BEFORE THE

STATE OF FLORIDA

COMMISSION ON ETHICS

 

 

 

In re BETTY POWELL,         )

                            )

     Respondent.            )                                 Complaint No. 89-73

                            )             

____________________________)

 

 

 

 

RECOMMENDED PUBLIC REPORT OF HEARING OFFICER

 

 

INTRODUCTION

 

This matter was initiated by the filing of a complaint by the Complainant, Michael Bush.  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 the Executive Director of the Panama City Housing Authority, violated Section 112.313(6), Florida Statutes, by pressuring employees under her supervision to lease properties for the benefit of Mr. Jim C. Hanlon and by providing administrative support for Mr. Hanlon through the Housing Authority; and (2) whether the Respondent violated Section 112.313(7)(a), Florida Statutes, by having a contractual relationship with Century 21 Bay Properties, Inc., a business entity that was subject to the regulation of or doing business with the Housing Authority. 


A public hearing was held on Monday, November 19, 1990, in Panama City, 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; John F. Daniel, Esq., appeared on behalf of the Respondent.

At the public hearing the Advocate called the following witnesses:  Edmund D. Quintana, Betty Steffers, Joyce Tolliver,Tarolyn Moore, and Jim C. Hanlon; the depositions of the Respondent and of Linda Abelson were admitted into evidence.  The Respondent testified and called the following witnesses:  John Hutt, Jack G. Williams, Janet Dean, Bob Evans, Debbie Brewer, and Marguerite Wainwright.  To expedite the hearing, the parties agreed on the record to examine witnesses as to their cases in chief and as to cross examination at the initial calling of a particular witness by either side.  The parties filed a prehearing stipulation, and various exhibits offered by the Advocate and the Respondent were received in evidence.  Portions of the deposition of Linda Abelson were excluded from consideration of the Hearing Officer by an order of the Hearing Officer.  By leave of the Hearing Officer and with the consent of the Advocate, the Respondent filed an Amended Proposed Recommended Public Report of Hearing Officer.


Both parties have submitted proposed findings of fact and conclusions of law 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 prehearing stipulation are made by the abbreviation "Stip.", followed by the page number; references to the depositions of the Respondent and Abelson are made by the names "Powell" and "Abelson", respectively, 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.  Pursuant to the Respondent's request, the Hearing Officer has taken judicial notice or official recognition of Section 887.105, Code of Federal Regulations.   

 

FINDINGS OF FACT

 

From the evidence presented at the hearing, the undersigned Hearing Officer finds as follows:

 

1.  The Respondent, Betty Powell, served as the Executive Director of the Panama city Housing Authority from November of 1980 until she resigned in July of 1989.  Stip., 3.


2.  The Housing Authority administered a federal Section 8 Program under the jurisdiction of the Department of Housing and Urban Development.  State and local housing authorities administer this federal housing program, the purpose of which is to make housing available to low-income households.  Owners of housing units that qualify under the program are entitled to receive rental assistance payments from federal funds dispersed by Housing Authority for units which are rented to eligible households.  Stip., 3. 

3.  Housing Authority personnel make a determination whether a household is eligible for such federal housing assistance and give the household a list of available housing units from which the households (prospective renters) may choose.  Stip., 4.

4.  There is great competition for tenants among developers and owners of low income housing in the Panama City area, and the Housing Authority was limited as to the number of units it could subsidize by the number of vouchers and certificates issued by the federal Department of Housing and Urban Development.  T, 235, 97.

5.  In 1988 and 1989, Century 21 Bay Properties, Inc., a Florida real estate company, constructed 24 residential housing units which qualified for federal assistance payments under the Section 8 program.  Stip., 4.

6.  The 24 units were eligible for tax credits to their owner under the federal tax code.  Stip., 4.

7.  The president/director and owner of the real estate company, at all times material to the complaint in this matter, was Jim C. Hanlon, a long-time friend of the Respondent.  Stip., 4.


8.  The Respondent directed employees of the Housing Authority to provide administrative support for Mr. Hanlon's application for eligibility for the federal tax credit benefit for the 24 units.  T, 230; Abelson, 7, 8, 9, 10.

9.  The administrative support provided Mr. Hanlon by the Respondent and Housing Authority staff included the preparation of documents which pertain to Mr. Hanlon's application for tax credit status for the 24 units and documents which are letters to potential investors in Mr. Hanlon's residential units.  The documents are personal documents of Mr. Hanlon relating to his private business interests, and are not documents required by the Housing Authority for any of its federal programs.  The tax credit matters of Mr. Hanlon did not constitute a program of the Housing Authority or a portion of a program of the Authority.  Abelson, 7, 8, 9, 10; T, 230; AE, 2.     

10.  The Respondent provided or had provided the type of administrative support as aforesaid only for Jim Hanlon.  T, 230,  231; Abelson, 8.

11.  The federal tax credit was not a Housing Authority program.  It was Mr. Hanlon's tax credit program.  The Authority, at the direction of the Respondent, assisted Mr. Hanlon in preparing his application to the Housing Finance agency for the tax credit allocation.  T, 230, 232; Abelson, 7, 8, 9, 10.

12.  Linda Abelson spent 40 to 50 of her on-the-job hours as an employee of the Housing Authority working on matters for Mr. Hanlon, including overtime and regular hours.  Abelson, 9.


13.  The Respondent told Linda Abelson and Betty Steffers, employees of the Housing Authority, that she wanted Mr. Hanlon's tax credit units leased and that he had to obtain a ninety-five percent occupancy rate before he could sell the units.  Abelson, 10, 11; T, 69, 92.

14.  The Respondent held meetings with Abelson and Steffers to see how many of Hanlon's units had been leased.  The Respondent would question them regarding how many referrals had been made to Hanlon's units.  Steffers and Abelson were told directly by the Respondent to lease Hanlon's units.  T, 92; Abelson, 12, 13.     

15.  Housing Authority procedures call for prospective tenants to be served on a first-come, first-served basis.  No preference is authorized for one property owner over another.  T, 89; Abelson, 16, 17, 22.

16.  The Respondent would frequently question Abelson about who Abelson had for Hanlon's units or whether Abelson had spoken to prospective tenants about Hanlon's units or offered one of Hanlon's to prospective tenants.  Abelson, 10, 11, 12.

17.  The Respondent engaged in this behavior on a frequent day-to-day basis for over a four-month or five-month period in 1989.


18.  As a result of the pressure applied by the Respondent to lease Mr. Hanlon's housing units, Abelson and Steffers "jumped" people on the waiting list who were interested in renting Hanlon's units.  This jumping had the effect of getting prospective tenants who expressed a desire to rent Hanlon's units housed more quickly than prospective tenants who did not specify Hanlon's units.   T, 98, 106; Abelson 11, 12, 13, 23, 24.

19.  In December of 1988, the Respondent acquired a Florida real estate sales license.  Stip., 4. 

20.  In order to maintain an active sales license, an individual salesperson must associate with a licensed real estate brokerage firm.  In January of 1989, the Respondent associated herself with Century 21 Bay Properties, Inc., a Florida real estate corporation, and had her license listed with that company.  Stip., 4. 

21.  During the period of time the Respondent had her real estate license listed with Century 21, the Respondent, as a real estate salesperson whose real estate license was with Century 21, also listed a piece of property for sale  with Century 21; and Century 21 had properties listed with the Housing Authority under the Section 8 program during that time.  The Section 8 program requires housing voucher contracts between property owners and housing authorities, in the form prescribed by the federal Department of Housing and Urban Development, and provides housing assistance payments to owners.  T, 131, 132, 133, 134, 137; AE 2; RE 2; AE 3.    

 

APPLICABLE STATUTES

Section 112.313(6), Florida Statutes, provides:


 

  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.

 

For purposes of this statute, the term "corruptly" is defined by Section 112.312(7), Florida Statutes, as follows:

 

  'Corruptly' means 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 112.313(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.

 

 

CONCLUSIONS OF LAW


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, Betty Powell, in her capacity as Executive Director of the Panama City Housing 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, and is subject to the continuing jurisdiction of the State of Florida Commission on Ethics.

2.  With respect to an alleged violation of Section 112.313(6), 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 used or attempted to use her official position or property or resources within her trust, or performed her official duties.

 

c.  The Respondent's actions were done with an intent to secure a special privilege, benefit, or exemption for herself or others; and

 

d.  The Respondent's actions were done "corruptly," that is,

(1)  done with a wrongful intent, and

(2)  done for the purpose of benefiting from some act or omission which was inconsistent with the proper performance of public duties.

 


3.  The Respondent used her official position and property and resources within her trust when she directed personnel of the Housing Authority to provide administrative support for Jim Hanlon's application for eligibility of his housing project units under the Internal Revenue Code's tax credit provision.

4.  The Respondent's actions were intended to provide and did provide a special privilege or benefit for Hanlon by having those documents prepared which were necessary for him to acquire the tax credit status and to market the properties/units.  Any public purpose served by this work was at the very best only incidentally-related to encouraging more affordable housing in the Panama City area.  Any public benefit to be gained by the tax credit work performed for Hanlon was, at best, of a limited and dubious nature in view of the overabundance of public housing in the Panama City area as evidenced by the great competition among owners of such housing for prospective tenants; housing units were available without the need to generate more as a by-product of the assistance given Hanlon to acquire a tax credit. 

5.  Hanlon was a long-time personal friend of the Respondent.  The Respondent had her real estate sales license listed with Hanlon's company.  The testimony of Abelson and Steffers established that the Respondent was constantly presuring them about renting Hanlon's property.  They further testified that in violation of Housing Authority procedures they "jumped" people on the waiting list in order to rent Hanlon's units. 


6.  Under the circumstances of this case, the Respondent's intent to secure a  special benefit for Hanlon was  wrongful, and her actions, serving only a private purpose, were inconsistent with the proper performance of her public duties. 

7.  Accordingly, the Respondent violated Section 112.313(6), Florida Statutes, by directing personnel of the Housing Authority to provide administrative support for Hanlon and by pressuring agency personnel to lease Hanlon's property. 

8.  With respect to an alleged violation 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. 

 

9.  The Respondent held an active real estate license during the period of time she served as Executive Director of the Housing Authority.  During the first five months of 1989, the Respondent had her license listed with Century 21 Bay Properties, and thus had a contractual relationship with Century 21 (a business entity doing business with her agency--the Housing Authority).


10.  During the first five months of 1989, Century 21 Bay Properties was on the eligible property list for low-cost housing administered by the Panama City Housing Authority.  In fact, during this period, a number of Century 21's properties were listed with the Housing Authority under the Section 8 Program.  In CEO 81-87, the Commission on Ethics found that a prohibited conflict of interest existed under Section 112.313(7)(a), Florida Statutes, where a commissioner and the executive director of a housing authority had an employment or contractual relationship with a  business entity participating in the Section 8 program; the Respondent's situation is analogous to the facts of that case.

11.  Thus, the Respondent had a contractual relationship with Century 21, a business entity which was doing business with the Panama City Housing Authority, the Respondent's public agency. 

12.  Accordingly, the Respondent violated Section 112.313(7)(a), Florida Statutes. 

13.  The Respondent's contention that she did not receive any special privilege, benefit, or exemption from her contractual relationship with Century 21 is irrelevant to the determination that the Respondent violated the two statutory sections at issue.  Section 112.313(6) can be violated when an improper use or attempted use is engaged in for the benefit of another, such as Hanlon.  Section 112.313(7)(a) is concerned with the existence of  the relationship, and does  not require that a privilege, benefit, or exemption be received by the public officer or employee from the relationship.


14.  There is evidence to support a finding of the requisite intent for a violation of Section 112.313(6).  Section 112.313(7)(a) requires no intent for a violation.

15.  The Respondent's placing of her real estate license on an inactive status, once she was advised of a conflict by the attorney for the Housing Authority's Board, is irrelevant to a determination that the Respondent had a conflicting relationship in violation of Section 112.313(7)(a).

16.  Likewise, the receipt of incorrect legal advice by the Respondent as to whether she had a conflicting relationship is irrelevant to a determination that the Respondent violated Section 112.313(7)(a).

17.  Knowledge of the Respondent's having a real estate license by the Housing Authority Board members as well as said members not being aware of any conflict of interest of the Respondent until advised by the Board's attorney is irrelevant to a determination that a violation of the two statutory sections at issue in this matter occurred.

18.  The evidence presented in this matter does support the conclusion that the Respondent illegally and improperly pressured employees under her supervision to lease properties and otherwise act for the benefit of Hanlon.  The record does not show that the Hanlon tax credit matter was a program of the Housing Authority nor does it show that the benefits provided Hanlon by the Respondent were merely administrative support for new Housing Authority programs required by the Respondent's position to be provided. 


RECOMMENDED PENALTY

 

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.

In this matter, the Respondent caused a goodly portion of the energy and assets of a public agency to be devoted to the business concerns of a private person, contrary to the proper performance of her public duties.

What emerges from the record in this matter is a clear picture of a public trust and its resources being given over by the Respondent to the promotion, organization, and advancement of the private interests of a commercial property owner who was her long-time friend, acquaintance, as well as a business associate who owned the real estate firm with which she was associated.  That is the very kind of situation the Code of Ethics seeks to prevent and to deter.  In consideration of the foregoing, it is recommended that the Commission on Ethics recommend that the Panama City Housing Authority publicly censure and reprimand the Respondent and impose a civil penalty of $5,000 against her.

 

RECOMMENDED FINAL ACTION

 


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, Betty Powell, former Executive Director of the Panama City Housing Authority, has violated Section 112.313(6), Florida Statutes, by pressuring employees under her supervision to lease properties for the benefit of Mr. Jim C. Hanlon, and by providing administrative support for Hanlon through the Housing Authority.  It is further recommended that the Respondent be found to have violated Section 112.313(7)(a), Florida Statutes, by having a contractual relationship with Century 21 Bay Properties, Inc., a business entity that was doing business with the Authority.  The Hearing Officer recommends that the Commission's order recommend that the Panama City Housing Authority Commission publicly censure and reprimand the Respondent and  impose a civil penalty of $5,000 upon her.

 

ENTERED and respectfully submitted this ____ day of March, 1991.

__________________________

Don T. Hall

Hearing Officer and Member

Commission on Ethics

 

 

Copies furnished to:

 

     Mr. John F. Daniel, 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.

3.  Accepted.

4.  Accepted in substance in finding of fact "4".

5.  Accepted.

6.  Accepted, except for word "Florida" appearing before words "Income Tax Code".

7.  Accepted.

8.  Accepted.

9.  Accepted.

10.  Accepted.

11.  Accepted in substance in finding of fact "11".

12.  Accepted in substance in finding of fact "12".

13.  Accepted.

14.  Accepted.

15.  Accepted.

16.  Accepted.

17.  Accepted.

18.  Accepted.

19.  Accepted.

20.  Accepted.

21.  Accepted.

22.  Accepted in finding of fact "21".

23.  Rejected for lack of competent and substantial evidence showing a regulatory relationship; however, the record clearly demonstrates that Century 21 was doing business with the Housing Authority.

24.  Accepted in substance in finding of fact "18".

 

 

     The following are rulings on the proposed findings of fact submitted by the Respondent:

 

1.  Accepted.

2.  Accepted, except that portion regarding knowledge of the Board is rejected as being unnecessary and irrelevant to a decision in this matter as to whether the Respondent violated the Code of Ethics.

3.  Rejected as unnecessary and irrelevant to a decision in this matter as to whether the Respondent violated the Code of Ethics.

4.  Rejected as unnecessary and irrelevant to a decision in this matter as to whether the Respondent violated the Code of Ethics.

5.  Rejected as unnecessary and irrelevant to a decision in this matter as to whether the Respondent violated the Code of Ethics.


6.  First sentence, Rejected; the evidence did show an intentional violation of Section 112.313(6), Florida Statutes, and Section 112.313(7)(a), Florida Statutes, requires no intent.  Second sentence, Rejected as unnecessary and irrelevant to a decision in this matter as to whether the Respondent violated Section 112.313(7)(a), Florida Statutes.

7.  Accepted, except as to any implication that the federal tax credit involvment of the Respondent with Jim Hanlon was a housing program for low income families, and except as to any implication that such was a program of the Housing Authority.

8.  Rejected due to the use of the term "program".  While tax credit matters of Jim Hanlon were attended to or acted on by the Respondent, no tax credit program of the Authority was established by the evidence.

9.  Rejected due to the use of the term "program".

10.  Accepted that the Respondent filed a request for judicial notice, although the request is unclear as to which numbered section of the Code of Federal Regulations is tendered for official recognition.  Rejected that Section 887.105, CFR, establishes the responsibility of the Executive Director as to subject matter to which that section does not apply.

11.  Rejected as unnecessary and irrelevant to a decision in this matter as to whether the Respondent violated the Code of Ethics.

12.  Rejected as to lack of pressure on employees.  Rejected as unnecessary and irrelevant to a decision in this matter as to whether the Respondent violated the Code of Ethics, as to the length of waiting period.

13.  Rejected.

14.  Rejected as unnecessary and irrelevant to a decision in this matter as to whether the Respondent violated the Code of Ethics.

15.  Accepted, but with the same exceptions as Respondent's finding of fact numbered "7".

16.  Rejected.