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Sunday, December 03, 2006

Ind. Gov't. - "Exodus of state staff triggers ethics rule"

Niki Kelly of the Fort Wayne Journal Gazette has an important story today on what ethics rules/laws apply to members of the Daniels administration who are now returning to the private sector. She writes:

INDIANAPOLIS – Key executive staffers and agency heads have been resigning at an increased rate in recent months, leaving Gov. Mitch Daniels’ administration and heading back to the private sector nearly two years into the governor’s tenure.

The departures include internal public policy advisers, leaders of the Bureau of Motor Vehicles and Department of Natural Resources, and the governor’s chief of staff and communications director. [ILB - Also leaving, effective Dec. 1, but not mentioned, is Matt Klein, director of IDEM enforcment, who has announced his move to the law firm of Bose McKinney.]

And state ethics laws sometimes prohibit some lobbying activities and institute other post-employment restrictions.

“I don’t see it as a big deal. The governor is very clear that he wanted to have the highest ethical standards for his administrations,” said Jason Barclay, who served as Daniels’ special counsel and policy director for public safety until July. “It’s a standard part of doing business these days both in the public and private sector.”

When Daniels took office in January 2005 he didn’t think the ethics rules were tough enough and his administration instituted several changes – with help from the legislature.

Barclay helped rewrite some of the rules, saying he reviewed post-employment restrictions in other states and drafted similar ones for Indiana.

“It’s another example of the state being woefully behind in its ethical standards when others have been abiding by them,” he said.

Daniels initially proposed a one-year prohibition on any lobbying for those who left the executive branch, but legislators watered down the law so staffers could immediately lobby the legislative branch but not the executive. [Emphasis added by ILB]

Individuals working in state government who negotiate or administer contracts, make regulatory or licensing decisions or [sic.] are also bound by additional state rules, said Laura Forest, director of the Indiana State Ethics Commission.

And in addition to state rules, Governor Daniels' Executive Order 5-12 is still in effect, as far as I know. I reference this May 11th ILB entry, including this quote:
For the May 2006 issue of Res Gestae, I have written an in-depth column about the use of executive orders by Indiana governors. Two issues are examined:

(1) Does a governor’s executive order continue in effect when his term is over?

(2) Can the general assembly by passing a statute preempt an area – thereby invalidating an executive order on the same subject?

More from Kelly's story:
Barclay and Harry Gonso, recently departed chief of staff and senior counsel, both recognized possible limitations and sought a formal advisory opinion from the ethics commission on their new employment.

“My advice would always be to seek an advisory opinion,” Forest said. “It’s preventative, free legal advice. It’s a great service we love to do. It’s our bread and butter.”

Plus, it could avoid a range of penalties in the future, from the canceling of a contract to civil fines, reprimands and being barred from future state employment. If the activity was egregious enough, there might also be criminal sanctions.

For Barclay and Gonso – both lawyers – seeking the opinion made sense.

During Barclay’s time in the governor’s office, he worked on several ethics-related law changes. He also helped investigate and briefly ran the Indiana Criminal Justice Institute.

He took a job at Barnes & Thornburg as an associate attorney working on white-collar criminal defense work.

“I went to a large law firm that obviously does business both for and against the state, so I wanted to go before the commission and be very clear and transparent to make sure they were comfortable with that,” Barclay said.

Gonso, meanwhile, returned to his old law firm – Ice Miller – where he was a partner before leaving to help run Daniels’ staff. At Ice Miller he will be leading the firm’s life sciences practice.

He did not return several messages seeking comment.

The ethics commission ruling for both men spelled out “particular matters” that they were personally and substantially involved with that they must stay away from in their new jobs to avoid conflict of interest and revealing confidential information obtained while a state employee.

For Barclay that meant a list of things he could not go near on behalf of his new employer. This includes work on a lawsuit between the Indiana Gaming Commission and East Chicago Second Century; a legal battle on wine shipping with the Alcohol and Tobacco Commission; various investigations he assisted on out of the inspector general’s office, horse racing commission or gaming commission; a key food service contract for the Department of Correction; and several Indiana State Police contracts.

Barclay said the restrictions aren’t a concern to him because as a lawyer he is already legally required to avoid such conflicts of interest.

Gonso – one of the governor’s closest advisers and senior counsel – reported participation in only two specific matters during his two years of service: a dispute between business partners involving the French Lick casino and the award of state incentives to Cummins Engine and Honda.

The commission found Gonso must screen himself from those matters in his new law practice.

“They have recognized the governor’s promotion of ethics when they present themselves to the commission for review,” Forest said of Gonso, Barclay and others. “It sets a great example for those throughout state government.”

It may set an example, but not if no one knows about it. There is no indication on the Ethics Commission site of these individuals' applications for ethics rulings, or the rulings themselves. Apparently you can go to the Commission and ask for the opinions by name, as reporter Kelly may have done:
But departing state employees seeking more privacy can seek an informal advisory opinion from the commission, which is not open to the public.

It is unclear whether, for instance, Kyle Hupfer sought an opinion on leaving his DNR post and taking a job as general counsel for ProLiance Energy in Indianapolis. The company manages the supply of natural gas for industry, schools and hospitals, according to its Web site, and has little or nothing to do with the issues that have busied Hupfer in recent years such as canned hunting and guns in parks.

And BMV Commissioner Joel Silverman simply retired, again.

The latest Daniels’ appointee to leave is communications director Marc Lotter, who asked counsel in the governor’s office whether he should be concerned about post-employment restrictions.

“I wanted to make sure that I was doing everything that needed to be done,” he said. “But my current duties don’t require any contract negotiations or other legal work.”

Lotter is leaving Tuesday to become public relations manager for Lauth Property Group, a vast national organization that includes the French Lick casino.

Kelly ends her story by quoting Rep. Phil GiaQuinta, D-Fort Wayne: “'Sometimes there’s an appearance that folks may be doing their two years and then using that knowledge to their advantage in the private sector,' he said."

Posted by Marcia Oddi on December 3, 2006 09:47 AM
Posted to Indiana Government