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Federal money could have paid settlements for former state employees

Published: Thursday, April 17, 2014 11:03 a.m. CDT

DES MOINES (AP) — An official of the Iowa Department of Administrative Services said Wednesday that some federal money may have been used to pay former state employees to keep quiet about settlement agreements, which one lawmaker suggested could potentially be a serious problem for the state.

Lon Anderson, DAS’s chief deputy director, appeared before the Government Oversight Committee to answer questions about the Legislature’s deepening investigation into the agreements.

Government documents show that more than 320 state workers have entered settlement agreements to leave their jobs since Gov. Terry Branstad returned as governor in 2011. More than two dozen were asked to sign confidentiality agreements, with the total paid out exceeding $500,000, including some former DAS workers.

Anderson’s agency oversees numerous state-owned buildings and is paid fees from other state agencies to provide maintenance, construction and repairs. Committee Chairwoman Sen. Janet Petersen, D-Des Moines, asked Anderson and two other DAS managers if money from other agencies used to pay those fees came from federal sources.

“They pay us fees for service because everything we do is a service, and we have no way of knowing where that’s coming from,” Anderson said.

Rep. Pat Murphy, D-Dubuque, inquired further of Doug Woodley, the DAS chief operations officer, asking if money for at least one of the settlement agreements could have come from federal money.

“Potentially yes, sir,” Woodley said.

If federal money was used it could be a serious problem for the state, said Sen. Matt McCoy, D-Des Moines.

“Ultimately, federal money can’t be used to keep confidential settlements. If in fact it is determined that there was federal funds involved, it can have serious implications on our ability to seek other federal funding as well as keep the federal funding we have,” he said.

The Senate, where Democrats hold a majority, has been much more aggressive in its investigation of the settlement agreements than the Republican-controlled House, which has participated in some meetings stemming from the controversy. House leaders have accused Senate Democrats of using the issue to advance the gubernatorial campaign of Sen. Jack Hatch, who wants to unseat Branstad, a Republican.

House Oversight Committee Chairman Rep. Kevin Koester, R-Ankeny, released a statement after Wednesday’s meeting saying his committee would not participate further in oversight meetings until it received answers to a list of 16 questions from the governor’s office.

Another hearing is set for Thursday, and Petersen has asked Michelle Minnehan, the top human resources officer at DAS, and Jim Riordan, chairman of the Public Employment Relations Board, to appear. Petersen plans to explore polices regarding hiring, firing, layoffs and reorganization.

DAS Director Mike Carlson told the oversight committee earlier this month that there were no such offers made to laid-off workers, but documents surfaced that clearly indicated there had been offers. Branstad fired Carroll.

Petersen and McCoy also plan to look into allegations that state hiring practices changed after many state workers laid off in a 2011 reorganization of government ordered by Branstad. During Wednesday’s hearing, Petersen suggested that several of Woody’s business acquaintances or friends had joined DAS since he started at the agency three years ago and may not have been properly vetted. She asked him to provide a list of everyone he brought into state government, and he agreed.

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