Governor's office finally provides document requested in May

Governor Kim Reynolds’ senior legal counsel Michael Boal has belatedly provided a copy of former Iowa Veterans Home Commandant Timon Oujiri’s termination letter. On May 10, Bleeding Heartland asked the governor’s office and the Iowa Veterans Home for records showing the “documented reasons and rationale” for Oujiri’s dismissal, which Reynolds’ staff had recently confirmed.

Boal, who is the records custodian for the governor’s office, did not acknowledge receipt of the request at that time. He also ignored follow-up emails on June 30 and July 23, as did the governor’s chief of staff Sara Craig Gongol and spokesperson Pat Garrett, whom I copied on that correspondence. Staff at the veterans home likewise did not provide any responsive records.

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Iowa ethics board to review COVID-19 ads featuring governor

The Iowa Ethics and Campaign Disclosure Board will review advertisements featuring Governor Kim Reynolds, which were funded through federal COVID-19 relief dollars.

The board’s executive director Mike Marshall told Bleeding Heartland on June 18 that some commercials from the “Step Up, Stop the Spread” campaign launched last November “are now under review by the Ethics Board.” Earlier this month, State Auditor Rob Sand asked the board to consider whether the ads violated Iowa’s law banning state officials from engaging in “self-promotion with taxpayer funds.”

Marshall said he anticipates the ethics board will discuss the matter in closed session at its next meeting, scheduled for August 12.

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Former DHS director files wrongful termination lawsuit

Jerry Foxhoven asserts in a new lawsuit that Governor Kim Reynolds and her senior staff forced him out as Iowa Department of Human Services director “because he refused to engage in illegal activity” and to prevent him from seeking legal advice about possible misuse of federal Medicaid funds.

The petition filed in Polk County District Court on June 9 closely tracks allegations Foxhoven made in a wrongful termination claim soon after he resigned under pressure in 2019. Reynolds, her chief of staff Sara Craig Gongol, and her former senior legal counsel Sam Langholz are named defendants in addition to the state of Iowa.

Foxhoven’s court filing says the events leading to his ouster centered on a dispute over payments from DHS for work done by Reynolds’ deputy chief of staff Paige Thorson. The DHS director agreed in early 2018 to have the agency pay 69 percent of Thorson’s salary and benefits, as she assisted Iowa’s new Medicaid director Mike Randol. Foxhoven signed a similar agreement for the next fiscal year, which ran through June 2019. (Several of the governor’s staffers are mostly paid by other state agencies; the longstanding practice helps Reynolds keep more staff on payroll than her budget appropriation could support.)

Foxhoven says that in February or March 2019, he told Craig Gongol in a telephone conversation “that Randol was now adequately familiar with Iowa’s health care network,” adding that “Thorson was no longer performing duties that furthered the mission of Iowa Medicaid and that he did not believe DHS could legally divert federal Medicaid dollars to pay her salary.”

In the spring of 2019, Republican lawmakers approved an extra $200,000 for the governor’s office, supposedly for health and tax policy analysts. Foxhoven says he “believed that the issue was resolved,” and spoke with Craig Gongol in early June “hoping to confirm that DHS would not continue paying any portion of the Thorson’s salary with Medicaid funds in the next fiscal year.”

However, the governor’s chief of staff indicated that she expected the agency to keep compensating Thorson. Foxhoven “questioned the legality of such an arrangement” and asked Craig Gongol to consult with legal counsel Langholz, but she refused.

According to Foxhoven, he told Craig Gongol “that he intended to ask the assistant attorney generals assigned to DHS for a legal opinion” on June 18, after the expected conclusion of a federal trial they were working on. But he wasn’t able to send that email, because Craig Gongol and Langholz asked for his resignation on June 17. Foxhoven says during that meeting, the governor’s senior staff “demanded the immediate return of all of Foxhoven’s state issued equipment and told him not to return to his office.”

The lawsuit alleges that the defendants terminated Foxhoven:

  • “in order to prevent him from enforcing his statutory right to disclose information he reasonably and in good faith believed constituted a violation of the law, mismanagement, a gross abuse of funds or abuse of authority […]”;
  • “in order to prevent him from disclosing information he reasonably and in good faith believed constituted a violation of the law, mismanagement, a gross abuse of funds or abuse of authority […]”;
  • “because he refused to engage in illegal activity; that is committing Medicaid fraud and misuse of federal monies by continuing to pay Thorson’s salary despite the fact that she was no longer providing any duties relating to Medicaid or otherwise furthering the mission of DHS […]”; and
  • interfered with and prevented him from consulting with the Iowa Attorney General’s office about his agency continuing to pay Thorson’s salary.

Foxhoven told journalists in 2019 he would not have objected to using Medicaid funds to support Thorson’s compensation if legal experts determined the practice was still allowable. But he wanted a letter from the Attorney General’s office. That way, in case state or federal auditors questioned the payments later, “There might be a difference of opinion between the auditor and the AG’s office, but it isn’t a matter of Foxhoven diverting funds.”

State agency directors are at-will employees, who serve at the pleasure of the governor. But one exception to the at-will doctrine is firing someone in violation of public policy–for instance, because they refuse to engage in illegal conduct. Foxhoven’s lawsuit alleges that his “termination violates well established public policy of the State of Iowa as defined by statute, regulation, and judicial decision.”

The court filing notes that Foxhoven has suffered “substantial loss of earnings, insurance benefits, retirement benefits and other employee benefits” as well as “emotional distress and damage to his reputation.” It also argues that he’s entitled to punitive damages against Reynolds, Craig Gongol, and Langholz, because their termination of his employment “was willful and wanton and done in reckless disregard of his rights.”

The governor’s office did not immediately respond to Bleeding Heartland’s request for comment on the lawsuit. The Iowa Attorney General’s Office had no comment. Langholz has worked there since late last year, representing the Reynolds administration in several high-profile cases.

Reynolds said in 2019 that “many factors” influenced her decision to ask for the DHS director’s resignation. (The agency has faced lawsuits and investigations over its management of the State Training School for Boys and the Glenwood Resource Center for the intellectually disabled.) In early 2020, the governor told reporters “she was ‘not happy’ with the response she received” about an increase in deaths at Glenwood.

Reynolds also claimed Foxhoven “never raised concerns with me or my staff about the salary agreements in question, and he never asked my staff for a legal opinion or said he would be reaching out to the Attorney General’s office for one.”

Final note: Records I received while investigating the governor’s office spending indicated that DHS did not end up paying any portion of Thorson’s salary during fiscal year 2020, which began in July 2019. However, DHS did pay 100 percent of the salary and benefits of the governor’s new health policy adviser Liz Matney from July 2019 through mid-March 2020. Thorson and Matney were among 21 permanent staffers in Reynolds’ office who had about 62 percent of their compensation from mid-March through June 2020 covered through federal COVID-19 relief funds.


Appendix: Petition filed in Polk County District Court on June 9

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A failure to communicate

A special investigation by the State Auditor’s office asserted on June 3 that Governor Kim Reynolds violated Iowa law by using $152,585 in federal COVID-19 relief funds to purchase “online and televised ads containing the Governor’s voice, image, and name.”

Less than 30 minutes after the auditor’s report was published, Reynolds responded in a news release that the law “clearly allows” such use of public money in the context of a public health disaster emergency.

A few hours later, State Auditor Rob Sand defended his conclusions in a new written statement.

My non-lawyer’s reading of the relevant statutes aligns with the governor’s interpretation. But while legal points could be argued, one indisputable fact is that all parties involved should have discussed these findings prior to the report’s publication, instead of duking it out in news releases today.

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Exclusive: Iowa spent CARES Act funds on governor's office software switch

UPDATE: Weeks after publication, state officials said this payment had been “inaccurately coded to the federal CARES program,” which was “anticipated” to cover this expense but did not. They said the database would be corrected to reflect the coding error. More details are at the end of this post. Original text follows.

Iowa’s Office of Chief Information Officer spent $39,512 in federal COVID-19 relief funds on a project to migrate computers in Governor Kim Reynolds’ office from Google suite to Microsoft Office 365.

Public databases showing expenditures from Iowa’s Coronavirus Relief Fund do not indicate the governor’s office was the beneficiary of that November payment from OCIO to the vendor Insight Public Sector for unspecified “IT Outside Services.” Documents obtained through public records requests show the money covered the cost of the Google to Office 365 migration.

The governor’s office reimbursed OCIO for that expense in mid-December, days after the Reynolds administration was forced to backpedal on other COVID-19 funds spent on computer technology. Earlier the same month, Bleeding Heartland had sought records related to goods and services OCIO purchased on behalf of the governor’s office using money from the Coronavirus Relief Fund. 

The governor’s spokesperson Pat Garrett has not replied to inquiries about who authorized the initial spending on switching from Google to Office 365 or what funding source eventually covered the cost.

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Best of Bleeding Heartland's original reporting in 2020

My primary goal in running this website is to provide Iowa political news and analysis that’s not available anywhere else. I’m proud of what Bleeding Heartland accomplished in 2020 and want to highlight some of the investigative reporting and accountability journalism published first or exclusively here.

A forthcoming post will review the site’s most popular pieces from 2020, which included many I worked hardest on or most enjoyed writing.

As always, I’m grateful for readers whose appetite for this kind of reporting keeps me going.

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