It’s time to rid Iowa’s swamp of cozy insider deals and no-bid contracts

Multimillion-dollar, no-bid contracts and cozy insider deals are creating a swamp in Iowa government. (Creative Commons photo via Pxhere)

It’s time to drain the swamp, and not just the one in Washington.

Iowa lawmakers need to take a serious look at the ethics laws that allow former executive branch staff to slide right into the private sector and start selling multi-million-dollar bills of goods to Iowa taxpayers.

And while they’re in their hip waders, lawmakers also should hose the slime off of the state’s competitive bidding requirements. The governor’s latest slick maneuver is likely to cost Iowa taxpayers at least $21 million.

As the state auditor recently revealed, Gov. Kim Reynolds attempted to use federal coronavirus relief money to circumvent the Legislature and pay for a $21 million, human resources software contract that was planned long before anyone had ever heard of COVID-19. Lawmakers earlier this year refused to shell out the first $21 million for the contract, in part because the governor’s office hand-picked the vendor, a California company called Workday, instead of going out for competitive bids.

The registered lobbyist for the company is Jake Ketzner, a long-time aide and campaign leader for the governor, who resigned as chief of staff and left state government in June 2018.

The focus has rightly been on the fact that this was a blatant misuse of money that was intended to help Iowans who are suffering from the pandemic.  While lawmakers gave Reynolds broad authority to spend federal CARES Act money, there’s little question that a software contract planned in 2019 has little to do with COVID-19.  That money should have been directed to the Iowans Reynolds professes to care so much about —the ones whose jobs have been endangered or lost because of the economic downturn that has accompanied the out-of-control spread of this dangerous virus.

Reynolds has been told by the inspector general for the U.S. Treasury that she needs to repay the coronavirus relief fund. If she doesn’t, the state may have to turn the money back to the federal government. Either way, if the contract (reported to be $50 million total) goes forward, Iowans will be on the hook for the cost at a time when money may be tight and the state should have more urgent priorities.

This is just one of the cozy, no-bid contracts the governor has jumped into, with little advance notice or transparency. The Test Iowa COVID-19 program, as you may recall, was also a no-bid contract that the governor chose after hearing about it from Iowa-native actor Ashton Kutcher. One could argue that time was of the essence in that case, but Test Iowa has hardly been trouble-free and GOP lawmakers have refused to bring the Legislature’s Oversight Committee together to look into the deal.

Reynolds also tried to get lawmakers this year to spend a half-million for a Salt Lake City company to provide online training for Iowa adults who lack a high school diploma.  She wrote a line item for Graduation Alliance, for whom Ketzner was a lobbyist, right into her budget proposal.  Lawmakers of both parties questioned why they would pay a private company to do the job that community colleges are supposed to do.

This isn’t about Ketzner, who seems like a nice guy and who isn’t doing anything illegal. But positions like his old job should be subject to the state’s revolving door law, which requires a two-year waiting period before statewide elected officials, state lawmakers or top executive or legislative branch officials can become lobbyists. Iowa has one of the stricter laws in the nation—many only require a one-year cooling-off period—but even so, two years is not nearly enough.  Five years would be better, or at least a prohibition on a former employee lobbying the same administration he or she just left.

This should apply across state government. Even five years doesn’t seem long enough for employees of regulatory agencies who often wind up in the employ of regulated businesses. For them, a lifetime ban would be better.

The revolving door is only part of the problem, however.  Lawmakers need to rein in no-bid contracts even if there’s no Kutcher or Ketzner paving the way.

Iowa law requires competitive bids for many purchases over a dollar threshold that varies by the type of project. But the law includes lots of exceptions, including a big, juicy pass for information technology systems or software. While there would still need to be allowances for upgrades and compatibility issues, lawmakers need to review what appears to be an enormous loophole.

And while no-bid contracts require some oversight within the executive branch, any no-bid purchase over a certain dollar limit should trigger an automatic review by the Legislature’s Oversight Committee. The work of legislative oversight shouldn’t be a partisan exercise. Governors who enjoy single-party control of the Legislature by their own party should get more scrutiny, not less.

Iowa’s swamp may be a puddle compared to the Everglades-sized bog in Washington. But it’s not the size of the pond that matters, it’s the size of the alligators. Iowa’s are getting bigger and hungrier.