BEFORE THE
STATE OF FLORIDA
COMMISSION ON
ETHICS
In re WALTER STOTESBURY, )
)
Respondent. ) Complaint
No. 89-160
)
______________________________)
RECOMMENDED PUBLIC
REPORT OF HEARING OFFICER
This
matter was initiated by the filing of a complaint by the Complainant, Kenneth
P. Brown. Following a preliminary
investigation, the Commission on Ethics found probable cause and ordered a
public hearing on the following two issues:
(1) whether the Respondent, as a member of the Gainesville-Alachua
County Regional Airport Authority, violated Section 112.313(7), Florida
Statutes, by entering into a contractual relationship with Kenn Air to provide
helicopter needs analysis; and (2) whether the Respondent violated Section
112.313(7), Florida Statutes, by providing investment services to the
Complainant, Kenneth P. Brown. A public hearing was held on Tuesday, February
19, 1991, in Gainesville, Florida, before the undersigned member of the
Commission on Ethics, who served as Hearing Officer for the Commission. Craig B. Willis, Assistant Attorney General,
appeared as Advocate for the Commission; David D. Fuller, Jr., Esq., appeared
on behalf of the Respondent.
At the public hearing
the Advocate called the following witnesses:
Charles Lawrence Hauck, Gene Clerkin, Kenneth Paul Brown, and James
Thomas Smith; the deposition of the Respondent was admitted into evidence. The Respondent testified in his own
behalfand called no other witnesses.
Various exhibits offered by the Advocate and the Respondent were
received in evidence.
Both parties have
submitted proposed findings of fact and conclusions of law, and written
argument, which have been considered by the Hearing Officer. Specific rulings on the proposed findings of
fact are set forth in the appendix to this order. References to the transcript of the hearing are denoted by the
letter "T", followed by the page number; references to the deposition
of the Respondent are made by the name "Stotesbury", followed by the
page number; references to the Advocate's exhibits are made as "AE",
followed by the exhibit number and page number, if applicable; references to
the Respondent's exhibits are made as "RE", followed by the exhibit
number and page number, if applicable.
From the evidence
presented at the hearing, the undersigned Hearing Officer finds as follows:
1. The Respondent, Walter B. Stotesbury, served
as a member of the Gainesville-Alachua County Regional Airport Authority
(Authority) at all times material to the Complaint in the above-referenced
matter. The Authority has nine
appointed members. (T 97, 16)
2. The Authority was created by Special Act of
the Legislature and operated the airport owned by the City of Gainesville, the
Gainesville-Alachua County Regional Airport, at all times material to the
Complaint in this matter. (T 14, 15; AE
3)
3. The special act creating the Authority
provides in part:
Section 4. Powers and duties.--The authority shall have
jurisdiction over the operation and maintenance of, and improvements to,the
airport and airport facilities, and pursuant thereto shall have the following
powers and duties, which are in addition to all other powers granted by other
provisions of this act:
(7) To adopt rules for the regulation of its
affairs and the conduct of its business, and rules for the operation of the
airport, airport facilities, and aircraft, including, but not limited to, safety
and noise abatement rules, and to enforce and administer all such rules. (AE 3)
4. The Authority regulates fixed-base
leaseholders at the Gainesville-Alachua County Regional Airport. (T 16, 17, 18,
19)
5. At all times material to the Complaint in
this matter, Kenn Air Aviation Corporation (Kenn Air), formerly known as
American Copters, Inc. (American Copters) and owned solely by Ken Brown, held
one of three fixed-base operator (FBO) leases with the Authority. The three lease agreements involved private
charter services, storage and maintenance of private aircraft, and sale of
fuel. Mr. Brown maintains separate bank
accounts for his corporations and personal holdings. (T 33, 34, 54, 55, 67; AE 12, 13, 14)
6. Under its lease with the Authority, Kenn Air
was subject to regulatory standards enforceable by the Authority. (AE 12)
7. In 1987, Charter Air Center, Inc./Charter
Leasing Corporation (Charter Air), the company holding the other two FBO leases
with the Authority, filed a federal bankruptcy action, and Kenn Air purchased
the two leases from the bankruptcy court, conditioned upon approval by the
Authority, with the sale being finalized in March, 1988. (T 34; AE 10)
8. From July, 1987 to March, 1988, Kenn Air was
involved in negotiations with the Authority with respect to Kenn Air purchasing
the two FBO leases in the bankruptcy proceedings and with respect to the terms
and conditions that would be acceptable to both parties for the Authority's
approval of Kenn Air's FBO purchase application. (T 35; AE 5)
9. Sometime in the latter part of 1987, the
Respondent approached James T. Smith, an employee of Kenn Air, and requested
Mr. Smith's assistance in performing an aircraft needs analysis for the South
Florida Water Management District. (T
76-79)
10. Mr. Smith, who possessed expertise needed by
the Respondent in order to compile the analysis, informed the Respondent that
he would have to speak with Ken Brown because he (Smith) only worked for Kenn
Air. (T 76, 81, 82)
11. Mr. Brown and the Respondent reached an
agreement that Mr. Smith, on behalf of Kenn Air, would assist the Respondent in
compiling the analysis, and it was Mr. Smith's understanding that Kenn Air and
the Respondent would split any proceeds from the analysis fifty-fifty. (T 65, 77)
12. The work performed by Mr. Smith, as an
employee of Kenn Air, for the analysis included the making of recommendations
supported by explanations and data.
Said recommendations, supporting data and explanation were supplied to
the Respondent on or about February 1, 1988.
(T 82; AE 7)
13. On February 23, 1988, the Respondent
submitted an invoice of $2,500 to the Water Management District for payment for
the analysis. (AE 6)
14. On February 7, 1989, Mr. Brown wrote the
Respondent a letter indicating that he may not have billed the Respondent for
the work performed by Kenn Air on the analysis and enclosed a bill for
$1,500. (AE 4)
15. On February 13, 1989, the Respondent
submitted a check in the amount of $1,250, payable to Kenn Air, for the
analysis assistance compiled by Mr. Smith.
(T 72; AE 8)
16. The analysis services being done by Mr.
Smith on behalf of Kenn Air were occurring during the period of time Kenn Air
was negotiating the terms and conditions of FBO lease agreements with the
Authority, and during the time the Authority and Kenn Air were doing business
under a FBO lease agreement for one of the three leaseholds at the airport. (T 64, 65, 67, 33, 34, 54, 55; AE 12)
17. The Respondent engages in several
occupations, including certified financial consultant and aviation consultant,
and during the period of time the Respondent was a member of the governing
board of the Authority and during the period of time Kenn Air was leasing FBO
facilities from the Authority, the Respondent solicited Mr. Brown to make
investments through his private business, Stotesbury and Associates. (T 91, 60, 61, 33, 34, 54, 55, 67; AE 1, 9, 11,
12)
18. As Charter Air developed financial
difficulties, the Respondent's investment overtures to Mr. Brown became more
significant. (T 60, 61)
19. In January, 1987, Mr. Brown invested
$100,000 in the Alliance Bond Fund offered by the Respondent because he felt
pressured by the Respondent and was interested in purchasing the assets of
Charter Air. (AE 1; T 60, 61)
20. The Respondent placed Mr. Brown's investment
with the Alliance Bond Fund through his broker, Lowrey Financial Services,
and received a commission of
approximately $1,200. (T 107;
Stotesbury 53)
Section
112.313(7)(a), Florida Statutes, provides:
CONFLICTING EMPLOYMENT OR CONTRACTUAL
RELATIONSHIP.--No public officer or employee of an agency shall have or hold
any employment or contractual relationship with any business entity or any
agency which is subject to the regulation of, or is doing business, with an
agency of which he is an officer or employee . . .; nor shall an officer or
employee of an agency have or hold any employment or contractual relationship
that will create a continuing or frequently recurring conflict between his
private interests and the performance of his public duties or that would impede
the full and faithful discharge of his public duties.
Based on the
foregoing findings of fact, the undersigned Hearing Officer recommends that the
Commission on Ethics make the following conclusions of law:
1. The Respondent, Walter B. Stotesbury, in his
capacity as a member of the Gainesville-Alachua County Regional Airport
Authority, was a public officer subject to the provisions of the Code of Ethics
for Public Officers and Employees contained in Part III of Chapter 112, Florida
Statutes, at all times material to this proceeding, and is subject to the
continuing jurisdiction of the State of Florida Commission on Ethics.
2. With respect to an alleged violation of the
first clause of Section 112.313(7)(a), Florida Statutes, the Advocate must
establish by a preponderance of the evidence that:
a. The Respondent was either a public officer
or a public employee.
b. The Respondent must have been employed by or
had a contractual relationship with a business entity or agency.
c. The business entity or agency must have been
subject to the regulation of or doing business with the agency of which the
Respondent was an officer or employee.
3. With respect to an alleged violation of the
second clause of Section 112.313(7)(a), Florida Statutes, the Advocate must
establish by a preponderance of the evidence that:
a. The Respondent must have been either a
public officer or a public employee.
b. The Respondent must have held employment or
a contractual relationship that will create a continuing or frequently
recurring conflict between his private interests and the performance of his
public duties, or that would impede the full and faithful discharge of his
public duties.
4. The Respondent had or held a contractual
relationship with Kenn Air by virtue of having Kenn Air perform for the
Respondent, for compensation, through Kenn Air's employee,James T. Smith,
services necessary to compile the aircraft needs analysis the Respondent was to
submit to the South Florida Water Management District. At the time the Respondent held this
contractual relationship, Kenn Air was a business entity doing business with
the Gainesville-Alachua County Regional Airport Authority,the Respondent's
public agency, by virtue of Kenn Air's leasing of fixed-base facilities from
the Authority. Further, at the time the
Respondent held this contractual relationship, Kenn Air was subject to the
regulation of the Authority by virtue of the Authority's powers under the Authority's
special act and under the fixed-base lease with Kenn Air. Accordingly, the Respondent violated Section
112.313(7)(a), Florida Statutes.
5. The Respondent had or held a contractual
relationship with Kenneth Brown, the sole owner of Kenn Air, by providing
investment services for Mr. Brown and receiving a commission on Mr. Brown's
investment of $100,000 in the Alliance Bond Fund, at a time when Kenn Air was
leasing fixed-base facilities from the Respondent's public agency--the Gainesville-Alachua
County Regional Airport Authority. Mr.
Brown felt pressured to invest the $100,000 through the Respondent's company
because of the Respondent's relationship with the Authority. The contractual relationship between the
Respondent and Mr. Brown created a situation that would impede the full and
faithful discharge of the Respondent's public duties as a member of the
Authority, in violation of Section 112.313(7)(a), Florida Statutes. The Respondent's sales overtures to Mr.
Brown resulted in Mr. Brown being pressured into making a substantial
investment from which the Respondent received a monetary benefit. Such a relationship with Mr. Brown, the
owner of a business entity leasing facilities from the Respondent's agency,
placed the Respondent in a situation where his independent judgment and public
duty on behalf of his agency, the Authority, could be compromised, that is, in
a situation which tempted dishonor. The
Respondent could not fully and faithfully discharge his duty to the Authority
regarding fixed-base leases at the same time he was generating income from
private dealings between himself and the owner of a corporation which was a
fixed-base leaseholder. See Zerwick
v. State Commission on Ethics, 409 So.2d 57 (Fla. 4th DCA 1982).
6. Sections 112.313(7)(b) and 112.316, Florida
Statutes, and Chapter 86-469, Laws of Florida, do not insulate the Respondent
from violations of Section 112.313(7)(a), Florida Statutes.
7. Section 112.313(7)(b) is applicable where a
statute or ordinance requires or permits the public officer or employee to be
from a particular occupation or profession in order to serve in the public
position, such as the requirement under Section 481.205, Florida Statutes, that
five members of the Board of Landscape Architecture be landscape
architects. See CEO 80-59, CEO 91-5,
and CEO 91-13. Under the special act
creating the Authority, there is no provision that members of the Authority be
from particular occupations or professions, such as investment/financial
consultant or aviation consultant.
Further, the language of Chapter 86-469, Laws of Florida, which does not
prohibit members of the Authority from purchasing supplies or services from
fixed-base operators, concerns only a paragraph of that special act and does
not shield the Respondent from a violation of the Code of Ethics for Public
Officers and Employees. The special act
language provides:
(8) RESTRICTIONS.--
(a) No person who has transacted business with
the authority shall be eligible for appointment to the authority until 3 years
after the last transaction. No person
who has served on the authority shall be eligible to transact business with the
authority until 3 years after his last date of service. Said transactions include transactions
either for oneself or as an employee of, agent for, or consultant to any other
person or legal entity. However,
nothing in this paragraph shall be construed as prohibiting an appointed member
from purchasing supplies or services from any fixed-base operators or tenants
at the airport or airport industrial park.
8. Section 112.316 is not applicable as a
shield to the Respondent's violations of Section 112.313(7)(a). Section 112.316 only applies when the
employment or pursuit in question "...does not interfere with the full and
faithful discharge by such officer...of his duties to the...political
subdivision of the state involved."
Relationships such as the ones between the Respondent and Kenn Air or
the Respondent and Ken Brown might not affect the discharge of duty to the
Authority if, for example, the Respondent had been a janitor or secretary for
the Authority. However, such is not the
case for a member of the Authority. The
very purpose of the Respondent's public position is to police, deal with, and
make accountable, for the benefit of his public entity, fixed-base leaseholders
and their owners, such as Kenn Air and Ken Brown.
Having concluded
that the Respondent has violated the Code of Ethics for Public Officers and
Employees, it is necessary to consider what penalty, if any, would be
appropriate for the violations.
Due to the gravity
of the Respondent's public responsibility as a member of the Authority, the
violations in this matter are serious.
However, they are not, for example, as serious as a corrupt misuse of
public position under Section 112.313(6), Florida Statutes. Therefore , it is recommended that the
Governor impose a civil penalty against the Respondent in the amount of $2,500
for each violation, for a total of $5,000.
Based on the
foregoing findings of fact and conclusions of law, the undersigned Hearing
Officer recommends that the Commission on Ethics enter a final order and public
report finding that the Respondent, Walter B. Stotesbury, former member of the
Gainesville-Alachua County Regional Airport Authority, violated Section 112.313(7)(a),
Florida Statutes, by having or holding a contractual relationship with Kenn
Air, a business entity doing business with, and subject to the regulation of,
his public agency--the Gainesville-Alachua County Regional Airport Authority. It is further recommended that the
Respondent be found to have violated Section 112.313(7)(a), Florida Statutes,
by having or holding a contractual relationship with Kenneth Brown, sole owner
of Kenn Air, by virtue of his provision of investment services, that would
impede the full and faithful discharge of the Respondent's public duties. The Hearing Officer recommends that the
Commission's order recommend that the Governor impose a total civil penalty of
$5,000 upon the Respondent.
ENTERED and respectfully
submitted this ____ day of May, 1991.
__________________________
Hamilton Upchurch
Hearing Officer and
Member
Commission on
Ethics
Copies furnished
to:
Mr. David D. Fuller, Jr., Attorney for
Respondent
Mr. Craig B. Willis, Commission Advocate
APPENDIX
The following are rulings on the proposed
findings of fact submitted by the Advocate:
1. Accepted.
2. Accepted in finding of fact "2."
3. Accepted in substance in finding of fact
"5."
4. Accepted in substance in finding of fact
"5."
5. Accepted in substance in finding of fact
"7."
6. Accepted in substance in finding of fact
"7."
7. Accepted.
8. Accepted.
9. Accepted.
10. Accepted.
11. Accepted in substance in finding of fact
"12."
12. Accepted.
13. Accepted.
14. Accepted in substance in finding of fact
"15."
15. Accepted in substance in finding of fact
"16."
16. Accepted in substance in finding of fact
"17."
17. Accepted.
18. Accepted.
19. Accepted.
20. Rejected as unnecessary to a determination
of whether the Respondent violated Section 112.313(7)(a), Florida Statutes.
The following are rulings on the proposed
findings of fact submitted by the Respondent:
1. Accepted in substance in finding of fact
"2."
2. Accepted in substance in finding of fact
"2."
3. Accepted.
4. Accepted in substance in finding of fact
"1."
5. Accepted in substance in finding of fact
"5."
6. Accepted in substance in finding of fact
"5."
7. Accepted in substance in finding of fact
"5."
8. Accepted in substance in finding of fact
"7."
9. Accepted in substance in finding of fact
"7."
10. Accepted in substance in finding of fact
"7."
11. Accepted in substance in finding of fact
"7."
12. Accepted in substance in finding of fact
"7."
13. Partially accepted in substance in finding
of fact "7;" to the extent inconsistent with finding of fact
"7," rejected as irrelevant and unnecessary to a determination of
whether the Respondent violated Section 112.313(7), Florida Statutes.
14. Accepted in substance in finding of fact
"7."
15. Rejected as irrelevant and unnecessary to a
determination of whether the Respondent violated Section 112.313(7), Florida
Statutes.
16. Accepted.
17. Accepted that Brown invested in the bond
fund; rejected that said investment or placement was done without pressure from
the Respondent due to the Respondent's public office with the Authority.
18. Accepted in substance in findings of fact
"19" and "20."
19. Accepted in substance in finding of fact
"20."
20. Accepted in substance in finding of fact
"9."
21. Accepted in substance in finding of fact
"10."
22. Accepted in substance in findings of fact
"9" and "10;" with the year l987 being accepted rather than
the year 1988.
23. Accepted in substance in finding of fact
"10."
24. Accepted that Smith discussed the matter
with Ken Brown, owner of Kenn Air, and that Brown would have to approve Kenn
Air's working on the project. Rejected
that Smith worked on the project independently and not as an employee of Kenn
Air.
25. Accepted that Kenn Air's provision of
services to Stotesbury was approved.
Rejected that Smith was approved to provide services to Stotesbury
independently and not as an employee of Kenn Air.
26. Accepted in substance in finding of fact
"12."
27. Rejected as contrary to the greater weight
of the evidence.
28. Accepted in substance in finding of fact
"14." Rejected that Smith
performed the services individually and not on behalf of Kenn Air.
29. Accepted in substance in finding of fact
"15." Rejected that Smith
performed the services individually and not on behalf of Kenn Air.
30. Rejected.
Is a conclusion of law.
31. Rejected as unnecessary and irrelevant to a
determination of whether the Respondent violated Section 112.313(7), Florida
Statutes, as charged in this matter.