September 3, 2014

Hatch says Branstad ‘can’t buy back integrity’ with campaign ads

Jack Hatch

Jack Hatch

Jack Hatch, the Democratic candidate for governor, says Repulican Governor Terry Branstad has taken “zero responsibility” for mistakes in his administration and that can’t be papered over by Branstad’s barrage of campaign advertising.

“The governor can spend all that he wants, but you can’t buy back integriy,” Hatch said this morning during a statehouse news conference.

Branstad’s campaign war chest dwarfs Hatch’s campaign treasury, but Hatch says raising money isn’t “equivalent” to success — and Hatch pointed to the 1998 governor’s race, when summertime polls showed former Congressman Jim Ross Lightfoot leading eventual-winner Tom Vilsack by 30 points.

“After almost $3 million of advertisement, this governor is still only 11 points ahead of me,” Hatch said, “so this campaign is not over.”

Hatch said Iowans “are suspicious” of what Hatch calls the “fake numbers” Branstad’s administration is presenting about how many new jobs have been created in Iowa and how much personal incomes have grown. Next week Hatch plans to start airing his own ads, which Hatch said are sprinkled with humor but will focus on Branstad’s management of state government.

“The abuse of power, the mismanagement of our resources has been to a level never seen before in this state,” Hatch said.

Hatch will he’ll also talk in the ads about his vision for the state’s future, including “clean water” initiatives and a new economic development approach.

Last week the chairman of the Iowa Republican Party accused Hatch of killing a bill about tax credits for developers that may have reduced Hatch’s income as a property developer. Hatch called it a “desperate” attack that ignores the political reality of the legislature.

“The Republicans are reaching deep into the recesses (for) a minority bill that joined 80-90 percent of the bills introduced into the state senate and not getting through a committee,” Hatch said.

According to Hatch, it was the committee chairman who didn’t want the bill to pass, but Hatch says “in hindsight” he should have turned down the assignment of subcommittee chairman for the bill.

In other campaign news, political action committees representing the Iowa Association of Business and Industry and the Iowa Corn Growers Association have endorsed Branstad’s bid for a sixth term. The Iowa Corn PAC has also endorsed Democrat Bruce Braley in the U.S. Senate race, along with Republican Congressman Steve King and Democratic Congressman Dave Loebsack. The group is backing Democrat Pat Murphy in Iowa’s first district race and Republican David Young in the third congressional district.

State hires more people to investigate unemployment fraud

IWD director,Teresa Wahlert.

IWD director,Teresa Wahlert. (file photo)

State officials are hiring more staff to review unemployment claims and look for fraud.

Iowa Workforce Development director Teresa Wahlert says in 2010 five of the nine investigators in the investigative unit took early retirement incentives and left the agency.

“So we went down to four investigators,” Wahlert says.

The department operated at that barebones staff level for the past three-and-a-half years. However, in May, Wahlert started hiring more investigators for the bureau and by February she plans to have 11 investigators on staff. Wahlert says she’s not worried some fraudulent claims have gone unnoticed during the past few years when the investigative unit was understaffed because Iowa reviews cases longer than the federal government requires.

“I’m not concerned about that because we investigate our cases for over 10 years,” Wahlert says. “So even though the federal law really cuts things off at three years, we in Iowa do go the extra step, so we will continue to be investigating fraud cases for at least 10 years in arrears, as we do overpayments.”

The increase in fraud investigators comes as the number of unemployment claims submitted to Iowa Workforce Development has dropped, due to the improving economy.

In 2013 the agency reported that about six percent of unemployment claims filed in Iowa had some sort of mistake or contained intentional fraud. Iowa Workforce Development recently signed a contract with a company that uses its computer software to flag suspected fraud. For example, sham companies are being set up around the country, claiming to have hired workers, then claiming layoffs — just to collect the unemployment checks. Federal officials estimate about 30 percent of unemployment fraud comes from people who were out of work, but continue to receive unemployment benefits after they’ve landed another job.

State audit finds cost of confidential settlements more than reported

A state audit released Thursday shows taxpayers paid nearly $700,000 to cover confidential settlements to former state employees over a four-year period. The dollar figure is roughly $200,000 more than what had been previously reported.

On March 24, Governor Branstad signed an executive order ending the use of confidentiality provisions. At the time, his administration identified 24 former state employees who given settlements totaling  $468,000.

State Auditor Mary Mosiman has identified 18 more. “We identified at total of 37 who had confidentiality clauses and of ones that were settled through court proceedings, we had five, so a total of 42 confidentiality clauses,” Mosiman said.

The audit did not reveal any more evidence of so-called “hush money” payments to former state workers in exchange for their silence. Governor Branstad fired Mike Carroll, who was head of the Iowa Department of Administrative Services, after a Des Moines Register investigation found his office had paid nearly $300,000 in settlements to a half dozen former workers to keep the details of their firings secret.

Mosiman noted in her report that the 42 confidentiality clauses did not violate public records laws. “None of them violated (section 22.13 of) the Iowa Code, which states these clauses are a matter of public record,” Mosiman said. “It seems the (confidentiality clauses) were intended to impact the behavior of the parties to the agreements, but it did not impact the ability of the public to have access to the document as a public record.”


Jack Hatch, the Democrat who is challenging Governor Branstad’s re-election bid, released the following statement:

“It’s exhausting trying to get answers out of this Governor. Iowa needs a fresh start with a government built on openness, honesty and transparency after these years of Terry Branstad dodging the truth and hiding the facts. Terry Branstad promised Iowans he would get the facts out, level with Iowans and open up the books.  None of it was true. He still hasn’t kept his promise. Branstad hasn’t been open, he isn’t being honest, and his administration shows no signs of being accountable. Branstad made a change in the leadership at the Department of  Administrative Services and pronounced everything okay. That clearly was not the case as the new Director did not reveal the information about the additional secret settlements. This Governor continues to mismanage state government and act as if he’s above the law, and re-electing him will only reward that behavior. Iowa can do better, and when I’m Governor, we will.”


Statement from Senator Janet Petersen, Democrat, Oversight Committee chair:       

“When the story broke earlier this year about former state employees being offered and paid hush money to keep quiet, few of us could imagine what else was going wrong in the Branstad Administration. Today’s report by the State Auditor is another wake-up call for Iowans concerned about secret settlements, hush money and misuse of our tax dollars.  We need a long-term solution — not Band-Aids — to fix this serious problem in the management of state government. While Governor Branstad and many legislative Republicans show no concern about all these problems, the Senate Oversight Committee is continuing to ask questions that Iowa taxpayers deserve to have answered. We remain disappointed that Governor Branstad and legislative Republicans turned their backs during the 2014 session on Senate File 2358. The report today by the State Auditor demonstrates the need for the Legislature and Governor to get behind legislation, which was designed to keep state government open, honest and accountable to taxpayers by:

- Banning secret settlements and hush money payments throughout state government.

- Expanding protections for those who blow the whistle on wrongful activity.

-  Requiring the State Auditor to investigate previous secret settlements.

- Preventing no-bid contracts on state jobs.

-Outlawing cronyism in hiring state employees.

-Mandating disclosure of state worker bonuses.

-Reforming use of the state “do-not-hire” database.

IWD director defends her managment of state agency, says she’s ‘direct’

Iowa Workforce Development director Teresa Wahlert appeared before the Iowa Senate Oversight Committee Wednesday and defended the way she runs the agency.

“My management style is direct,” Wahlert said.

On Tuesday, administrative law judges in the agency told legislators Wahlert has pressured them to rule in favor of businesses rather than employees in contested unemployment cases. Wahlert told lawmakers the statistics show employees win those cases more often and the rate of employee wins has been increasing.

“To think that I have been influencing people to rule on behalf of employers — the data just does not support that,” Wahlert said.

On Tuesday, several workers in the agency appeared before the senate committee to say Wahlert’s primary management tool was fear. Wahlert on Wednesday told lawmakers she had to make changes to save money and make the agency run more efficiently — and she’s aware her management style isn’t popular with everyone in the department.

“I know that some personalities adapt to change more quickly and readily than others,” she said.

Wahlert and Democrats on the committee quarreled about the agency’s March overpayment of unemployment benefits to 85 people who didn’t seek another round of benefits. Democrats blasted Wahlert for telling employees in the agency not to talk about the computer glitch, and questioned whether the overpayment might be larger. Wahlert responded: “We knew exactly how many people reported it in to us. I have no reason to think it’s more.”

Wahlert said it’s just a cost of doing business and the state will not seek repayment of the 27-thousand dollars worth of unemployment benefits sent to those 85 Iowans since the mistake was the state’s and the employees aren’t at fault.

Judges tell legislators they were pressured to make pro-business rulings

Current and former judges who rule on contested claims over unemployment benefits for laid-off workers testified Tuesday before the Iowa Senate Oversight Committee. Joe Walsh, the former chief administrative law judge in the Iowa Workforce Development agency, was laid off by the department’s director, who then put herself in charge.

“Which means that you have a partisan political employee in direct management of administrative law judges,” Walsh said.

Walsh said Teresa Wahlert — Governor Branstad’s Iowa Workforce Development director –pressured him to give tips to businesses on how to win cases against laid-off employees. Other judges like Marlon Moorman testified that Wahlert questioned their pro-employee rulings.

“And the pressure was direct. It wasn’t subtle,” Mormon told lawmakers. “It was: ‘You need to change.’”

But one judge who has now been elevated to a management role said she had never been pressured to decide a case one way or another. Wahlert is scheduled to appear before the committee today.

U.S. Chamber of Commerce ‘all in’ for GOP’s Joni Ernst for U.S. Senate (AUDIO)

Rob Engstrom of the U.S. Chamber of Commerce with Joni Ernst.

Rob Engstrom of the U.S. Chamber of Commerce with Joni Ernst.

The U.S. Chamber of Commerce has endorsed Republican Joni Ernst in Iowa’s U.S. Senate race. Rob Engstrom, the group’s national political director, said today they’re “all in” for Ernst because her opponent is “actively hostile” toward businesses.

“In any senate race across the country, the choice couldn’t be more clear where you have somebody in Congressman Bruce Braley who is a personal injury lawyer. He’s made a career suing businesses,” Engstrom said. “…He is the face of the problem in Washington, D.C.”

Engstrom spoke during an event at an Indianola hardware store, praising Ernst as an advocate of the free enterprise system, but directing most of his remarks at Braley.

“Whether it’s chasing chickens around his neighbor’s yard and threatening lawsuits, whether it’s pretending to be a farmer, there’s not enough duct tape in aisle three to fix Mr. Braley’s failed record in Washington, D.C.,” Engstrom said, as Ernst laughed.

The U.S. Chambers of Commerce spent over $35 million supporting Republican candidates in 2012 and the group this year has already spent more than half a million on behalf of just one incumbent Republican senator from Mississippi. Ernst will now benefit from U.S. Chambers of Commerce campaign ads run on her behalf in Iowa.

“I do truly hope to have the opportunity to fight the good fight for good, solid, pro-growth economic policies for Iowans — both employees and employers — in the United States Senate,” Ernst said at the event inside McCoy Hardware.

AUDIO of U.S. Chamber of Commerce event in Indianola, 16:00

Braley, her opponent, told reporters an hour later that Ernst will find the endorsement from the U.S. Chambers of Commerce to be a “liability.”

“They are strongly opposed to increasing the minimum wage, which would give 300,000 a pay raise — 20 percent of the workforce,” Braley said after a campaign stop in Des Moines. “And the fact that they’re another organization that is financed by the Koch brothers should be no surprise to Iowans as to why they chose to endorse my opponent.”

The Koch brothers are billionaires who are expected to spend $300 million this election cycle to back conservative candidates and causes.

Unemployment tax for Iowa businesses reduced (AUDIO)

Teresa Wahlert of Iowa Workforce Development talks during Governor Branstad and Lt. Governor Reynold's weekly news conference.

Teresa Wahlert of Iowa Workforce Development talks during Governor Branstad and Lt. Governor Reynold’s weekly news conference.

For the fourth consecutive year state officials are reducing the tax rates businesses pay into the government-managed fund used to pay unemployment benefits to Iowans. Teresa Wahlert is director of Iowa Workforce Development, the state agency that handled unemployment checks.

“In January of 2011, the Unemployment Trust Fund level was at $446 million,” she says. “Today, and the reason we’ve been able to have this great announcement today, is today that Unemployment Tax Fund is now $1.1 billion.”

The unemployment tax rates now set for Iowa businesses are the lowest they’ve been in 12 years.

“This is clearly providing business an incentive to keep their business here, to grow their business here,” Wahlert says, “and to relocate here, when they’re asked.”

The tax rates vary and are based on the lay-off track record of a business.

The Senate Oversight Committee will convene to quiz Wahlert over her management of the agency. Due to a computer malfunction in March, Iowa Workforce Development sent unemployment checks to 85 people who didn’t seek another round of benefits. Wahlert says it’s just a cost of doing business.

IWD director Teresa Wahlert.

IWD director Teresa Wahlert.

“Nobody is going to be penalized because it would cost us way more to collect the small number — it was only about $27,000 — and on a scale of a fund that has $1.1 billion in it, it’s really quit a small number,” Wahlert says. “And so we don’t want to penalize Iowans and we don’t want to spend our time going after that amount of money when we know what happened.”

Democratic senators have quesitons about an internal office memo which directed the department’s staff to stay quiet about the glitch.

“Staffers were told to do their job,” Wahlert says, “and so a lot of times people especially with an agency that is as large as ours spend time talking and visiting about things and we want our people to work on their important assignments.”

Governor Terry Branstad says his Workforce Development director has his “full support” as she prepared to appear before the legislative committee.

“I think Teresa with her background in business and with the Des Moines Partnership has a perfect background for this job and I think she’s done a really good job,” Branstad says. “…I feel confident that she’ll be able to answer all the questions and accusations that are thrown at her.”

This past spring Democrats in the Senate accused Wahlert of trying to tilt unemployment cases in favor of businesses by firing the chief judge in charge of the administrative law judges who handle the cases and putting herself in charge.

Branstad and Wahlert made their comments this morning during the governor’s weekly statehouse news conference.

AUDIO of news conference