Civic Skinny

Gov sidesteps a scandal; Rants rants; the rest of us drink

It’s an ill wind that blows no good, Skinny’s sainted mother used to say. Or maybe it was Skinny’s sotted grandmother. And while the new revenue forecast for the state is the ill-est of winds, and a political as well as an economic nightmare for the Governor, it did do him a little good: it quickly overshadowed a messy and finger-pointing report from the Feds, whose finger is pointing at him for messy use of federal funds in his days as Secretary of State. What could have been an embarrassing, weeks-long, page-one story ended up as a one-day, bottom-of-the-page story on a day when Terry Branstad took the headline by filing “exploratory” papers to run against the Governor. Then came the bleak outlook from the Revenue Estimating Conference, and then the 10 percent-across-the-board spending cut. You’d have to be a nursing-home administrator who thinks sexual abuse of old folks is harmless to break into that news lineup.

The fed’s charges against Chet Culver’s office are eerily similar to the state’s allegations against the movie-tax-credit guys in the Department of Economic Development: careless administration, sloppy bookkeeping, misuse of funds, no follow-through. In the latest scandal, you can add no-bid contracts that helped a Culver supporter. In the movie scandal, the Governor — this being an election cycle — quickly fired DED boss Mike Tramantino and two underlings. There’s no one to fire in the latest scandal — unless he fires himself or his longtime colleague Charlie Krogmeier.

The 57-page report implies that Culver — or his staff — was careless or inept in the handling of funds the state got under something called the Help America Vote Act — money Culver was conveniently spreading around the state while he also was running for governor. The law’s aim was to help the states become better equipped and better able to administer federal elections, among other things. The accounting firm Clifton Gunderson — the same one that looked into the movie-tax scandal — makes 10 charges involving $2,555,274. It “concluded that [the Secretary of State’s office under Culver] did not account for and expend HAVA funds in accordance with the HAVA requirements or comply with the financial management requirements” established by the Feds.

The report says that Culver’s office charged $885,573 in salaries and benefits to the HAVA program without indicating that any of the paid workers’ work “was for HAVA-related activities.” (Culver responded by having Krogmeier file after-the-fact affidavits attesting to the legitimacy of the work.) It also says Culver used sole-source contracts without, at the very least, maintaining “documentation the contractor was the only qualified contractor.” What hasn’t been in the papers is that the outfit getting up to $22,145 a month — “without identifying an hourly rate or an estimate of the hours to be worked or the number of employees assigned to the contract in order to earn the monthly fee” — was Tom Slater’s State Public Policy Group. Slater is an affable former Democratic legislator who remains well-connected to the party in general and to Culver in particular — and, in fact, has a similar no-bid contract to facilitate events for the overhead-heavy Rebuild Iowa Office, which is supposed to be coordinating post-flood recovery. The federal report says SPPG got $763,702 for fees and expenses “without justification.” There’s other stuff about sloppy payments made to counties — payments made too early, interest income not returned, funds put in the wrong accounts, and the like. But you get the idea. (Current secretary Michael Mauro has quietly tightened the policies and procedures since Culver left.)

All this is grist for the Republican mill — which is overflowing with grist at the moment. The audit “shows us that the incompetence of the Iowa Film Office is not an isolated incident,” Republican Christopher Rants declared. “Governor Culver has no one else to blame this time....This time it should be Culver’s job on the line.” Rants is always first out of the box with a quote. After the revenue-estimating conference reported, but before the Governor announced his 10 percent cut, the GOP gubernatorial hopeful said, “I would expect to see the Governor issue a 5 percent to 6 percent across the board cut in the next few weeks. But across the board cuts are a dumb and lazy way to fix the budget. A smarter move would have been to reconvene the legislature to make selected cuts and whole eliminations.” And that prompted an alert Democrat to e-mail Skinny: “When Rants was on Iowa Press in June he admitted to being too aggressive in the past, but he just can’t help himself. He’s managed to find a way to call the Governor dumb and lazy without calling him dumb and lazy.”

In fact, two folks told Skinny over the weekend that the Governor was getting conflicting advice from his staff about the size of the across-the-board cut and whether to couple it with a call for a special session — which would have opened up debate on gay marriage and all those other issues the Republicans want to talk about and use to corner Democrats up for election. The debate went down to the final minutes before the announcement, Skinny is told, with new staff chief John Frew finally carrying the day. Frew is turning out to be decisive — a quality previously lacking in the governor’s office. According to The Des Moines Register, Frew fired the head of the state board of nursing home administrators during a three-minute meeting. Still, noted one wry agency bigshot, “three minutes is more than most of us have gotten with the governor’s staff since he came into office.” That was nearly three years ago.

The fact that Culver didn’t know what he was going to say until moments before he said it explains why some key players — agencies, labor, big donors — had no advance notice. And some of them are pissed about that. None of that is going to help him raise money for his re-election, and the race got a lot more expensive last week when Branstad said he was “exploring” running for the office he held for 16 years. With Bruce Rastetter, Gary Kirke and others of the super-rich in his corner, and already making calls, he’ll have little trouble raising the $8 million to $10 million it will take to run in the primary and the general election — though a primary victory isn’t a sure thing. The Republicans have a dozen or so Bill Knapps; the Democrats just have Knapp along with a sullen and wounded labor leadership. Another thing Branstad is “exploring” is whom to put on the ticket as a running-mate. He’s already felt out soon-to-retire Des Moines businessman Doug Reichardt, the chairman of Holmes Murphy (and son of the late Bill Reichardt, a Democrat), and others are on the list, Skinny is told.

Meantime, things are likely to get worse — economically — for the Governor and the state before they get better. While dramatically cutting the revenue estimate for the fiscal year that ends June 30 — and causing the 10 percent across-the-board cut — the Revenue Estimating Conference punted on fiscal 2011.It said revenue would drop only 0.4 percent in fiscal 2011 following an estimated 8.4 percent drop this year. That seems optimistic to some economists, who see education, health-care, prisons and everything else having to take another hit some time in the next year.

Iowans seem to think there’s only one thing to do in the face of all this: pop open a beer. While corporate and personal income, cigarette, liquor and most other tax takes are dropping, the state’s revenue from beer sales has risen steadily the past couple of years, and the estimators say it will rise again this year and next. Which brings us back to grandma. CV

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