Source: http://ethics.state.fl.us/Documents/Orders/1989/89-80ro.html
Timestamp: 2019-04-24 15:58:44+00:00

Document:
Pursuant to written notice, a formal hearing was held in this case before Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on November 12, 1991, in Tallahassee, Florida.
Whether the Respondent, Charles Polk, violated Section 112.313(7), Florida Statutes, by having a contractual relationship with a real estate developer who was doing business with the Daytona Beach Community College.
On or about August 3, 1989, a Complaint against the Respondent, Charles Polk, was filed with the Florida Commission on Ethics (hereinafter referred to as the "Commission"). Based upon a review of the Complaint, the Commission issued a Determination of Investigative Jurisdiction and Order to Investigate on October 20, 1989, ordering the staff of the Commission to conduct a preliminary investigation into whether Mr. Polk violated Sections 112.313(6), and 112.313(7), Florida Statutes.
Following the Commission's investigation of the allegations against Mr. Polk, a Report of Investigation was released on October 16, 1990. Based upon the Complaint and the Report of Investigation an Advocate for the Commission issued an Advocate's Recommendation on October 25, 1990. The Advocate determined that there was no probable cause to believe that Mr. Polk violated Section 112.313(6), Florida Statutes, but that there was probable cause to believe that he had violated Section 112.313(7), Florida Statutes.
Based upon the Report of Investigation and the Advocate's Recommendation, the Commission issued an Order Finding Probable Cause on December 5, 1990. The Commission concluded there was no probable cause to believe that Mr. Polk violated Section 112.313(6), Florida Statutes, and dismissed the allegations concerning that alleged violation. The Commission concluded, however, that there was probable cause to believe that Mr. Polk violated Section 112.313(7), Florida Statutes, and ordered that a public hearing be conducted.
By letter dated June 20, 1991, the Commission referred the matter to the Division of Administrative Hearings and, in accordance with Rules 34-5.010 and 34-5.014, Florida Administrative Code, requested that the public hearing on the Complaint against Mr. Polk be conducted by the Division of Administrative Hearings. The hearing was scheduled for November 12 and 13, 1991.
Prior to the formal hearing the parties filed a pre-hearing statement containing stipulated findings of fact. Those facts have been accepted in this Recommended Order.
At the formal hearing the Advocate called no witnesses. The Advocate offered four exhibits for identification purposes. Advocate's exhibits 1-2 and 4, were accepted into evidence. Advocate's exhibit 3, was rejected. One of the exhibits accepted into evidence consisted of the deposition testimony of Anargyros N. Xepapas.
Mr. Polk testified on his own behalf. Mr. Polk also offered seven exhibits for identification purposes. All of the Respondent's exhibit's were accepted into evidence.
The parties have filed proposed recommended orders containing proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto.
2. Mr. Polk resigned as President of Daytona Beach Community College in 1990.
4. The purchase price of the life estate and one-half interest in the condominium unit was $150,000.00. [Stipulated Fact.] The weight of the evidence failed to prove that this price was not the fair market value or that the transaction was not an arms-length transaction.
5. Under the terms of the agreement, Mr. Polk and his wife were required to pay $30,000.00 immediately. They subsequently executed and delivered to Mr. Xepapas a note and mortgage for the remaining $120,000.00. [Stipulated Fact.] Mr. Polk was a mortgagor and Mr. Xepapas was a mortgagee.
12. Mr. Xepapas action in selling the condominium to Mr. Polk and his wife was a business transaction.
15. In addition to being the owner of the condominium building at issue, Mr. Xepapas was the architect, developer and contractor for the condominium and for other condominium buildings in the areas.
16. Mr. Xepapas was trying to sell the condominium units as part of his business because of cash-flow problems. [Stipulated Fact.] The condominium sales market was "soft" and Mr. Xepapas was trying to eliminate the carrying costs for unsold units.
17. Mr. Xepapas sold a total of four condominium units pursuant to an arrangement similar to the arrangement by which he sold the condominium unit to Mr. Polk.
19. Mr. Xepapas was a sole proprietor. He entered into his relationship with Mr. Polk in his capacity as a sole proprietor.
23. Mr. Polk was involved to some extent in the decision as to whether the new center should be purchased or constructed, and whether it should be acquired through a long-term lease/purchase agreement.
24. In response to the advertisement of the request for proposal in September, 1988, Mr. Xepapas submitted a proposal. [Stipulated Fact.] There were a total of nine persons or businesses that responded to the request for proposal for the Deltona facility.
25. Mr. Polk knew that Mr. Xepapas had picked up a bid proposal package and, therefore, believed that Mr. Xepapas would submit a proposal.
26. Mr. Polk appointed the committee which reviewed the proposals. This committee ultimately narrowed the acceptable proposals to two, including Mr. Xepapas, and directed that those two proposers submit final proposals.
28. Mr. Xepapas and Mr. and Mrs. Polk were co-owners of the condominium prior to and at the time that Mr. Xepapas was awarded the Daytona Beach Community College contract.
29. Ultimately, Mr. Xepapas was not able to fulfill his obligations under the contract with Daytona Beach Community College.
30. Although the evidence failed to prove that Mr. Polk asserted any influence over the decision to award the contract to Mr. Xepapas, Mr. Polk was involved to some small degree in the award of the contract to Mr. Xepapas.
31. The evidence failed to prove that Mr. Polk disclosed his co-ownership of the condominium with Mr. Xepapas to the Board of Trustees of the Daytona Beach Community College, that he refused to participate in any way in the bidding process or that he attempted to take the more drastic step of severing his relationship with Mr. Xepapas while the bidding process was going on.
32. In May, 1989, Mr. and Mrs. Polk ultimately quit claim deeded the property to Mr. Xepapas. The evidence failed to prove why. They, therefore, lost their investment in the property.
33. Mr. Polk also resigned as President of Daytona Beach Community College as a result of the allegations concerning his relationship with Mr. Xepapas.
A. Jurisdiction and Burden of Proof.
34. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1989). Section 112.322, Florida Statutes, and Rule 34-5.0015, Florida Administrative Code, authorize the Commission to conduct investigations and make public reports on complaints concerning violations of Part III, Chapter 112, Florida Statutes (the "Code of Ethics for Public Officers and Employees").
35. The burden of proof, absent a statutory directive to the contrary, is on the party asserting the affirmative of the issue of the proceeding. Antel v. Department of Professional Regulation, 522 So.2d 1056 (Fla. 5th DCA 1988); Department of Transportation v. J.W.C. Co., Inc. 396 So.2d 778 (Fla. 1st DCA 1981); and Balino v. Department of Health and Rehabilitative Services, 348 So.2d 249 (Fla. 1st DCA 1977). In this proceeding it is the Commission, through the Advocate, that is asserting the affirmative: that Mr. Polk violated Section 112.313(7), Florida Statutes. Therefore, the burden of proving the elements of Mr. Polk's alleged violations was on the Commission.
faithful discharge of his public duties.
37. Section 112.313(1), Florida Statutes, defines the terms "public officer" to include "any person elected or appointed to hold office in any agency . . . ." An "agency" is defined in Section 112.312(2), Florida Statutes, to mean "any state, regional, county, local, or municipal government entity of this state, whether executive, judicial, or legislative . . . ."
38. The evidence proved that Mr. Polk was the President of the Daytona Beach Community College. Therefore, Mr. Polk was a "public officer" for purposes of Section 112.313(7), Florida Statutes.
39. Relationship with a Business Entity or Agency.
The second element of a violation of Section 112.313(7), Florida Statutes, has also been proved. The evidence proved that Mr. Polk had a contractual relationship with Mr. Xepapas. Mr. Polk and Mr. Xepapas had a contractual relationship as mortgagor and mortgagee. See Sobel v. Mutual Development, Inc., 313 So.2d 77 (Fla. 1st DCA 1975).
40. The evidence also proved that Mr. Xepapas was a "business entity" for purposes of Section 112.313(7), Florida Statutes. The agreement and the resulting mortgage between Mr. Xepapas and Mr. Polk were entered into in an arms-length transaction. Mr. Xepapas sold Mr. Polk the interest in the condominium as part of his business as a real estate developer, which he operated as a sole proprietor. Mr. Xepapas engaged in his business arrangements, such as the one he entered into with Mr. Polk, in his individual capacity. Mr. Xepapas also entered into his business arrangement with Daytona Beach Community College in his individual capacity. Mr. Xepapas was acting in both instances as a sole proprietor.
Business with, the Daytona Beach Community College.
41. The evidence also proved that Mr. Xepapas was doing business with the Daytona Beach Community College. Although it is true that this business transaction took place approximately three years after Mr. Polk and Mr. Xepapas entered into their business arrangement, it is also true that the relationship between Mr. Polk and Mr. Xepapas still existed when Mr. Xepapas bid on, and was awarded, the contract with Daytona Beach Community College. Mr. Polk's reliance on Commission on Ethics Opinions 83-58 and 85-55 is misplaced. Both of those cases involved business relationships entered into between a public officer or employee and a business entity after the business entity had already done business with the public officer's or employee's employer. That is not what happened in this case.
42. Based upon the foregoing, it is concluded that Mr. Polk violated Section 112.313(7), Florida Administrative Code.
43. The conclusions of law reached in this Recommended Order have been made whether the "clear and convincing evidence" standard or the "preponderance of the evidence" standard is applied to the evidence. Compare Ferris v. Turlington, 510 So.2d 292 (Fla. 1987); and Smith v. Department of Health and Rehabilitative Services, 522 So.2d 956 (Fla. 1st DCA 1988); with In re: Blackburn, 13 FALR 1859 (Commission on Ethics 1989).
6. A civil penalty not to exceed $5,000.00.
received because of the violation committed.
8. Public censure and reprimand.
The Advocate has recommended that a penalty of $1,000.00 be imposed in this matter.
45. The Advocate has recognized that there was no evidence of willful or malicious intent on Mr. Polk's part in this matter. This fact mitigates against the type of penalty which should be imposed. Additionally, the fact that the violation was clearly more technical than substantive also mitigates the penalty which would be imposed. Finally, the fact that Mr. Polk did not apparently profit from his relationship with Mr. Xepapas, and, in fact, ended up losing his investment and his employment mitigates against the penalty to be imposed.
46. Mr. Polk's conduct was, however, a violation of the law. His suggestion that there was nothing he could do to prevent Mr. Xepapas from entering into the business relationship with Daytona Beach Community College is correct. His suggestion that he could do nothing at all, however, is not correct. Mr. Polk could have made full and public disclosure of his relationship with Mr. Xepapas to the Board of Trustees, he could have avoided any involvement whatsoever in the bidding process and, ultimately, he could have ended his relationship with Mr. Xepapas, which it is recognized could not have been done without difficulty. Mr. Polk, however, chose to do nothing until the relationship was disclosed.
47. Based upon a consideration of all of the evidence in this case, it is concluded that Mr. Polk should be publicly censured and reprimanded. No civil penalty is recommended because of the loss which Mr. Polk has already suffered.
RECOMMENDED that Mr. Polk be subjected to public censure and reprimand.
DONE and ENTERED this 13th day of December, 1991, in Tallahassee, Florida.
this 13th day of December, 1991.
The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.
6 4, 12 and 19-20.
8 3, 21, 27-28 and 30.
3 3, 11 and 14.
12 26 and hereby accepted. See 23, 27 and 30.
All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

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