Branstad: No 'hush money' for state employees' silence

But Democratic challenger Hatch calls for special investigation

Rod Boshart
Published: April 7 2014 | 1:45 pm - Updated: 8 April 2014 | 8:06 am in

Gov. Terry Branstad said Monday he is standing by a top administrator who told lawmakers no extra “hush money” was paid to laid-off state employees to buy their silence concerning settlement agreements as part of a state agency’s reorganization.

But Branstad’s expected Democratic rival in the fall campaign, Des Moines Sen. Jack Hatch, called for an independent audit to clear the air about accusations of cronyism and alleged secret payments that he says could have illegally violated legislative intent in the budgeting process.

Mike Carroll, head of the Iowa Department of Administrative Services (DAS), told the Legislature’s Government Oversight Committee last week that no money was offered to former workers for silence about their dismissals, and Branstad told reporters Monday that he believes his DAS director in the face of two laid-off state employees and attorneys who say otherwise.

“I specifically asked director Carroll about this matter and he assured me that was not true. He also went before the (Oversight) committee and said the same thing and I believe him,” Branstad told reporters.

“I do understand that you do have a disgruntled employee and his lawyer who have made contradictory statements to that,” he added. “Attorneys represent their clients and oftentimes will make all kinds of accusations and that’s why you have courts of law to determine what the facts are.”

Branstad said Iowans should not “assume as fact” the allegations of two former state workers who testified to being offered extra cash to keep their settlements secret.

The five-term Republican governor said he did not know that 24 confidential settlements – 10 with lump-sum payments -- had been signed with dismissed state workers since January 2011 until the practice came to light in a newspaper story. In response, Branstad issued an executive order last month to bar confidential employee settlements going forward.

Hatch called his own Statehouse news conference Monday to demand an independent audit be conducted into financial and performance issues related to the confidential settlements to determine if any laws were broken or whether there was any attempt by the Branstad administration to cover up evidence related to allegations of cronyism or secret settlement payments.

“This is a cancer on the integrity of government,” Hatch told reporters.

He said Branstad has opened more questions than he has answered as the situation has unfolded and it’s time for the Government Oversight Committee, the state auditor or the governor himself to bring in an independent certified public accountant or auditor to unravel what happened within the agencies that entered into settlement agreements.

“I believe somebody’s hiding something. I think somebody’s not telling the truth and I think there is a potential for blaming other people,” Hatch said. “We have warring partners, a he-said, she-said kind of a situation that may only be resolved in the courts. Somebody has the facts and we should get them.”

Hatch said there is a difference between the confidential settlements that occurred during the past Vilsack and Culver administrations versus the claims of secret “hush money” included by current state agencies without Branstad’s knowledge. He noted that past governors fired state directors who were accused of improprieties and he suggested similar steps might be appropriate for “a few people who ignited and initiated this whole process.”

Branstad told reporters Monday that he would discipline any of his appointees if he became convinced that they lied about secret pay for silence provisions, “but I’ve been told that’s not the case.”

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