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In this issue:

  • Conflicts of Interest Rule
  • Use of State Property Rule

Conflicts of Interest Rule
The Conflicts of interest rule in I.C. 4-2-6-10.5 prevents state officers, employees and special state appointees from knowingly having a financial interest in a contract made by an agency. This broad prohibition encompasses contracts made with all state agencies, not just the agency for which the contracting parties work. Pursuant to this rule, officers, employees and appointees are only permitted to contract with either their own agency or another state agency if they do not have official responsibilities for any of the activities of the contracting agency and if they observe the provisions set out in I.C. 4-2-6-10.5(b)(1)(A)-(D). In this context, the State Ethics Commission has interpreted “official responsibilities” to encompass an individual’s involvement in making contract decisions. Financial and conflict of interest disclosures are available on the OIG website.

In short, in order for state officers, employees and special state appointees to be able to contract with any state agency, they must not be responsible for making contracting decisions for the agency making the contract, and they must observe the restrictions in I.C. 4-2-6-10.5(b)(1)(A)-(D). In those instances in which the officers, employees and appointees are contracting with the state agency they serve, they must also ensure that they observe the provisions of I.C. 35-44-1-3, the State’s criminal conflict of interest statute. Violating this statute can result in a Class D felony.

For the foreseeable future, the increasing amount of federal stimulus dollars reaching the State that will in turn be awarded via grants and contract services presents a growing concern for the application of the State’s conflict of interest statutes, especially I.C. 4-2-6-10.5. As the Ethics Officers for your respective state agencies, you should ensure that the officers, employees and appointees within your agency are aware of these rules to ensure they do not confront ethics problems or even criminal violations in their contracting activities. If you have any questions about the application of I.C. 4-2-6-10.5 or I.C. 4-2-6-9, the other conflict of interest provision in the Code of Ethics, please request informal advice from the Office of Inspector General or submit a request for formal advice from the State Ethics Commission.

Use of State Property Rule
The rule on Use of State Property (42 IAC 1-5-12) prohibits state employees from using state resources for unofficial business unless such use is otherwise permitted by a written agency policy. The Ghost Employment Rule (42 IAC 1-5-13) further restricts state employees from engaging in any unofficial work during working hours unless such activity is also similarly permitted by a written agency policy. Strictly construed, these rules together make any use of state resources by an employee for other than official business or any unofficial work done during working hours a violation of the Code of Ethics. However, these rules also contemplate that there are some uses of resources and some unofficial activities in which employees may be allowed to engage without violating the Code. The ethics officer and head of each agency can help identify for their employees what these appropriate uses and activities are by drafting a limited use policy for their agency. Policies will likely differ across state agencies due to the different responsibilities with which each agency is charged as well as the different resources each agency has at its disposal. These policies are most helpful when they clearly and specifically identify the nature and duration of activities which are permissible for employees to engage in, such as infrequent personal emails or telephone conversations to set up lunch with a friend or to make childcare arrangements, and which uses amount to unethical activities. It should be noted as well that engaging in illegal activity on state time or through the use of state resources is impermissible irrespective of the duration of the activity. Pursuant to 42 IAC 1-6-1, such policies are required to be filed with the OIG. As a result, please submit a copy of your agency’s policy to our office once you and your agency head have adopted one.

For More Information

The Ethics Code

Seeking Advice

Filing A Complaint

Recent Advisory Opinions
09-I-07: Conflicts of Interest
09-I-06: Conflicts of Interest

Upcoming Meetings

October 8, 10:00AM
November 12, 10:00AM
December 10, 10:00AM

Legislative Ethics Questions

Senate Ethics Committee:

House Statutory Committee on Ethics: 800.382.9842

Judiciary Ethics Questions

Disciplinary Commission: 317.232.1807
This is a product of the Office of Inspector General and State Ethics Commission.
150 West Market Street, Indianapolis, IN 46204, 317.232.3850