A year ago this week, State Auditor Mary Mosiman released the findings from her office's only examination of the wide-ranging scandal surrounding former Iowa State University President Steven Leath's use of university-owned airplanes.
To say the self-styled "taxpayer's watchdog" failed to properly investigate Leath's personal trips on the taxpayer's dime would be an understatement.
Mosiman did not try to find out how many times Leath misused ISU's airplanes or how much his personal travel cost the university. Because the auditor looked the other way, Iowans will never know the scope of a top official's misconduct at a large public institution.
1. NO SPECIAL AUDIT
Although Leath's use of ISU's planes was a major news story for months, beginning in September 2016, Mosiman opted not to conduct a special audit of the matter. Instead, her office folded a brief discussion into the following year's routine audit of ISU. At the end of this post I've enclosed the full text of that section, barely longer than a page.
Even the Iowa Board of Regents internal audit of Leath's airplane use, which left many important questions unexplored, was eleven pages long.
Mosiman's staff routinely produce lengthy reports about official corruption on a much smaller scale. For instance, a March 2017 investigation of Volunteer Services within the Iowa Veterans Home devoted five pages to documenting "$1,800.00 of popcorn sales which were not properly deposited" over a 20-month period.
When I asked Mosiman last fall why her staff hadn't filled in obvious gaps in the internal audit, the auditor's chief of staff Bernardo Granwehr replied on her behalf,
We try to avoid duplication of effort whenever possible. For that reason, our FY16 Report of Recommendations does not cover certain items already covered in the ISU Internal Audit Report dated December 12, 2016. [...] The ISU Internal Audit Report and our Report of Recommendations constitute the full public record regarding the issues you listed in your email.
Many salient facts are missing from that "full public record."
2. NO ATTEMPT TO REVIEW LEATH'S PERSONAL PILOT LOG
The Board of Regents instructed internal auditors to review every flight involving an ISU airplane during Leath's tenure. Staff had access to the university president's personal pilot log, which would have recorded every trip he took on the Cirrus SR-22 purchased in 2014 for his use.
Yet for some reason, the internal audit's public document drew solely from flight records provided by a tracking data service. The report acknowledged, "FlightAware may not have been able to track all flights" in the Cirrus, because pilots have contact with air traffic control only when using instrumentation flight rules. Leath could have taken ISU's plane out for any number of daytime trips using visualization flight rules.
That shortcoming should have spurred Mosiman to use her subpoena power to obtain the pilot log. Her staff could have determined how many times Leath flew the Cirrus, then investigated which trips had a legitimate business purpose.
3. NO CATALOG OF ISU PRESIDENT'S FLIGHTS
Using the flight tracker, the internal audit identified 76 trips in ISU’s smaller plane over a two-year period. Leath was a pilot or passenger on 72 of those trips, of which 52 had pilot “proficiency/training or certification” as the stated business purpose.
One would expect an appendix with relevant facts (date, destination, supposed purpose, name of pilot, cost to ISU) for each of those 76 trips. But the internal audit contained no such list. The university and Board of Regents rebuffed many attempts by journalists to obtain a full accounting of Leath's training flights and other Cirrus travel.
Mosiman's staff did not calculate the cost of the 76 known Cirrus trips. Nor did they use their subpoena power to obtain a comprehensive list of Leath's flights as a pilot or passenger. Instead, the State Auditor's office observed in the report released last year, "We have not identified a requirement for the University President to be a licensed pilot. Based on the limited use of the Cirrus SR-22 for flights with clear business purposes, we question whether the purchase [of the airplane] served a University purpose."
A serious investigation would have listed key facts about every flight. Open almost any special audit by Mosiman's office, and you will find questionable expenditures recorded in great detail. A June 2017 report on the city of Harlan was 119 pages long. Auditors drew from credit card statements and checking accounts to list hundreds of transactions (with date and cost for each) pointing to the former city administrator's improper payments.
4. NO SCRUTINY OF HOW LEATH USED ISU'S LARGER PLANE
Mosiman's Report of Recommendations to ISU last year did not mention the university's King Air, other than to note it picked up Leath in North Carolina on March 15, 2016. Yet the internal audit identified 109 trips the president took on the larger plane. Leath was the only passenger on 21 of those trips, and the president and his spouse were the only passengers on another 22 trips.
How much did that travel cost ISU? Mosiman's staff didn't find out. They didn't even try to determine how many of Leath's King Air trips alone or with only his wife occurred during the 2016 fiscal year. The task would have been easy; Ditchwalk did the work in this post predating the Regents audit.
Because the annual audit covered July 1, 2015 through June 30, 2016, Mosiman's staff didn't examine Leath's March 2014 trip to watch the men's basketball team play a "Sweet Sixteen" NCAA game. Although the King Air could have flown non-stop to the east coast and back, it stopped each way at the small Elmira/Corning airport to pick up and drop off Leath's relatives.
Had Mosiman authorized a special investigation of misconduct related to ISU aircraft, her staff could have put a price tag on those unnecessary stops in Elmira. As Bleeding Heartland discussed here, the additional costs must have been substantial. Surely they exceeded the missing proceeds from popcorn sales at the Iowa Veterans Home.
5. NO DIGGING INTO "DONOR RELATIONS" TRIPS WITH NO FUNDRAISING
ISU records indicated that 62 of Leath's trips on university aircraft were ostensibly for donor relations or outreach. But ISU Foundation documents described a donor visit for only 38 of those trips. For another seventeen trips, “the Foundation was aware of the individual [being solicited], but no records could be provided specific to the trip in question.” For seven trips in the fundraising category, "the ISU Foundation did not have any records" supporting the stated business purpose.
Incredibly, the internal audit said nothing about where or when those seven trips occurred, how much they cost, or who flew with Leath.
Here was another invitation for Mosiman to demand a real investigation. But the auditor's office did not look into flights ISU attributed to donor relations with no supporting evidence.
Remember, Mosiman's chief of staff told me last year, "We try to avoid duplication of effort whenever possible." There could have been no duplication, because the internal audit whitewashed these discrepancies.
If only Iowa had a watchdog with subpoena power to sort all this out.
6. NO ACCOUNTING FOR LEATH'S PERSONAL MEDICAL TRAVEL
To my knowledge, Leath never did fully reimburse ISU for travel to medical appointments. Bleeding Heartland chronicled here the university's stonewalling and shifting explanations about trips to Rochester, Minnesota in July 2015. The topic is sensitive; ISU has repeatedly denied anyone was injured when Leath damaged the Cirrus in a hard landing. If he or his wife needed medical treatment as a result, he would have been required to report the event as an “accident” to the National Transportation Safety Board. He didn't.
The disputed medical travel occurred during the 2016 fiscal year, so there was no excuse for Mosiman's staff not to investigate those trips as part of the limited report published last year.
7. A RELEASE TIMED TO ATTRACT LITTLE ATTENTION
ISU officials must have been relieved when Mosiman declined to order a special audit. Even so, the few paragraphs state auditors devoted to ISU's airplane program didn't shine a flattering light. The report questioned the Cirrus purchase and suggested the university should "consider seeking reimbursement from former President Leath" for part or all of Cirrus flights to and from North Carolina on March 12, 2016. (The Regents' internal audit had glossed over that trip.)
Fortunately for anyone at ISU worried about bad publicity, Mosiman guaranteed few Iowans would hear about her office's mild criticism. The Regents had hired Wendy Wintersteen as the new ISU president on October 23, 2017, making headline news across the state. Media organizations weren't likely to find room to cover the airplane findings Mosiman released the following day. Leath had moved on to Auburn University. ISU had unloaded the Cirrus to an alumnus who probably overpaid.
My review of ISU's routine annual audits since 2005 showed that they typically came out in July or August, once in early September.
When I asked Mosiman last year why her office hadn't published the report sooner and whether anyone had urged her to delay its release, the auditor replied by e-mail the following day,
Our Office did not release the ISU Report of Recommendations months ago because it was not yet ready to be released. Other reports of recommendation have recently been released, and some are pending. As you demonstrated in your email with past ISU release dates, the release date of reports can vary based on the time required to complete the report. We have an obligation to the taxpayers to take the time necessary to issue an accurate report.
Our Office released the ISU Report of Recommendations in a manner consistent with our standard practice of releasing reports when they are complete.
Not quite. I checked past records and found that most of the time, the State Auditor's office published the routine annual reviews of state universities within a few days of sending the findings to the Board of Regents. Last year, Mosiman's cover letter to the board was dated October 9. Since staff had completed the report, why wait until October 24 to publish, if not to bury "bad news" on a day with massive, favorable media coverage of Wintersteen's hiring?
Mosiman never answered my follow-up question.
Incidentally, the auditor's office released the latest Report of Recommendations for ISU on July 18, 2018, one week after the date on Mosiman's cover letter to the Board of Regents.
Side note: when it comes to convenient timing, you can't beat Mosiman's predecessor David Vaudt. He released an audit of the Iowa Department of Economic Development's Film Office one week before the 2010 general election. The auditor's office had sent the report to state legislators and the governor's office on August 19 of that year.
WHY DIDN'T MOSIMAN INVESTIGATE?
Having spent a personally significant amount of time digging into Leath's airplane misadventures, I've wondered why the state auditor didn't want her staff to thoroughly investigate what went on at ISU. Not being a mind-reader, I can only speculate.
Speaking truth to power has never been Mosiman's strong suit. She hasn't called out irresponsible budgeting practices by members of her own party. She hasn't held for-profit insurance companies accountable for cutting Medicaid patients' services or for stiffing providers.
The president of the Iowa Board of Regents during Leath's tenure was Republican heavy-hitter Bruce Rastetter. When the airplane scandal was in the news, Rastetter and fellow board member Larry McKibben, a former GOP state senator, expressed their confidence in Leath early and often. (For those who are wondering, Rastetter wasn't a donor to Mosiman's last state auditor campaign. His first contribution to her was a $5,000 gift a few weeks ago.)
Compounding her natural inclination not to make trouble for well-placed Republicans, Mosiman is an ISU alumna and spent much of her career in Story County. Ames is essentially a company town. Anyone who lives and works there is bound to have some university ties.
One connection: Mosiman's campaign treasurer for the past five years has been Annmarie Kurtenbach. She is married to former state lawmaker Jim Kurtenbach, who provided free piloting lessons in late 2014 to Leath, possibly in violation of Iowa's gift law. (See point 10 of this post.)
Kurtenbach landed a well-paid, high-ranking position at ISU on an interim basis around the same time he was helping Leath become certified to fly the Cirrus. He later received a permanent appointment to the same lucrative job. Both hires happened without any formal search process.
Final note: Mosiman's Democratic challenger Rob Sand moved quickly to investigate Leath's hard landing in ISU's Cirrus. Superiors shut him down, Ryan Foley reported for the Associated Press in October 2016.
Prosecutor Rob Sand, who has pursued white-collar crime and misconduct by public officials, sought and obtained public records about Leath's plane accident after it was revealed last month. But his inquiry was ended within days when leaders of the Board of Regents learned about it and had the board's lawyer contact Iowa Attorney General Tom Miller's office, where Sand is an assistant attorney general.
Appendix: Excerpt from October 24, 2017 State Auditor's Report of Recommendations to Iowa State University covering the fiscal year that ended on June 30, 2016.
We performed additional limited fieldwork and reported on one specific issue identified in the following comment and recommendation.
(A) Aircraft Purchase and Usage – At the time of the purchase of the Cirrus SR-22, policy 8.2 of the departmental procurement procedures required equipment with a unit cost greater than $250,000 to be submitted to the Board Office for approval. For large purchases in prior years, Board Office approval included a justification from the University to the Board Office and the written signature of the Executive Director approving the purchase.
In July 2014 the University used ISU Foundation 497 accounts to purchase a Cirrus SR- 22 aircraft. The University recorded a $498,000 gift at the time of the donation which properly reflected a $28,000 trade-in of a Piper PA-28-161 (Piper Cherokee) owned by the University. ISU internal audit staff discussed the purchase with the Executive Director of the Board of Regents who confirmed he was aware of the purchase of the aircraft in advance, however, the evidence of approval is a memo signed by then Senior Vice President for Business and Finance stating the Board Office was informed of the transaction and indicated approval to proceed. Written approval by the Executive Director of the Board Office was not obtained.
The ISU Internal Audit Department performed a review of the trips taken on the Cirrus SR- 22 and we have reviewed that documentation. The ISU Internal Audit Department identified 76 trips on the aircraft which included 52 trips for the President to obtain an instrument rating. We also obtained the hobbs meter reading for the Cirrus SR-22 from the University. The hobbs meter reading identifies the amount of time the aircraft engine is running including ground operations such as taxi and engine checks. From the time the University purchased the aircraft in July 2014, the airplane logged a total of 264.8 hours on the hobbs meter, or an average of 88 hours per year in the three years it was owned. We have not identified a requirement for the University President to be a licensed pilot. Based on the limited use of the Cirrus SR-22 for flights with clear business purposes, we question whether the purchase served a University purpose.
One of the Cirrus SR-22 flights occurred on March 12, 2016, the start of spring break, in which Mr. Leath and a University pilot flew the aircraft from Ames to Mr. Leath’s home in Ashe County, North Carolina and the other pilot brought the aircraft back to Ames. The flight was noted as instrument flight rules (IFR) training for the University pilot. On March 15, 2016, the King Air left Ames and arrived in Ashe County, North Carolina and the following day left Ashe County, North Carolina for various locations finally arriving back in Ames on March 19, 2016. The business purpose subsequently provided by the University was to present a speech, attend a University programs meeting in Pittsburgh and an ISU mens basketball game in Denver, Colorado. Because the trip was used to transport former President Leath to his home in North Carolina the business purpose for the Cirrus SR-22 trip on March 12, 2016 is not clear and no further explanation has been provided. According to the flight log provided by ISU Internal Audit Department total flight time was 9.1 hours. Records do not exist to determine if any portion of this flight was reimbursed by former President Leath.
Recommendation – The University should ensure all purchases have a business purpose, the business purpose is documented when not clearly evident and are made in accordance with procurement policies including obtaining written approval from the Board Office when required. Because at least part of the March 12, 2016 flight did not have a clear University business purpose and the former President has reimbursed for other flights when a clear business purpose was not present, the University should determine what portion of the flight was personal and consider seeking reimbursement from former President Leath.
Waukee audit report
I predict she's going to use the audit report of Waukee schools for political gain as well. I'm guessing it'll be a Friday news dump on the morning of November 2 because that would give her a boost in the media right before the election at the right time. It'll be fresh in the minds of voters, but Sand won't have time to respond because people will tune out over the weekend.
After the election, all 6 of the current school board members who were around at the time of the Eric Rose scandal (None of whom are Democrats) will say the public should disregard their complicity in the scandal because the audit report was just a political game. Unless the board finds a low level scapegoat, no one will be held accountable.
I hope they prove me wrong, but I don't think they will.