By WILLIAM L. DAY and BRITTA B. HARRIS

Supreme Court v. Auditor General how separate are separated powers?

The office of auditor general and the Legislative Audit Commission owe their origin to the 1956 scandal in which Orville E. Hodge, auditor of public accounts, embezzled or misappropriated more than $1 million in public funds. The investigation that followed highlighted a situation that invited financial disaster: The elected auditor was responsible for writing state checks for all agencies of the state — and he later selected the auditors who would audit the spending he had approved in the first instance. Attempting to cover up the scandal, Hodge had named his own auditor to audit his office.

A special commission recommended that the postaudit responsibility be placed in a separate auditor general, appointed by and responsible to the legislature, and reporting to a Legislative Audit Commission. Then it was discovered that the 1870 Constitution apparently forbade such an arrangement, since the legislature was not permitted to elect executive officers. So the new officer was made an appointee of the governor.

This was not a wholly satisfactory solution, since the auditor general would be auditing the governor and his agencies. That it worked was largely due to the vigor with which the chairman of the new Audit Commission exercised his office. He was the late Sen. W. Russell Arrington. He enforced audit recommendations on recalcitrant department heads by threatening retaliation when they came before the legislative appropriations committees. Usually a hint sufficed. How he would have dealt with the present controversy provides ground for interesting speculation.

The 1969-70 Constitutional Convention was able to accomplish the original goals of the earlier reform. It made the auditor general a constitutional officer, appointed by the legislature, for a 10-year term, subject to removal only by a three-fifths vote of both houses.

Robert G. Cronson is the first auditor general to be elected by the legislature. After a nationwide search, he was chosen in 1974 and took office on August 1 that year. A lawyer, 55, he has been active in the financial community in the securities and insurance fields, has served on the staffs of the Illinois Senate and the secretary of state and taught public administration at Roosevelt University, Chicago.

WHAT happens — in state government — when an irresistible force meets an immovable object?

Something of this sort happened in 1977 when Robert G. Cronson, auditor general of Illinois, was denied access to the books of two entities that function under the authority of the Illinois Supreme Court. The denial came from then Chief Justice Daniel P. Ward. Last year, it was reiterated by Chief Justice Joseph H. Goldenhersh.

"The Auditor General shall conduct the audit of public funds of the State," says the Constitution (Article VIII, section 3b). He is appointed by a three-fifths vote of the members of the House and Senate, so he is the agent of the General Assembly, and he reports to the Legislative Audit Commission, which consists of five senators and five representatives.

But the high court maintains that the funds of the Board of Law Examiners and the Attorney Registration and Disciplinary Commission are not public funds, but private funds, collected from attorneys and would-be attorneys. The court says that the licensing, registration and disciplining of attorneys — functions which the two entities perform subject to final action by the court — are judicial functions, and under the separation of powers provision in the Constitution (Article II, section 1), the legislature has nothing to say about the practice of law.

But because the legislature has the exclusive power to appropriate public funds and to provide for their audit by the auditor general, the auditor general believes this legislative power includes auditing the two judicial entities.

Thus the forces that are on a potential collision course are the General Assembly and the Supreme Court.

Because these two judicial entities — the Board of Law Examiners and the Attorney Registration and Disciplinary Commission — do not deposit their fees in the state treasury and are not dependent on the legislature for appropriations, they occupy what appears to be a unique position in Illinois state government. (Even the Supreme Court itself receives appropriations from the General Assembly and is subject to audit by the auditor general.) The two entities also denied they were bound to observe the state purchasing act or to follow the state comptroller's uniform statewide accounting system.

Not that the books of the board and commission have avoided an audit entirely. In 1978, as a matter of "comity" or courtesy, the court agreed

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to an independent audit, and the Legislative Audit Commission selected the first of three accounting firms proposed by the court. The audit of the Disciplinary Commission made by Arthur Andersen & Co., a well known firm of certified public accountants, opened with this statement:

"We have been informed by the Illinois Supreme Court . . . that: (a) The funds administered by the Commission are not 'public funds' nor are they subject to audit under the Illinois Auditing Act by the Auditor General. . . . Since these matters are subject to legal interpretation, we have no further comments or recommendations pertaining to them. ..." Similar language occurs in the audit of the Board of Law Examiners.

Employee benefits

The audits caused no stir except that Audit Commission members lifted their eyebrows when they discovered that the Disciplinary Commission had set up a profit-sharing plan for its employees. Chief Justice Goldenhersh, who was at the Audit Commission's meeting when this report was reviewed in November 1979, hastened to assure the legislators the term was a misnomer. He said it was in actuality a pension plan since the Disciplinary Commission employees are not state employees and do not participate in the State Employees' Retirement System (see box).

The court's position makes the legal profession unique among the almost 200 businesses and occupations licensed by the State since the funds of all the other licensing agencies are subject to audit. Rep. Dwight Friedrich (R., Centralia), a member of the Audit Commission, asked Ward at the January 1978 Audit Commission meeting about the difference.

"I'm having a little trouble recognizing why an attorney as a professional person is any different, for example, than a real estate broker, or an insurance broker . . . ," Rep. Friedrich said, "I can't quite figure out what the difference is between the money a guy pays in to take his insurance broker's license exam as between a lawyer who takes the bar exam."

'I don't think many lawyers would be willing to vote against the Supreme Court of Illinois because they live in fear of the courts .... they're the untouchables'

Ward responded that the difference lay in the fact that these other professions are licensed by act of the legislature, but the practice of law has been traditionally regulated by the courts. When Auditor General Cronson pointed out that there has been a statute since 1874 providing for the court to license attorneys. Ward called his attention to an 1899 Illinois Supreme Court decision. In re Application of Henry M. Day et al. for admission to the bar, which held unconstitutional a legislative act relating to licensing of attorneys. The opinion states, "The function of determining whether one who seeks to become an officer of the courts [attorney] ... is sufficiently acquainted with the rules established by the legislature and the courts ... under which justice is administered pertains to the courts themselves.... The fact that the legislature may prescribe the qualifications of doctors, plumbers, horseshoers and persons following other professions or callings not connected with the judicial system ... can have no influence on this question .... The attorney is a necessary part of the judicial system. ... He is the first one to sit in judgment on every case, and whether the court shall be called upon to act depends on his decision. It is our duty to maintain the provision of the constitution that no person or collection of persons, being one of the departments of the government, shall exercise a power properly belonging to another, and if the legislature by inadvertence, as in this case, assumes the exercise of a power belonging to the judicial department, it should only be necessary to call its attention to the restraint imposed by the constitution."

Lawyers, described above as officers of the legislature, constitute almost a third of the membership of the 81st General Assembly (29 senators and 46 representatives according to one count) and lawyers have also been named to executive offices, but nobody seems to

Attorney Registration and Disciplinary Commission THE Attorney Registration and Disciplinary Commission (ARDC) was created by rule of the Supreme Court in 1973, taking over a function that had become financially burdensome to the Illinois State and Chicago Bar associations which previously had undertaken the inquiries and hearings that can lead to the disbarment or other disciplinary action of an attorney by the Supreme Court. When ARDC inquired about social security coverage for its employees, the Internal Revenue Service advised that since ARDC was a "wholly owned instrumentality of the State of Illinois," it was exempt from social security unless an agreement was reached between the U.S. Department of Health, Education and Welfare and the state — in particular, the State Employees' Retirement System (SERS). SERS advised Carl H. Rolewick, administrator of ARDC, that an opinion must be obtained from the attorney general of Illinois that ARDC was, indeed, an "instrumentality" of the state. The attorney general, in July 1974, said in his opinion (S-793) that ARDC could not be an "instrumentality" of the state because only the legislature could create an "instrumentality." "I conclude that the Commission is not an instrumentality of the State . . . but rather that it is an agency of the judicial branch. ..." Subsequently, the employees obtained social security coverage as employees of a nonprofit corporation, supplemented by their own pension plan under the guise of a profit sharing plan. The Board of Law Examiners has only one full-time employee and this employee is the beneficiary of an annuity policy.

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have raised the question as to whether their presence in the legislative or executive branches violates the separation of powers provision referred to by the court and carried over into the 1970 Constitution (Article II, section 1).

But doubts have been expressed that the lawyers in the legislature would want to go on record against the Supreme Court if the question of the auditor general's audit of the two judicial entities came to a vote.

This became apparent when the Audit Commission members at their January 1978 meeting were discussing what to do next. Said former Sen. HarberHall (R., Bloomington), "One of the distinguished and highly respected [lawyers] of the leadership of the General Assembly told me he's right with us 100 percent 'til it comes to the vote."

Rep. Friedrich came on stronger: "I don't think many lawyers would be willing to vote against the Supreme Court of Illinois because they live in fear of the courts because the courts run a kingdom in Illinois. Let's face it, they're the untouchables. ..."

Debate and opinion

The Audit Commission in that January 1978 meeting put aside any ideas of seeking legislative action and instead adopted a resolution pressing for an audit. The chief justice's response came in a letter which the Audit Commission considered at its April 1978 meeting. The letter said, "While the court judges the funds under discussion to be funds as to which the court considers itself a trustee and as to which the Auditor General does not have responsibility, the court in the interest of comity and avoiding conflict between your Commission and the courts will agree to an audit of receipts and disbursements of the Board [of Law Examiners] and the [Disciplinary] Commission." The audits by the Andersen firm resulted.

At the November 1979 Audit Commission meeting, following departure of Justice Goldenhersh, the Audit Commission heard Cronson review possible options for future action: File a suit in circuit court, file in the federal district court, or lodge a complaint with the Judicial Inquiry Board. Rep. Friedrich suggested another possiblity:

Reduce the appropriation for the court system. No definite action was taken, however.

The debate has since gone public. Justice Goldenhersh addressed the American Business Club in Springfield a day after the Audit Commission meeting. "I say the auditor general is absolutely wrong," he told club members. Cronson told his side to the club a few weeks later.

Early in December, Cronson found a sympathetic audience when former delegates to the 1969-70 Constitutional Convention held a reunion in the Old State Capitol and reconstituted the convention's judicial committee. Rubin Cohn, retired University of Illinois law professor who served as counsel for that committee, felt Cronson's best bet was in airing the controversy and arousing public opinion.

Will the court soften its stand? A strong indication to the contrary can be found in People v. Scholz, handed down last year. The case involved an order by Circuit Judge Richard F. Scholz Jr., which raised salaries of the Adams County probation officer and superintendent of the youth home above the amounts set by the county board. The amounts of the raises were small, and the high court overruled Judge Scholz and set them aside.

But the opinion, written by Justice Ward, went on to cite Pennsylvania and New Jersey decisions holding that "the judiciary has inherent power to determine what funds are reasonably necessary for its efficient and effective operation and the power to compel the payment of those funds."

The closing words of his opinion were: "We have commented at some length on this question of authority because of its importance in insuring the discharge of the constitutional responsibilities imposed on the judiciary."

Was this a message by the Supreme Court to the auditor general and the Audit Commission? Some think so.

As of early 1980, the court still stood as an immovable object. And the auditor general? So far, his actions have not been irresistible to the judiciary.

William L. Day is editor emeritus of Illinois Issues and was director of the Illinois Legislative Council for 14 years. Britta B. Harris is faculty assistant for the Center for Legal Studies, Sangamon State University.

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