Iowa senator says state settlement payments reveal “systematic problem”

Gov. signed order to increase accountability, openness and transparency of employee settlements

Rod Boshart
Published: March 31 2014 | 6:00 pm - Updated: 1 April 2014 | 10:22 am in

DES MOINES – A Senate leader of the Legislature’s Oversight Committee said Monday that initial information she has received about department heads that made secret pay settlements to former state employees indicates a “systematic problem” in hiding the payments.

Sen. Janet Petersen, D-Des Moines, said requested documents she received Monday show various funding streams that were tapped by eight state agencies to pay settlements as part of confidential agreements with eight former employees. Responses included operations, discretionary funds and a utility fund in the state Department of Administrative Services as the sources of money for the payouts.

“I think it shows we’ve got a systemic problem on our hands and dollars were hidden,” said Petersen, who released the documents she received to Statehouse reporters Monday afternoon. “I think the story keeps growing.”

In the case of the DAS utility fund, Petersen said the head of the budget subcommittee that oversees the state’s administration and regulation functions had repeatedly tried “to cut back a carry-over utility fund from DAS and got word back from the director that those funds can’t be cut or we’d need a supplemental and it would be unfortunate if you cut.”

“Well, we found that for four years, they’ve been taking from that fund to pay settlements and never word one to people on that budget sub,” she said.

One week ago, Branstad announced his administration’s internal review found that 12 separate state agencies had entered into 24 secret settlement agreements with employees that carried a cost of at least $427,000 – a practice that he called unacceptable and declared would not happen again in his administration.

The governor signed an executive order that he said would increase accountability, openness and transparency of employee settlements.

On Monday, Branstad told reporters he could not say what government functions may have been curtailed or what functions may have may have been affected within the state agencies that used part of their budget allotments to secretly pay employee settlements, although he noted that savings from some agency reorganizations were used to cover the settlement costs.

Petersen said she is awaiting responses from more requests for information she made to Branstad administration officials so she is uncertain what the appropriate response by the Legislature may be. “We’re going to have to figure that out,” she said.

The Oversight Committee has scheduled hearings on Wednesday and Thursday to gather more information on the confidential employee settlements.

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