The latest “Civic Skinny” column in the Des Moines-based weekly Cityview explores an angle that hadn’t occurred to me when I read Jason Noble’s excellent recent reports about “ongoing financial struggles” for the Central Iowa Expo facility in Boone.
Noble documented “red flags” surrounding the initial business plan for the facility, which received substantial aid from Boone County and a $5 million federal loan guarantee. U.S. Department of Agriculture officials “felt pressure to approve” the loan guarantee and agreed thanks to “assurances by expo officials of substantial fundraising by two of the most powerful men in Iowa: once and future Iowa Gov. Terry Branstad and Republican super-lawyer Doug Gross.”
Civic Skinny took a closer look at Branstad’s fundraising for the Boone venue.
If you haven’t read Noble’s investigative reports about the Central Iowa Expo’s finances, published in the May 16 Sunday Des Moines Register, I encourage you to do so. Noble started looking into the “years of deficits” at the expo in March, after the Republican Party of Iowa selected the Boone venue for this year’s presidential candidate straw poll.
A sidebar to one of Noble’s May 16 articles gave background on the fundraising firm that provided a side income to Branstad between his stints as governor.
FOUNDING: Documents from the Secretary of State’s Office show Policy Management Interests LLC was formed on Jan. 14, 1999 – the final day of Terry Branstad’s first tenure as Iowa governor.
OTHER KEY PLAYERS: PMI was organized by Des Moines lawyer and one-time gubernatorial candidate Doug Gross, who remains an executive with the company. Filings with the Iowa Secretary of State’s Office from earlier this year also identify Mary Boote, a political organizer who served as an agricultural adviser to Branstad in the 1990s, as a partner. Other sources call Boote PMI’s CEO and managing partner.
BRANDSTAD’S [sic] ROLE: He was involved with the company from 2001 to 2009, serving as chairman, spokesman Jimmy Centers told the Register. In that role, Branstad helped raise funds for the FFA Enrichment Center in Ankeny and the Central Iowa Expo. He terminated his relationship with PMI in 2009, as he was gearing up for his gubernatorial campaign.
Branstad’s 2010 tax return (covering the previous calendar year) showed “a $50,000 commission from PMI for fundraising conducted in 2009.” Presumably work for the Central Iowa Expo generated that commission, because the FFA Enrichment Center’s capital campaign raised the bulk of its money years earlier. That project at the Des Moines Area Community College’s Ankeny campus broke ground in 2007 and was complete by early 2010.
Skinny commented in the current edition of Cityview, dated May 27-June 3:
What [Noble’s] articles didn’t note was that fund-raisers who charge a percentage of the take violate the Code of Ethical Principles and Standards of the Association of Fundraising Professionals. […]
Asked to confirm that the Governor received the $50,000 fee “and that the Governor was paid on a percentage basis,” [Branstad’s communications director Jimmy] Centers said: “I can confirm the reported payment referenced.”
“Members shall not accept compensation or enter into a contract that is based on a percentage of contributions; nor shall members accept finder’s fees or contingent fees,” the code of the fund-raising group states. “It is imperative that a compensation structure does not place self-gain over charitable missions,” the code explains.
Cityview’s headline reads, “Branstad’s Expo money-raising broke ethics rule.” That phrasing might be a bit strong. Since his Policy Management Interests firm has never been a member of the Association of Fundraising Professionals, Branstad may not have felt bound by the association’s ethical standards.
On the other hand, Skinny noted that Des Moines University was a member of that association at the time Branstad was raising money for Central Iowa Expo. Moreover, charging a commission on money raised for a non-profit organization clearly violates accepted best practices in the fundraising field.
Skinny observed that “it’s highly unusual – perhaps unprecedented – for a president of a university to hire out as a professional fund-raiser for other organizations while still heading the university and, presumably, working hard to raise money for his own institution.”
What bothers me more is that while earning a high salary as Des Moines University’s president, Branstad used work for non-profits as a way to pad his income. Many retired politicians spend countless hours volunteering on boards of directors or capital campaign cabinets for 501(c)3 organizations. (Former Iowa Lieutenant Governors Joy Corning and Sally Pederson come to mind.) They pound the pavement to raise money for good causes without looking to earn a buck for themselves in the process.
Certainly professional fundraisers deserve to be compensated for their work, preferably on a fee schedule that doesn’t involve commissions. But Branstad wasn’t primarily working as a fundraiser. He had a full-time job as a university president. By 2009, his salary for that position exceeded $300,000 per year. Why couldn’t he use his connections to help the FFA Enrichment Center or the Central Iowa Expo become solvent without being paid to do so?
Any relevant comments are welcome in this thread.
P.S. – Speaking of “red flags,” this one jumped out at me from Noble’s report:
2010: Federal tax filings show the expo was charged $69,750 for fundraising services by Policy Management Interests LLC but received just $57,948 back in contributions – a net loss of almost $12,000.
(Although the records show PMI charged the expo more than it raised in 2010, fundraiser Mary Boote disputed those figures, saying the company assessed fees based on the amount collected.)
Is Boote accusing Central Iowa Expo officials of not fully reporting funds raised during 2009 on their 2010 federal tax return? Can she demonstrate that her firm generated significantly more than $57,948 in contributions to the expo that year?