Iowa State University President Steven Leath tried on Monday to cut off further scrutiny of how he used a university plane. Shorter version of the seven-paragraph statement you can find near the bottom of this post: I did nothing wrong, and I won’t do it again. End of story. Leath has donated $15,000 to the ISU Foundation scholarship fund to cover costs associated with fixing and storing a Cirrus SR22 damaged in a July 2015 “hard landing.”
While ISU spokesperson John McCarroll slow-walks my information requests, refusing to send me even the insurance policy that should take his staff minutes to retrieve, now seems like a good time to explain why Iowans haven’t heard the last about this scandal.
Facts don’t support Leath’s claim that he disclosed this event promptly.
In his September 26 statement, Leath asserted, “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.”
How much later? Austin Harrington reported yesterday for the Ames Tribune,
According to Leath, he had told Board of Regents President Bruce Rastetter about one month to five weeks after the incident had taken place.
“Bruce and I meet regularly on updates but we don’t meet like weekly. So next time I got with him, I said, ‘Bruce, you probably ought to know this,’” Leath said.
The hard landing happened on July 14, 2015. By Leath’s account, he told Rastetter sometime in mid- to late August. Iowa Board of Regents spokesperson Josh Lehman told me Rastetter learned about the event sometime “in fall 2015.”
Either way, Leath failed to inform members of his governing board before the regents voted unanimously on August 5, 2015 to approve his latest contract extension, including a $25,000 raise and generous deferred compensation. UPDATE: The author of the Ditchwalk blog reminded me that Rastetter helped arrange for Leath to have dinner with Bruce Harreld in Ames on July 30, 2015, after Harreld met with Rastetter and several other board members earlier in the day. It seems unlikely Leath and Rastetter did not communicate between July 14 and July 30.
When I asked Lehman whether Rastetter had told other regents about the hard landing, he replied by e-mail, “Not to my knowledge.” That’s consistent with what Dr. Subhash Sahai told Harrington:
“I was disappointed to hear about this incident because the first time I heard about this incident was on Thursday or Friday [of last week],” Regent Dr. Subhash Sahai said. “I was disappointed that he was flying the plane, that we were never informed of that and that it was a plane that belonged to ISU.”
I am seeking confirmation from the other regents about when they first learned that Leath was flying ISU aircraft and when they learned about the hard landing. I assume that like Sahai, they knew nothing until ISU started trying to get ahead of the story Ryan Foley was researching for the Associated Press.
Before voting on a university president’s contract, all board members (not just Rastetter) “probably ought to know” if said president has a habit of flying a university plane to visit his other home. Especially since ISU policy and Iowa Code prohibit “any state employee from using, or permitting any other person to use” state property “for any private purpose or for personal gain.”
One donor visit does not make an eleven-day vacation a business trip.
Leath has reimbursed ISU for four trips involving the Cirrus SR22, including an eleven-day visit to North Carolina in July 2015. He told Harrington it was “the only long vacation I’ve taken the five years that I’ve been here.” During the trip, he spent about four hours with a couple who could be “potentially very important donors” to ISU.
On that basis, ISU contends that none of Leath’s trips “were strictly for personal reasons; each of them had university business purposes.”
Leath noted on Monday, “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.”
Fundraising is an important part of a university president’s job, but let’s get real. One donor meeting is a flimsy excuse for Leath to take an ISU airplane on an eleven-day vacation. He could have flown commercial or rented a private plane to fly himself to and from North Carolina.
Leath’s piloting license has no bearing on whether he was entitled to use ISU’s plane.
In written statements, Leath referred to “my ability to fly this plane as an FAA certified pilot,” while Rastetter said, “I am also aware of President Leath’s use of the university plane. He is a licensed pilot and can fly aircraft for which he is certified.”
But the official page for ISU’s Flight Service mentions a “twin engine turbo prop airplane, equipped and maintained to airline and charter service standards, [which] is flown by experienced professional pilots.”
Not a plane that is flown by experienced professional pilots or other ISU employees who may have a pilot’s license.
Twitter user Paula Anton put it well: “I have a drivers license. Can I take a fleet car to Disneyland if I stop on the way home at a library to do some research?”
Leath bristled at what he called “inaccurate allegations that suggest I may have violated university policy and/or state law.”
After full disclosure of all relevant facts, neutral attorneys will be better placed to comment on legalities. For now, I reject the premise that Leath’s license to pilot a Cirrus SR22 entitles him to fly this Cirrus SR22.
As for senior university staff and counsel clearing the president’s use of the plane, their approval wouldn’t change the reality that ISU policy and Iowa Code prohibit “any state employee from using, or permitting any other person to use” state property “for any private purpose or for personal gain.”
We still don’t know why ISU didn’t file an insurance claim after the hard landing caused “substantial damage.”
Speaking to the AP’s Foley last week, ISU spokesperson McCarroll didn’t explain why the university “paid for $12,000 in repairs itself rather than file an insurance claim.” He told the Iowa State Daily’s Alex Hanson “the school decided it was ‘best’ to just pay for the damage instead of filing an insurance claim.”
Perhaps ISU officials feared the university’s premiums would go up by more than $12,000 if a claim was filed. McCarroll told Foley, “We had the money to pay for it. In terms of aircraft damage, that’s a relatively small amount of money.”
Another thought crossed my mind: maybe ISU’s insurance policy for the airplanes only covers usage by the “experienced professional pilots” who work for the flight program.
That would explain why, in an interview with Foley, former ISU Senior Vice President Warren Madden “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.” UPDATE: Madden disputed this characterization of his views in a letter to the Iowa State Daily; I’ve enclosed excerpts at the end of this post.
Leath’s statement on Monday asserted,
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. […] 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. […]
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.
What “business reasons”?
Wondering how outsiders who work in the insurance field would view this matter, over the weekend I sought a copy of the insurance policy along with other documents. On Monday morning, McCarroll acknowledged receipt of my request, promising to “notify you if we determine it will require more than one hour to collect, review and redact the documents. Our policy grants the first hour at no charge.” The same day, I asked him to send me the insurance policy (which should take little time to locate) while his staff calculates how long it would take to assemble the other documents. No response.
When I asked this morning about the delay and again requested a copy of the insurance policy while ISU staff process the rest of my request, McCarroll replied, “We have many pending requests for information. Your request is among them.” No doubt lots of people are interested in documents that could shed light on unanswered questions about Leath’s use of the ISU plane. But in the time it took McCarroll to type his latest e-mail, someone could have sent me a message with the insurance policy attached. I can’t be the only person who has asked to see it since Foley’s first story about the hard landing appeared on Friday.
Leath may not have reimbursed ISU for all costs associated with his use of the plane on personal visits.
The Iowa State Daily’s Hanson reported the following details about the four trips for which Leath repaid the university:
March 25-29, 2015, trip: Leath reimbursed $1,212.50 […]
May 12-17, 2015, trip: Leath reimbursed $1,162.50 […]
July 3-14, 2015, trip: Leath reimbursed $1,100.00 […]
Aug. 26-30, 2016, trip: Leath reimbursed $1,162.50
Foley reported for the AP, “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.”
So Leath still saved money compared to what he would have spent to rent private aircraft.
The cost of storing the plane for more than 20 days on these trips do not appear to be reflected in Leath’s reimbursements. I am seeking further details on the total cost of plane storage and which ISU fund paid those bills. Under ISU’s travel policy, Leath should have been responsible for all expenses related to the personal portion of those trips–such as the ten days between July 3 and 14, 2015, when he had no meetings related to his work for ISU.
The president’s September 26 statement acknowledged as much:
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.
Iowans deserve more than Leath’s word that he went “above and beyond what is required.” Let’s see all the expenses and determine whether the president paid his fair share.
On a related note, these four trips may have imposed additional costs on the university. Did other ISU officials have to fly commercial for business-related travel on the days when Leath had the plane near his other home?
A former member of the Iowa Bar commented via e-mail after reading some news reports about Leath’s piloting, “I very much doubt that keeping the plane unavailable for 11 days would be included as an authorized use of the plane in any pre-existing [ISU] policy.”
We don’t know whether Leath orchestrated the purchase of this plane primarily for his own convenience.
Democratic State Representative Beth Wessel-Kroeschell, whose Iowa House district covers part of Ames, raised a point I hadn’t considered in her interview with the Tribune’s Harrington.
“It sounds like the [Cirrus SR22] plane was actually purchased for the purpose of him [Leath] using it,” Wessel-Kroeschell said.
Leath denies that claim. According to him, the plane was purchased in 2014 as a backup or replacement for another aircraft. Although, he does admit that since it was bought, he has piloted the aircraft more than any other pilot at ISU, including several times since the Illinois incident took place.
Curiously, the official description of ISU’s Flight Service mentions a “twin engine turbo prop airplane, equipped and maintained to airline and charter service standards, [which] is flown by experienced professional pilots.”
Not two airplanes.
Perhaps having the Cirrus SR22 in North Carolina didn’t inconvenience other ISU officials, because Leath was for all intents and purposes the only one using that airplane. How much did its acquisition cost ISU, and how much will the plane be used now that the president has promised not to fly it anymore?
Leath may now get a tax deduction on money he should have spent to fix the plane last year.
From Monday’s statement:
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.
Leath’s check for $15,000 would cover repairs costing $12,591 and $1,099 for storing the damaged plane. However, the amount left over would fall short of covering the more than $2,200 it cost to send ISU’s other plane to Illinois to pick up Leath and his wife last July.
My understanding is that Leath’s $15,000 donation to the ISU Foundation is tax-deductible, whereas he would not have been able to deduct payments he should have made last summer to fix and store the Cirrus SR22. Leath’s base salary is $525,000 a year, so he would be in the top state and federal tax brackets.
Any relevant comments are welcome in this thread.
UPDATE: The Iowa State Daily posted a letter from retired Senior Vice President Warren Madden on September 28. Excerpts:
In the context of a long discussion, with a reporter about the history of the ISU Flight Service Department, I stated that according to ISU policy, university aircraft should not be used for purely personal purposes. While this is true, nothing I have known or have read about President Leath’s use of Flight Service or university aircraft is in violation of ISU policy. When ISU employees travel for university business, the university pays for the transportation expenses related to the travel. This is true even if the employee conducts personal activities while on the trip. […]
I am not aware of any time that the university paid the transportation costs for President Leath when he was traveling for purely personal reasons. To suggest that I believe that the travel described in the various news articles violated policy or state law is simply wrong. I have no such belief. In fact, my understanding is directly opposite to this conclusion.
It has also been reported that I said that President Leath would not be allowed to fly university planes by himself under policy or university insurance requirements. This is also not true. 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. To my knowledge, there is no requirement in the insurance policy or university policy that the smaller of the two planes be flown with more than one pilot. […]
It is also being suggested that President Leath’s use of university aircraft and the fact that he was piloting university aircraft was not known by me or other university leaders or by the general public. This is not the case. The fact that President Leath is a pilot was widely reported when he was hired nearly five years ago. In 2013, the Des Moines Register did extensive reporting about President Leath’s travel including the fact that he would pilot university aircraft and fly himself on university business. I certainly was aware of this and it seems like the newspaper that published this article and its readers were as well.
On September 29, the AP reported that the Cirrus SR22 “was out of state far longer than the school has acknowledged”: “A university spokesman said this week the plane was stored in Illinois for three to four weeks after the July 14, 2015 incident. But the record shows it didn’t return to Iowa until Sept. 23, when it was flown to Pella for repairs.”
SECOND UPDATE: Jeff Charis-Carlson reported for the Des Moines Register on September 30 about irregularities related to how ISU acquired its two current airplanes in 2014. The ISU Foundation purchased a Beechcraft King Air for $2.4 million and the Cirrus SR22 for $470,000, then donated both planes to the university.
[Board of Regents spokesperson Josh] Lehman said the board’s executive director, Bob Donley, was informed via telephone about the purchase of the two aircraft to replace older aircraft for ISU’s Flight Service. Donley notified board leadership of the university’s intent to purchase the planes to replace the older aircraft.
For universities, however, regent policy at the time required that any equipment costing more than $1 million must be submitted to the full board for approval. […]
No such request can be found among the meeting agenda items for 2014 on the regents’ website. […]
Regents officials said no board policies or state laws were violated in the purchase of the aircraft or in Leath’s use of the aircraft.
The regents’ policy manual was changed earlier this year to require universities to notify the board’s chief operating officer of any purchase between $1 million and $2 million. For equipment costing more than $2 million, the purchase may be submitted to the board for approval but at the discretion of the COO.
The policy requires the COO to provide a summary of all equipment purchases of $1 million or more to the board on a quarterly basis.
Charis-Carlson quoted Democratic State Senators Jeff Danielson and Herman Quirmbach raising questions about the foundation acquiring planes outside of ISU’s operating budget and without following normal purchasing requirements.
As of September 30, ISU still had not provided a copy of its insurance policy covering the airplanes or other documents I requested.
LATE UPDATE: On October 20, “Leath told reporters after the [Board of Regents] meeting that it was never his intention to claim a deduction for the donation,” Charis-Carlson reported.
ISU officials say Leath was not required to reimburse the university for the damage, just as he would not be liable if he damaged a university car while on a business trip.
“The President and Mrs. Leath decided to make a donation equal to the costs because they wanted to move forward in a positive way — not because they were obligated to reimburse the university or Foundation,” Megan Landolt, Leath’s assistant for communications, said via email last week. “Just because a donation is provided to the ISU Foundation does not mean that it has to be taken as a charitable deduction on one’s taxes.”