Edwards, owner of Edwards Insurance Management, entered the complaint on March 13, accusing Smith of maintaining a conflict of interest and casting an unethical vote as the court was negotiating with insurance agents late last year.
During the negotiations, Edwards and another local agency, Winchester Insurance, were competing to manage the county's health, life, dental and vision insurance policies, which amounted to about $600,000 in premiums.
Winchester Insurance offered a policy through its partnership with the Kentucky Association of Counties (KACo). At the time, Smith was serving as second vice president of KACo.
The Fiscal Court voted 7-1 in November to retain Edwards Insurance. Smith voted in opposition, commenting that the Fiscal Court should allow any interested local agent to bid on the county's coverage.
In the complaint, Edwards argued that Smith's vote and his attendance at an earlier insurance committee meeting violated the county's ethics ordinance. Edwards also said Smith violated ethics policy by attending a meeting of the Winchester Board of Commissioners, during which the commission addressed the city's insurance coverage. The city commission eventually awarded an insurance contract to Winchester Insurance.
Smith has countered that his vote pertained only to Edwards' policy, not to the KACo policy, and did not violate ethics regulations. Smith has also said that he did not vote or make a recommendation when he attended the insurance committee meeting.
After holding two special meetings on the allegations and taking testimony from six witnesses, the ethics committee sided with Smith, concluding that the vote pertained only to Edwards' policy and did not violate ethics code. The committee further concluded that as with any citizen, Smith had a lawful right to attend the insurance committee and city commission meetings.
"The Clark County Ethics Committee concludes that Magistrate Smith took no overt activity or action to subjugate or influence the insurance committee's recommendations or selection for Clark County's health insurance plan," the statement read.
Edwards criticized the committee for not calling two additional witnesses - an employee for Edwards and a United Health Care representative, both of whom attended the insurance committee meeting.
"The only people they talked to were people that were on the committee and myself," he said. "There were two other people that were there."
He declined to comment further on the matter.
In a final paragraph of the committee statement, committee members recommended that the Clark County Fiscal Court hold an informational meeting each year to explain the county's ethics ordinance and proper filing of financial disclosure statements.
"The ethics ordinance is a very complicated thing," said committee chairman Mike Irwin. "I'm not sure that when people are elected or given supervisory jobs that these things are presented. I'm not sure that half of them even read them or much less understand them."