An Iowa municipal insurance coverage pool that made waves with costly junkets for board members does not must cooperate with an investigation by the Iowa state auditor, the Supreme Court docket dominated Friday.

The swimsuit pitted Auditor Rob Sand towards the Iowa Communities Assurance Pool, which offers property and casualty protection for almost 800 Iowa municipalities and different public entities. The pool has a board of administrators made up of officers from its member governments, and a 2019 Related Press investigation discovered that, for years, the board had been holding annual conferences at posh resorts on Lake Michigan and the Gulf of Mexico.

Within the wake of the report, Sand’s workplace requested paperwork from ICAP, as it’s identified, and finally filed subpoenas. The chance pool voluntarily answered some requests however resisted others, arguing that it isn’t a authorities company beneath the precise legal guidelines granting the auditor authority. A district court docket choose agreed and denied Sand’s request to implement the subpoena.

From 2021: Supreme Court docket upholds auditor’s subpoena in $1.2 billion College of Iowa utility deal

Friday’s determination affirms that ruling. Justice Christopher McDonald wrote for the unanimous court docket that Sand has no statutory proper to demand data from the chance pool.

In an announcement, Sand stated he’s involved the choice leaves taxpayers at the hours of darkness about how their cash is getting used.

“The court docket’s determination signifies that some entities, solely funded by tax {dollars}, are usually not topic to authorities oversight,” he stated. “We hope the Legislature will resolve they need to repair that. The auditor’s workplace will proceed to work to extend accountability of tax {dollars}.”

What sort of entity is ICAP?

In arguments earlier than the court docket, Sand’s workplace contended that the one approach to legally create a danger pool resembling ICAP is beneath chapter 28E of the Iowa code, which might grant the auditor oversight authority into its funds. Although ICAP was not created beneath 28E, as a substitute organizing itself as a substitute as an unincorporated nonprofit, Sand argued the court docket ought to deal with it as a 28E entity regardless.

The court docket was not persuaded. McDonald wrote that a number of state legal guidelines seem to authorize the creation of native authorities danger swimming pools outdoors the strictures of the code part. Even when Sand might show ICAP ought to have been created beneath part 28E, McDonald wrote, the right treatment could be to dissolve it and begin over, not faux it is one thing it is not.

“A celebration with standing would possibly have the ability to enjoin the operation of an illegally created entity, however that’s it,” he wrote. “(Prior caselaw) can’t be learn to permit this court docket to recategorize ICAP and topic it to the state auditor’s authority.”

Dispute 33 years after ICAP fashioned

McDonald famous, in a line Sand cited in his assertion, that “it could be good coverage to topic native authorities danger swimming pools to some oversight.” However McDonald stated that is a call for the Legislature.

He additionally identified the issue of arguing in 2023 that ICAP ought to have been created as an official governmental entity when it has functioned as a nonprofit for many years.

“The state auditor had by no means tried to say authority over ICAP within the thirty-three years previous to this case, and it isn’t as if ICAP is a few fly-under-the-radar operation,” McDonald wrote. “ICAP has nearly 800 authorities entity members all topic to the state auditor’s authority.”

Attorneys for ICAP didn’t reply to a message looking for touch upon the choice. After the AP’s 2019 report, the pool canceled future out-of-state board conferences.

Iowa Republican lawmakers are looking for to restrict the auditor’s subpoena powers

The Supreme Court docket ruling comes as Republicans within the Iowa Legislature are looking for to go a invoice that might restrict the facility of the auditor, the only real Democrat to carry a statewide workplace in Iowa, to situation subpoenas to authorities entities.

Senate File 478 would cease the auditor’s workplace from going to court docket towards one other statewide workplace holder or govt department company, division, board or fee to implement a subpoena for paperwork.

The invoice additionally would apply to licensed public accountants who’re auditing cities, college districts and different public entities.

On Monday, Senate Republican leaders stated they have been submitting a public information request for each subpoena issued by Sand since he took over as auditor in January 2019. He was reelected in 2022.

“Friday’s ruling once more raised the priority and urgency for motion on this situation,” Senate Majority Chief Jack Whitver, R-Grimes, stated in an announcement. “With the willpower by the court docket the auditor’s workplace has exceeded its statutory authority, it’s crucial for the Senate to establish some other areas the place the auditor’s workplace has exceeded its authority to situation subpoenas.”

Extra: Invoice to restrict Iowa auditor might depart $12B in funding unchecked, nonpartisan company says

The invoice additionally would restrict the auditor’s entry to a number of types of private data. It handed the Senate on a celebration line vote earlier this 12 months and is awaiting a vote within the Iowa Home. Home Republicans have stated they intend to make modifications to the measure.

The nonpartisan Legislative Companies Company has stated that if the Senate invoice have been enacted with out modifications it might restrict the auditor’s potential to supervise greater than $12 billion in state and federal funds. That might probably put a few of that funding in danger if the state couldn’t show it has satisfactory oversight over the packages.

In an announcement Monday afternoon, Sand stated Senate Republicans’ information request is an try to distract from the truth that passing the invoice could be “a disaster.”

“America’s authorities watchdogs of each events and the CPA career are talking out in regards to the catastrophic results of SF478 permitting authorities to cover paperwork from auditors, so political insiders who simply voted for it are making new excuses for his or her horrible vote,” he stated.

William Morris covers courts for the Des Moines Register. He could be contacted at wrmorris2@registermedia.com, 715-573-8166 or on Twitter at @DMRMorris.