Four former state employees told senators Wednesday they were part of a sweeping layoff in September 2011 that did not follow procedures and likely resulted in extra costs as new hires and private contractors tried to replace their knowledge of big-ticket state projects they worked on.
The ex-employees — Ken Thornton, Carol Frank, Tony Schmitz and Dean Ibsen — were called to testify at a Senate hearing looking into secret settlement agreements that one Republican called “a witch hunt” but others said uncovered troubling practices by Branstad administrators that may warrant an independent investigator.
“I think what’s happened here is illegal, it’s wrong, and it needs to be fully investigated by this committee and perhaps an outside investigator,” said Sen. Matt McCoy, D-Des Moines, one of five members of the Senate’s Government Oversight Committee who referred to the mass layoff as “the September massacre” that was an embarrassment to the agency, the state and the administration.
Following the hearing, officials with the state Department of Administrative Services (DAS) issued a statement saying their reorganization helped streamline operations and saved the state money.
Three of the former DAS workers said they were among about a dozen employees that were laid off at 8 a.m. and by 11 a.m. three replacements had been hired with lesser credentials but higher pay they think was tied to “good old boys’ club” connections.
“The first day these people walked through the door they were making more than any of us,” pulling down the maximum salaries for their pay levels, Schmidt told a hearing that attracted at least a dozen senators and several House members.
None of the ex-workers believed they were ushered out of state employment due to political reasons. However, Ibsen said the project managers who were laid off or reassigned had been heavily involved in state projects that involved project labor agreements set up previously that were unpopular with the Branstad administration. The changes were framed as a reorganization, the former workers testified, but they said new positions and some privatized functions were not advertised and did not follow normal protocol.
Frank said she was “shocked” by what McCoy called “a wholesale layoff” that bypassed normal seniority and other workplace procedures and protocol that was followed with efforts to keep the action private by offering extra money to keep the settlements confidential that Frank and Schmitz took.
Committee member Sen. Sandy Greiner, R-Washington, questioned why the DAS reorganization would have cost money as Frank contended if the agency replaced 12 people with three. She also questioned by Frank and Schmitz were testifying if they had signed confidential settlement agreements.
"Do you have any intention of returning the money?" Greiner asked.
"If they want it back, I'll give it to them in pennies. They can come pick it up at Lake Panorama, where I live," said Frank, an engineer who told the panel she has not landed a job since her 2011 layoff and reluctantly agreed to the secrecy provision.
Schmitz said he was hesitant about providing testimony Wednesday but was advised by his attorney that state officials had breached the confidentiality agreements by publicly detailing 24 secret settlements made with employees in 12 separate state agencies since the current Branstad administration began in January 2011.
McCoy responded to Greiner’s questions by telling the employees he didn’t think anyone violated their confidentiality pledges by cooperating with lawmakers to “try to blow the stink off this bad arrangement.”
After Wednesday’s meeting, Greiner told reporters the hearing took on the air of a “witch hunt.”
She said she wanted to get to the bottom of the details surrounding confidential employee settlements but not via a “dog-and-pony show.” She said the committee needs access to personnel records, otherwise “it’s a he said, she said” situation.
Sen. Julian Garrett, R-Indianola, said he looked forward to hearing from DAS Director Mike Carroll and other top agency administrators at Thursday’s committee hearing.
“I believe they’ve got a lot of explaining to do,” said committee chairwoman Sen. Janet Petersen, D-Des Moines. After Wednesday’s testimony, she said “I think every taxpayer in Iowa should be disgusted” by what went on in the state Department of Administrative Services.
After the hearing, DAS officials issued a statement saying their reorganization have netted savings of $730,000 per year, growing to $915,207 last fiscal year. Total savings on the entire state construction volume were projected to top $12 million, said DAS spokesman Caleb Hunter in an email.
“Director Carroll spent 35 successful years in the commercial construction industry. He knows how to deliver and manage construction projects in order to provide the best possible project at the lowest cost to the taxpayers,” Hunter said in a statement.
Prior to the reorganization of DAS’ design and construction area, the department had limited technology and a paperwork-heavy process that required multiple copies of each contract and multiple signatures of state employees on each contract, change order or scheduling adjustment – a process that bogged down project management and created excessive use of the change order process, which increases costs and delays project completion, he added.
Projects were rarely completed on time and on budget and frequently led to formal disputes, such as delay claims, on construction projects managed by the department, Hunter said. With the reorganization, three individuals were hired to different positions within DAS who possessed different skill sets to do different work than the seven former employees, he said.
The department retained six construction management firms to be agents for the state. The firms, Hunter said, are held to industry standards through new DAS contracts and act on the state’s behalf to ensure a high-quality project is completed on time and on budget, he added.Comments: (515) 243-7220; firstname.lastname@example.org