Governor Ivey Bans Use of Loaned Executives

By  | April 15, 2018 | Filed under: News

MONTGOMERY – Governor Kay Ivey on Wednesday signed Executive Order 714, which bans the practice of non-governmental personnel being “loaned” to executive branch agencies, while receiving pay from a private business or nonprofit.

The executive order ensures that no outside party or entity has undue influence on the executive operations of state government, and comes on the first day of Governor Ivey’s second year in office.

“When I first took office one year ago, I promised an open and transparent administration; I’ve followed through on that promise and this directive is just another part of our continuing efforts,” Governor Ivey said. “Executive Order 714 will prohibit someone from working in a key government role while taking a salary from private sources for the work being performed.”

Per the governor’s directive, executive appointees and/or staff members may not serve in the Ivey administration while also receiving compensation from a non-state entity for the work being performed for the state. Further, the executive order prohibits an executive appointee and/or staff member from soliciting a private entity to provide a loaned employee to the state or from seeking compensation from a private entity for work performed for the state. The order does allow for temporary exemptions during times of natural disasters and other emergencies. The executive order does not apply to those serving on state boards or commissions, or those who are state contractors.

Executive Order 714 applies to all appointments made by Governor Ivey, or any other member of the executive branch, unless otherwise stated in the order. The order is effective immediately.



WHEREAS it is the declared policy of the State of Alabama that “lilt is essential to the proper operation of democratic government that public officials be independent and impartial;” that ” [glovernmental decisions and policy should be made in the proper channels of the governmental structure;” that “[n]o public office should be used for private gain other than the remuneration provided by law;” that “[i]t is important that there be public confidence in the integrity of government;” and that ” [t]he attainment of one or more of [these ends] is impaired whenever there exists a conflict of interest between the private interests of a public official or a public employee and [his or her official] duties,” Ala. Code S 36-25-2;
WHEREAS it is also the declared policy of the State of Alabama that it is “necessary” to the integrity of the processes of state government “that the identity, expenditures, and activities of certain persons who engage in efforts to persuade members of the legislative bodies or members of the Executive Branch to take specific actions. be publicly and regularly disclosed,” id.; and
WHEREAS the Ethics Commission, through Advisory Opinion 2015-16, concluded that an employee who is paid from a source other than public money but who performs all of the functions of a public-sector employee presumptively cannot serve under that arrangement without violating the fundamental principles underlying the Ethics Act;
NOW, THEREFORE, I, Kay Ivey, Governor of the State of Alabama, by virtue of the authority vested in me by the Constitution and laws of the State of Alabama, do hereby order and adopt the following policy, effective immediately, to preclude the use of so-called “loaned executives” or “loaned employees” in agencies of the Executive Branch:
Section 1. Definitions.
As used in this Executive Order, the following terms have the following meanings:
a. AGENCY. Any agency, department, office bureau, board, or commission of the Executive Branch under the Governor’s authority and control.

b. NON-GOVERNMENT PERSON. An individual who is neither a public official nor a public employee as those terms are defined in section 36-25-1 of the Code of Alabama, 1975.
c. PRIVATE ENTITY. Any non-governmental corporation, partnership, proprietorship, company, firm, foundation, enterprise, franchise, association, organization, individual, or any other legal entity, whether or not organized for profit or exempt from taxation under 26 U.S.C. S 5010.
Section 2. Prohibition of “Loaned Executives” or “Loaned Employees” in
Agencies of the Executive Branch
a. Except as provided in subsection (b) below, an officer of the Executive Branch may not do either of the following:
i. Solicit a private entity to pay a fee, salary, or other compensation to a non-government person to perform the functions of a public official or public employee for the executive officer or his or her agency.
ii. Knowingly permit a non-government person to perform the functions of a public official or public employee for a fee, salary, or other compensation paid by a private entity.
b. The prohibitions of subsection (a) do not apply with respect to the following services, provided that payment for the services by a private entity is not otherwise prohibited by law:
i. Services paid for by an agency pursuant to a lawfully awarded grant, contract, or employment agreement.
ii. Temporary services provided in connection with a natural disaster or other emergency affecting the safety of persons and property.
iii. Service on a board, commission, council, or committee created by legislation or executive order of the Governor.
iv. Isolated, infrequent legal, medical, or other professional services provided to, or on behalf of, an agency.
Page 2

DONE AND ORDERED this 11th day of April, 2018.




Secretary of State

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