13-001043EC In Re: David Rivera vs. * Status: Closed Recommended Order on Thursday, March 5, 2015.

Summary: Respondent, a former state representative, was guilty of violating sections 112.313(6) and 112.3144, Florida Statutes, as well as Article II, Section 8 of the Florida Constitution.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: DAVID RIVERA, Case No. 13 - 1043EC

Respondent.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a final he aring was conducted in this

matter on February 12, 201 4 , in Tallahassee, Florida, and Miami,

Florida (via video tele conference), and continued on

February 20, 2014, in Tallahassee, Florida, before

Administrative Law Judge W. David Watkins of the Division of

Administrative Hearings (DOAH) .

APPEARANCES

For Advocate : Diane L. Guillemette, Esquire

Lisa Raleigh, Esquire

Office of the Attorney General

The Capitol , Plaza Level - 01

Tallahassee, Florida 32399 - 1050

For Respondent: Emmett Mitchell, IV, Esquire

Coates Law Firm, PL

115 East Park Avenue, Suite 1

Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

There are seven alleged violations at issue, six of which

are related to alleged financial disclosure violations. A s

stipulated by the parties, at issue is whether Respondent

violated:

1 . Section 112.313(6), Florida Statutes, 1 /

by requesting and/or accep ting State

reimbursement for travel expenses that were

paid by campaign accounts and/or State

office expense accounts;

2 . Article II, s ection 8, Florida

Constitution, by failing to or not properly

reporting income; and/or stocks and bonds;

and/or seconda ry source income on his 2005

CE Form 6, Full and Public Disclosure of

Financial Interest;

3. Article II, s ection 8, Florida

Constitution, by failing to or not properly

reporting income; and/or stocks and bonds;

and/or bank accounts; and/or real property;

and/or secondary source income on his 2006

CE Form 6, Full and Public Disclosure of

Financial Interest;

4. Article II, s ection 8, Florida

Constitution, by failing to or not properly

reporting income; and/or stocks and bonds;

and/or bank accounts; and/or real property;

and/or secondary source income on his 2007

CE Form 6, Full and Public Disclosure of

Financial Interest;

5. Article II, s ection 8, Florida

Constitution, by failing to or not properly

reporting income; and/or stocks and bonds;

and/or bank a ccounts; and/or real property;

and/or secondary source income on his 2008

CE Form 6, Full and Public Disclosure of

Financial Interest;

6. Article II, s ection 8, Florida

Constitution, by failing to or not properly

reporting income; and/or stocks and bonds ;

and/or bank accounts; and/or real property;

and/or secondary source income on his 2009

CE Form 6, Full and Public Disclosure of

Financial Interest; and

7. Section 112.3144, Florida Statutes, by

failing to file a CE Form 6F Ð Final Full and

Public Disclo sure of Financial Interests Ñ

within 60 days of leaving his position with

the Florida House of Representatives.

PRELIMINARY STATEMENT

On October 24, 2012, the Commission on Ethics

( Ð Commission Ñ ) entered an Order Finding Probable Cause , finding

that there was reasonable cause to believe that Respondent

violated provisions in chapter 112, Florida Statutes, and

Article II, s ection 8, Florida Constitution. Specifically, it

found probable cause to believe Respondent violated the

following p rovisions:

Section 112.313(4), Florida Statutes, by

receiving income from Southwest Florida

Enterprises, Inc., when he knew, or with the

exercise of reasonable care should have

known, it was given in an effort to

influence Respondent's vote[s] and/or

actio ns;

Section 112.313(7), Florida Statutes, by

having a contractual relationship with

Southwest Florida Enterprises, through

Millennium Marketing Inc., which was

regulated by the Respondent's agency, and/or

a relationship which would create a

continuing or frequently recurring conflict

between Respondent's private interests and

the performance of his duties as a Florida

Representative, and/or would impede the full

and faithful discharge of Respondent's

public duties;

Section 112.313(6), Florida Statutes, by

using campaign funds for non - campaign

related expenditures;

Section 112.313(6), Florida Statutes, by

requesting and/or accepting State

reimbursement for travel expenses that were

paid by campaign fund accounts and/or State

office expense accounts;

Article II, s ection 8, Florida Constitution,

by failing to or not properly reporting

income; and/or stocks and bonds; and/or

secondary source income on his 2005 CE Form

6, Full and Public Disclosure of Financial

Interests;

Article II, s ection 8, Florida C onstitution,

by failing to or not properly reporting

income; and/or stocks and bonds; and/or bank

accounts; and/or real property ; and/or

secondary source income on his 2006 - 2009

CE Form 6, Full and Public Disclosure of

Financial Interests;

Section 112.3 144, Florida Statutes, by

failing to file a [ 2010 ] CE Form 6F, Final

Full and Public Disclosure of Financial

Interests, within 60 days of leaving his

position with the Florida House of

Representatives; and,

Section 112.3148(8), Florida Statutes, by

failin g to report Millennium Marketing,

Inc.'s gift of forgiveness of a portion of

Respondent's indebtedness.

The matter was referred to DOAH on March 20, 2013, for the

assignment of an a dministrative l aw j udge to conduct a public

hearing and enter a recommended order. Thereafter, the matter

was assigned to the undersigned, and set for hearing on June 11

and 12, 2013, in Miami, Florida. However, at the request of the

parties the final hearing was continued three times, and

ultimately scheduled to commence on February 12, 2014.

Prior to the final hearing, the parties stipulated to

s everal facts and conclusions of law in a Joint Pre - hearing

Statement. The parties' stipulations have been incorporated

below to the extent they are relevant. Also prior to the

hearing , the Advocate abandoned allegations relating to

purported violation s of sections 112.313(4), 112.313(7), and

11 2.3148(8) . Thus, the only remaining allegations in dispute

are the seven stipulated by the parties in their Joint Pre -

hearing Statement .

The final hearing was conducted in two parts. On

February 12, 201 4 , the hearing was conducted via video

teleconference with locations in Tallahassee and Miami. The

second and final day of hearing was held on February 20, 2014,

in Tallahassee.

At the final hearing, the Advocate presented the testimony

of the following witnesses: Alex Havenick, Brett Lycett, Kelly

Kimsey and Keith Powell. The Advocate offered 26 exhibits, all

of which were received in evidence. Respondent testified on his

own behalf, and offered six exhibits, five of which were

received in evidence.

The three - volume T ranscript of the hearing was filed at

DOAH on March 10, 2014. On April 9, 2014, the parties timely

filed their Proposed Recommended Orders, which have been

carefully considered in the preparation of this Recommended

Order.

FINDINGS OF FACT

Based upon the testimony and documentary evidence presented

at hearing, the demeanor and credibility of the witnesses, and

on the entire record of this proceeding, the following findings

of fact are made:

Background

1 . At all times material to the Complaint, Respondent was

a public officer. Respondent no longer holds public office .

2 . Respondent successfully ran for the Florida House of

Representatives in 2002, 2004, 2006, and 2008. Respondent

briefly ran for election to the Florida Senate in 2010 and

opened a campaign account for that purpose .

3 . Respondent successfully ran for U.S . House of

Representatives in 2010, but was d efeated in 2012 for re -

election .

4 . Respondent also ran for State Committeeman, a private,

political party office of the Republican Party of Florida, in

2003, 2004 , and 2008, and opened campaign accounts for that

purpose.

State Reimbursement for Travel Expenses that were Paid from

Respondent's Campaign Accounts or State Office Expense Accounts

5 . The State of Florida allows reimbursement to employees

and elected officials for travel and related expenses incurred

during the conduct of official state business. Such expenses

include, among other things, airfare, rental cars, hotels, and

meals while travelling.

6 . The Florida House of Representatives' Office of

Legislative Services is responsible for reviewing and approving

expense reimbursements for members of the Florida House of

Representatives. Respondent's state travel expenses were

reimbursed by the Office of Legislative Services when he served

as a member of the Florida House of Representatives from 2002 -

2010.

7 . Kelly Kimsey, at the time a Senior Crime Intelligence

Analyst II with the Public Corruption U nit of the Florida

Department of Law Enforcement (FDLE), testified that she

conduct ed the forensic analysis for this case utilizing

financial records subpoenaed from financial institutions . In

doing so, Ms. Kimsey analyzed Respondent's personal bank

accounts, as well as his campaign accounts , and compared them

against his campaign records.

8 . Ms. Kimsey created a summary showing Respondent's Bank

of America campaign accounts ending in 162 6, 9269 , and 0856 .

The account statements , as well as the actual cancelled checks,

reflect payments directly from the campaign accounts to

RespondentÓs credit card accounts, in payment of the full

balance due on Respondent's personal credit cards.

9 . Notwithstanding the fact that Respondent had several

credit cards, including a Chase Visa, American Express, and U.S.

Senate Federal Credit Union Visa Gold, Respondent did not pay

for expenses relating to his official duties as a st ate

representative on a designated credit card. Rather, Respondent

testified that his personal expenses, political party expenses,

state house campaign expenses, and state house official expenses

were all comingled among all of his credit cards Ð because the

Florida House of Repr esentatives does not issue credit cards. Ñ

10 . On t wenty - nine separate occasions throughout the

period at issue , Respondent requested and received State of

Florida direct - deposit reimbursement into his personal bank

account for travel that was paid for by one of his campaign

accounts, either his official campaign account or his

committeeman account. The total reimbursement Respondent

improperly received in this manner totaled tens of thousands of

dollars. Three such examples follow .

11 . Respondent reques ted reimbursement of $622.90 for

official state travel in March of 2006. Respondent's travel

expenses were charged to his Chase credit card. The Chase

credit card balance, which included the travel expenses, was

paid for by Respondent's Campaign account numbered 1626. The

State paid $622.90 for that travel into Respondent's personal

bank account.

12 . Respondent requested reimbursement of $738.59 , also

for travel in March of 2006. Respondent's trave l expenses were

charged to his U .S. Senate Federal Cred it Union credit card.

The U.S. Senate Federal Credit Union credit card balance, which

included the travel expenses, was paid by Respondent's Campaign

accounts numbered 9269 and 1626. The state paid $738.59 for

that travel into Respondent's personal bank account.

13 . Respondent requested reimbursement of $1,692.32 for

official state travel in December of 2008. Respondent's travel

expenses were charged to his American Express credit card. The

American Express credit card balance, which included the trave l

expenses, was paid by Respondent's Campaign account numbered

9269. The state paid $1,692.32 for that travel into

Respo ndent's personal bank account. 2 /

14 . The Advocate established by clear and convincing

evidence that Respondent received State of Florida reimbursement

for travel and related expenses that were in fact paid for by

one of his campaign accounts. Thus, Respondent was reimbursed

for tens of th ousands of dollars of expenses which he did not

Ðincur . Ñ The evidence also clearly and convincingly established

that this double - reimbursement was knowing and intentional,

since Respondent himself authorized the travel - related credit

card charges, and the n subsequently personally drafted the

campaign account checks used to pay off the credit card

balances. He also personally signed and submitted the State of

Florida reimbursement requests.

15 . T he amounts reimbursed by the State of Florida for

travel - rel ated expenses that were paid by RespondentÓs campaign

accounts represent income to Respondent.

16 . Respondent characterized the Ðdouble - reimbursementÑ

allegation as an Ðaccounting dispute.Ñ Respondent testified

that he had loaned his campaigns personal f unds, and that the

payments made from his campaign accounts directly to his credit

card accounts should be considered repayments of his loans to

his campaign accounts. However, Respondent provided no

corroborative evidence to substantiate personal loans t o his

campaign accounts, and his testimony in this regard is rejected

as not credible.

Additional Sources of Income

17 . Millennium Marketing , Inc. (Millennium) and Southwest

Florida Enterprises entered into a Consulting A greement

(Agreement) effective November 1, 2006. Pursuant to that

agreement, Millennium (Consultant) was to provide consulting and

strategic advice relative to a Miami - Dade County referendum

campaign for approval of slot machine gaming .

18 . Respondent acted as the chief strategist and primary

provider of services under the A greement . Indeed, the Agreement

expressly stated that Respondent was to be the person primarily

responsible for leading the strategic effort to win approval of

the referendum:

The Consultant agrees, as a condition

precedent to this Agreement, that it shall

engage David Rivera as the key person to act

as the primary provider of service pursuant

to the terms and conditions of this

Agreement and to act as the intermediary on

behalf of the Consultant with the Company

for all purposes, and that the failure of

David Rivera to act in these capacities

shall be grounds to terminate immediately

this Agreement, without notice and without

the Company's being required to pay any

further amounts or damages, except for

ac crued, payable and incurred amounts due

and previously invoiced as the date of

termination.

19 . The Agreement provided for a base compensation to

Millennium of $250,000.00, with an additional bonus of

$750,000.00 should the gaming referendum prove succe ssful.

20 . The officers of Millennium were Respondent's mother,

Daisy Magarino - Rivera, and Ileana Medina .

21 . O n October 13, 2010, a Miami Herald article was

published in which RespondentÓs income was questioned. In

response to the article, the Florida Department of Law

Enforcement (FDLE) immediately began a criminal investigation of

RespondentÓs sources of income and financial reporting.

22 . A s ubpoena was issued to Millennium on December 2,

2010 , requesting any and all financial records from the

inception of Millennium to the present concerning any and all

payments made to or received from David Rivera and/or

Interamerican Government Relations.

23 . Millennium supplied documents pursuant to the subpoena

in two separate productions. FDLE received the first group of

documents on December 17, 2010 , and a second group on

January 24, 2011. The first response included 11 checks made

payable to Respon dent , totaling $132,000. The checks have no

notation on the ÐForÑ line , whether loan, contingent loan,

compensation, or otherwise.

24 . Th e following checks were drafted by Millennium , made

payable to David M. Rivera, and deposited into Respondent's

personal bank account :

Check No. 100 6 , dated January 8, 2007,

$25,000 deposited January 10, 2007 ;

Check No. 1007, dated February 20, 2007,

$10,000 deposited February 22, 2007 ;

Check No. 1024, dated February 26, 2008,

$10,000 deposited Ma rch 11, 2009;

Ch eck No. 1015, dated June 12, 2008,

$20,000 deposited July 10, 2008 ;

Check No. 1025, dated October 2, 2009,

$18,000 deposited October 6, 2009 ;

Check No. 1026, dated October 3, 2009,

$12,000 d eposited October 6, 2009;

Check No. 1031, dated February 12, 2010,

$10,000 deposited March 16, 2010 ;

Check No. 1032, dated February 26, 2010,

$8,000 deposited March 16, 2010 ;

Check No. 1033, dated March 10, 2010,

$ 7,000 deposited March 18, 2010;

Check No. 1036, dated August 10, 2010,

$ 8,000 deposited August 16, 2010;

Check No. 1038, dated August 12, 2010,

$4,000 deposited August 16, 2010.

25 . As can be seen, Check No. 1024 is out o f check number

sequence for the date, and was not deposited until March 11,

2009, more than a year aft er it is dated . While it is possible

that this check was intentionally pulled from the back of the

checkbook and drafted, such seems extremely unlikely given that

the rest of the check numbers are in numerical order for the

dates of issuance. Rather, the more plausible explanation for

this anomaly is that the check was actually drafted shortly

before it was deposited by Respondent in March 2009, and for

some reason intentionally backdated to F ebruary 26, 2008. This

inference is supported by the fact that with one exception, all

of the other checks were deposited by Respondent within 30 days ,

and most within just a few days, of the check date. 3 / Given this

inference, the promissory note purpor ting to correspond to the

February 26, 2008 , loan was, in all likelihood, also

inaccurately dated.

26 . Respondent contends that the above payments represent

the proceeds of loans made to him by Millennium. In support of

this contention, Respondent introd uced 11 promissory notes whose

dates correspond exactly to the dates of the 11 checks above.

27 . Copies of the promissory notes were not included in

Millennium Ós first document production to FDLE, but rather were

included with the second group of documents provided by

Millennium on or about January 24, 2011.

28 . The promissory note dated February 26, 2008,

corresponds directly with check number 1024. As noted, t h e

corresponding proceeds of that purported loan ($10,000 ) were not

actually received by Respondent until the following year when

check number 1024 was deposited on March 11, 2009.

29 . Respondent testified that he repaid the Millennium

loans in November 2010 with two checks from his personal account

in the amounts of $29,760.27 and $11,845.21, and the conveyance

of ownership of the condominium unit identified as collateral in

the promissory notes .

30 . Ileana Medina of Millennium and Respondent's mother

(Ms. Magarino - Rivera ) loaned Respondent the cash to timely re pay

the loans to Millennium. Specifically, o n October 29, 2010,

Respondent's personal account received a deposit of $49,000 from

Ileana Medina's Bank of America Home Equity Line of Credit

(HELOC). The deposit raised his balance to $5 5,418. That

deposit allowed Respondent to clear two checks to Millennium on

November 24, 2010 , totaling $41, 6 05.48, both checks identified

as Ð loan repayment. Ñ

31 . Between December 21 and 24, 2010, Respondent deposited

$19,714.72 from his mother's savings bonds into his personal

account. On December 22, 2010 , Respondent deposited $10,000

into his personal bank account from his Charles Schwab account.

These two deposits allowed Respondent to repay nearly $30,000

towards Ms. Medina's HELOC on Decembe r 28, 2010.

32 . On January 6, 2011, Respondent deposited $20,000 from

his inactive campaign account number 9269 4 / into his personal

account. The $20,000 had been deposited into Account No. 9269

by cashier's check, remitter Daisy Rivera. That deposit al lowed

Respondent to pay off the remaining $18,286 of Ms. Medina's

HELOC.

33 . Respondent testified that he secured the $49,000 HELOC

loan from Ms. Medina for his congressional campaign in case he

needed more money than what had been budgeted for media time .

However, as of October 2010 ( the t ime of the loan from

Ms. Medina) , Respondent's congressional campaign account had a

balance of $96,645.19. Notably , the campaign had donated

$87,000 to charitable organizations just the month before .

34 . Brett Lycett was the lead investigator for the FDLE

criminal investigation of Respondent . Being skeptical of the

legitimacy of the promissory notes, Inspector Lycett asked

Millennium for the original promissory notes and the computer on

which the promissory notes were p repared in order to conduct a

forensic analysis. A f orensic analysis of the computer and the

original documents would have helped identify when the actual

document s were created and/ or signed.

35 . Ms. Magarino - Rivera (RespondentÓs mother) told

Investigator Lycett that the computer on which the promissory

notes were created had been discarded. Ms. Magarino - Rivera also

advised Investigator Lycett that the original promissory notes

had been given to Respondent once he had repaid the loans .

36 . T he Advocate propounded discovery to Respondent in

this case requesting the original promissory notes. In

response, Respondent stated Ð [ O ] nly copies of such promissory

notes are in Respondent's possession. Ñ

37 . The greater weight of the evidence supports the

conclu sion that the $132,000 in payments made to Respondent from

2007 through 2010 were compensation paid to Respondent for his

consulting work on the gaming referendum, rather than the

proceeds of loans from Millennium. This evidence includes : the

absence of any notation on the actual checks that they

represented a loan to Respondent ; the Check No. 1024 anomaly

discussed in Finding of Fact 25 above; and the absence of the

computer and original promissory notes upon which a forensic

analysis could be performed to determine the legitimacy of the

dating. That having been said, the evidence of record does not

rise to the Ðclear and convincing standardÑ required in this

proceeding.

38 . Respondent testified that repayment of the $132,000 in

Millennium lo ans was contingent on whether Respondent

consummated a business relationship with or joined Millennium by

January 15, 2011. Thus, f or financial disclosure purposes,

Respondent treated the loans he received from Millennium as

Ð contingent liabilities ,Ñ and did not report the loans on his CE

Form 6's for the years 2007 - 2010.

39 . Respondent offered no evidence to support his

contention that Millennium considered the loans to Respondent to

be contingent on whether Respondent consummated a business

relatio nship with or joined the company . Moreover, RespondentÓ s

contention is belied by the express language of the promissory

notes themselves, which make no mention of RespondentÓs

repayment obligation being contingent on any future event.

40 . RespondentÓs as sertion that the loans from Millennium

were contingent liabilities is rejected. Rather, the best

evidence of RespondentÓs obligation to repay the loans are the

promissory notes, which clearly state that RespondentÓs

obligation to repay the loans was uncon ditional.

RespondentÓs Form 6 Financial Disclosures for 2005 through 2009.

41 . On his 2005 CE Form 6, Respondent disclosed only his

State of Florida, House of Representatives' salary of $29,916.

However, r eview of Respondent's personal bank account records

reflects income of approximately $52,473 in 2005 , and personal

expenditures of approximately $75,000.

42 . On his 2006 CE Form 6, Respondent disclosed only his

State of Florida, House of Representatives' salary of $30,576.

However, r eview of Respo ndent's personal bank account records

reflects income of approximately $44,968 in 2006 , and personal

expenditures of approximately $54,000.

43 . On his 2007 CE Form 6, Respondent disclosed only his

State of Florida, House of Representatives' salary of $31 ,932.

However, r eview of Respondent's personal bank account records

reflects income of approximately $101,000 in 2007 , and personal

expenditures of approximately $128,000.

44 . On his 2008 CE Form 6, Respondent disclosed only his

State of Florida, House of Representatives' salary of $30,336.

However, r eview of Respondent's personal bank account records

reflects income of approximately $79,789 in 2008 , and personal

expenditures of approximately $88,000.

45 . On his 2009 CE Form 6, Respondent disclosed only his

State of Florida, House of Representatives' salary of $29,697.

However, r eview of Respondent's personal bank account records

reflects income of approximately $93,000 in 2009, and personal

expenditures of approximately $113,000 .

46 . The Advocate clearl y and convincingly established that

for reporting years 2005 through 2009, Respondent had income

well in excess of what he reported on his CE Forms 6 for those

years. Even assuming the $95,000 received from Millennium

during 2007, 2008, and 2009 was a loa n, not income, RespondentÓs

other income still exceeded by tens of thousands of dollars the

amounts that he reported on his CE Form 6 Ós for the years at

issue.

4 7 . No loans, contingent or otherwise, were disclosed as

liabilities in Respondent's 2006, 2007 , 2008, or 2009 CE

Forms 6.

4 8 . CE Form 6 requires a specific description of each

asset valued over $1,000. On his 2005 through 2009 CE Forms 6,

Respondent listed Ð real estate, Ñ Ð 401K, Ñ Ð stocks and bonds Ñ and

Ð bank accounts .Ñ In his Proposed Recommended Order, Respondent

conceded that he did not list certain assets with the level of

detail required by the Commission for the years 2006 - 2009.

4 9 . CE Form 6 asks for major clients under section D as

Secondary Sources of Income. For purposes of the CE Form 6,

Ð Secondary Sources Ñ are not second jobs. Rather, the reporter

is required to disclose major customer s , clients and other

sources of income to business entities of which they have an

interest.

50 . Under Ð Secondary Sources of Income ,Ñ Respondent listed

Interamerican Government Relations as a Ð business entity Ñ with

the U.S. Agency for International Development as a Ð major

client Ñ on his 2005 - 2009 CE Form 6's. According to Respondent,

w hile serving in the Florida House, Respondent was engaged in

international democracy building programs with the U.S.

Government. Funds paid to the Respondent under these grant

programs were nominal and intended to pay only for expenses

incurred while Respondent participated in the programs .

5 1 . Respondent also disclosed Millennium as a secondary

source of income on his 2005 CE Form 6 , but not on his 2006

through 2009 CE Form 6 Ós .

5 2 . Respondent filed the first set of CE Form 6X,

Amendment to Full and Public Disclosure of Financial Interes ts ,

on October 15, 2010. These amendments delete the secondary

source of income disclosed for 20 03 through 2009, but make no

other changes.

5 3 . Respondent filed a second set of CE Form 6X on

January 4, 2011, for the years 2006 through 2009, which

specifically identifies parcels of real estate, provid es the

address for Respondent's bank account with Bank of America, and

lists stocks and bonds with particularity. The amendments for

2007, 2008, and 2009 also list contingent loans from Ileana

Medina a nd/or Millennium for those years.

5 4 . A CE Form 6F, Ð Final Full and Public Disclosu re of

Financial Interest Ñ was required to be filed within 60 days from

November 2, 2010, the date Respon dent left office as a state

representative .

5 5 . The significant di fference between a CE Form 6 and a

CE Form 6X is that the CE Form 6 asks for the financial

information as of December 31, or a more current date. The CE

Form 6X asks for financial information as of the date the

discloser left office.

5 6 . On March 25, 2011, Respondent filed CE Form 6 which

refers to an attachment under liabilities. Attached is a United

States House of Representatives' Disclosure Statement which

lists a Ð contingent liability/loan Ñ from Ileana Medina and/or

Millennium as paid in full in 2010.

5 7 . On August 7, 2012 , and August 24, 2012, Respondent

filed two CE Forms 6X. The accompanying cover letter refers to

the forms as amendments to Respondent's CE Form 6F filed for

2010. The Form filed on August 24, 2012 , lists Millennium as a

conti ngent liability and also lists a loan from Ileana Medina

for $49,000.

5 8 . Respondent testified that he was not aware that he was

required to file a CE Form 6F in January 2011. He stated that

he thought the report was due in May or June of the following

y ear. He also testified that he filed the report in March 2011 ,

because he received a call from the Florida House counsel

advising him that the report was overdu e.

CONCLUSIONS OF LAW

5 9 . The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding. §§ 120.569 and 120.57(1), Fla . Stat.

60 . As a member of the Florida House of Representatives

from 2002 through 2010, Respondent was subject to Article II,

s ection 8, Florida Constitution, and part III, chapter 112,

Florida Statutes ( the Code of Ethics for Public Officers and

Employees ) for his acts and omissions during the time of the

alleged violations .

6 1 . Se ction 112.322, and Florida Administrative Code Rule

34 - 5.0015, authorize the Commission on Ethics to conduct

investigations and to make public reports on complaints alleging

violations of the Code of Ethics.

6 2 . The Florida House of Representatives has jurisdiction

over the appropriate penalty in this matter. § 112.324(8)(e),

Fla. Stat .

6 3 . In this proceeding, the Commission, through its

Advocate, is asserting the affirmative of the issues.

Therefore, as the parties stipulated, the Advocate has the

burden of establishing by clear and convincing evidence the

elements of Respondent's alleged violations. Latham v. Fla.

Comm Ó n on Ethics , 694 So. 2d 83 (Fla. 1st DCA 1997) ( citing

Dep't of Banking & Fin. v . Osborne Stern , 670 So. 2d 932 (Fla.

1996), and Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987) ) .

6 4 . As noted by the Florida Supre me Court:

[C]lear and convincing evidence requires

that the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

testimony must be precise and explicit and

the witnesses must be lacking in confu sion

as to the facts in issue. The evidence must

be of such weight that it produces in the

mind of the trier of fact a firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established.

In re: Henson , 645 So. 2d 398, 404 (Fla. 2005) ( quoting

Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983) ) .

The Supreme Court of Florida also explained, however, that,

although the Ð clear and convincing Ñ standard requires more than

a Ð preponderance of the ev idence, Ñ it does not require proof

Ð beyond and to the exclusion of a reasonable doubt. Ñ Id.

Reimbursement for Travel - Misuse of Public Position .

6 5 . Section 112.313(6) provides as follows:

(6) MISUSE OF PUBLIC POSITION. Ï No public

officer, employee of an agency, or local

government attorney shall corruptly use or

attempt to use his or her official position

or any property or resource which may be

within his or her trust, or perform his or

her official duties, to secure a special

privilege, benefit, or exemption for

himself, herself, or others. This section

shall not be construed to conflict with

section 104.31 .

6 6 . The term Ð corruptly Ñ is defined by s ection 112.312(9),

as follows:

ÐCorruptlyÑ 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 or her public duties.

6 7 . In order to establish a violation of s ection

112.313(6), the following elements must be proved:

1. Respondent must have been a public

officer or employee.

2. Respondent must have:

a) used or attempted to use his or her

official position or any property or

resources within his or her trust ;

or

b) performed his or her official duties.

3. Respondent's actions must have been

taken to secure a special privilege , benefit

or exemption for him - or herself or others.

4. Respondent must have acted corruptly,

that is, with wrongful intent and for the

purpose of benefiting him - or herself or

another person from some act or omission

which was inconsistent wi th the proper

performance of public duties.

6 8 . Section 112.061(3)(b) provides:

Travel expenses of travelers shall be

limited to those expenses necessarily

incurred by them in the performance of a

public purpose authorized by law to be

performed by the agency and must be within

the limitations prescribed by this section.

6 9 . According to the Advocate, Respondent recovered the

costs of his travel twice - once, from the State of Florida and

a second time through one of his campaign accounts. By doing

so, Respondent secured a special private gain, that of

additional income, which is inconsistent with his public duties.

Respondent maintains that he was owed reimbursements from his

various campaign accounts dating back to 2002. He further

maintains that he is still owed funds from his campaign accounts

to this day. Some of the funds owed are from his political

party campaigns.

70 . The facts adduced at hearing do not support

RespondentÓs theory that campaign account payments made to him,

as well as direc tly to his credit card accounts, represented

reimbursements for past loans. Accordingly, RespondentÓs

testimony in this regard is rejected as non - credible.

7 1 . The credible forensic financial evidence presented at

hearing revealed that payments toward Respondent's personal

credit cards came from both his committeeman and Florida House

Campaign accounts. The evidence also established that

Respondent's committeeman campaign accounts were primar il y used

to pay Respondent's personal credit card charges. H e presented

no evidence that funds from account number 1626, at the time it

was designated a committeeman account, were used for any

campaign related expenses. The records reflect that it was used

solely to pay Respondent's personal credit cards, or for c ash

withdrawals. Account number 9269 does show campaign related

expenses of $143 , 470.44 , mostly in July and August 2008, but

more than $80,000 of that account was applied to Respondent's

personal credit cards.

7 2 . Regardless of which campaign paid for RespondentÓs

travel expenses, Respondent did not incur the expenses himself.

When Respondent requested and received deposits to his personal

bank account for travel expenses from the State of Florida he

accepted money that he was not due from the State of Florida.

7 3 . To satisfy the statutory element of corrupt intent,

clear and convincing evidence must be adduced that Respondent

acted Ð with reasonable notice that his conduct was inconsistent

with the proper performance of his public duties and would be a

violation of the law or the code of ethics. Ñ Blackburn v.

State, Comm'n on Ethics , 589 So. 2d 431, 434 (Fla. 1st DCA

1991).

7 4 . Ð Direct evidence of [wrongful] intent is often

unavailable. Ñ Shealy v. City of Albany, Ga. , 89 F.3d 804, 806

(l1 th Cir. 1996) ; see also State v. West , 262 So. 2d 457, 458

(Fla. 4th DCA 1972) ( Ð [I]ntent is not usually the subject of

direct proof. Ñ ).

7 5 . Circumstantial evidence, however, may be relied upon

to prove the wrongful intent which must be shown to establish a

violation of section 112.313(6). See U.S. v. Britton , 289 F.3d

976, 981 (7th Cir. 2002) ( Ð As direct evidence of a defendant's

fraudulent intent is typically unavailable, specific intent to

defraud may be established by circumstantial evidence and by

inferences drawn from examining the scheme itself that

demonstrate that the scheme was reasonably calculated to deceive

persons of ordinary prudence and comprehension. Ñ ) (internal

quotation marks omitted). For instance, such intent may be

inferred from the public se rvant's actions. See Swanson v.

State , 713 So. 2d 1097, 1101 (Fla. 4th DCA 1998) ( Ð Appellant's

actions are sufficient to show intent to participate. Ñ ); State

v . Breland , 421 So. 2d 761, 766 (Fla. 4th DCA 1982) ( Ð Actions

manifest intent. Ñ ); and G.K.D. v. State , 391 So. 2d 327, 328 - 29

(Fla. 1st DCA 1980) ( Ð Appellant testified that he did not intend

to break the window, but the record indicates that he did

willfully kick the window, and he may be presumed to have

intended the probable consequences of his act ions. Ñ ).

7 6 . Respondent personally authorized the travel expense s

which were charged to his credit cards. He also personally

signed and submitted the travel reimbursement requ ests to the

State of Florida. Finally, Respondent also personally signed

the campaign account checks used to pay off his credit card

balances. Respondent individually, and without the

participation of anyone else, personally orchestrated this

sequence of events. Thus, Respondent knowingly and

intention ally received travel reimbursements from the State of

Florida to which he was not entitled. Thus, the required mens

rea element of section 112.312(9) (corrupt intent) has been met.

7 7 . At the time of the s tate travel payments , Respondent

was a public official. The Advocate established by clear and

convincing evidence that Respondent used his official position

to request and receive s tate travel reimbursement for travel

expenses that he did not personally incur. These actions gave

Respondent a special benefit, additional income. Such acts were

inconsistent with the proper performance of Respondent's public

duties, and therefore constitute a violation of s ection

112. 313(6) .

Financial Disclosure

7 8 . Article II, s ection 8 of the Florida Constitution

provides in relevant part :

Section 8 Ethics in government. Ï A public

office is a public trust. The people shall

have the right to secure and sustain that

trust against abuse. To assure this right:

(a) All elected constitutional officers and

candidates for such offices and, as may be

determined by law, other public officers,

candidates, and employees shall file full

and public disclosure of their financial

interests.

* * *

(i) Schedule Ï On the effective date of this

amendment and until changed by law:

(1) Full and public disclosure of financial

interests shall mean filing with the

custodian of state records by July 1 of each

year a sworn statement showing net worth and

identifying each asset and liability in

excess of $1,000 and its value together with

one of the following:

a. A copy of the personÓs most recent

federal income tax return; or

b. A sworn statement which identifies each

separate source and amount of income which

exceeds $1,000. The forms for such source

disclosure and the rules under which they

are to be filed shall be prescribed by the

independent commission established in

subsection (f), and such rules shall include

disclosure of secondary sources of income.

(2) Persons holding statewide electi ve

offices shall also file disclosure of their

financial interests pursuant to subsection

(i)(1).

(3) The independent commission provided for

in subsection (f) shall mean the Florida

Commission on Ethics.

7 9 . Section 112.3144(1) provides as follows :

(1) An officer who is required by s. 8,

Art. II of the State Constitution to file a

full and public disclosure of his or her

financial interests for any calendar or

fiscal year shall file that disclosure with

the Florida Commission on Ethics.

A. The Mill ennium Marketing ÐLoansÑ

80 . The Advocate contend s that payments from Millennium to

Respondent for the years 2007 - 2010 were income and should have

been disclosed by the Respondent on his CE Form 6 Ós for the

applicable years. However, as found herein, the Advocate did

not prove that the funds received by Respondent from Millennium

were income, rather than loans, by clear and convincing

evidence.

8 1 . The Advocate argues that because Respondent (and

Millennium) failed to pro duce the original promissory notes, or

the computer on which they were prepared, the undersigned should

draw an adverse presumption that an examination of the originals

would have shown that they were prepared and signed much later

in time , and not contemp oraneously with the dates stated on the

face of the documents. However, even were the undersigned to

agree that under the facts of this case such a presumption is

merited , it would not rise to the level of clear and convincing

evidence.

8 2 . A contingent liability is defined in the CE Form 6

instructions as:

[O]ne that will become an actual liability

only when one or more future events occur or

fail to occur, such as where there is

pending or threatened litigation, where you

are liable only as a partner ( without

personal liability) for partnership debts,

or where you are liable only as a guarantor

surety or endorser on a promissory note.

8 3 . Neither the promissory notes, nor the checks

themselves, indicate any type of contingency . RespondentÓs

testimony that both he and Millennium considered the loans to be

contingen t is not supported by the evidence and is rejected.

8 4 . While the Advocate has not established by clear and

convincing evidence that the Millennium funds represented income

that should have been reported on CE Form 6, it has been

established by clear and convincing evidence that Respond ent

violated Article II, s ection 8 of the Florida Constitution by

failing to report his loans from Millennium, since they

represented liabilities well in excess of $1,000 .

B. Income from State of Florida Travel Reimbursements

8 5 . Respondent did not disclose the income he received

from S tate of Florida travel reimbursement s. Since Respondent

did not personally pay for the travel expenses he was reimbursed

for , the payments he received represented income to Respondent .

Accordingl y this income, totaling tens of thousands of dollars,

should have been , but was not, reported on CE Form 6 Ós for 2005,

2006, 2007, 2008, and 2009.

C. Non - Disclosure of Other Sources of Income

86 . The Advocate also clearly and convincingly established

that for reporting years 2005 through 2009, Respondent had

income well in excess of what he reported on his CE Form 6 Ós for

those years, in viola tion of Article II, section 8 of the

Florida Constitution.

D . Description of Assets

87 . Respondent conceded that he did not list certain of

his assets with the level of detail generally required by the

Commission for the years 2006 - 2009.

8 8 . Ð One of the acknowledged purposes of financial

disclosure is to provide members of the public with the

opportunity to detect conflicts of interest on the part of

public officials. Ñ CEO 77 - 139 ; Goldtrap v. Askew , 334 So. 2d 20

(Fla. 1976) .

8 9 . Ð [E]ach asset should be identified sufficiently to

allow the public to ascertain with what persons or business

entities the officer's personal financial interests lie. Ñ CEO

77 - 139.

90 . RespondentÓs general description of his assets on his

2005 through 2009 CE F orm 6 Ós ( Ð real estate property , Ñ Ð 401K , Ñ

Ð stocks and bonds , Ñ and Ð bank accounts Ñ ) are so vague as to

preclude the public from ascertaining whether a conflict could

exist between Respondent's public duties and his holdings.

91 . Respondent filed two sets o f amendments to his CE Form

6 Ós for the years in question. The first set on October 15,

2010 , does not address this issue. The second set filed on

January 4, 2011, does describe Respondent's assets in detail for

the years 2006, 2007, 2008, and 2009. A second amendment for

2005 was not filed. Although Respondent has now appropriately

described his assets, the public was deprived of that

information prior to the second set of amendments.

E . Final Full Public Disclosure

9 2 . Section 112.3144(6), provid es as follows:

(6) Each person required to file full and

public disclosure of financial interests

shall file a final disclosure statement

within 60 days after leaving his or her

public position for the period between

January 1 of the year in which the person

leaves and the last day of office or

employment, unless within the 60 - day period

the person takes another public position

requiring financial disclosure under s. 8,

Art. II of the State Constitution, or is

otherwise required to file full and public

disclosure for the final disclosure period.

The head of the agency of each person

required to file full and public disclosure

for the final disclosure period shall notify

such persons of their obligation to file the

final disclosure and may designate a pe rson

to be responsible for the notification

requirements of this subsection.

9 3 . Respondent's last day serving in the Florida House of

Representatives was November 2, 2010. Consequently, he should

have filed a CE Form 6F Ð Final Full and Public Disclosure of

Financial Interests Ñ by January 2, 2011. Respondent did not.

He did file a CE Form 6 Full Public Disclosure of Financial

Interests for the year 2010 on March 25, 2011. Attached to that

Form wa s a Ð United State s House of Representatives Eth ics in

Gover n m ent Act Calendar Year 2010 Financial Disclosure

Statement. Ñ

9 4 . Respondent violated section 112.3144(6) by not filing

a CE Form 6F Ð Final Full and Public Disclosure of Financial

I nterests Ñ by January 2, 2011.

9 5 . In cases concerning former members of the Florida

L egislature who have violated provisions applicable to former

members or whose violation occurred while a me m ber of the

legislature, as is the case here, the appropriate penalty is to

be determined by the Speaker of the House of Representatives.

§ 112 .324(8)(e), Fla. Stat .

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that the Commission on Ethics issue a Final

Order finding that Respondent:

1. Violated s ection 112.313(6), Florida

Statutes, by requesting and accepting State

of Florida reimbursement for travel expenses

that were not incurred by him, but rather

were paid by his campaign fund accounts;

2. Violated Article II, s ection 8, Florida

Constitution, by failing to or not properly

reporting income and/or stocks and bonds;

and/or secondary source income on his 2005

through 2009 CE Form 6, Full and Public

Disclosure of Financial Interest;

3. Violated s ection 112.3144, Florida Statutes,

by failing to file a CE Form 6F Ð Final Full

and Public Disclosure of Financial

Interests Ñ within 60 days of leaving his

position with the Florida House of

Representatives.

DONE AND ENTERED this 6 th day of June , 2014 , in

Tallahassee, Leon County, Florida.

S

W. DAVID WATKINS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 6 th day of June , 2014 .

ENDNOTES

1 / Unless otherwise noted, all references to the Florida

Statutes are to the 2013 version.

2 / The $1,692.32 reimbursement was combined with an other State

of Florida travel reimbursement for $399.12. A ccordingly ,

Respondent's personal bank a ccount reflects a combined State of

Florida deposit of $2,091.44.

3 / The exception is the February 12, 2010, check, which was not

deposited until March 16, 2010.

4 / There had been no activity in this a ccount since June 2010.

COPIES FURNISHED :

Michael R. Band, Esquire

Michael R. Band, P.A.

1200 Alfred I. DuPont Building

169 East Flagler Street

Miami, Florida 33131

Emmett Mitchell, IV, Esquire

Coates Law Firm

115 East Park Avenue , Suite 1

Tallahassee, Florida 32301

Lisa Marie Raleigh, Esquire

Office of the Attorney General

The Capitol, Plaza Level - 01

Tallahassee, Florida 32399

Kaye B. Starling , Agency Clerk

Florida Commission on Ethics

Post Office Drawer 15709

Tallahassee, Florida 32317 - 5709

C. Christopher Anderson, III, Gen eral Co unsel

Florida Commission on Ethics

Post Office Drawer 15709

Tallahassee, Florida 32317 - 5709

Virlindia Doss, Exec utive Dir ector

Florida Commission on Ethics

Post Office Drawer 15709

Tallahassee, Florida 32317 - 5709

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any

exceptions to this Recommended Order should be fil ed with the

agency that will issue the Final Order in this case.