Your ISU alumni dollars at work: $1.1 million was paid to foundation bosses Leath ordered fired without cause.

10/21/2016

The Iowa State University Foundation has spent more than $1.1 million to buy out the contracts of two foundation presidents fired by university President Steve Leath.

The two men were fired for no cause — other than the fact that Leath apparently didn’t like them. Both raised millions for the university and were widely admired by their colleagues.

Documents obtained by Cityview under the Freedom of Information Act show that the foundation paid at least $760,000 to Dan Saftig and about $340,000 to his successor, Roger Neuhaus.

Saftig was fired March 11, 2012, just two months after Leath became head of the university. Saftig had headed the foundation since 2003. He was heavily relied on by President Greg Geoffroy, who after Saftig’s firing called him “the absolute best fund-raising professional I know [and] a great leader.”

Leath apparently had a dissenting view. Saftig accompanied the new president and his wife on a fund-raising trip early in 2012, and at the time an ISU person told Cityview that the Leaths didn’t feel they were treated with the respect they believed was due them. Weeks later, the foundation president was fired.

Saftig was replaced by Roger Neuhaus, who started work in January of 2013. He built on the success posted under Saftig and worked to restore the morale that had been damaged by the firing of Saftig. The foundation raised more than $100 million in 2013 and again in 2014, but Neuhaus was unceremoniously dumped in March of 2015.

Neuhaus’s “separation agreement” bars him from saying anything “disparaging or detrimental in any respect to the reputation or goodwill” of the university. Nor can the university or any of its employees say anything bad about him, according to the agreement.

But people close to the university say Leath and Neuhaus slowly became wary of one another. University foundations are big business — the ISU Foundation employs more than 125 people and had assets of more than $900 million as of June 30 — and most are legally independent from their universities. But most are, in fact, simply arms of the office of the universities’ presidents, who usually sit on the foundations’ boards. What the president wants, he gets — and foundation boards, often sprinkled with loyal alums, usually just go through the motions of approving requests from a president. Sometimes, they don’t even do that.

Indeed, no one can remember a time when the ISU Foundation ever turned down a request from an ISU president.

But Leath, unlike Geoffroy, had several unusual requests. One was to buy an airplane for $3 million to $4 million, which would have allowed him to avoid disclosing that to the Board of Regents or the public. The plane then would be given to the university. It’s unclear how Leath accomplished this — one board member says the foundation never voted on the issue — but a person familiar with how foundations work said there often are back-doors into and out of foundations. At any rate, in February of 2014 the foundation bought a Beechcraft King Air 350 for $2,875,000 and spent another $600,000 on upgrades and furnishings. The foundation then gave the plane to the university.

The contract was signed not by Neuhaus but by Lisa Eslinger, the foundation’s senior vice president for finance and operations.

(The July 2014 contract to buy a single-engine, four-seat plane for $470,000 was directly with the university, perhaps because the price was below the threshold that required notification to the Board of Regents. It is this plane that pilot Leath damaged a year ago, an accident he didn’t report to the Board of Regents.)

Neuhaus was soon gone. In return for his silence and an agreement not to sue, the foundation paid him $28,125 a month for 12 months and agreed to pick up the full cost of medical insurance for a year. He also got $4,685 in accrued-vacation pay. Foundation tax forms say Neuhaus was paid $332,960 in 2014 plus about $40,000 in “other compensation.”

Saftig, who had been at the foundation for nearly a decade, got a richer deal. His “separation agreement” guaranteed $35,000 a month for 18 months, full medical benefits for the 18 months, $81,254.57 from a deferred compensation account, $6,250 for payments into a deferred-comp plan, $7,500 for legal fees and up to $10,000 for hiring a search firm to help him find a new job. He also got to keep his company car.

Saftig ultimately took a big fund-raising job at Arizona State University and now is a senior consultant in Arizona for Marts and Lundy, a large consulting firm based in New Jersey. Neuhaus now is the chief development officer for Habitat for Humanity of Central Arizona.

The foundation now is headed by Larissa Holtmyer Jones, who signed a three-year, $340,000-a-year contract in April of last year. If the foundation fires her without cause, she gets full payout of her contract or a year’s salary, whichever is greater. Her contract is not unlike the contracts given to football and basketball coaches: She can leave at any time without a financial penalty. …

Bert Iannone is a well-known Des Moines cardiologist. Kathleen Stahl is a well-known travel agent dealing in “luxury and high-end travel,” her website says. Don’t sit them next to one another at your next dinner party.

Three years ago, Iannone and his wife, Dee, decided to take a two-week trip to Europe to celebrate their 40th wedding anniversary. They went to Stahl to book a cruise on the Danube and visits to five countries.

At one point, Dee Iannone noted that her passport would expire on Oct. 23, just a few weeks after the Sept. 13 end of the trip. Not to worry, Stahl said, according to documents filed in Polk County district court last month. “You will be fine with your passport as long as you’re back before it expires,” Stahl emailed.

So on Aug. 31, the Iannones flew to Minneapolis and boarded a plane bound for Paris. But before the plane took off, according to court papers, “security personnel boarded the plane and removed the Iannones from that flight with all passengers watching, as though the Iannones were a grave security risk. The Iannones were told that, because of Mrs. Iannone’s passport, they could not leave the United States for the planned trip.”

In fact, most European countries will not accept tourists or business travelers whose passports expire within three months of the date of departure, according to the U.S. State Department. So the Iannones were stuck. They asked Stahl for their money back, but she refused, according to the lawsuit. Rather, she noted they had bought travel insurance, and, the court papers say, she advised them to tell the insurer falsely that one of them suffered from a medical condition and had to cancel the trip.

The Iannones consulted their lawyer, who advised them against that. They then told Stahl of the lawyer’s advice. “I would not have said anything to an attorney,” she responded in an email, according to the lawsuit.

The lawsuit alleges breach of contract and negligent misrepresentation. The Iannones have asked for compensation “and such other relief as the court deems just.” They also have asked for a jury trial. Attorneys for Stahl have not yet filed their response.

Update: At the end of October, Stahl’s lawyers filed a response admitting some of the facts, denying others, saying the Iannones had no case and asking the court to dismiss the action. Judge Robert Hanson has set a trial scheduling conference for Dec. 13.

John Tate and Jesse Benton are two of the three men convicted in federal court in Des Moines this year for their roles in funneling money to former state legislator Kent Sorenson to get him to switch his allegiance from Michele Bachmann to Ron Paul in the 2012 presidential caucus fights. In May, Federal Judge John Jarvey sentenced them to six months of home confinement and then two years of probation. A third defendant, Dmitri Kesari, was sentenced to three months in prison. (Sorenson is scheduled to be sentenced Jan. 17.)

The probation conditions barred them from associating with any person convicted of a felony — which would mean one another — without permission from the probation officer. The other day, Tate asked the court to remove that prohibition.  It turns out the three men are back in politics, with Tate and Benton employed by the same political action committee and Tate and Kesari “in negotiations to be engaged by candidates and political action committees involved in Virginia state elections [in 2017] that will require them to work together,” according to court papers filed in mid-October.

The papers, filed by Tate’s lawyer, asked that the restriction be removed because “if they are barred from having any contact with each other…the ability…to be employed in their lawful profession of thirty years, in their home state, will be severely diminished.”

Not so fast, the government replied. “All three defendants argued [in sentencing hearings] that they should receive lenient sentences in large part because, they said, their careers in politics were over.” Now, the government noted in opposing the request, “all three are right back at their former political employment less than a month after sentencing, apparently suffering nothing like the adverse career consequences they asserted in open court.”

Judge Jarvey has not yet ruled on the request.

Kesari has not yet begun his prison sentence. But the papers in the Tate plea indicate Kesari could well be planning to operate a political-consulting business out of federal prison. A Justice Department lawyer in Washington involved in the case didn’t respond to a question about that.

Update: On Oct. 31, Tate withdraw his motion “as Mr. Benton is no longer employed by Mr. State’s employer and Mr. Kesari is about to begin his period of incarceration.”

Dan Johnston

Dan Johnston leaves two legacies.

As a 30-year-old lawyer in 1968, he argued and won a United States Supreme Court case that ensured the free-speech rights of students. “Students do not shed their Constitutional rights at the schoolhouse gate,” Justice Abe Fortas wrote in the 7-to-2 decision involving the rights of students in the Tinker family to wear black armbands to schools in Des Moines to protest the Vietnam War.

                Though the decision has been diluted over the years, it was and remains a great victory for freedom in America.

                And as a still-young lawyer in 1972, he argued an Iowa Supreme Court case that led to new rules for apportioning state legislative districts — a system now viewed as a model for American states.

He was equally, and rightfully, proud of both.

He was a smart and complicated man. Raised in Marshalltown, he graduated from Drake Law School in 1964 and was elected to the Iowa House in 1966 after a stint as an assistant Iowa Attorney General. Two years later, he won a three-way primary to get the Democratic nomination to run for Attorney General, but he lost to Dick Turner by more than 100,000 votes in a million-vote election. Backed by organized labor, he was appointed Polk County attorney in 1977, when Ray Fenton was appointed to the bench, and he won a full term in 1978. He was re-elected in 1982.

At the time of his elections, he was a closeted gay and the subject of whispering campaigns. He recalls ducking the issue on a radio call-in show, but others say the caller in effect outed him before the 1982 election. Though he won handily each time, he remained in the background as the gay-rights movements began to sweep the country following the Stonewall Riots in New York in 1969.

He left as county attorney in 1985 and moved to New York, where, among other things, he became a strong advocate for gay rights. He moved back to Iowa about 10 years ago.

In his retirement speech from Polk County, he acknowledged his homosexuality.

“I made three points in that speech,” he said the other day from his hospital bed. He spoke out against the death penalty, he recalled. He said there was “no inconsistency between law enforcement and civil liberties,” he said. And, he recalled, “I said I had stood up for children and immigrant farm workers, but never for the group whose oppression I know the best — my gay and lesbian brothers and sisters.”

He had a 35-year love affair with Norman Jesse, whom he met at Drake Law School and who served in the Iowa Legislature for 12 years. They lived apart but were often together in a relationship that became increasingly open. Jesse, who died in 2000, was “the love of my life,” Johnston said.

If Jesse was the love of his life, civil rights came in a close second. He had an unshakeable belief in the equality of laws and the dignity of man — for a while he was a staff lawyer for the Iowa Civil Liberties Union. And he had an unbreakable faith in unions — though as county attorney he stood with police during the bitter, 19-month Delavan strike by the Auto Workers in 1978 and 1979 to ensure that non-union replacements could safely cross picket lines; he also believed in law and order.

He never made any money — he got no fee for the Tinker case, though Joe Rosenfield picked up the $500 in expenses — and in recent years he had a spartan life style. He mentored young lawyers who shared his beliefs and took great pride in their efforts and accomplishments. At lunch, he always talked more about them than about himself, about their cases and about how they were fighting the good fight for the good cause.

He often ate lunch alone, at a high table at the Cub Club at Principal Park, and, wan and slow-moving and a bit disheveled, at times he seemed almost a ghost from the past as he stopped by to talk with judges and lawyers and others lunching there. But his mind was always in the present — expressing outrage at this injustice or disbelief at that absurdity. More recently, he was astonished by the presidential race. His final request to a kind nurse who watched over him at Iowa Methodist was to take him downtown to the Election Office to vote. She did, on Oct. 10. The next day, he was moved to Kavanagh House to die.

He was 78 and riddled with cancer when he died there on Oct. 21.

– Michael Gartner

Regents President Bruce Rastetter didn’t throw his friend Steve Leath under the bus the other day at the Board of Regents meeting when he said he was “extremely disappointed” in Leath’s personal use of university aircraft.

But the Regents head clearly walked the university president to the bus stop.