“It’s kind of a sad day in Flagler County that it’s what we’re known for in Tallahassee, these continual ethics complaints,” Flagler County Commissioner Barbara Revels said last month. She was referring to a slew of such complaints filed against her and the rest of the county commission by then-Supervisor of Elections Kimberle Weeks, who has since resigned. Revels was also well aware at the time of another ethics complaint pending against her, that one filed by Ray Stevens, a two-time candidate for sheriff and a member of the right-wing insurgent group known as the Ronald Reagan Republican Assemblies.
That complaint was prompted by Stevens’s claim that Revels acted improperly by not disclosing a conflict of interest as she voted with the county commission to buy the old Memorial hospital in Bunnell (for $1.23 million) in the summer of 2013. She did so even though she had a business relationship with one of the three owners of the hospital at the time, Palm Coast Intracoastal Bank President Bruce Page. Revels owned Intracoastal Bank stock worth $100,000 at the time of purchase in 2007 (with gains of 15 percent since 2008, according to Revels), and the bank had just increased a line of credit to her.
In an unusual move that reflects the commission’s willingness to go beyond the parameters of a complaint, the ethics commission later ordered a further investigation into what appeared to have been Revels’s improperly making a motion at a special meeting to go ahead with due diligence and negotiations for the eventual purchase of the old hospital, thus putting her in a position to have privately benefited from the act.
Last week (on Jan. 8), the Florida Ethics Commission made public the Revels investigation prompted by the Stevens complaint and the supplemental investigation, finding probable cause to believe that Revels broke Florida law on both counts–one alleged by Stevens, and one deduced by ethics investigators.
Revels has agreed to concede to the commission that she broke the law, though she denied having ever gained anything from the deal, or gained anything even indirectly through her association with Intracoastal Bank. She now faces fines of $1,250 on each count (or a total of $2,500), a civil, not a criminal, penalty, but the ethics commission itself must approve the agreement when it next meets on Jan. 23.
The ethics investigation, rich in details of the former hospital owners’ business history and stakes, led to the dismissal of another charge Stevens brought against Revels–that her vote was influenced by a $200,000 increase in a line of credit from Intracoastal Bank in May 2013, weeks before the vote on the old hospital that August. Revels told investigators she needed the credit as she and her husband had started “flipping houses.”
Revels’s ownership of stock was known at the time of the hospital vote: she had disclosed it in a previous financial disclosure form when running for reelection to that seat. But the details of her relationship with the bank, including details of the line of credit, were not. Nevertheless, Revels, along with the rest of the commission, sustained strong public criticism in the weeks leading up to the vote on the hospital, which had only recently before the deal been appraised at $354,000. (Page would subsequently tell investigators that he took a loss on the sale, not a gain, when all costs were calculated.) The county administration had been negotiating a deal with the owners in the full knowledge of county commissioners outside of public meetings until a FlaglerLive article in late April 2013 revealed the nature of the negotiations.
On May 6, 2013, it was Revels who made the motion at a commission meeting to move ahead with due diligence and appraise the hospital again on the way to negotiations for a final price. That motion carried 3-2, making Revels the swing vote: had she abstained, the tie vote, assuming another commissioner had made the motion, would have led to a failed motion, and the matter might have ended there.
On Aug. 1, the commission voted 4-1 to buy the hospital, with Revels again making the motion. (Commissioner Charlie Ericksen was the lone dissenter.)
If there was any doubt left that Revels had been at least part of the driving force behind the hospital buy, the ethics commission investigation dispelled those doubts. The investigation notes that Revels was approached by Page and Larry Jones–the husband of Realtor Margaret Sheehan-Jones, who was the broker on the hospital property–in late 2012 or early 2013 so they could present their arguments as to why the county should buy the building and turn it into a Sheriff’s Office administration headquarters. Revels at the time told them the county was planning on refurbishing the old courthouse for the sheriff’s HQ, and that she would not herself push the idea of using the old hospital, but that if they wanted to take the proposal anywhere, “they’d have to go sell it to the administrator themselves” she told them, referring to County Administrator Craig Coffey. Page agreed that Revels was non-committal at the meeting. The administrator, however, does not make deals without his commissioners’ approbation.
Page owned the hospital at the time with Michael Chiumento, the Palm Coast attorney, and James Newslow of Ormond Beach, both of whom, like Revels, owned stock in Intracoastal Bank. Page revealed to ethics investigators that far from making a profit on the sale of the hospital, his documents pointed to an aggregate loss of $863,464 for Flagler Crossroads, the company that owned the property under the trio’s name. Page owned a third of the company stock. Those figures are based on Flagler Crossroads buying the building in 2005 for $1.65 million, though at the time of the negotiations in 2013 the county property appraiser’s website showed the original purchase price to have been $750,000.
Investigators asked Revels whether she knew that Page was, like her, a shareholder in Intracostal Bank at the time of the hospital deal. “I never really thought about it in that way,” Revels told investigators through her attorney. “He is the CEO, employed by the bank, I guess one might assume he invested in the start-up, but that has never been discussed by him around me. That would have been highly inappropriate for him to say something like that as I am not in that ‘inner circle’ of the Board of Directors. Nor do I have any kind of personal relationship with Mr. Page that he would discuss his personal finances. I bought stock and put my business banking there, that was it.”
“Upon further questioning,” the investigative report states, “Commissioner Revels stated that she did not know that Mr. page was a shareholder of Intracoastal Bank at the time she voted on May 6, 2013, and August 1, 2013.”
That drew a sharp dissent from Page himself, who told investigators that Revels “absolutely” knew he was a shareholder, a fact “clearly disclosed” in the bank’s “Offering Circular” and “Subscription Agreement” that Revels, who is known for her attention to details at commission meetings and with government documents, signed when she became a shareholder in 2007. (Revels says she doesn’t recall reading the circular or signing the subscription agreement.) Page told investigators it is “standard practice that the President/CEO of a community bank has a material ownership in the bank, typically.”
Page at the time owned 3.7 percent of the bank’s total shares (and now owns 4.62 percent), Revels less than 1 percent. Chiumento, too, was a stockholder in Intracoastal Bank (owning just under 3 percent of the shares), and Revels acknowledged that she knew he was. Page says Revels had been to almost all shareholder meetings since 2008, and therefore would have seen Chiumento and Newslow there, though Revels says she didn’t know Newslow was a shareholder when she voted on the hospital.
The investigation report revealed another running discrepancy in the way Revels described her relationship with Page. Revels described it as professional and “friendly,” but not social, and that she’d known him at least 10 years. Page described the relationship almost identically when he spoke to investigators. But investigators unearthed a speech Page delivered at a Corporate Pinnacle Award meeting in November 2012, when he received an award from Revels and the county commission, and thought it relevant enough to include in the report as it described his relationship with Revels.
“I was just told Barbara Revels wants you at the commission chambers at 9 o’clock Monday Morning,” Page is quoted as having told the assembly, “and those of you who know me, and Barbara, and our relationship, when Barbara tells me to do something, I do it. When I first moved to this community 20 years ago, a business person, a community leader, Barbara took me under her wing and has mentored me on every level, professionally; how to be a good community citizen; how it’s all about the community and the citizens, not you as a business person or individual. It first started out as a professional relationship, but I am glad to say that she is one of my best friends. I love her and her husband Jerry like no other.”
Page nevertheless stressed to investigators that the majority of his interactions with Revels remained through community involvement, while Revels denied to investigators that she’d been his mentor. She said Page has a tendency to “emote.”
In a statement Revels circulated to the press Monday and thsat was first reported by the Palm Coast Observer Tuesday, Revels said: ““After working with the Flagler County Ethics Commission to resolve the question of a voting conflict of interest to purchase the Bunnell hospital property, I now have a clear understanding of the statute’s intent on ‘business relationships.’ At the time I felt I complied with all requirements and could vote on the purchase. I have since learned that my minority ownership of stock (less than one percent) still gives the appearance of a business relationship with other stock owners. To avoid the appearance of impropriety, I should have filed a conflict of interest form and not participated in the vote. Further I am pleased the Ethics Commission determined that I did not benefit from the sale nor did I receive favorable treatment from the bank. The commission only found a procedural violation. The appropriate use of Flagler’s citizens’ tax dollars is always my overriding concern when making thee kinds of decisions. I still believe the county received a good value in the purchase of the property.”
Revels is understating the case: the commission advocate concludes that Revels showed more than “the appearance of impropriety” or that she merely committed “a procedural violation.” Revels, the advocate found, violated the law in two instances, and the investigation casts at least some doubt over the distance Revels sought to establish between her and Page, or her lack of knowledge about the nature of her business relationship with Intracoastal Bank.
“It is difficult to have more to say until the Ethics Commission affirmatively agrees with my agreement with the Advocate,” Revels said in an email Thursday morning.
But whatever criticism the county commission faced as a whole over the purchase of the old hospital, it was not significant enough to translate into political consequences: two of the four commissioners who joined Revels in the vote to buy the hospital (Frank Meeker and Nate McLaughlin) were reelected last November.