Payout for sexual harassment leaves oversight failures unexplored

A divided state board has approved settlements worth a combined $4.15 million to two women who reported extensive, appalling sexual misconduct by former Iowa Finance Authority Director Dave Jamison. Under the agreements posted in full below, $2.35 million will go to the agency's former business development director Beth Mahaffey, and $1.8 million will go to the agency's communications director Ashley Jared. Attorney's fees for both women will come out of those payments.

The settlements bring closure to women who endured a horrific workplace environment. But they also ensure that oversight failures at the finance authority will never be fully explored in litigation.

Two members of the State Appeal Board okayed the settlements. David Roederer had already signed the papers in late January in his role as Department of Management director. State Treasurer Michael Fitzgerald said in a statement following the February 4 meeting that after weighing the available information, he felt approving the settlement was "in the best interest of Iowans."

While I believe the conduct related to these allegations is egregious, I also believe it is imperative to minimize the financial risk to the state. Given the jury award and subsequent settlement in the [Kirsten] Anderson case, the comprehensive report that was issued regarding the Jamison allegations and the experience of our attorney general’s office, I voted to approve the settlement.

An investigation by a Des Moines law firm recounted shocking, unacceptable behavior by Jamison over a period of years. The full report and appendix, containing details from witness testimony, can be found here or at the end of this post.

State Auditor Rob Sand voted against the settlement, primarily because it did not require the state to seek restitution from the perpetrator. “If Dave Jamison isn’t going to pay for his actions, neither should taxpayers,” he said in a statement, adding that holding "bad actors" personally accountable would put Iowa taxpayers "in a better position" long-term by deterring misconduct.

Other concerns Sand noted in a letter to fellow appeal board members included:

  • Possible outstanding liability to Jared, who settled a sexual assault claim in addition to harassment and discrimination claims. State law prohibits "any claim arising out of assault" from being settled in this manner.
  • The risk that the victims could "undo these settlements" if the state pursued a restitution suit against Jamison, which could require their testimony.
  • An unclear purpose of the governor's possible request that Iowa Finance Authority "repay the general fund for this settlement." Sand observed that such a request would have little purpose: "IFA's assets are taxpayer assets, so it seems to be just taking money out of one account instead of another, with no effect. [...] it is still taxpayers funding all settlements." UPDATE: The agency's board voted on February 6 to reimburse the state for the settlement costs. The agency's interim president told Ben Oldach of WHO-TV that "the money will come from a fund that is made up of private money they’ve collected from their housing programs and low interest loans," not from taxpayers. However, those are still funds that could have gone toward some other public purpose but will now be used to pay Jamison's victims.

    LATER UPDATE: Iowa Finance Authority staff later provided this statement on behalf of Director Debi Durham: “The settlements will be paid from a reserve and revolving loan fund established over the last 40 years through the Authority’s earnings on loan investments paid by private entities. To reiterate, no state general fund dollars will be used to pay the settlements. Upon my appointment, I requested a meeting with the IFA bond counsel to provide background on the Authority’s structure.” The agency provided this letter from an attorney confirming that the Iowa Finance Authority is "a corporate entity, separate and distinct from the state."

  • A rush to approve only days before an agreed-upon payment date. If the board rejected the deal, Sand noted, "plaintiffs still have 6 months to file their suit. That is plenty of time to continue negotiations [....] At the same time, the State could negotiate a resolution with the harasser for restitution."
  • Why the hurry to settle? Ryan Foley and David Pitt provided a clue in their story for the Associated Press.

    Both women had filed legal complaints with the Iowa Civil Rights Commission, but had not yet filed lawsuits. Settling the cases this early — and for this much money — is unusual for the state. But the move avoids potentially years of proceedings during which Jamison’s conduct and his association with the governor would have been examined, along with the risk that jurors could eventually return larger verdicts.

    The women said that Jamison frequently boasted of his close relationship with the governor and that they didn’t complain sooner because they believed he would face no consequences. They came forward after they were disturbed by an incident in which Jamison allegedly showed one a pornographic video during a car ride, looked at his crotch and said, “can you tell when I am excited?” They said they were afraid of the former Marine.

    Speaking to investigators, several other witnesses corroborated the victims' claims. From the write-up of the interview with Chief Administrative Office Brian Crozier:

    One of the tasks that Mr. Jamison assigned to Mr. Crozier was to aid in getting the job positions of certain employees reclassified. [...]

    Mr. Crozier said that DAS [Department of Administrative Services] kept saying "no, no, no" to Ms. Flaherty's reclassification. He heard that Mr. Jamison had lunch with Governor Kim Reynolds and Mr. Jamison told her about what was happening. Mr. Crozier said that although Mr. Jamison had seemed reluctant to reach out to Governor Reynolds after she became Governor, he decided to reach out to her over Ms. Flaherty's reclassification. Mr. Jamison reported to Mr. Crozier that Governor Reynolds said that she would call DAS Director Janet Phipps. Ms. Phipps subsequently drove to IFA several times to work on getting Ms. Flaherty's reclassification. He said that Ms. Phipps told them exactly what Ms. Flaherty's "position description questionnaire" needed to say in order for Ms. Flaherty to be promoted.

    Incidentally, Phipps was among four state officials who signed off on the settlement agreements before they went to the State Appeal Board. The others were Roederer, current Iowa Finance Authority Director Debi Durham, and Solicitor General Jeffrey Thompson of the Attorney General's office. (Last month, Reynolds picked Durham to head the finance authority while keeping her in charge of the Iowa Economic Development Authority, a post she has held for eight years.)

    Back to the investigative report's appendix:

    Mr. Crozier reported that Mr. Jamison frequently told people that he was great friends with Governor Reynolds and that they served as county treasurers together and had been on the 2010 campaign trail together as well. Mr. Crozier said Mr. Jamison was "very proud of his relationship with the Governor." Mr. Crozier remembered one time Mr. Jamison was so mad about something unimportant (he does not remember what it was) and he said, "Damn it, I'm going to the Governor with this one." Mr. Jamison also went to Governor Reynolds to "get her on board with the new building." Mr. Crozier said that Mr. Jamison had a picture of [sic] in his office of him, Governor Reynolds, and State Auditor Mary Mosiman on the White House lawn.

    [...] He said that in December 2017 or January 2018, Mr. Jamison did a lot of work on his personal computer. Mr. Jamison later told him that he had been editing Governor Reynolds's Condition of State address. According to Mr. Jamison, Governor Reynolds accepted all of his edits."

    The write-up of investigators' interview with Jess Flaherty noted, "Ms. Flaherty acknowledged that Mr. Jamison wasn't afraid to say he would call the Governor to get things done if he needed to."

    From the notes on the interview with Rhonda Kimble, director of an IFA program:

    Ms. Kimble discussed with Witness 1 and Witness 2 the possibility of reporting Mr. Jamison's conduct. She particularly encouraged Witness 2 to come forward about things Mr. Jamison had done. None of them believed, however, that reporting the conduct internally at IFA would do any good. Ms. Kimble said that whether it was true or not, Mr. Jamison portrayed that he had a relationship with Governor Reynolds that would allow him to resolve issues favorably at IFA when he needed. [...] She said that while Mr. Jamison touted his relationship with Kim Reynolds when Ms. Reynolds was the Lieutenant Governor, such references and claims increased significantly after Ms. Reynolds became Governor.

    The agency's Human Resources manager, Brooke Parziale, told investigators about "uncomfortable situations" regarding Jamison's demands for job reclassifications. "On this reclassification issue, Mr. Jamison would also say, 'I'll just call my friend Kim and get my way anyways.'"

    From the notes on IFA's general counsel Mark Thompson:

    Mr. Thompson said that Mr. Jamison let people know about his relationship with Governor Reynolds. Due to his relationship with the Governor, Mr. Thompson stated that he would often take advantage of DAS and try to get his way on different issues. He said that he did this with the job reclassification for Jess Flaherty, his executive assistant.

    Phipps told investigators she

    was fully aware that IFA and other agencies were giving large pay increases of 5%, 10%, or sometimes even 15%. She would transmit this information to the Governor because she did not think it looked good when the state was cutting budgets everywhere else and these employees were getting such large pay increases.

    During Reynolds' interview with investigators, she confirmed that Jamison had "helped her edit the Condition of the State Address" and occasionally raised agency-related concerns with her. She remembered telling her chief of staff Jake Ketzner, "I continue to hear concerns about the [job classification] process, can you talk to Ms. Phipps and see what is going on and what we can do to make this process work for both parties."

    Allies have crafted an image of Reynolds as someone who is "happy to dig into the weeds and perform her own research en route to making a decision." Yet Reynolds did not act on Phipps' reports of excessive pay hikes and did no fact-finding before intervening on Jamison's behalf with Phipps' agency.

    If she had looked into the matter, the governor might have learned what multiple witnesses affirmed: Jamison occasionally sought promotions for employees who were not qualified for the new position and sometimes not even performing the duties associated with their current jobs.

    Add this to the list of ways Reynolds doesn't live up to her reputation as "a studier and a worrier."

    Jared and Mahaffey praised the governor this week for firing Jamison quickly and protecting their privacy after they reported misconduct.

    With the settlements signed, Reynolds can rest easy, knowing that no lawsuits will lead to discovery on how Jamison was able to keep harassing and intimidating subordinates for years.

    Appendix 1: Redacted settlement agreement and release document for Ashley Jared

    Appendix 2: Statement released by Ashley Jared's attorney on February 4

    Coming forward to the Governor about the sexual assault and harassment I was enduring by my then Executive Director took every ounce of courage and strength I had.

    I’m passionate about the work the Iowa Finance Authority does and I made the decision to come forward in order to remain in my job and to help ensure other women would not have to go through what I did.

    I put all my trust in Governor Reynolds when coming forward, knowing the risk of the details becoming public, and will be forever grateful to her for taking action quickly while protecting my identity.

    I look forward to putting this behind me and moving forward alongside my talented coworkers in a safe, dignified and respectful workplace.

    I’m wholly committed and proud to serve in my role as IFA’s Communications Director now and into the future.

    I will have no further statement on this issue as I work to move past this horrific and appalling experience.

    Appendix 3: Redacted settlement agreement and release document for Beth Mahaffey

    Appendix 4: Statement released by Beth Mahaffey's attorney on February 4

    I took the position of Business Development Director at the Iowa Finance Authority because I believe in community service and civic duty. My goal was to use my skills and experience to serve Iowans and further the mission of the Iowa Finance Authority, which is “to enhance the quality of life for Iowans.” The majority of staff at the Iowa Finance Authority take this mission to heart and work very hard to assist Iowans. Unfortunately, the work environment created by the former Executive Director became increasingly toxic and harmful. I came forward in desperation when I could no longer tolerate the dehumanization of myself and others. This was a very difficult decision due to the constantly looming threat of retaliation.

    Fortunately, our Governor acted swiftly and honored my wishes to remain confidential. These actions will certainly reduce barriers for other victims to come forward.

    Additionally, the State of Iowa revised their policies to provide an avenue for the reporting of mistreatment by State employees.

    I have no further comments about this negative experience. At this point, I am moving on and looking forward to future opportunities to provide community service.

    Appendix 5: Statement released by State Treasurer Michael Fitzgerald following the State Appeal Board meeting

    As a member of the State Appeal’s Board, two settlements came before the Board related to alleged sexual harassment by the former director of the Iowa Finance Authority. My job as a member of the State Appeal’s Board is to represent the best interests of Iowans. As with any settlement that is brought before the Board, I rely on the expertise of our Attorney General and the facts before me.

    While I believe the conduct related to these allegations is egregious, I also believe it is imperative to minimize the financial risk to the state. Given the jury award and subsequent settlement in the Anderson case, the comprehensive report that was issued regarding the Jamison allegations and the experience of our attorney general’s office, I voted to approve the settlement.

    These are not easy decisions and are not made lightly. I weighed the information provided and in the end, I believe that what is in the best interest of Iowans is to approve the settlement.

    Appendix 6: Statement released by State Auditor Rob Sand following the State Appeal Board meeting

    Auditor Sand: “If Harassers Aren’t Paying for Their Actions, Neither Should Taxpayers”

    Today, during the Iowa State Appeals Board Meeting, Auditor Sand voted against a $4.125 million dollar settlement package to be paid out to victims of Dave Jamison’s sexual harassment, perpetrated while Jamison was Director of IFA.

    Auditor Sand made clear in the meeting that he will not support any settlement unless the Attorney General’s Office seeks restitution from Dave Jamison making him pay back the State of Iowa for the settlement. “If Dave Jamison isn’t going to pay for his actions, neither should taxpayers.” said Auditor Sand.

    “Sexual harassment is not only a pervasive problem in state government but has become an drain on taxpayer resources at a time when our state’s budget is hurting. Former Director Jamison’s behavior and the fact that he was an agency head make it more egregious than anything we’ve seen for a long time.” furthered Auditor Sand.

    Auditor Sand’s vote today was twofold: By seeking restitution Iowa taxpayers will not continue to bear the financial burden of bad actors. Second, we seek an end to sexual harassment in the workplace by holding the perpetrator personally accountable, which in the long run, puts Iowa taxpayers in a better position.

    “This will provide accountability for harassers, protection for taxpayers, and in the long run, will save taxpayer money by deterring sexual harassment and collecting from those who do harass.” Auditor Sand concluded.

    Appendix 7: Letter from Auditor Sand to other members of the State Appeal Board prior to the February 4 meeting

    Appendix 8: Independent investigative report on Dave Jamison's alleged sexual harassment during his time leading the Iowa Finance Authority

    Appendix 9: Appendix to independent investigative report, containing detailed witness statements

    • I really hope there will be a little more media attention paid... just where the settlement money is coming from. A couple of TV news stories I saw today seemed to be kind of saying that the settlements will be paid with some kind of magic money that doesn't really matter because it's not "tax dollars." If it's magic money that doesn't really matter, why don't we do something magic with it, like build a new affordable-housing project in a small Iowa town that really needs it? Wait, perhaps that's what the money could have been used for anyway! [sarcasm mode].

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