ISU slipped previously undisclosed airplane spending onto "FAQ" page

Pro tip: Promising to “be as open and transparent as possible” works better when you don’t keep concealing relevant facts from the public.

Iowa State University linked incomplete and redacted files on its page for “Frequently Asked Questions” about President Steven Leath’s use of university-owned airplanes. Staff employed several methods to prevent outsiders from obtaining information about the flights. In an October 22 editorial, the Des Moines Register described the “clumsy response” by ISU and Leath as “every bit as damaging to the university’s reputation as the original offense.”

I would add a few other points to the Register’s list. For instance, ISU quadrupled down on a cover story that makes no sense in order to explain questionable stops on one of Leath’s trips.

In addition, university officials quietly admitted in recent days that ISU’s Foundation spent much more than previously disclosed on one of the airplanes purchased in 2014.


Michael Gartner hinted in an October 21 column for Cityview that Leath’s air travel preferences may have played a role in deteriorating relations between the university president and Roger Neuhaus, who was hired to run the ISU Foundation in January 2013.

[P]eople close to the university say Leath and Neuhaus slowly became wary of one another. Most university foundations are legally independent from their universities, but most are, in fact, simply arms of the office of the universities’ presidents. What the president wants, he gets — and foundation boards, often groups of 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 [his predecessor Gregory] 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. And it now is owned by the university.

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

The focus of Gartner’s piece was ISU’s Foundation using more than $1.1 million to buy out the contracts of two foundation presidents let go without cause since Leath arrived in Ames.

But hang on: “$600,000 on upgrades and furnishings” for the King Air 350, the larger of ISU’s two airplanes?

I hadn’t heard that figure before, despite closely following the scandal some are calling “planegate.”

When I e-mailed ISU staff Friday evening, seeking to confirm Cityview’s account, Leath’s assistant for communications Megan Landolt quickly replied, “This is addressed in question 3 of the FAQ http://www.ur.iastate.edu/flightservice/ .”

Sure enough, when I clicked through, the information was right where Landolt said it would be.

3. How much did the university aircraft cost?

It was initially reported that the cost of the King Air 350 was $2.4 million. That figure was based on incomplete information from ISU Flight Service that included the purchase price of the aircraft plus the expense of certain after-purchase upgrades minus a credit for the sale of the old plane. There was no attempt to mislead anyone. The King Air 350 was purchased for $2,875,000 by the Iowa State University Foundation. After the purchase, avionics upgrades, inspections, safety improvements, maintenance, refurbishment, branding and paint totaling $595,568 were made to the King Air using the same discretionary funds that were used by the ISU Foundation to purchase the plane; those funds are designated for Department of Athletics’ priorities (see question 5). Pursuant to an agreement between the ISU Foundation and the university, title to the aircraft was transferred directly from the seller to the university. The old King Air 200 was sold for $835,000. (Attached copies: Aircraft Purchase Agreement | Aircraft Listing and Sales Proceeds Agreement | Aircraft Acquisition Agreement).

The Cirrus was purchased by the university for $470,000 plus the trade-in value of an older plane owned by the university, which had a trade-in value of $28,000. (Attached: Cirrus purchase agreement.)

I read the FAQ several times after its debut on October 12 while working on this post. How had I missed that detail? Turns out, the original answer to question 3 was much shorter. The keeper of the Ditchwalk blog had the foresight to save a copy of the text on October 13. Here is the relevant portion, shared with his permission:

ISU airplane FAQ (original text) photo Screen Shot 2016-10-22 at 7.43.22 PM_zpspgoobntd.png

Leath feels media coverage of his hard landing in ISU’s smaller airplane has been “blown way out of proportion.” He told reporters for ISU’s student newspaper and a frustrated member of the Board of Regents that the incident caused “the equivalent of $600 damage on a $35,000 car.”

By the same token, spending $595,568 to equip and refurbish a $2,875,000 plane is like spending $7,245 on improvements to a $35,000 car. Who does that?

Landolt has not responded to my query about when ISU edited the FAQ page to disclose the $595,568 in King Air upgrades. Todd Stewart, chief audit executive for the Iowa Board of Regents, did not mention those expenses in the preliminary “Review of Travel Polices and Use of State Equipment” he presented to the regents’ October 20 board meeting. (Page 3 of that report lists other costs associated with acquiring the King Air in February 2014.)

In fairness to Leath, he’s not the only person to benefit from the King Air upgrades. The answer to question 1 on the FAQ notes,

The aircraft are available to all Iowa State units and are important to facilitate efficient, flexible, and cost-effective travel by university officials. The primary unit 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.

Whether anyone besides Leath benefited from money ISU spent on the Cirrus SR22 is less clear, however. The university insists that plane was not “purchased so President Leath could fly it.” But ISU officials won’t say “how often the three ISU Flight Service pilots have flown the Cirrus since its purchase in 2014.” Leath said earlier this month “he has more training on Cirrus planes than the university’s other three professional pilots combined,” adding that the Cirrus “may not get enough use to justify” keeping it, now that he has promised not to fly it anymore.

Amazingly, ISU’s Flight Service “does not maintain a comprehensive log for all flights on the Cirrus SR22.” Stewart’s report to the Board of Regents recommended that the university “maintain comprehensive flight records” for both planes.

ISU has released conflicting information on who pays for the Cirrus flights. The answer to question 15 on the FAQ indicates,

University Flight Service does not bill for use of the Cirrus aircraft in the same manner as the King Air, so the same type of records are not available. Use of the Cirrus is billed annually and divided among departments that use the plane. The university was able to obtain a log of the Cirrus flights from a third-party service. This log is attached. Additionally, the Cirrus maintenance log is attached. This information will be updated if more information becomes available.

In contrast, the report Stewart presented to the Board of Regents noted on page 4,

ISU Flight Service has developed rates to be charged for use of the Cirrus SR22 and the Beechcraft King Air. Use of the Cirrus SR22 is charged to the Office of the President at the end of the fiscal year based on flight hours flown. Regarding usage of the Beechcraft King Air, there are three university partners of ISU Flight Service: Iowa State Athletics, Office of the President, and the ISU Foundation. Each partner pays a partnership fee based on their expected use of the Beechcraft King Air during the upcoming fiscal year. In total, $336,175 was collected in partnership fees during fiscal year 2016. Partners are then charged a rate of $4.52 per nautical mile flown, while university non-partners are charged a rate of $6,00 per nautical mile flown in the Beechcraft King Air.

The regents’ internal auditor interviewed ISU Flight Service personnel “to obtain an understanding of the operation,” so I assume his research was accurate. His account suggests that Leath’s office was the only ISU entity to use the Cirrus.

Why, then, does the FAQ imply multiple departments use the plane?

Over the weekend, Ditchwalk took a deep dive into the Cirrus flight log and supplemental log linked on the FAQ page.

Among many gaps and inconsistencies Ditchwalk identified:

• The records don’t show “the number of flight hours accrued by Cirrus-qualified pilots” at ISU;

• ISU “departments that use the plane” are not listed either;

• “the fact that the university had to go to a third-party service to track the flights of its own airplane” creates the impression “no one at ISU has any idea who flies the Cirrus, where it goes on those trips, or even why it goes on those trips”;

• “some known flights” are not included in either the flight log or supplemental log linked on the FAQ page, while a few “redundant” flights are listed and other undocumented flights “can be inferred”;

• ISU’s FAQ page says Leath took piloting lessons from Jim Kurtenbach from October 18, 2014 to January 12, 2015. Ditchwalk found that the logs show no flights in the Cirrus between October 23, 2014, and January 9, 2015. Did Leath do his training in ISU’s Cirrus? If so, did he reimburse the university for the use of the plane, and why are those flights not logged?

• Over approximately two years and one month between “the first logged flight on 08/22/14 and the last logged flight on 09/23/16,” the logs show 22 trips on the Cirrus occurred on 32 or 33 days. “All told, Iowa State’s Cirrus SR22 sat idle for approximately 730 out of a possible 760 days, including multiple two-month and three-month stretches with no flights logged. After three months without flying, FAA certification requirements would have required that Leath (or anyone else) make one or more solo flights before carrying passengers, thus possibly accounting for several more of the logged trips.”

• “if ISU’s Cirrus SR22 was only used on 30 or so days out of a possible 760, then cost-effectiveness has been in the crapper since the moment it was purchased. Take a $500K outlay, add in maintenance and fuel costs, insurance, hangar fees, and whatever else ya got, and Iowa State’s Cirrus was probably never cost-effective — assuming, again, that there aren’t hundreds of undocumented flights yet to be found.”

Ditchwalk noted,

What would be ideal, of course, would be a first-party log (or logs) which detailed exactly who was using the ISU Cirrus SR22, where it was flown, and when. Speaking of which, did you know that pilots are required to keep a log of their flights? Indeed, they are — meaning if Iowa State was having a hard time piecing the flight history of either one of its planes together, one solution would be to go to any of the pilots on campus who had flown that particular plane and ask them for log entries about their use of that aircraft, which of course they would be happy to provide.

Of course, if there were one or two pilots who made predominant use of the Cirrus, then their logs would be particularly relevant to the full, open and transparent inquiry just announced by the Board of Regents. […] In fact, because we know that ISU President Steven Leath flew the Cirrus from time to time, then from his log entries alone we should be able to get a much clearer picture of where the plane went and when, as well as some idea whether the percentage of annual costs billed to the president’s office (if any) were proportional to his use of that plane.

Leath’s personal flight log is not accessible through ISU’s FAQ page. The president seems not to have made it available to the internal auditor who researched ISU travel policies on behalf of the Board of Regents. I don’t know whether he can be compelled to provide it for the State Auditor’s Office review of ISU’s airplane usage, or for the more extensive ISU Flight Service audit the regents approved last week.

Over the weekend, the Des Moines Register’s editors concluded ISU had provided students of public relations with “a textbook example of crisis mismanagement.” I expect more teachable moments in the coming weeks and months.

P.S.- The numbers in the revised question 3 of the FAQ don’t add up: $2.875 million (purchase price of King Air) plus $595,568 (for upgrades) minus $835,000 (sale price of old King Air) equals $2,635,568–not $2.4 million, the price ISU originally provided to the media.

UPDATE: On October 24, ISU updated the answer to question 3 on the FAQ page again. New text:

3. How much did the university aircraft cost?

It was initially reported that the cost of the King Air 350 was $2.4 million. That figure was based on incomplete information from ISU Flight Service that included the purchase price of the aircraft plus the expense of certain after-purchase upgrades minus a credit for the sale of the old plane. There was no attempt to mislead anyone. The King Air 350 was purchased for $2,875,000 by the Iowa State University Foundation. After the purchase, avionics upgrades, inspections, safety improvements, maintenance, refurbishment, branding and paint totaling $595,568 were made to the King Air using the same discretionary funds that were used by the ISU Foundation to purchase the plane; those funds are designated for Department of Athletics’ priorities (see question 5).

The bulk of the total includes the G1000 Avionics system at a cost of $327,213. This includes communications, navigation, monitoring, flight-control, collision-avoidance, and weather radar systems, which are essential for the operation and safety of the aircraft. Also included in the total was the ROSENVIEW VX Combination Moving Map and DVD player, audio and video distribution amplifiers, display and base, receiver, and remote ($50,960), and the Aircell ATG-2000 high-speed internet system ($79,338). These items were installed at the same time because installation with the other upgrades was more cost-effective then adding these items later. The moving map system was installed to allow passengers to track the progress of the flight, including distance, landmarks, arrival time, etc. on their own without constant disruptions to the pilot in-flight, therefore, also offering an important safety component. The high-speed internet system costs $2,595 per month and was installed to allow passengers to access internet on board, enabling them to conduct work in-flight. These specific upgrades were also completed with the same consideration given when upgrading athletics and other facilities: first-rate facilities for our faculty, staff, administrators, students, athletes and coaches is an important component for recruitment and other success. All of the upgrades were made using the same discretionary funds designated for Department of Athletics’ priorities that were used by the ISU Foundation to purchase the plane. (Attached: Invoice)

Pursuant to an agreement between the ISU Foundation and the university, title to the aircraft was transferred directly from the seller to the university. The old King Air 200 was sold for $835,000. (Attached copies: Aircraft Purchase Agreement | Aircraft Listing and Sales Proceeds Agreement | Aircraft Acquisition Agreement).

The Cirrus was purchased by the university for $470,000 plus the trade-in value of an older plane owned by the university, which had a trade-in value of $28,000. (Attached: Cirrus purchase agreement.)

Cost breakdown of the King Air 350

Purchase price: $2,875,000
Upgrades: $595,568
Less sale of King Air 200: ($835,000)
Total net cost of King Air 350: $2,635,568

OCTOBER 26 UPDATE: Ryan Foley reported for the Associated Press that Iowa State spent $290,000 on avionics upgrades to its 1977 King Air 200 in January 2013.

University spokeswoman Megan Landolt said the school determined a year later that it would be more cost-effective to sell that plane and buy a newer one. She says the sale price of $835,000 was “far higher” due to its avionics upgrades, saying the costs were recouped.

At this writing, those costs have not been added to the FAQ page.

I wonder whether donors to ISU’s Foundation feel it was cost-effective to sink so much money from a discretionary fund into Leath’s airplane habit.

Speaking of which, Ditchwalk fact-checked Leath’s claim during an October 5 interview with the Iowa State Daily that he never took personal trips on ISU’s King Air.

Those were all normal work trips and generally with other people. I mean it’s not like I just took it by myself, except very rarely. I can’t say I’ve never been on it alone or just with my wife. But most of those trips had other people on them.

Click through for the full list of relevant flights. Ditchwalk’s final tally:

King Air invoices with Steven Leath and/or Janet Leath only:

2014 — 4 invoices at a cost of $17,608.84.

2015 — 21 invoices at a cost of $58,415.60.

2016 — 15 invoices at a cost of $46,023.64.

Total invoices with only Steven Leath and/or Janet Leath: 40.

Total cost: $122,048.08.

On top of the 40 trips that Leath took by himself or with his wife in the King Air, there are another 14 or so where he travels with one other person, and more where he travels with two or three others who would have fit in the Cirrus — though I would not wish the backseat in a single-engine plane on anyone. Over two years and four months, a minimum of 54 trips were flown by ISU President Steven Leath — a fully qualified pilot in the school’s Cirrus SR22 — in which the King Air 350 traveled with eight empty seats or more, and there were many more flights where the King Air was carried four passengers or less with Leath included, meaning those flights could have been taken in the Cirrus as well.

The findings of auditors working for the State Auditor’s Office and the Iowa Board of Regents should be interesting.

NOVEMBER 28 UPDATE: Ryan Foley reported for the Associated Press that while conducting the audit ordered by the Iowa Board of Regents, Stewart requested Leath’s “complete and unredacted” pilot’s log.

Leath asked Stewart if non-university flights had to be divulged, and Stewart responded they did. Board spokesman Josh Lehman says Leath later provided the log unredacted, and Stewart reviewed but didn’t take possession of it.

I hope Stewart took good notes. Information from the pilot’s log should shed light on whether Leath used the Cirrus for personal trips without reimbursing ISU, including on March 12, 2016.

You need to signin or signup to post a comment.