No. 06-I-26 State Ethics Commission Advisory Opinion November 9, 2006
The Indiana State Ethics Commission ("Commission") issues the following advisory opinion concerning Indiana Code 4-2-6. Any opinion rendered by the Commission, until amended or revoked, is binding on the Commission in any subsequent allegations concerning the person who requested the opinion and who acted in good faith in accordance with the advice rendered, unless material facts were omitted or misstated by the person in the request for the opinion or testimony before the Commission.
SUMMARY
IC 4-2-6-8 Financial disclosure; filing false statement; penalty
SEC concluded that since at least three (3) members of the IFA board were required to vote in favor of an action before transacting any business, it appeared as though no individual board member had final purchasing authority for purposes of IC 4-2-6-8(a)(6).
BACKGROUND
On November 3, 2006, the Commission received a joint request for an advisory opinion from the respective General Counsels for the Indiana State Teachers’ Retirement Fund (TRF), the Indiana Public Employees’ Retirement Fund (PERF), and the Indiana Finance Authority (IFA) regarding the application of IC 4-2-6-8(a)(6) to the board members of each entity. The request for an opinion noted that IC 4-2-6-8(a)(6) requires any agency employee, special state appointee, former agency employee, or former special state appointee with “final purchasing authority” to file a written financial disclosure statement with the Inspector General. The term “final purchasing authority” has not yet been defined by statute, administrative rule, or written advisory opinion. The General Counsels indicated their belief that whether their respective board members would be required to file a financial disclosure statement in accordance with IC 4-2-6-8(a)(6) hinged on the definition of the term “final purchasing authority” and whether their respective board members would be considered to have such authority in the performance of their duties as special state appointees with the entities in question.
While the General Counsels collectively asked for a written advisory opinion as to the application of IC 4-2-6-8 to their respective boards, the Commission notes that each entity must be analyzed separately given that each entity has different statutory authority. Accordingly, the Commission issues separate written advisory opinions to each entity. The analysis in this opinion relates specifically to IFA.
ISSUE
Are the persons who comprise IFA’s governing body (hereinafter “the Authority”) required to file financial disclosure statements in accordance with IC 4-2-6-8?
RELEVANT LAW
IC 4-2-6-8, Financial disclosure; filing false statement; penalty
ANALYSIS
As a threshold matter, the Commission finds that it has jurisdiction over the five members who comprise the Authority. The Commission renders this advisory opinion by virtue of its authority under IC 4-2-6-4(b)(1)(A). This analysis is limited to the factual representations made to the Commission by Jennifer Alvey, General Counsel of IFA, and the Commission’s understanding of the IFA’s statutory authority set forth in IC 4-4-11.
The Commission notes that the Authority is composed of the following five (5) members: (1) The budget director, or the budget director's designee, who shall serve as chairman of the authority; (2) The treasurer of state, or the treasurer of state's designee; and, (3) Three (3) members appointed by the governor, no more than two (2) of whom may be from the same political party. See IC 4-4-11-4. The day-to-day management of the Authority is handled by the Pubic Finance Director, who is appointed by the Governor and is responsible for performing various duties directed by the members of the Authority. See IC 4-4-11-9. Three (3) members of the Authority constitute a quorum for the transaction of business, and the affirmative vote of at least three (3) members is necessary for any action to be taken by the Authority. See IC 4-4-11-7.
With regard to the application of IC 4-2-6-8 in this case, the Commission finds that the members of the Authority are not subject to IC 4-2-6-8(a)(6). Specifically, the filing requirement set forth in IC 4-2-6-8(a)(6) appears to be intended to apply to an individual employee or special state appointee, current or former, who has or had individual discretion to exert final purchasing authority. Given that at least three (3) members of the Authority must vote in favor of an action before transacting any business, it is apparent that no individual member of the Authority has final purchasing authority for purposes of IC 4-2-6-8(a)(6).
The Commission notes that members of the Authority have a statutory duty to disclose conflicts of interest in accordance with state ethics law (IC 4-2-6-9) and the IFA’s enabling statute (IC 4-4-11-12). To the extent that any member of the Authority would have a potential conflict of interest as contemplated by IC 4-2-6-9, any other state ethics statute, or IFA’s statute, such member has a mandatory duty to disclose the potential conflict of interest for review.
Conclusion
Subject to the foregoing analysis, the members of the Authority are not required to file financial disclosure statements under IC 4-2-6-8(a)(6); however, this advisory opinion does not relieve any member of the Authority from filing a financial disclosure statement if such member would be required to do so in accordance with another filing provision listed in IC 4-2-6-8(a). Members of the Authority must ensure compliance with this advisory opinion and all state ethics laws and rules.