)                                   CASE NO. 93-0044EC

      Respondent.        )






     Pursuant to notice, the Division of Administrative Hearings, by its duly designated hearing officer, Mary Clark, held a formal hearing in the above-styled case on April 19, 1993, in Tallahassee, Florida.




     For the Commission  Virlindia Doss, Esquire

     on Ethics           Department of Legal Affairs

                         The Capitol, PL-01

                         Tallahassee, Florida  32399-1050


     For Respondent:     W. Dexter Douglass, Esquire

                         Post Office Box 1674

                         Tallahassee, Florida  32302-1674




     The issue for disposition is whether Respondent violated Article II, Section 8(e), Florida Constitution, by personally representing his private employer for compensation before the Orlando-Orange County Expressway Authority while serving as a State Senator.  After admissions and stipulation of the parties, the single issue of law and fact is whether the Orlando-Orange County Expressway Authority is a "state agency" for purposes of Article II, Section 8(e), Florida Constitution.




     The controversy in this forum was initiated by complaints of Respondent's violations of various provisions of Article II, Section 8, Florida Constitution and Part III, Chapter 112, Florida Statutes.


     After investigations, on June 5, 1992 the Commission entered its order finding probable cause of the single violation described in the statement of issues above.  No probable cause was found as to the remaining alleged violations: "Accordingly, these allegations were dismissed and will not be at issue at the public hearing."


     The case was referred by the Commission to the Division of Administrative Hearings on January 5, 1993 for a public hearing and a recommended order, and the hearing was set after consultation with counsel for the parties.


     On April 13, 1993 the parties filed their prehearing stipulation, which stipulation disposed of most of the material facts in issue.  Those stipulated facts are incorporated here.


     At the hearing the Advocate presented no witnesses and two exhibits:  OOCEA Official Statement 1988; and Drexel, Burnham Lambert Proposal to serve as Co-Manager Underwriter for the Central Connector Project, Orlando-Orange County Expressway Authority, August 12, 1988; both were received in evidence.


     Respondent testified in his own behalf and presented two exhibits, received in evidence: Declaratory Statement of the Department of Community Affairs; and a memorandum by Julie Costas, Ethics Commission Staff Attorney, dated May 21, 1992.


     The parties also submitted a joint exhibit: The Report of Investigation and Supplemental Report of Investigation, conducted by Commission on Ethics staff and considered by the Commission in its determination of probable cause in this case.


     After hearing the parties filed proposed recommended orders, including proposed findings of fact and conclusions of law.  The facts previously stipulated and material facts proposed by the parties are adopted here.




     1.  Respondent, George Stuart, served as State Senator from District 14, the Orlando area, from 1978 until November 1990.


     2.  On September 22, 1986, Respondent was hired by the brokerage firm, Drexel Burnham Lambert, to serve in the company's municipal bond finance division.  He served as vice president of the division until December 29, 1989.


     3.  Respondent was compensated for his services, which services included calling on clients to explain how Drexel Burnham could assist in their bond issues and to urge the issuer to select Drexel Burnham as an underwriter.


     4.  The Orlando-Orange County Expressway Authority (OOCEA, or Authority) was created in 1983 by section 348.753, F.S.  It has five members, three of whom are appointed by the Governor; the fourth member is chair of the Orange County Board of County Commissioners, and the fifth member is the district secretary for the Department of Transportation for the district which includes Orange County.


     5.  OOCEA is limited in its operation to Orange County.  Its budget has no legislative oversight and it is not operated with state funds appropriated to meet its budget.  Tolls collected by the Authority are used for construction, financing and operation of its expressway system.  Once built, the roads are operated and maintained by the Department of Transportation.


     6.  OOCEA members are required to file financial disclosure statements.  OOCEA participates in the Florida Retirement System.


     7.  Bonds issued by the OOCEA are tax exempt.  The Authority's General Counsel, J. Fennimore Cooper, advised that the Florida Constitution requires legislative approval for revenue bond issues; and in 1986, he sent a letter to Respondent seeking assistance in obtaining the necessary appropriations proviso language to approve various projects of the Authority.


     8.  In 1988 when OOCEA decided to issue bonds to finance its Central Connector Project, legislative approval was again required and the necessary language was provided by its General Counsel to its registered lobbyist, Bobby Hartnett.


     9.  The OOCEA received the legislative approval for the project during the Special Session on June 8, 1988.  Chapter 88-557, Laws of Florida, containing appropriations act proviso language, includes this section:


          Section 59.  The Orlando-Orange County Ex-

          pressway Authority is hereby authorized to

          construct the Central Connector and the

          Southern Connector of the Expressway System

          as part of the authority's 20-year capital

          projects plan.  These extensions shall each

          be financed with revenue bonds issued by the

          Division of Bond Finance of the Department

          of General Services on behalf of the author-

          ity pursuant to s. 11, Art. VII of the

          State Constitution and the State Bond Act,

          ss. 2156.57-215.83, Florida Statutes.


     10.  Respondent met with the chairman of the OOCEA to express Drexel Burnham's interest in serving as a co-managing underwriter for the issue and to ask for a request for proposal to which Drexel Burnham could respond.  Respondent made a similar visit to the executive director of the Authority.  A September 23, 1988 contact by Respondent was specifically regarding the Central Connector bond issue.


     On August 12, 1988, Respondent, as vice president of the Municipal Bond Finance Division and Ander Crenshaw, as first vice president, submitted Drexel Burnham's "Proposal to Serve as Co-Managing Underwriter for the Central Connector Project" to the Authority.


     11.  Respondent received compensation for all representations he made for Drexel Burnham, including this one.


     12.  The Authority received twenty-two proposals and ultimately selected nine co-managers, one of which was Drexel Burnham.  Drexel Burnham co-managed a small percent of the issue and received $59,940 total compensation.  The total amount of the bond issue was $140,600,000.00.  The Department of General Services, Division of Bond Finance, served as agent for the OOCEA's 1988 bond issue.


     13.  In his contacts with OOCEA, Respondent did not consider there was any ethical proscription.  He avoided Cabinet-level bond issues and called on cities, hospital districts, or airport authorities.  He considered OOCEA a similar local agency.




     14.  The Division of Administrative Hearings has jurisdiction in this proceeding pursuant to Section 120.57(1), F.S. and Rule 34-5.010, F.A.C.


     15.  Article II, Section 8(e), Florida Constitution provides:


          No member of the legislature or statewide

          elected officer shall personally represent

          another person or entity for compensation be-

          fore the government body or agency of which

          the individual was an officer or member for

          a period of two years following vacation of

          office.  No member of the legislature shall

          personally represent another person or entity

          for compensation during term of office before

          any state agency other than judicial trib-

          unals.  Similar restrictions on other public

          officers and employees may be established

          by law.

                          (emphasis added)


     16.  It is not in dispute here that the Respondent, George Stuart, approached the OOCEA and asked it to consider his employer, Drexel Burnham, to underwrite the Authority's 1988 bond issue.  It is not disputed that he was compensated for his efforts, or that he was a State Senator at the time.  The only dispute is whether the OOCEA is a state agency for purposes of this constitutional prohibition.


     17.  Chameleon-like, an agency may assume a legal character based upon the particular statutory or regulatory background against which it is examined.  For example, in AGO 80-29, the Attorney General reviewed numerous statutes in responding to the query, "For what purpose is the Florida State Commission on Hispanic Affairs a state agency?"  Attorney General Opinion 74-387 recognized that the Pasco County Expressway Authority qualified as a special district under Section 218.31, Florida Statutes.  However, the opinion also observes, "The expressway authority is unquestionably a 'state agency' for certain purposes".  In the Declaratory Statement submitted as Respondent's Exhibit 1, the Department of Community Affairs notes with respect to the Seminole County Expressway Authority, "the classification of the authority as a state entity for one purpose does not preclude it from being a local one for another."


     18.  The most obvious background against which the OOCEA should be examined is the statute which created it, which provides, in pertinent part:


          There is hereby created and established a

          body politic and corporate, an agency of the

          state, to be known as the Orlando-Orange

          County Expressway Authority . . . .

          (Section 348.753(1), F.S., emphasis added)


     19.  I am aware of no reason to differentiate between the terms "state agency" and "agency of the state."  Although the legislature sometimes uses one phrase and sometimes the other, the courts and the Attorney Generals' opinions use the terms interchangeably. 


     20.  In a bond validation case involving OOCEA, Pepin v. Division of Bond Finance, 493 So.2d 1013 (Fla. 1986), the court states:


          The Orlando-Orange County Expressway Authority

          (Authority) is a state agency created by

          section 348.753(1), Florida Statutes (1985),

          a portion of the Florida Transportation Code.

          Section 344.01 et seq., Fla.Stat.

          (emphasis added)


     21.  In the Pasco County Expressway Authority opinion just cited, AGO 74-387, the reason the Attorney General said the Authority was "unquestionably a state agency for certain purposes" was that "[it] was so designated by the statute by which it was created, s. 348.82 . . . . " That statutes uses precisely the same language as that cited above for creation of OOCEA.


     22.  In AGO 57-208, the Attorney General found the Jacksonville Expressway Authority a state agency required to follow the bid and contract procedures set out in Chapters 283 and 287, Florida Statutes.  This conclusion was reached primarily in reliance on the Authority's establishment, by statute, as an "agency of the state".  In AGO 89-56, the Attorney General found the Seminole County Expressway Authority a state agency for purposes of Section 11.45, Florida Statutes, requiring the Auditor General to audit state agencies.  In AGO 75-56, the same office found the Sarasota-Manatee County Airport Authority not to be a state agency for purposes of Chapter 287.  The distinction was explained as follows:


          . . . "each of these governmental agencies

          [the Jacksonville Expressway Authority and

          the State Turnpike Authority] was expressly

          designated in the creating statute as a state

          agency. No such designation is made by Chapter

          31263, supra, as to the Sarasota Manatee

          County Airport Authority."


The statutes creating the Pasco County Expressway Authority, the Jacksonville Expressway Authority [Section 2(9) and 3, Chapter 29996, Florida Statutes (1955)] and the Seminole County Expressway Authority, did not call these entities "state agencies", but rather each is designated "an agency of the state."  There is no distinction.


     21.  Thus, the first reason to consider the OOCEA a state agency is because it is defined as such.


     22.  In Spangler v. Florida State Turnpike Authority, 106 So.2d 421 (Fla. 1958), the Florida Supreme Court, using the terms interchangeably, found the Florida Turnpike Authority to be both a state agency and an agency of the state, entitled to sovereign immunity.  The conclusion was based on six facts.


     1.  The Authority performed an essential governmental function.


     2.  The revenues upon which it operated, albeit derived from tolls, were public revenues because they were devoted entirely to a public purpose.


     3.  Members of the authority were commissioned state officers, one a liaison with the State Road Department.


     4.  The Authority issued securities which were tax exempt.


     5.  The Authority had eminent domain power.


     6.  The Authority built roads which became part of the state highway system.


     23.  The circumstances of the OOCEA are virtually the same.  It performs an essential government function; its toll revenues are used to build, finance and operate the expressway system; three of its members are appointed by the Governor; one member is the chair of the Board of County Commissioners, and one is the local district secretary of the Department of Transportation; the Authority's bonds are tax exempt; it has eminent domain power [Section 348.754(2)(j), Florida Statutes]; and its roads are operated and maintained by the Department of Transportation.  OOCEA is a state agency because, in a general sense, it behaves like one.


     24.  Finally, there are compelling public policy reasons to consider the OOCEA a state agency for purposes of Article II, Section 8(e).


     25.  In Myers v. Hawkins, 362 So.2d 926, 930 (Fla. 1978) the Supreme Court stated:


          . . . we are always obliged to interpret a

          constitutional term in light of the primary

          purpose for which it has been adopted.  Both

          Myers and the amici recognize that the Sun-

          shine Amendment was evolved to establish an

          arsenal of protections against the actual

          and apparent conflicts of interest which can

          arise among public officials, and that Sec-

          tion 8(e) was designed specifically to pre-

          vent those  who have plenary budgetary and

          statutory control over the affairs of public

          agencies from potentially influencing agency

          decisions (or giving the appearance of having

          an influence) when they appear before the

          agencies as compensated advocates for others.

                                       (emphasis added)


While the legislature does not directly appropriate funds to the Authority nor directly control its budget, it must approve the projects funded with the very life blood of that agency, its revenue bonds.  The Florida Constitution requires:


          Section 11.  State bonds; revenue bonds-


          (e)  Each project, building, or facility to

          be financed or refinanced with revenue bonds

          issued under this section shall first be

          approved by the Legislature by an act relat-

          ing to appropriations or by general law.


Such approval power approaches "plenary control".


     26.  In determining that OOCEA is a "state agency" for purposes of Article II, Section 8(e), I am cognizant of the myriad opinions of the Commission on Ethics cited by both parties.  None is precisely on point and none may be effectively considered an interpretation entitled to great weight or deference.  Considered as a whole, they underscore the principle with which this discussion began, that the character of an agency may be as many faceted as the variety of legal standards against which it is measured.


     27.  Given that principle, Respondent's unwitting trespass into proscribed activity may be understandable, but it is nonetheless a violation.


     28.  Other ethical violations require intent or knowledge. See, for example, section 112.313(2),(4) and (6); and section 112.3143(2), (3) and (4), F.S.  Intent or knowledge is not a necessary element here.


     29.  No penalty is recommended because no authority for a penalty is found.  Respondent was not charged with a violation of section 112.3141, F.S., which section has been repealed.  Its successor penalty provisions of section 112.317, F.S. were enacted after Respondent's violation occurred.




     Based on the foregoing, it is hereby


     RECOMMENDED that the Commission on Ethics issue its Final Order and Public Report finding that Respondent, George Stuart, violated Article II, Section 8(e), Florida Constitution, by representing Drexel Burnham Lambert before the Orlando-Orange County Expressway Authority for compensation while serving as State Senator.


     DONE AND ENTERED this 10th day of August, 1993, in Tallahassee, Florida.




                            MARY CLARK

                            Hearing Officer

                            Division of Administrative Hearings

                            The Oakland Building

                            2009 Apalachee Parkway

                            Tallahassee, Florida  32399-1550

                            (904) 488-9675


                            Filed with the Clerk of the

                            Division of Administrative Hearings

                            this 10th day of August, 1993.







Virlindia Doss, Esquire

Department of Legal Affairs

The Capitol, PL-01

Tallahassee, Florida  32399-1050


W. Dexter Douglass, Esquire

Post Office Box 1674

Tallahassee, Florida  32302-1674


Bonnie Williams, Executive Director

Ethics Commission

Post Office Box 6

Tallahassee, Florida  32302-0006


Phil Claypool, General Counsel

Ethics Commission

Post Office Box 6

Tallahassee, Florida  32302-0006





     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.