Debi Durham's appointment as economic development leader was the big news of the week from Governor-elect Terry Branstad's camp, but he and his close advisers continue to lay the groundwork for his administration.
After the jump I catch up on stories about the state budget, inauguration plans, and top Branstad donors from the past year.
Branstad and his advisers continue to complain publicly about the two-year contract Governor Chet Culver recently approved with AFSCME, the largest union representing state workers. To avoid letting the new governor negotiate the contract, AFSCME proposed a draft almost identical to the current contract, and Culver accepted the deal with no haggling. AFSCME members have not yet voted on the contract terms. Branstad wants AFSCME to reopen negotiations, and his future head of the Department of Management told journalists this week that the state cannot afford the modest pay increases in the proposal Culver accepted.
[David] Roederer will be Branstad's budget director and he says it's "unfortunate" that Branstad may open his fifth term as governor with a confrontation with state workers over their pay and benefits.
"What's unfortunate when you get in these discussions is that it boils down to whether you think somebody deserves a pay raise or whether they don't. That's not the issue ... The question is whether or not you have the resources to do it," Roederer says. [...]
Roederer says the state has a "structural deficit" and a $100 million package for state employee pay raises adds to the red ink. [...]
Roederer says both management and labor consider providing essential state government services their mutual, "number one" goal. "Now there's always a dispute or a disagreement I should say about what are the necessary services that need to be provided to Iowans," Roederer says, "and that's what we're looking at."
Roederer is hinting at cuts to the state workforce. Incoming Iowa House Speaker Kraig Paulsen has also warned that layoffs will be needed if AFSCME members approve a contract including automatic pay increases. But House Republicans have wanted to slash state government for years, and Branstad promised during his campaign to reduce the size of government by at least 15 percent if elected. That can't be done without some layoffs, even if AFSCME did agree to a pay freeze.
"The president is now asking that the federal employees accept a freeze. I guess my feeling would be to ask the union to reopen negotiations and consider doing something similar. I think it's only fair," Branstad said in an interview this morning [November 30].
"We believe in the Obama plan," added David Roederer, who will head Branstad's Department of Management.
I can't imagine AFSCME reopening the contract negotiations unless the union's members vote down the deal on the table, which seems unlikely. Not only does Branstad want to block raises, he has made clear that he would like to cut state workers' benefits package. If negotiations were reopened, the process might end up in arbitration. Culver has claimed that would be costly to the state and would probably result in a wage increase comparable to the one he approved.
Roederer will take a lead role in drawing up a draft budget for fiscal year 2012. He said this week that the work "may take longer" than he'd anticipated, because he'd found it "cumbersome" to get some of the financial details from Culver's administration.
Roederer is one of only three Branstad staffers being paid a salary during the transition period. The others are Jeff Boeyink and Tim Albrecht, who will serve as chief of staff and communications director in the new administration. Everyone else assisting the transition team is reportedly volunteering their time.
During the campaign, Branstad promised he would carefully review all state regulations and economic incentives, such as tax credits. So far few details have emerged about which programs Branstad would axe, but this week he confirmed that he wants to eliminate the film tax credit program. That's an easy target given the mismanagement of the Iowa Film Office, which has led to criminal charges. Other tax credits and state incentives have more powerful interest groups ready to fight to keep them.
On the other hand, if Branstad wants to cut corporate taxes, he'll need to make the money up somewhere in the budget. Some policy analysts have argued convincingly that corporate tax cuts won't stimulate the state economy, but those voices won't have the governor's ear. Durham is the board chair of the Iowa Chamber Alliance, and that group's legislative agenda calls for reducing corporate income tax rates. The Iowa Association of Business and Industry's legislative priorities also include a more favorable tax climate for business, and ABI's President Mike Ralston applauded Durham's appointment this week.
Branstad's campaign revealed some details on December 1 about the upcoming inauguration. The will take place January 14 in Des Moines' Hy-Vee Hall. Margaret Hough will direct the event; she did the same job for Branstad's 1991 and 1995 inaugurations and worked as Branstad's executive assistant and office manager when he was president of Des Moines University. Co-chairs of the inaugural committee will be Bruce Rastetter and Teresa Wahlert. Here are the official bios provided by the Branstad camp:
- Rastetter, of Iowa Falls, founded a small feed management business and eventually became a leader in the pork and renewable fuels industries. He currently manages Hawkeye Energy Holdings LLC and Summit Farms, a northern Iowa farming operation. Rastetter is an active philanthropist, supporting local and state efforts focused on education and entrepreneurship, and serves on a number of agricultural boards.
- Wahlert, of Waukee, is a longtime business executive, including work at AT&T, Qwest and Mid-Ameria Group. In 2003, she served as president and CEO of the Greater Des Moines Partnership. Wahlert serves on a number of civic and business boards and is a 2004 inductee to the Iowa Business Hall of Fame.
In this piece on Branstad's "inner circle" published a few months ago, the Des Moines Register's Thomas Beaumont named Rastetter as "Branstad's top fundraiser and one of his newer advisers." Rastetter was the largest individual donor to Branstad's campaign, giving at least $164,000. His brother Brent Rastetter contributed at least $30,000, according to campaign finance disclosure documents. Some Iowa politics-watchers speculated in early 2009 that Rastetter might run for governor himself, but he ended up being one of the business leaders who recruited Branstad to run.
Beaumont reported that Wahlert "has played a lead role in Branstad's economic development agenda." Let's hope she and others involved with the Greater Des Moines Partnership advise the new governor not to reject federal money for passenger rail in Iowa.
Rastetter's connection to the American Future Fund was conspicuously absent from the bio provided by the Branstad campaign. Many major donors have become trusted advisers to Iowa governors, but I am not aware of any other governor being so close to people affiliated with a secret donor network. The American Future Fund raised and spent millions of dollars to influence elections around the country. Nick Ryan, who runs the 501(c)4 group, was among the top 10 individual donors to Branstad with more than $67,000 in contributions. Ryan has worked for Rastetter's companies in various jobs since 2007. This New York Times feature on the American Future Fund discussed some of the Rastetter-Ryan connections:
Mr. Rastetter began his corn-based ethanol company, Hawkeye, in 2003, after making his fortune with a pork production company, Heartland Pork. Hawkeye quickly became one of the nation's largest ethanol producers, and Mr. Rastetter became an outspoken advocate for ethanol, helping to start a new trade group, Growth Energy, that supports its increased use at fuel pumps and tariffs on foreign producers. As his stature grew, so did his position as a Republican donor, and potentially as a candidate himself.
Speculation of a candidacy increased in 2007, when Nick Ryan, who managed former Representative Jim Nussle's losing 2006 campaign for Iowa governor, registered with the state as a lobbyist for four Rastetter businesses, including Hawkeye.
After Mr. Ryan helped establish a political committee called Team Iowa, Mr. Rastetter was the largest donor in federal tax records, listed as giving $100,000. After Mr. Rastetter started his family foundation, Mr. Ryan became one of four board members.
And when Mr. Ryan started the American Future Fund, Mr. Rastetter provided "seed money," but nothing more, said Mr. Rastetter's lawyer, Mr. Stockdale. He declined to name an exact figure but put the amount at less than 5 percent - or less than $374,025 - of the nearly $7.5 million the group collected in 2008. [...]
Mr. Stockdale said Mr. Ryan had not received any compensation from Mr. Rastetter since the first quarter of 2009, though they remain "good friends."
Tim Albrecht worked with Ryan as the American Future Fund's communications director before Branstad hired him to handle press relations for his gubernatorial campaign. Branstad hired former American Future Fund president Nicole Schlinger to run his campaign's fundraising; it's not yet clear whether she will have a position in the next administration.
Since 501(c)4 groups do not have to disclose their donors, the public and press have no way to find out who donated to the American Future Fund. Whoever they are, I suspect they won't have trouble getting access to Branstad through Rastetter, Ryan or Albrecht. The Federal Elections Commission has not yet ruled on a complaint alleging the American Future Fund functions like political committees that have disclosure requirements.
The Iowa Republican posted the 20 largest individual donors and the five largest PAC contributors to Branstad's campaign. The Iowa First Foundation, co-chaired by longtime Branstad associates Doug Gross and Richard Schwarm, was the largest PAC donor, giving $70,000. I would argue that the two polls that foundation commissioned in 2009 were even bigger gifts to Branstad. The first poll (for which I was a respondent) sparked the Branstad comeback rumors:
The survey also gave respondents descriptions of potential gubernatorial candidates and asked them to rank how appealing each sounded. The highest approval numbers, nearly 90 percent, went to "A widely-respected former statewide elected official who has managed Iowa through troubled times before." Presumably, the description is referring to former Republican Gov. Terry Branstad, was also mentioned in another question asking respondents if they would like a gubernatorial candidate who was "a lot like Terry Branstad, somewhat like Terry Branstad, somewhat different than Terry Branstad or very different than Terry Branstad."
The Iowa First Foundation's second poll, taken in July 2009, indicated that Culver would win against all potential challengers except Branstad. I still think Culver would have been re-elected if he had faced Bob Vander Plaats, and I doubt any Republican but Branstad could have beaten Vander Plaats in the primary.
Former Gov. Tom Vilsack's porridge was too cold when he was taking the reins from the first Branstad administration. He recalls being given a tiny office behind the legislative dining room, about $37,000 in state money and not nearly enough detailed information to satisfy his wonky heart. [...]
"When I transitioned to Governor Culver, we had offices, we gave them multiple offices, we had computers, we had books - significant books that outlined all of the budgets, all of the problem areas that we were still dealing with," Vilsack said. "So there was a very smooth transition. We learned from the experience that I had, how to do a transition."
According to Kathie Obradovich, Branstad's team will be able to use the Culver Department of Management's budget analysts.