DES MOINES — Iowa State Auditor Rob Sand has lost a major battle over his ability to dig into secret government discussions involving nearly $2 million in taxpayer-funded settlements, prompting the Democratic candidate for governor to accuse Iowa political leaders of enabling “corruption and secrecy.”
The Iowa Supreme Court ruled that Sand’s office cannot force the City of Davenport to surrender communications protected by attorney-client privilege as part of an investigation into $1.9 million in settlements involving harassment claims by three city employees.
The dispute grew out of settlements publicly approved by Davenport officials in December 2023.
Questions erupted after allegations surfaced that agreements had actually been reached before the November 2023 city election but were not publicly announced until afterward.
Sand’s Auditor of State office launched a reaudit and subpoenaed documents connected to the settlements, including records from closed-door city council discussions.
Davenport refused to hand over some of the material, arguing the communications were protected by attorney-client privilege.
A Scott County District Court initially concluded the auditor could subpoena attorney-client privileged material and planned to privately review the disputed records.
Davenport appealed — and the Iowa Supreme Court sided with the city.
The high court concluded that Iowa Code section 11.41, despite giving the Auditor of State broad access to government records, does not override the longstanding attorney-client privilege.
Sand reacted sharply.
“This decision, guided in part by the legislature and Governor’s recent pro-corruption law, means a city can hide $2 million from taxpayers just because they kept an attorney in the room,” Sand said in a statement following the ruling. “We respect the Court’s ruling, but not the corruption and secrecy the insiders wrote into the law.”
The comments carry additional political weight because Sand is not simply Iowa’s state auditor anymore — he is also the Democratic nominee for governor in the November 2026 election.
Sand has made government accountability, taxpayer protection and his record as state auditor significant themes of his campaign for governor.
His office has repeatedly investigated questionable spending by local governments around Iowa, including several cases previously reported by NorthIowaToday.com.
The Davenport fight presented a larger legal question: whether the auditor’s broad statutory authority to inspect government records extends even to confidential conversations between a government body and its attorneys.
The Supreme Court said it does not.
Attorney-client privilege is a deeply established protection under Iowa law intended to allow a client to communicate confidentially with an attorney and receive legal advice without those communications being involuntarily disclosed.
The justices said that because the privilege is so firmly rooted in Iowa law, the Legislature would have to explicitly say that the auditor may override it.
Iowa Code section 11.41 gives the Auditor of State access to confidential government documents, but the statute does not specifically mention privileged communications.
The Court said there is an important difference between something being confidential and something being legally privileged.
While privileged documents are confidential, not all confidential government records qualify for attorney-client privilege.
The Supreme Court also pointed to Iowa’s subpoena and discovery rules, which generally limit compelled production to material that is not privileged.
Before the ruling, Sand had argued publicly that Davenport taxpayers deserved to know what happened behind closed doors.
He said checks tied to some of the settlements were written roughly two months before the city council formally approved the payments and argued the city’s internal financial controls should have prevented money from going out before council authorization.
Sand also warned that allowing government bodies to shield such discussions simply by having an attorney present could encourage officials to use lawyers as cover for financial decisions they do not want taxpayers to see.
The Supreme Court rejected that argument as a basis for overriding attorney-client privilege.
The justices effectively left the next move to the Iowa Legislature: If lawmakers want the Auditor of State to have access to attorney-client privileged communications during government audits, they must clearly grant that authority in state law.
For Sand, the ruling now intersects directly with the race for governor, giving him another platform from which to argue that Iowa’s government needs greater transparency while his political opponents can point to a unanimous Supreme Court decision limiting the authority he claimed for his office.
The underlying Davenport investigation grew from questions about $1.9 million in public money.
The larger fight now concerns something potentially much bigger — just how much power Iowa’s taxpayer watchdog should have to see what government officials are saying behind closed doors.