September 1, 2014

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.

Iowa GOP chair blasts Hatch over killed bill

The chairman of the Iowa Republican Party is accusing Jack Hatch, the Democratic candidate for governor, of killing a bill in the state senate that would have been a hit to Hatch’s bottom line as a real estate developer. Iowa GOP chairman Jeff Kaufmann says Hatch has been trying to “hide the truth” about his business from Iowans.

“This is just one more example of where his job as state senator has lined his pockets,” Kaufmann says.

In 2013 a Republican in the state senate introduced a bill that would have reduced the fee property developers could claim on tax credits that are issued by the Iowa Finance Authority for low income housing developments. Senator Jake Chapman, a Republican from Adel, says Hatch used his position as chairman of a three-member SUB-committee to kill the bill.

“Hatch, a man who has made millions of dollars from developer fees, killed the bill,” Chapman says. “He stuck it in his desk drawer, never held a (subcommittee) meeting or let it come to a vote because it would have personally cost him millions of dollars if it had passed.”

Chapman says Hatch should have cited a conflict of interest and removed himself from any decision-making on the legislation.

Hatch’s campaign manager accuses Republicans of making a “false attack” against Hatch to divert attention from the two-day hearing a Senate Committee is holding this week to review Branstad Administration management practices. Hatch campaign manager Grant Woodard says it shows Branstad must be “extremely concerned” that Iowans are deciding Hatch is “more competent, honest and informed” than Branstad.

Branstad’s campaign manager sent an email blast to the Branstad supporters, citing the Iowa Republican Party’s allegations and referring to Hatch as a “liberal Des Moines politician” who “owes every Iowan an apology.”

Advocates fret over new Iowa law decriminalizing cannabis oil possession

Advocates of a new state law that allows Iowans with severe epilepsy to use cannabis oil as a treatment say they’re not sure the cards issued by the State of Iowa will let them buy the product in other states or will even protect them from prosecution.

Raymond Lakers is an Iowan who has multiple sclerosis. He moved to Colorado Springs so he could legally buy marijuana there, but he doubts the Iowa children who suffer from a rare form of epilepsy will be able to get cannabis oil there.

“Every Iowan right now that wants to obtain any form of medical marijuana in the state Iowa, they are criminals — even these children — and it breaks my heart,” he said.

Iowa Department of Public Health officials held a public hearing this morning (Tuesday) on the rules they’ve drafted to administer the new law. Deborah Thompson, the department’s policy advisor, says her agency will review applications and the DOT will issue the cards that show the person has permission to possess cannabis oil. The goal is to have the system up and running by the end of the year.

“With any new program that becomes implemented, it is a lengthy process with a lot of moving parts,” she said. “But we do respect the fact that people wants this very quickly and we’re doing the best we can.”

Some people who participated in the hearing spoke in favor of expanding the law so marijuana could be used as treatment for other diseases. Linda Gale of Sioux City joined the hearing over a video conferencing system.

“I’m glad they made the first step, but there’s many other people that suffer that should not have to suffer like they do,” she said.

Gale has Crone’s Disease and she would like to use marijuana rather than prescription narcotics to control her nausea and other symptoms.

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

Garner State Representative arrested on sexual abuse charge

The Iowa DCI has arrested a state representative from Hancock County in northern Iowa on a sexual abuse charge. A news release says 78-year-old Henry Rayhons of Garner is charged with third-degree sexual abuse after he allegedly went to the Concorde Care Center in Garner and performed a sex act on a person who did not have the mental ability to give consent to any sexual activity.

A roommate of the individual reported the May 23rd incident to police. The victim is not being identified. A June 18th report in the Mason City Globe Gazette says Rayhons’ wife is a resident of the Concorde Care Center and his daughter was ordered to be her temporary guardian after issues arose between Rayhons and the center over visits with his wife.

Rayhons is a Republican from House District 8. He recently announced he would not seek re-election.


Lawmaker appeals Iowa Supreme Court ruling in defamation case

A Woodbury County state Senator is appealing a ruling from the Iowa Supreme Court that threw out a judgment in his favor in a defamation case. Republican Rick Bertrand sued after the Democrat party ran an ad that said the pharmaceutical company Bertrand worked for sold sleeping pills to children.

The Iowa Supreme Court concluded the evidence failed to establish actual malice toward Bertrand and threw out a $231,000 award. Jeana Goosmann is representing Bertrand. “The Iowa Supreme Court applied an unreasonably high standard for defamation and liable in a political action case. And it’s really important to him that truth of information be front and center in balance with the First Amendment and the U.S. Constitution,” Goosmann says.

Bertrand had confronted his opponent, Democrat Rick Mullin at a forum and asked him to stop running the ad. The Iowa Supreme Court ruling says Bertrand also used the forum and the subsequent filing the defamation lawsuit to score political points and seize the public moment as a means to achieve a political advantage.

Goosmann says they disagree. “Rick Bertrand in this case is really on the side of right. The jury did find that there was defamation, there were lies being purposely told about him in the campaign, and we think it should be up to a jury to make that decision,” Goosmann says. “We thought it was interesting that the Iowa Supreme Court did not the venue, that he did decide to file a lawsuit. But in the United States, that is your venue. If you have a wrong, you are supposed to take it to the judicial system. For them to insinuate that using the judicial system is a political stunt when he won the election and went all the way — I believe over a year-and-a-half later — to a jury that found he was in the right, just seems in the opposite to us. People should be encouraged to go to our courts when they’ve been wronged.”

The justices have the option of hearing the case or letting the Iowa ruling stand. “We think we have a fairly good chance that the United States Supreme Court will look at this issue,” Goosmann says. “The court has the chance in this case to set the standard as far as what is the standard for libel and defamation in politics and make it a very clear standard — especially when we are dealing with defamation by implication.” Goosmann says some of the justices have given an indication recently that this is a subject they are interested in taking up.