IECDB AO 2003-10
Peter L. J. Pashler, Esq.
Ahlers & Cooney, P.C.
100 Court Avenue, Suite 600
Des Moines, Iowa 50309-2231
Dear Mr. Pashler:
This opinion is in response to your letter of July 2, 2003, requesting an opinion from the Iowa Ethics and Campaign Disclosure Board. We note at the outset that the Board's jurisdiction is limited to the application of Iowa Code chapters 68A and 68B and rules in Iowa Administrative Code chapter 351.
Your law firm represents a political subdivision and you have been directed by the subdivision to request an opinion from the Board concerning the ability of the chief operating officer of the subdivision to serve on the board of directors of a private banking firm. You advise us that the subdivision currently conducts all of its banking business with the banking firm. In the organizational structure of the subdivision, the chief operating officer reports directly to the head of the subdivision and all other department heads report to the chief operating officer.
You further advise us that the subdivision is prepared to alter its existing organizational structure so that the chief financial officer will have full authority and control over the banking contract and will report directly to the head of the subdivision and the board president on matters concerning the banking contract. The chief operating officer will be removed from having any involvement in matters concerning the banking contract and banking services. Further, the subdivision and the chief operating officer would publicly disclose the existence of the potential conflict and its exercise of precautionary measures.
Is it permissible for the chief operating officer of the political subdivision to serve on the private banking firm's board of directors?
Iowa Code section 68B.2A prohibits any person who is employed by a political subdivision from engaging in an outside employment or activity that is in conflict with the person's official duties and responsibilities. The statute then sets out certain situations in which an unacceptable conflict could exist. Two of those situations could apply to your question:
1. The outside employment or activity involving the use of the political subdivision's resources.
2. The outside employment or activity is subject to the official control, inspection, review, audit, or enforcement authority of the person during the performance of official subdivision duties.
So long as the chief operating officer does not use any of the political subdivision's resources to further service on the private banking firm's board of directors, the first situation would not apply. Based on the procedural safeguard of removing the chief operating officer from any duties involving the bank, the second situation would not apply.1
Therefore, the chief operating officer could serve on the banking firm's board of directors so long as the procedural safeguard set out in your letter was implemented and the chief operating officer did not use any of the political subdivision's resources to benefit the banking firm.
BY DIRECTION AND VOTE OF THE BOARD
James Albert, Board Chair
1st Vice-Chair Geraldine Leinen
2nd Vice-Chair Gwen Boeke
Submitted by: W. Charles Smithson, Board Legal Counsel
1 The removal of the chief operating officer from oversight of the banking contract and banking services as set out in your letter would constitute a sufficient remedial measure to alleviate the potential conflict under Iowa Code section 68B.2A(2)"b" (publicly disclose the conflict and refrain from taking any official action or performing any official duty that would detrimentally affect or create a benefit for the outside employment or activity).