Florida Statutes (1987).]

In a previous opinion, CEO 83-62, we advised that a benefit would not be considered "special" within the meaning of this prohibition if one is entitled to it by law. Further, in CEO 78-76 we advised that in order to constitute a misuse of public position a public official's actions would have to be inconsistent with the proper performance of public duties. We noted there that so long as the official's actions were consistent with standards set by applicable laws, rules, and the interpretations of those governmental bodies having jurisdiction over them, the Code of Ethics would not be violated.

Our staff has reviewed all of the information contained in the Department's file and concludes that the office developments initially and subsequently proposed by your brother's company fell short of the 80 percent threshold and therefore did not constitute a DRI. Our staff also concludes that there is not sufficient information contained in the file to determine clearly whether the aggregation rule should be applied to require the aggregation of all aspects of development in the Magnolia Grove area in determining which thresholds have been met. However, assuming all developments within that area should be aggregated, based on the information provided to the Department, the entire area fell within the statutory and rule ranges as being presumed not to constitute a DRI.

We note that there is no letter contained in the file from the Department stating that the entire Magnolia Grove area would not constitute a DRI. Rather, the correspondence is consistent in stating that the entire area would be presumed not to be a DRI. Under these circumstances, the developer or an affected local government entity would be free to petition the Department for a binding letter as provided in Section 380.06(4), Florida Statutes.

We conclude that based on the information you have provided there is no indication that your brother's company received any special privilege, benefit, or exemption. In addition, we conclude that to the extent you took any actions with respect to the proposed development, your actions were consistent with applicable DRI statutory and rule standards and therefore were not inconsistent with the proper performance of your public duties.

Accordingly, we find that under the circumstances presented no provision of the Code of Ethics was violated by your actions regarding development proposed by a company of which your brother is the chairman of the board and the chief executive officer.