ISU president used university plane for personal trips, didn't pay to fix damage

Iowa State University President Steven Leath has flown one of the university’s planes on at least four personal trips, without the apparent knowledge of the official in charge of ISU’s flight program, Ryan Foley reported for the Associated Press on September 23. Leath reimbursed the university for some costs associated with those trips but not for expenses incurred after he damaged one of the planes through pilot error in July 2015.

Although Leath’s use of the plane appears to have violated both ISU policy and state law, Iowa Board of Regents President Bruce Rastetter has already released a statement supporting Leath.

Foley’s scoop is disturbing on several levels.

Leath flew a university plane on personal business.

ISU policy on “Personal Use and Misuse of University Property” states unambiguously,

State law, specifically Section 721.2 of Iowa Code, prohibits any state employee from using, or permitting any other person to use, property owned by the state or any subdivision or agency of the state for any private purpose or for personal gain. Violation of this statute is a serious misdemeanor.

This regulation is intended to cover all types of University property and services, including cars, supplies, telephones, typewriters and computer hardware and software, equipment, campus mail, electronic mail and copying facilities, products from University farms, and food, drugs or chemicals available from University activities. No one shall be permitted to remove for personal use from the buildings or grounds any property belonging to the University, even though it may seem to be of no value.

Here’s the relevant passage in Iowa Code on “Nonfelonious Misconduct in Office”:

Any public officer or employee, or any person acting under color
of such office or employment, who knowingly does any of the
following, commits a serious misdemeanor: […]

Uses or permits any other person to use the property owned by
the state or any subdivision or agency of the state for any private
purpose and for personal gain, to the detriment of the state or any
subdivision thereof.

The ISU official who ran the flight program was in the dark about Leath’s use of a university plane.

A statement Iowa State released late Friday afternoon indicated that Leath, a certified pilot, was allowed to fly the Cirrus SR22. That was news to the university official who had been in charge of the flight program.

Warren Madden, a recently retired senior vice president who oversaw the flight program, said that policy would bar personal use of university planes and that he was never aware of any. Madden also insisted the school would never let Leath “fly by himself one of our planes because of the insurance and liability issues” before AP informed him Leath had done that.

An Iowa Board of Regents spokesperson told Foley that Regents President Bruce Rastetter “was aware of Leath’s flying and hard landing.” I am seeking further details on when Rastetter was told and whether he informed any of the other eight board members. The Board of Regents extended Leath’s contract in the summer of 2014 and voted unanimously in August 2015 to extend it again.

UPDATE: In a September 28 letter to the Iowa State Daily, Madden disputed that he was unaware of Leath’s piloting: “I am not sure if I misspoke or if the reporter misunderstood me, but the fact is, after being certified I am certain that President Leath is authorized to fly the smaller of the two planes and is recognized on the university’s insurance policy as an authorized pilot.”

Leath didn’t pay for all costs associated with his use of a university plane.

Foley’s lede noted that Leath “caused ‘substantial damage’ to a university airplane he was piloting when it made a hard landing at an Illinois airport” on July 14, 2015. A pilot who reviewed the incident called it a “pretty clear-cut example of a comparatively inexperienced pilot messing up.”

The university called the conditions “a localized downdraft within a thunderstorm” and noted the incident didn’t meet the FAA’s technical definition for an accident. It said Leath has flown for 10 years.

Whatever you want to call this event, the not-technically-an-accident did $12,000 in damage to the Cirrus SR22’s wings. The university paid for those repairs. In addition,

University pilots were sent to pick up Leath and his wife with the school’s second airplane [after the first was damaged]. The roundtrip flight cost more than $2,200 and was charged to the “Greater University Fund.” Leath controls that pot of unrestricted donations, which Iowa State says pays for its “most critical needs.” […]

Asked why Leath didn’t cover repairs, university spokesman John McCarroll said: “We had the money to pay for it. In terms of aircraft damage, that’s a relatively small amount of money.”

It would also be a relatively small amount of money for a university president being paid $525,000 a year plus deferred compensation worth $125,000 annually.

When Leath reimbursed the university for some personal trips is not clear.

KCCI-TV reported on Friday evening, “Leath repaid the university for the cost of the [July 2015] trip, which was a combination of personal and business.”

ISU’s attempt at damage control isn’t consistent with what Foley was able to learn while researching the story:

Leath and his wife, Janet, were returning from Ashe County, North Carolina, where their family owns a home. Leath, who did not return a message seeking comment, hasn’t explained any business reason for the trip. […]

Iowa State said Leath has reimbursed the school $4,600 for four trips on which he flew the plane for personal use. A spokesman said he didn’t know whether the July 14, 2015, incident was one.

I am seeking further information on when Leath reimbursed the university for these flights. Remember, the senior vice president whose job was overseeing the flight program was not aware the president was using the plane for personal trips or flying unaccompanied by a university-employed pilot. He had the impression that in accordance with university policy, that scenario would be impossible.

Last year Leath sought assistance from a company owned by Rastetter to find and purchase recreational land. Influential ISU alumni defended that highly irregular land deal, saying “Steve has a lifelong passion for the outdoors and agriculture, and we should all be thankful he and his wife have made a commitment to calling Iowa their home.”

Given Leath’s repeated violations of state law on personal use of public property, he may need to build a retirement home on that Hardin County acreage much sooner than expected.

I will update this post as needed.

UPDATE: Foley reported on September 24,

University spokesman John McCarroll said the trip to North Carolina involved personal business for Leath, who reimbursed the university for part of the flight costs in November 2015. The plane was landing in Illinois so that Leath could meet with a potential donor before returning to Ames, he said.

The university, which is responsible for the aircraft maintenance, paid for the $12,000 in repairs to the plane instead of filing an insurance claim because “we had the money,” McCarroll said. The plane was also stored at the Bloomington airport for three or four weeks, but the cost of that wasn’t immediately available, he said. […]

Leath reimbursed the university a total of $3,500 for three other trips to North Carolina in which he used the plane, including one last month. The reimbursements have been paid at a rate of $125 per hour to cover costs such as fuel, McCarroll said. Several private companies advertise hourly rates of around $300 to rent similar aircraft.

The trips were either a mix of university and personal business or instances in which a business trip was scheduled before or after personal trips and Leath needed the flexibility of the school’s plane to meet his official obligations, McCarroll said.

McCarroll has not responded to several of my questions, including whether the university’s general counsel was informed about Leath’s use of the airplane and when Rastetter was told. He told Foley that Leath did not tell the Board of Regents “immediately after” the accident. The board voted to give Leath a raise and extend his contract on August 5, 2015.

Rather than responding to my specific questions, McCarroll sent a link to a September 23 news release, which buried some details about ISU’s flight service and Leath’s use of the plane after a section on “Improvements to Ames Municipal Airport.” Here are the relevant portions:

Iowa State University Flight Service

Iowa State’s interest in the Ames Municipal Airport development is also influenced by the fact that Iowa State University Flight Service is based at the Ames airport. The university owns two aircraft: a Beechcraft King Air (twin engine), and Cirrus SR22 (single engine).

ISU Flight Service has a staff of three highly trained pilots. Iowa State requires two pilots in the cockpit when the King Air is used. The Cirrus SR22 can be flown with one pilot. Iowa State owns both aircraft and is responsible for their maintenance. The Board of Regents executive director was notified of both aircraft purchases. Both aircraft were acquired using unrestricted private funds managed by the ISU Foundation. The foundation purchased the King Air and gifted it to the university. The university purchased the Cirrus SR22. No taxpayer money was used to acquire either aircraft.

The aircraft are available to all Iowa State units and are important to facilitate efficient, flexible, and cost-effective travel by university officials. One of the primary units that relies heavily on ISU Flight Service operations is the Iowa State Athletics Department. Specifically, coaches often utilize Flight Service operations during the student-athlete recruitment process. President Leath also relies on ISU Flight Service as an important tool to enhance his ability to conduct the business of the university across Iowa and the country and to connect with important partners, alumni, and friends of Iowa State. Many of these trips are associated with fundraising, which has become an increasingly important responsibility of university presidents.

Use of aircraft by President Steven Leath

Iowa State has owned and operated transportation aircraft for university use since the 1950s. However, because President Leath holds FAA pilot certification for single-engine aircraft and also holds an instrument rating, there have been some questions regarding his use of university aircraft. President Leath has been a pilot for more than 10 years. His initial training was in North Carolina, and since becoming Iowa State’s president in 2012, he has received additional training.

President Leath is certified to pilot the smaller of the university’s aircraft (Cirrus SR22) and has occasionally piloted this plane for the purposes of conducting university business and for flight training required by the FAA and the university’s insurer.

Our records show on four occasions President Leath has used the Cirrus SR22 for trips that were a combination of university business and personal business, or where university business scheduled immediately before or after personal trips required the flexibility of the Cirrus to meet the obligations of university business. Even though each of these trips had a component of university business associated with them, President Leath reimbursed the university for the costs of these trips. The reimbursement amount was based on a predetermined cost formula developed by ISU Flight Service.

On one of the aforementioned occasions, in July of 2015, while piloting the Cirrus SR22, President Leath encountered a microburst, a localized downdraft within a thunderstorm. As a result, he experienced a hard landing at the Bloomington, Illinois airport. Following the landing, a wing flap of the Cirrus clipped a runway light. While the aircraft remained airworthy, relevant repairs costing approximately $12,000 were subsequently made to the aircraft and were covered using non-general fund resources. There were no injuries resulting from the landing. President Leath immediately contacted the airport control tower to report the matter. The FAA was also informed of the matter and did not consider it as an accident pursuant to FAA regulations.

Alex Hanson reported more details in the Iowa State Daily on September 24:

John McCarroll, executive director of University Relations, said Saturday that the trip from July 3-14, 2015, was to North Carolina and “involved donor contacts [and] some personal business.” […]

Reimbursements:

March 25-29, 2015 trip: Leath reimbursed $1,212.50 (invoice sent April 7, Leath paid April 8.)
May 12-17, 2015 trip: Leath reimbursed $1,162.50 (invoice sent Sept. 23, Leath paid Nov. 19.)
July 3-14, 2015 trip: Leath reimbursed $1,100.00 (invoice sent Nov. 18, Leath paid Nov. 19.)
Aug. 26-30, 2016 trip: Leath reimbursed $1,162.50 (invoice sent Sept. 2, Leath paid Sept. 9.) […]

“Keep in mind, none of the trips in question using the Cirrus SR22 were strictly for personal reasons; each of them had university business purposes,” McCarroll said. “The president however felt that because some personal time was also involved, he should reimburse the university for the aircraft use.” […]

McCarroll said he could not answer legal questions about if the trip would have violated rules, but added, “President Leath believes he has acted appropriately.”

What other university policies and state laws are appropriate for Leath to ignore, in his opinion?

The public needs to know whether ISU’s general counsel signed off on Leath’s use of the plane for personal trips and why the vice president in charge of the flight program was not aware of the arrangement.

SECOND UPDATE: McCarroll told me Madden retired as ISU’s Senior Vice President for Business and Finance at the end of June 2016.

ISU’s spokesperson told the AP Leath met with a “potential donor” in North Carolina during the July 2015 trip.

I am seeking comment from attorneys and tax specialists on whether a trip could be characterized as having a “university business purpose” based on one meeting during an eleven-day period.

A written statement from Rastetter tried to confuse the issue, saying Leath “is a licensed pilot and can fly aircraft for which he is certified.” His piloting skills have no bearing on ISU policy and state law governing the personal use of state property.

I am also seeking comment from insurance specialists on whether it was irregular for ISU to pay for the plane repairs without filing an insurance claim about the July 2015 incident.

Meanwhile, the time-honored tactic of trying to bury bad news with a late Friday press release may be working for ISU. Large-scale flooding in northeast Iowa has prevented this story from generating the attention it would have received on a slow news day. The Des Moines Register ran Foley’s first report on page 4A of the Saturday print edition. The follow-up appeared on page 15A of the Sunday Des Moines Register.

SEPTEMBER 26 UPDATE: ISU made a concerted effort to put this story to bed on Monday morning, releasing this statement from Leath.

In response to continuing questions about my use of Iowa State University owned aircraft, I wanted to provide additional information and respond to inaccurate allegations that suggest I may have violated university policy and/or state law.

I worked with Iowa State University Flight Service and the Offices of University Counsel and University Risk Management in October 2014 to explore my use of the university’s Cirrus SR22 aircraft. I maintain an extremely busy, complex schedule that often requires travel across the state and country. Given the challenges and expense of commercial air travel, I believed my ability to fly this plane as an FAA certified pilot would allow for more efficiency and flexibility as well as a more cost-effective travel option.

The Offices of University Risk Management and University Counsel determined that my piloting of the Cirrus was allowed under Iowa State’s applicable insurance policies. The Office of University Counsel also looked at issues pertaining to me reimbursing the university for portions of my travel in this aircraft. To suggest that my piloting and use of the Cirrus SR22 aircraft was not known by Board of Regents leadership and university senior business administration is inaccurate.

Iowa State’s travel policy contemplates situations where travel on university business is combined with personal travel. In those instances, according to university policy, expenses related to the business portion of the travel are paid for by Iowa State and expenses related to the personal portion are paid for by the employee. The four trips where I reimbursed Iowa State for personal use of the Cirrus aircraft each had a business component to them. Rather than try to allocate the flight expenses between the personal and business travel, I simply reimbursed the university for the full amount. This practice was above and beyond what is required by Iowa State policy.

I believe that an important part of my job is to be a champion for Iowa State University and to create, foster, and enhance relationships between the university and its alumni, partners, friends, and benefactors. My work in partnership with the Iowa State University Foundation to generate additional resources for scholarships, faculty positions, capital improvements, etc. is vital to our university’s continued growth and success. This requires frequent travel on behalf of Iowa State across Iowa, the country, and even at times, the world. Janet and I also maintain a cabin in the North Carolina mountains, which we have opened up to host existing donors and to foster new relationships with prospective supporters to the benefit of Iowa State.

With respect to the hard landing incident, there was no attempt to hide this event from anyone. When it happened, I immediately notified the airport tower and ISU Flight Service and subsequently the FAA. I later notified Board of Regents President Bruce Rastetter. I believe this incident would have been covered by university insurance; however, for business reasons, the claim was not submitted and the cost of the repairs was covered by non-general use funds.

In an effort to move forward in a positive way, Janet and I have decided to make a donation to the ISU Foundation in an amount equal to all of the cost associated with this incident, including the repair and storage costs of the Cirrus. This will be put toward the university’s scholarship fund. Additionally, to allay any future concerns, I will no longer fly any state-owned aircraft.

Many questions remain to be answered. I am seeking further information about several angles, including ISU’s insurance policy for the planes, how much it cost to store the Cirrus SR22 during Leath’s trips to spend time at his other home, which ISU fund covered those storage fees, and whether any ISU staff had to fly commercial for business trips on days when the university’s plane was with Leath in North Carolina.

Leath’s assertion that “there was no attempt to hide this event from anyone” is unconvincing. According to an e-mail I received today from Board of Regents spokesperson Josh Lehman, Rastetter learned about the hard landing during the autumn of 2015. In other words, no one on Leath’s governing board knew about this incident before the regents voted unanimously on August 5, 2015, to give the ISU president a raise and another contract extension.

Leath has donated $15,000 to the ISU Foundation scholarship fund, enough to cover airplane repairs and storage fees. I am seeking comment on whether he will reimburse the university for the $2,200 it cost to send ISU’s other plane to pick up him and his wife in Illinois.

Democratic State Senator Rob Hogg, who chairs the Government Oversight Committee, released a statement on September 26:

“With regard to Iowa State University President Steven Leath’s aviation accident in Illinois in July of 2015, I’m very glad no one was injured in the plane or on the ground.

“I am also glad that President Leath is now taking responsibility for the damage he caused to state-owned property and that he has promised to no longer pilot ISU-owned airplanes for personal trips.

“However, this plane crash and the lack of disclosure for 14 months is the latest in a series of incidents which raise significant concerns about the Board of Regents’ management of Iowa’s three public universities.

“I believe lawmakers should review this and other issues during the 2017 session of the Iowa Legislature.”

“Significant concerns” is an understatement.

Incidentally, Rastetter’s six-year term on the Board of Regents expires on April 30, 2017. I assume Branstad will renominate him and hope he will get much more scrutiny from Iowa Senate Democrats than he received before his easy confirmation in 2011.

LATER UPDATE: Click here for more developments on this story and thoughts about unanswered questions regarding Leath’s use of the plane.

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