An Iowa municipal insurance pool that made waves with expensive junkets for board members doesn't have to cooperate with an investigation by the Iowa state auditor, the Supreme Court ruled Friday.
The suit pitted Auditor Rob Sand against the Iowa Communities Assurance Pool, which provides property and casualty coverage for nearly 800 Iowa municipalities and other public entities. The pool has a board of directors made up of officials from its member governments, and a 2019 Associated Press investigation found that, for years, the board had been holding annual meetings at posh resorts on Lake Michigan and the Gulf of Mexico.
In the wake of the report, Sand's office requested documents from ICAP, as it is known, and eventually filed subpoenas. The risk pool voluntarily answered some requests but resisted others, arguing that it is not a government agency under the specific laws granting the auditor authority. A district court judge agreed and denied Sand's request to enforce the subpoena.
From 2021:Supreme Court upholds auditor's subpoena in $1.2 billion University of Iowa utility deal
Friday's decision affirms that ruling. Justice Christopher McDonald wrote for the unanimous court that Sand has no statutory right to demand information from the risk pool.
In a statement, Sand said he is concerned the decision leaves taxpayers in the dark about how their money is being used.
"The court’s decision means that some entities, entirely funded by tax dollars, are not subject to government oversight," he said. "We hope the Legislature will decide they should fix that. The auditor’s office will continue to work to increase accountability of tax dollars."
CRIME & COURTS
Des Moines Register
An Iowa municipal insurance pool that made waves with expensive junkets for board members doesn't have to cooperate with an investigation by the Iowa state auditor, the Supreme Court ruled Friday.
The suit pitted Auditor Rob Sand against the Iowa Communities Assurance Pool, which provides property and casualty coverage for nearly 800 Iowa municipalities and other public entities. The pool has a board of directors made up of officials from its member governments, and a 2019 Associated Press investigation found that, for years, the board had been holding annual meetings at posh resorts on Lake Michigan and the Gulf of Mexico.
In the wake of the report, Sand's office requested documents from ICAP, as it is known, and eventually filed subpoenas. The risk pool voluntarily answered some requests but resisted others, arguing that it is not a government agency under the specific laws granting the auditor authority. A district court judge agreed and denied Sand's request to enforce the subpoena.
From 2021:Supreme Court upholds auditor's subpoena in $1.2 billion University of Iowa utility deal
Friday's decision affirms that ruling. Justice Christopher McDonald wrote for the unanimous court that Sand has no statutory right to demand information from the risk pool.
In a statement, Sand said he is concerned the decision leaves taxpayers in the dark about how their money is being used.
"The court’s decision means that some entities, entirely funded by tax dollars, are not subject to government oversight," he said. "We hope the Legislature will decide they should fix that. The auditor’s office will continue to work to increase accountability of tax dollars."
The court was not persuaded. McDonald wrote that multiple state laws appear to authorize the creation of local government risk pools outside the strictures of the code section. Even if Sand could prove ICAP should have been created under section 28E, McDonald wrote, the proper remedy would be to dissolve it and start over, not pretend it's something it isn't.
"A party with standing might be able to enjoin the operation of an illegally created entity, but that is it," he wrote. "(Prior caselaw) cannot be read to allow this court to recategorize ICAP and subject it to the state auditor’s authority."
McDonald noted, in a line Sand cited in his statement, that “it might be good policy to subject local government risk pools to some oversight.” But McDonald said that's a decision for the Legislature.
He also pointed out the problem of arguing in 2023 that ICAP should have been created as an official governmental entity when it has functioned as a nonprofit for decades.
"The state auditor had never attempted to assert authority over ICAP in the thirty-three years prior to this case, and it is not as if ICAP is some fly-under-the-radar operation," McDonald wrote. "ICAP has almost 800 government entity members all subject to the state auditor’s authority."
The suit pitted Auditor Rob Sand against the Iowa Communities Assurance Pool, which provides property and casualty coverage for nearly 800 Iowa municipalities and other public entities. The pool has a board of directors made up of officials from its member governments, and a 2019 Associated Press investigation found that, for years, the board had been holding annual meetings at posh resorts on Lake Michigan and the Gulf of Mexico.
In the wake of the report, Sand's office requested documents from ICAP, as it is known, and eventually filed subpoenas. The risk pool voluntarily answered some requests but resisted others, arguing that it is not a government agency under the specific laws granting the auditor authority. A district court judge agreed and denied Sand's request to enforce the subpoena.
From 2021:Supreme Court upholds auditor's subpoena in $1.2 billion University of Iowa utility deal
Friday's decision affirms that ruling. Justice Christopher McDonald wrote for the unanimous court that Sand has no statutory right to demand information from the risk pool.
In a statement, Sand said he is concerned the decision leaves taxpayers in the dark about how their money is being used.
"The court’s decision means that some entities, entirely funded by tax dollars, are not subject to government oversight," he said. "We hope the Legislature will decide they should fix that. The auditor’s office will continue to work to increase accountability of tax dollars."
What kind of entity is ICAP?
In arguments before the court, Sand's office contended that the only way to legally create a risk pool such as ICAP is under chapter 28E of the Iowa code, which would grant the auditor oversight authority into its finances. Though ICAP was not created under 28E, instead organizing itself instead as an unincorporated nonprofit, Sand argued the court should treat it as a 28E entity regardless.CRIME & COURTS
State auditor not entitled to records of insurance pool junkets, Iowa Supreme Court rules
William Morris Stephen Gruber-MillerDes Moines Register
An Iowa municipal insurance pool that made waves with expensive junkets for board members doesn't have to cooperate with an investigation by the Iowa state auditor, the Supreme Court ruled Friday.
The suit pitted Auditor Rob Sand against the Iowa Communities Assurance Pool, which provides property and casualty coverage for nearly 800 Iowa municipalities and other public entities. The pool has a board of directors made up of officials from its member governments, and a 2019 Associated Press investigation found that, for years, the board had been holding annual meetings at posh resorts on Lake Michigan and the Gulf of Mexico.
In the wake of the report, Sand's office requested documents from ICAP, as it is known, and eventually filed subpoenas. The risk pool voluntarily answered some requests but resisted others, arguing that it is not a government agency under the specific laws granting the auditor authority. A district court judge agreed and denied Sand's request to enforce the subpoena.
From 2021:Supreme Court upholds auditor's subpoena in $1.2 billion University of Iowa utility deal
Friday's decision affirms that ruling. Justice Christopher McDonald wrote for the unanimous court that Sand has no statutory right to demand information from the risk pool.
In a statement, Sand said he is concerned the decision leaves taxpayers in the dark about how their money is being used.
"The court’s decision means that some entities, entirely funded by tax dollars, are not subject to government oversight," he said. "We hope the Legislature will decide they should fix that. The auditor’s office will continue to work to increase accountability of tax dollars."
What kind of entity is ICAP?
In arguments before the court, Sand's office contended that the only way to legally create a risk pool such as ICAP is under chapter 28E of the Iowa code, which would grant the auditor oversight authority into its finances. Though ICAP was not created under 28E, instead organizing itself instead as an unincorporated nonprofit, Sand argued the court should treat it as a 28E entity regardless.The court was not persuaded. McDonald wrote that multiple state laws appear to authorize the creation of local government risk pools outside the strictures of the code section. Even if Sand could prove ICAP should have been created under section 28E, McDonald wrote, the proper remedy would be to dissolve it and start over, not pretend it's something it isn't.
"A party with standing might be able to enjoin the operation of an illegally created entity, but that is it," he wrote. "(Prior caselaw) cannot be read to allow this court to recategorize ICAP and subject it to the state auditor’s authority."
McDonald noted, in a line Sand cited in his statement, that “it might be good policy to subject local government risk pools to some oversight.” But McDonald said that's a decision for the Legislature.
He also pointed out the problem of arguing in 2023 that ICAP should have been created as an official governmental entity when it has functioned as a nonprofit for decades.
"The state auditor had never attempted to assert authority over ICAP in the thirty-three years prior to this case, and it is not as if ICAP is some fly-under-the-radar operation," McDonald wrote. "ICAP has almost 800 government entity members all subject to the state auditor’s authority."
State auditor not entitled to records of insurance pool junkets, Iowa Supreme Court rules
The ruling comes as legislative Republicans are seeking to limit the authority of the auditor, the sole statewide Democratic elected official
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