MIAMI-DADE COMMISSION ON ETHICS & PUBLIC TRUST

PROBABLE CAUSE MEMORANDUM

To:

Miami-Dade County Commission on Ethics and Public Trust

From: Michael P. Murawski, Advocate Re: C12-041 (Crespo v. Sarnoff)

Date: November 2012 ______________________________________________________________________________ Recommendation: There is Probable Cause to believe that respondent, Marc Sarnoff, failed to properly disclose a gift, in violation of Section 2-11.1(e) (4) of the Miami-Dade County Conflict of Interest and Code of Ethics Ordinance. Background and Investigation: Complainant, Al Crespo (Crespo), filed the instant complaint against City of Miami Commissioner Marc Sarnoff (Sarnoff) alleging that Sarnoff failed to file a Gift Disclosure Form within the required period, disclosing a trip to Brazil that was paid for by the Greater Miami Convention and Visitors Bureau (GMCVB). The 2011-2012 Volvo Ocean Race (the Race) is an international boat race consisting of 10 legs or port to port destinations. The Race included six vessels setting sail from South Africa on or about October 29, 2011 and arriving in Ireland on or about July 7, 2012. Miami was the 7th leg of the race; Itajai, Brazil was the 6th leg.

Interviews: Marc Sarnoff, City of Miami Commissioner As a City Commissioner, Sarnoff said he was involved in bringing the Race to Miami. As the Race proceeds throughout the scheduled cities, it is traditional for the mayor of the host city to invite the mayor of the next scheduled city to the host city to in order to partake in the Race festivities and other ceremonies. As such, City of Miami Mayor Tomas Regalado (Regalado) was to go to Brazil but declined the invitation. Sarnoff sits as the Chair of City of Miami Downtown Development Authority (DDA). The DDA was a contributor to Miamis host city activities and the activities took place within downtown Miami. A member of the DDA also attended the Brazil ceremonies although her expenses were paid for by the DDA. Sarnoff spoke to representatives from the GMCVB. He did not recall whether they contacted him or he contacted them. The GMCVB scheduled Sarnoff to contact GMCVB representatives in Rio de Janeiro and San Palo, Brazil, and to discuss GMCVB business. In return, the GMCVB agreed to reimburse Sarnoff for travel, lodging, meals and local transportation. Sarnoff advised that he agreed to the schedule and follow the itinerary provided by the GMCVB. The itinerary consisted of a Miami to Rio de Janeiro flight, where Sarnoff would contact GMCVB representatives; a flight to Itajai (the Races host City); and a flight from Itajai to San Paulo, Brazil, prior to returning to Miami. Sarnoff provided copies of the documentation that he had given to the GMCVB for reimbursement. Sarnoff advised that he contacted Miami City Attorney Julie Bru (Bru) to discuss the travel. Bru verbally opined that the trip was not a gift and that Sarnoff was not required to file a gift disclosure. Subsequently, Bru confirmed in writing the opinion she gave Sarnoff. (Exhibit A) During the course of the investigation it was learned that Sarnoff was separately reimbursed for approximately $700.00 for his wifes airfare by Volvo Ocean Race, a non-profit entity. Sarnoff should have declared this reimbursement as a gift.

Rolando Aedo (Aedo), Executive Vice President/Chief Marketing Officer for GMCVB Aedo confirmed that the GMCVB had reimbursed Sarnoff for the Brazil trip. He did not recall how the agreement between Sarnoff had been reached; whether the GMCVB had first contacted Sarnoff or whether Sarnoff had contacted the GMCVB. Aedo provided the COE with copies of the Sarnoffs schedule and documentation submitted by Sarnoff requesting reimbursement from the GMCVB.

William D. Talbert III (Talbert), President of GMCVB Talbert also confirmed that the GMCVB had reimbursed Sarnoff. Talbert explained that the GMCVB is largely funded by various tourist and bed taxes received by Miami-Dade County then a portion of which is given to the GMCVB. The Law: The Miami Dade County Conflict of Interest and Code of Ethics Section. 2-11.1 (e) entitled Gifts, states: (1) Definition. The term gift shall refer to the transfer of anything of economic value, whether in the form of money, service, loan, travel, entertainment, hospitality, item or promise or in any other form, without adequate and lawful consideration. (4) Disclosure. Any person included in the term defined in Subsection (b) (1) through (6) shall disclose as provided herein any gift, or series of gifts from any one person or entity, having a value in excess of one hundred dollars ($100 .00). Said disclosure shall be made by filing a copy of the disclosure form required by Chapter 112, Florida Statutes, for local officers with the Clerk of the Board of County Commissioners simultaneously with the filing of the form with the Secretary of State.

Review and Analysis: Sarnoff should have filed a gift disclosure for both the reimbursement he received from the GMVCB and the amount of money he was reimbursed for by Volvo Ocean Race for the cost of Mrs. Sarnoffs airfare. In complaint C12-26, this Commission determined that a trip to Peru by the Mayor of the City of Miami paid for by the Latin Builders Association (LBA) was a gift that the Mayor was obligated to report. In that case, although the City had created the Mayors International Council (MIC) with a process and procedure in place to accept donations to fund travel for the Mayor, the

LBA bypassed the procedure and paid for the Mayors trip directly, thus, removing transparency from the entire MIC process. Sarnoff claims that he reasonably relied on the advice of City Attorney Bru when he failed to file a gift disclosure for the reimbursement of his expenses to Brazil, in connection with the Brazil trip. According to the recently issued guidelines concerning gifts that this Commission issued: Attendance at official city business events generally does not require gift disclosure as long as the elected/appointed official is, in fact, performing some bona fide official function at the event (see generally, FSEC opinion 01-019). However, it should be noted that mere attendance at an event by an elected official does not magically transform the event into official city business. Official functions can include, but are not limited to: participating in a ribbon cutting, giving a speech, or leading the pledge of allegiance. There may also be occasions when, due to the presence of visiting dignitaries or other special invited guests, it will be appropriate for officials to attend an event to socialize with such persons as representatives of the local government. Such occasions, however, should be limited to special occasions rather than regularly scheduled events, and ought to include some official designation by the county/city government to those officials in attendance.

The GMCVB is a private, not-for-profit organization that has a public/private partnership with the City of Miami, Miami-Dade County, the City of Miami Beach and Bal Harbour. The GMCVB is funded in large part by tax revenue. Its mission is attracting and encouraging individuals and organizations to visit Greater Miami and the Beaches, the GMCVB supports all community activities that enhance Greater Miami and the Beaches as an attractive and desirable place for meetings, business or leisure. Sarnoffs agenda in Brazil included meeting with the Department of Commerce and the Brazilian Olympic committee as well as attending ceremonies involving the Race. These meetings, and the race itself, foster trade, commerce, business and tourism between Miami - the Gateway to South America - and Brazil. Thus, it was not unreasonable for the Miami City Attorney to conclude that Sarnoffs trip was in fact official city business that would obviate the requirement for him to file a gift disclosure. Sarnoffs attendance at various meetings and functions in Brazil fall within the parameters of the guidelines of official city business. 4

It should be noted, however, that these guidelines contemplated tickets and other local events. All-expense paid trips to distant and exotic locales, deserve different consideration, since the grandiose scale of the gift(s) create proportionately larger appearance of impropriety issues, thus, the more disclosure the better should be the rule of thumb. Moreover, at local events, for example, opening day of Marlins Stadium, the public purpose of the event i.e. ribbon cutting, award presentation etc is clearly evident; the same cannot be said for travel to distant locales where there is ample opportunity to combine personal enjoyment with whatever official duties may be attended to. Additionally, the receipt of a ticket to an event where an official is going to conduct some official function simply cannot be equated with a private entity or individual picking up the entire tab of an elected officials trip. In short, if a trip is to be taken for official city business it should be paid for by the City. If the City wants to establish a mechanism whereby private organizations can reimburse the City they can and should do so, as that would then provide the transparency so often lacking in these instances. However, Sarnoff relied on the reasonable advice of the City Attorney in that regard. Sarnoff should have filed a gift disclosure for the cost of his wifes airfare which was paid for by the Volvo Ocean Race organization. That situation is analogous to this Commissions holding in complaint C11-14. In that case, the City of Miami Beach paid for the City Manager and his wife to travel to Basel, Switzerland to participate in various events related to the Basel Art Festival. In Florida Ethics Commission (FEC) opinion C06-27, they opined that the trip for the manager was not a reportable gift because he was performing official city business; however, the trip for the managers wife was reportable by the manager as it was a gift to him. Similarly, although Sarnoff was arguably engaged in city related business while in Brazil, his wife was not. Her presence on the trip as a companion to Sarnoff was a gift to him that should have been reported. Sarnoffs failure to report that gift constitutes a violation of 2-11.1(g) of the MiamiDade County Conflict of Interest and Code of Ethics. Lastly, to the extent that any travel is paid for by another governmental agency that is related to Sarnoffs official business, those gifts are not reportable. (See generally FEC opinion 90-72.)

Conclusion: A finding of Probable Cause should be entered in the instant case charging respondent, Marc Sarnoff, with failing to properly disclose a gift, in violation of Section 2-11.1(e)(4) of the Miami-Dade County Conflict of Interest and Code of Ethics Ordinance.