by Brenda Fullick

Ever since the U.S. Supreme Court's controversial Kelo ruling last June, politicians throughout the country have scrambled to prove to their constituents just how serious they are about protecting private property rights.

The heart of the controversy isn't so much about eminent domain in the traditional sense - the taking of property so government can build public improvements like schools and highways - but about whether government should be allowed to condemn land on behalf of private developers.

In 38 states, including Iowa, legislators this year have debated eminent domain in the wake of the Kelo decision. And in 18 of those states, legislators adopted new restrictions to limit government's ability to take land from one person so another person can profit from it.
"For a legislature to pass a bill the first time out is pretty astounding," says Sterling Burnett, a senior fellow at the National Center for Policy Analysis. But throughout the country, Democrats and Republicans alike have been responding to widespread pressure from their constituents. "That just tells you how motivated people are."

In addition, certain states - including Montana, Colorado and Arizona - are putting eminent domain questions on the ballot to let the voters decide for themselves.
So what's going on in Iowa?

How did an eminent domain bill get 90 percent support in both the House and the Senate, only to face the governor's axe?

And if Iowa's Democrats are really so convinced that property rights are at risk under existing laws, why have they been so slow to override Tom Vilsack's veto?

"This does not make sense politically. I can't figure this out," says Rep. Jeff Kaufmann, a Republican who managed Iowa's eminent domain bill in the House.

Kaufmann says he doesn't understand certain Democrats' reluctance to return for a special session. "There's a hesitancy there. I can't get to that hesitancy," he says. "It's almost like there's something missing, but I don't know what that is right now."

Citizens, too, are speculating about whether more is going on than they can see on the surface.

"What disturbs me is everything apparently was fine with the governor's office when they debated," says farmer Doug Robins, who watched the Legislature's eminent domain debate closely because his family could lose land to the proposed Clarke County lake project. "Then all of the sudden the floor falls out beneath it and Vilsack vetoes it. That's something that really kind of eats at me a little bit. It was such a popular bill and such a bipartisan bill. It just seems so strange that he vetoed that thing."

After all, the original House bill had 51 co-sponsors. "There were an awful lot of Democrats on that sponsor list," Robins says.

Were there behind-the-scenes negotiations going on?

"I smell Doug Gross in all of this," Kaufmann says. "I've had some pretty solid Republicans tell me this, too."

But why would Democrat Vilsack come down on the same side as Gross, a former Republican contender for the governor's mansion, a man who has been a major fundraiser for George W. Bush?

And how could liberal lefty Vilsack wind up on the same side as Congressman Steve King, the Ÿber-conservative who pushed to make English Iowa's official language back when he was in the Statehouse?

The whole issue leaves some people with more questions than answers.

What does the Iowa bill say?

The three top issues in the Iowa Legislature this year were Touchplay, teachers pay and eminent domain, says Republican Sen. Bob Brunkhorst. While Touchplay was a black-and-white issue and teacher pay was simply a question of how much, the eminent domain question was the most worked-on bill of the year, he says. "We spent at least 30 meetings on this in the Senate."

By the time Iowa's eminent domain bill passed the House by 89-5 and the Senate by 43-6, it included several compromises designed to elicit broad-based support. Multiple deals were struck to bring additional legislators on board.

The original House bill had more stringent eminent domain restrictions, then more than 70 changes were made at the Senate's behest during the compromise process, says Rep. Geri Huser, a Democrat from Altoona. "In my opinion, we did compromise," she says. "We spent hours working on that piece of legislation with city officials, chamber of commerce representatives."

The final bill that passed out of both houses would allow land to be taken by eminent domain only for public use or public improvement. Utilities, like power companies, would continue to have the same rights to easements across private properties that they have now.

The bill would continue to allow the use of eminent domain for public uses, like roads and libraries. The bill specifically defines "public use," saying that raising the tax base is not enough of an argument to take a person's land. (The motivation: In the controversial Kelo decision, the U.S. Supreme Court ruled that it was legal for the local government to take people's homes specifically to boost the tax base.)

Iowa's bill would allow local governments to condemn people's property for urban revitalization only when at least 75 percent of the property meets the definition of a slum or is in a blighted condition. The bill also says that when private property is condemned so that it can be offered to a private business, that business must bring economic benefits to the city.

Because there are several lake-construction projects pending throughout the state, legislators added a provision saying that private property could be taken by eminent domain for a lake only if that lake is needed for a public water supply. The bill also stipulates that only enough land may be taken for a lake to meet the area's water-supply needs. And it says that before a governmental body can condemn private land to build a lake, it must prove there are no other water options.

Another provision was created in response to a proposed airport in Mahaska County. The city of Pella is interested in condemning agricultural land in the neighboring county for an airport, and property owners complain that their own elected officials have no say in the deal. The new bill would require a public hearing and a vote by the county supervisors before unincorporated land could be condemned in their county for an airport.

Why did Vilsack veto that bill?

When Vilsack vetoed House File 2351 on June 2, he released a public statement that reads, in part: "While Iowa property owners are protected from eminent domain abuse by the United States Constitution, the Iowa Constitution and several statutes in the Iowa Code, I am confident that we can pass legislation that will further protect property owners' rights while continuing our progress in job creation."

Vilsack has voiced specific concerns about the bill's potential effects on economic development. He sent an official letter to Secretary of State Chet Culver saying he was "particularly troubled" about the section of the bill that would allow governments to condemn land for urban renewal only when at least 75 percent of the property meets the definitions of slum or blight. He has argued that provision is too restrictive for urban renewal.

Vilsack's memo to Culver's office says nothing at all about the pending lake projects across the state.

But do Iowa's proposed lake projects play a bigger role than Vilsack is acknowledging?

Madison County property owners Lori Kirk, Roslea Johnson and Gil Dawes say that actually, Vilsack aide Steve Falck told them personally that Vilsack would sign the eminent domain bill if the Legislature dropped the lake restrictions.

The citizens say they were standing behind the Senate chambers one day, waiting to speak with Brunkhorst, who was deep in conversation with two men they didn't recognize. "One of them said, 'He'll sign it if you take the lake language out,'" Johnson recalls. "We about fell over. We thought, 'This is weird, the governor's carrying the water for Gross.'"

The men were arguing, Kirk recalls. "You could tell Sen. Brunkhorst was just getting very exasperated."

Then Brunkhorst introduced the citizens to the two men, one of whom turned out to be Falck, a top Vilsack aide. "We talked to Steve at length," Johnson says. Falck kept saying that the lakes are a way to keep young people in the state, she says. "Then he said the governor had been hearing a lot of concern from his friend Connell."

Former Shenandoah Mayor Gregg Connell is the primary force behind the proposed 6,186-acre lake in Page County. Connell is a Democrat who dropped out of the governor's race last fall.

Falck told the citizens that Vilsack would be happy with the eminent domain legislation if the lake projects were protected, Kirk says. She asked, even if that means taking people's private property? "He said yes. He has denied that ever since."

Falck did not return Cityview's calls, but instead referred questions to Jennifer Mullin, Vilsack's press secretary. She says Vilsack's biggest concern is the slum-and-blight language, but that he's also concerned about restrictions on lakes and airports. "The governor has made his three sticking points pretty clear," she says.

Mullin says Vilsack was willing to take a stand on eminent domain because he was concerned that the bill would have a chilling effect on economic development, even though he knew he was running against the crowd. "It was a pretty unanimous vote in both chambers. He still felt it was too restrictive."

Mullin says that Falck never made any promises about Vilsack signing the bill if the lake restrictions were removed. "The No. 1 issue for the governor was this 75 percent slum-and-blighted provision," she says, followed closely by concerns over airports and lakes.

Vilsack weighed the veto carefully, Mullin says, knowing that it could affect his presidential aspirations. "He understands it's a national issue," she says. "He really struggled with it, up until the day before he vetoed it."

Vilsack keeps saying he's willing to work with the Legislature, but that the Republicans aren't willing to work with him.

Republicans, on the other hand, point out that it's Senate President Jack Kibbie, a Democrat, who's held up the votes needed to go back into special session to work on the bill again.

Besides, the governor has the right to call a special session himself if he wants to. "It doesn't sound like he wants to," Brunkhorst says.

"We sat through countless hours of negotiations" during the regular session, says Republican House Speaker Christopher Rants.

During the process, some people actually wondered if Democratic Sen. Mike Gronstal would kill the bill, Rants says. "He didn't like it to begin with. Mike usually takes the side of the League of Cities. That's OK. ... There are legitimate concerns on both sides," Rants says. Plus, the process gives governors the right to veto, he says.

But here's the thing, Rants argues: Vilsack never hinted during the process that he intended to veto this bill.

"Vilsack is not negotiating," Brunkhorst charges. "I've sent tons of e-mails to his staff, but Vilsack has never called me. I'm one of the floor managers. I don't know who he's negotiating with, but it's obviously not the people who ran the bill."

Brunkhorst suggests that perhaps Vilsack wanted to stall the bill completely this year to buy more time to condemn property for lakes.

"The projects that are in jeopardy over the next year are going to be lake projects," Brunkhorst says. Though construction may be several years out, the Page and Madison county projects already have federal funding lined up. "I think some of them are to the point where they could start having petitions brought up for condemnation."

Like the Madison County property owners, Brunkhorst also says Falck was pushing hard to protect those pending lake projects. "Quite honestly, Steve Falck during session, that was his biggest concern."

During the session, a majority of Democrats and Republicans alike publicly agreed that if people want to build lakes for recreation, they're free to do that, but that government shouldn't condemn people's farms for recreation.

"If this bill doesn't get passed," Brunkhorst says, "they will be able to condemn land for recreational lake projects."

"I think the 75-25 is a red herring," citizen Johnson says.

Who stands to benefit from the lake projects?

Republican Doug Gross, who handled the legal paperwork creating the Madison County Lake Commission, personally owns land around the proposed Madison County lake site near Peru. Although the land is held under the name Hickory Hill Hereford Farms, it's no secret that Gross and his wife own that property.

If a Madison County lake is built where it's shown on a map, Gross will become the owner of valuable lakefront real estate. A lake consortium also hired Gross to represent them at the Capitol this year, so Gross law colleague Nancy Boyd repeatedly promoted legislative proposals that would have protected the lake projects.

But on the other lake projects, specific private beneficiaries are harder to pinpoint. That's partly because ownership can be concealed under the limited liability corporations, or LLCs.

In 2005, the Iowa Legislature passed a new law requiring LLCs to disclose their owners to the Secretary of State's office if they own 20 or more acres of agricultural land. However, only the attorney general or the Legislature can request that information; citizens have access only to the name of the registered agent - who may be nothing more than a lawyer or an accountant handling the paperwork for investors.

Further muddying the waters is the fact that certain people - notably Congressman King - are talking about creating private economic development around the publicly financed lakes.

In a 2004 letter to one of the Clarke County supervisors, King states, "[T]he ability for private development on and near the lake will be critical to the financial success of the project. A portion of lakefront property, possibly as much as one third of the total lake area, should be used for private development of homes and related businesses."

Connell has said that he disagrees with King about private economic development around the proposed lake in Page County. Instead, Connell says he's most concerned about providing a reliable water supply for residents and businesses around Shenandoah for the next 400 years.

Why do rumors about Chet Culver keep popping up?

For a while, Clarke County's lake commission was talking about building a new lake near property owned by Coyote Canyon Land and Cattle Company, an LLC. The registered agent is Norton Gegner, a CPA who lives in Cumming and has an office in Johnston.
But now Clarke County is considering a lake that's closer to land owned by High Prairie Farms, an LLC with registered agent Tony Caligiuri.

Caligiuri operates a hunt club and is involved in a federal lobby for hunting and fishing groups. He's active in the Congressional Sportmen's Caucus, the largest caucus in Congress. Its members include all of Iowa's federal-level politicians: Sens. Chuck Grassley and Tom Harkin, as well as Reps. King, Leonard Boswell, Tom Latham, James Leach and Jim Nussle.

"I have a few friends that are politicians," including Boswell and State Rep. Jeff Lamberti, Caligiuri says. Calgiuri also has been known to host political fundraisers.

However, he says there's nothing to the rumor that Culver is a secret partner in High Prairie Farms.

"Chet Culver's never been to High Prairie Farms," Caligiuri says. "I've never met Chet Culver." He says all his partners in the deal are investors from Chicago.

The rumor about Democrat Culver has been floating around for months now, heating up right along with his bid for the governor's office.

"It's a malicious rumor, and it's intended to foment opposition" not only in the gubernatorial race, but on eminent domain in general, says John Hedgecoth, spokesman for the Secretary of State's office.

The rumor actually started out that Culver owned future lakefront land in Madison County, then it morphed over to Clarke County.

"We're hearing it at the Statehouse as well," Hedgecoth says. "My sense is this is a malicious rumor. I don't understand the genesis of it."

The only property that Culver owns any interest in is his home in West Des Moines, Hedgecoth says.

Where do the federal-level politicians stand in all this?

Democrat Harkin got a special $350,000 Congressional earmark to finance the Page County lake project through an 11th hour rider to the 2006 Ag Appropriations Bill.
Republican Latham arranged a similar earmark for the proposed Madison County lake, also through the Ag Appropriations bill.

That money pushes those two projects to the head of the line at the National Resources Conservation Service, which is juggling work on other lake proposals as the funding becomes available. Both projects would require the use of eminent domain.
Yet Latham actually voted to curtail the use of eminent domain on Nov. 3, 2005, in the Private Property Rights Protection Act.

Voting along with him were Republican Congressmen Nussle, King and Leach. (Boswell, Iowa's only Democrat in the U.S. House, did not vote.)

In fact, King was one of the 97 co-sponsors of that bill, which would prevent government from using eminent domain to take land for economic development during the same fiscal year that it receives money for economic development. The bill has not come up in the U.S. Senate.

So is King for or against condemning private land for lake projects? And would this outspoken lake proponent turn down the chance to work on those lake projects in his dirt-moving business, King Construction, with offices in Odebolt and Wall Lake?

While King is in Congress, his oldest son Dave is running the family business. In April, King Construction took out job specs for work on lagoons in Iowa's Big Creek State Park, but the company never bid on that work.

King Construction was "quite active back when Steve King was in charge of the company," says Don Dietzenbach, purchasing manager for Iowa's Department of Natural Resources. But the last job the company did for the state of Iowa was finished in 2002, he says. "We haven't seen hide nor hair of them in the last couple of years."

King's press secretary would not return repeated calls.

Which developers would be involved in the lakefront developments that everyone keeps talking about?

During Madison County Lake Commission meetings, Bill Knapp's name has frequently popped up as a potential developer of this lakefront real estate. In Clarke County, lake commissioners frequently brought up the names of Knapp and Bill Grace, who owned Osceola's gambling boat but has since died.

Knapp, coincidentally, has been a frequent deep-pocket contributor to Vilsack's presidential war chest. He also serves as co-chair on Chet Culver's gubernatorial campaign.

Gerry Neugent at Knapp Properties says that, theoretically, the company might be interested in the lakefront projects. "For development, we're probably a likely candidate," he says.

However, Neugent says Knapp Properties has not entered into any discussions about any lake projects so far. "People may be tossing our name out, but we are not or have not negotiated with anybody to do development around these lakes."

"It seems like names get dropped even if they don't have anything to do with stuff," says Clarke County Supervisor Myron Manley. "It's just rumors."

Manley gets frustrated when he can't separate the gossip from the hard facts. "You don't know what's going on."

Is all this really about campaign contributions?

Political pundit Burnett suggests that the battle over eminent domain in Iowa may be a case of politicians talking out both sides of their mouths, especially with Democrats who voted to limit the use of eminent domain but have yet to return for a special session. "The Democrats can now go back to their constituents and say, 'We voted to this,' but in their party they can also say, 'We didn't undercut the governor.'"

This is often how the political game is played, Burnett says. "It's not unusual to see these things happen."

Yet there are still plenty of Democrats who voted to return for a special session, Democrats who say the importance of eminent domain trumps partisan politics. "There are too many people that are like me," says Democrat Huser. "I want to do something to protect private property owners in this state."

On Saturday, both parties added eminent domain planks to their party platforms during their state conventions. Republicans voted that eminent domain should be used for public use only, and they agreed to protect personal property rights. Democrats also voted to revisit the issue.

During the Legislature's four-month negotiating process, Republican Kaufmann says he was convinced that a majority of both Democrats and Republicans sincerely believed that protecting private citizens from land grabs by well-connected developers was the right thing to do. "This is a real, pure cause on the part of so many people," he says. "I don't know how to communicate the purity of the motives of some of us."

However, alliances since then have shifted somewhat, and some politicians' moves have been surprising.

And there is obvious pressure. Pella Corp. alone made $80,000 worth of contributions to the Republican Party, Kaufmann says, so some politicians with higher aspirations have had to make difficult choices. After all, Pella Corp. wants that airport in Mahaska County. "We have cut off some opportunities for campaign donations and support," Kaufmann says. However, "There's more than just politics at work for some of us."

Kaufmann suggests that the entire eminent domain battle has been colored by the reality of campaign contributions. In his first run for office, Kaufmann spent about $150,000 and his opponent spent $200,000. And that's just one state-level House race.
Many citizens, too, think it all comes down to campaign donations.

"In my opinion, there's got to be some big money in there somewhere," says Madison County property owner Rick Tuttle, who was one of the citizens who gave up about one day of work every week to watch the political process in action.

After the bill was passed so overwhelmingly in both houses, "We thought we had a leg to stand on, and now the whole rug's been pulled out from under us," says Tuttle, who found the democratic process ultimately demoralizing. "When you really thought that it worked, and it's back to 'The rich boys get their way again' - I've had better days."

"I'm very concerned that the disagreement will result in no special session," says Sen. Keith Kreiman, a Democrat. "If there is no bill, the people who benefit are the developers, the big companies who ultimately get the property that is taken by the cities and others."

Kreiman and Brunkhorst led the Senate discussions together, with participation from representatives of the governor. "They spoke up about concerns, but that was the extent of it," Kreiman says. He says he had no clue that Vilsack would end up vetoing the bill.

Throughout the session, all the legislators kept saying, "The governor will never veto this bill," Kirk says. Everyone agreed that eminent domain was too high-profile, she says; they kept saying he wouldn't do it.

And then he did.

"I just think there was a lot of backdoor politics," Kirk says, "and everything's going to be decided behind closed doors." CV

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