The Indiana State Ethics Commission (“Commission”) issues the following advisory opinion concerning the State Code of Ethics pursuant to IC 4-2-6-4(b)(1).
Background
A former state employee served as the Director of the Indiana Office of Management and Budget (OMB). The former Director served as OMB Director from January 10, 2005, until June 1, 2007. By virtue of his position as OMB Director, the former Director was a voting, ex-officio board member of both the Public Employees Retirement Fund (PERF) and the Teacher’s Retirement Fund (TRF). By Executive Order, the directors of both funds reported to the former Director to the extent allowed by law.
In the spring of 2006, the former Director participated, as part of a seven member group, in interviews of possible managers for a new Indiana focused investment fund (Indiana Fund) to be created by both PERF and TRF. He reviewed the recommendation by the management of both PERF and TRF to hire a financial services company to manage the new Indiana Fund and subsequently voted in favor of this recommendation. In both cases, the votes were unanimous.
The former Director indicated that he was not involved in negotiating the contract with the financial services company by PERF and TRF management or in supervising the financial services company after the selection. He states that those activities were performed by PERF and TRF investment professionals and management.
The former Director has been approached by the financial services company to become a paid consultant on a global infrastructure fund (“Global Fund”) they are forming. The Global Fund will be raising money from insurance companies, pension funds, and other investors to be invested in various infrastructure funds and opportunities around the world. His role, while still fluid, appears to be to assist the financial services company New York based team in the following ways: (1) in raising money for the Global Fund from various customers in the U.S.; (2) participating in reviewing investment opportunities for the Global Fund; and (3) working with selected clients after they have become investors in the Global Fund. The former Director stated that financial services company could choose to approach PERF and TRF about being an investor in the Global Fund in the future. He states that to his knowledge, the financial services company has not made any such contract with PERF and/or TRF to date.
Issue
The issue presented in this case is whether the former Director’s acceptance of an employment opportunity with the financial services company would be contrary to IC 4-2-6-11, the post-employment statute.
Relevant Law
IC 4-2-6-11, One year restriction on certain employment or representation; advisory opinion; exceptions
Analysis
In this case, the former Director would be prohibited from accepting an employment opportunity with the financial services company until the elapse of at least three hundred sixty-five (365) days of leaving state employment if he negotiated or administered a contract with the financial services company on behalf of the State. Whether the former Director negotiated or administered a contract with the financial services company depends upon whether his involvement with the financial services company during the selection of the Indiana Fund manager constitutes as the negotiation of a contract.
In this case, the Commission finds that the 365-day post-employment restriction set forth in IC 4-2-6-11(b) would not appear to apply to the former Director’s intended employment with the financial services company. Specifically, the Commission finds that the financial services company neither negotiated nor administered a contract with the financial services company on behalf of the State.
Should he accept employment with the financial services company, however, the Commission finds that the former Director would be prohibited from representing or assisting the financial services company in any “particular matter” in which he personally or substantially participated in during his tenure with the State. In this case, while he did not negotiate the contract between the State and the financial services company to manage the Indiana Fund, the former Director was personally and substantially involved in the determination to select the financial services company as the manger of the Indiana Fund. In effect, the former Director would be prohibited from assisting the financial services company in anything related to that determination or any other particular matter that he personally and substantially participated in during his tenure with the State.
Conclusion
Subject to the foregoing analysis, the Commission finds that the former Director‘s acceptance of an employment opportunity with the financial services company would not be contrary to IC 4-2-6-11, the post-employment statute.