Appeals court upholds dismissal of ethics charges against ex-IURC chief

Former Indiana Utility Regulatory Commission chairman David Lott Hardy will not face criminal prosecution despite violating state ethics rules, the Indiana Court of Appeals ruled Tuesday.

The court said in an 11-page opinion that state ethics law in effect at the time Hardy was indicted only covered criminal behavior and did not apply to administrative misconduct such as that of which Hardy was accused.

Bryan Corbin, spokesman for the Indiana attorney general's office which represented the state, said the office was reviewing the appellate decision carefully before deciding whether to ask the state Supreme Court to take up the case.

The crux of the argument was whether Hardy, who was fired by then-Gov. Mitch Daniels as part of an ethical scandal that eventually also cost three Duke Energy officials their jobs, should be charged with felony misconduct when he did not commit a crime.

Daniels fired Hardy as commission chairman in 2010 for ethical violations including that Hardy failed to disclose private meetings he had with Duke Energy executives about cost overruns at a coal-gasification power plant that the utility was building in southwestern Indiana. The 618-megawatt plant that went online last summer had an original 2007 cost estimate of $1.9 billion, but that eventually ballooned to about $3.5 billion.

Hardy was indicted by a Marion County grand jury on four felony counts of official misconduct in 2011. A Marion County judge later threw out those charges, saying Hardy couldn't be charged under changes the Legislature made in 2012.

The attorney general's office appealed, but the appellate court sided with the lower court judge.

The court said the revised misconduct law applies only to specific criminal offenses by public officials in the performance of their duties, not merely to violations of ethical or administrative rules.

The Indiana General Assembly narrowed the statute after the state inspector general sought clarification as a result of the scandal. The appellate court said lawmakers clearly intended for the change to be retroactive.