BEFORE THE
STATE OF FLORIDA
COMMISSION ON
ETHICS
In
re BETTY POWELL, )
)
Respondent. ) Complaint
No. 89-73
)
____________________________)
RECOMMENDED PUBLIC
REPORT OF HEARING OFFICER
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.
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.
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.
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.
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.
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.