Governor Kim Reynolds announced last week that Jim Kurtenbach will be the new director of the Iowa Department of Administrative Services (DAS), effective July 1. Paul Trombino has held that position on an interim basis for about a month, after the Iowa Senate did not confirm previous DAS Director Janet Phipps.

Tapping Kurtenbach for this job was a strange choice. The agency has broad responsibility for human resources, procurement, and accounting on behalf of the state. Sexual harassment or discrimination by senior officials has led to several lawsuits against the state and millions of dollars in settlements in recent years. Yet not only does Kurtenbach lack relevant experience in the HR field, his hiring and managerial decisions as Iowa State University’s vice president and chief information officer were far from a model for best practices.

REYNOLDS IGNORED CONCERNS ABOUT PREVIOUS DIRECTOR

Republicans hold 32 of the 50 Iowa Senate seats, two short of the two-thirds majority needed to confirm the governor’s nominees. Democrats have used their power to block such appointments sparingly. Last year, only three out of more than 200 Reynolds nominees failed to win confirmation. Democrats again approved more than 200 of Reynolds’ picks this year, rejecting only two.*

Republican leaders never brought Phipps’ nomination to the Senate floor, knowing she lacked the votes. Senate Minority Leader Janet Petersen commented to Bleeding Heartland shortly after lawmakers adjourned for the year,

“I informed the Governor’s office that Director Phipps’s nomination was in trouble. The Governor’s office never asked any questions about our concerns. Concerns expressed to me by members of our caucus included Phipps’s role as a chief negotiators for the state under the new collective bargaining law, her role addressing problems at the Iowa Finance Authority, and her role addressing harassment problems in the executive branch.”

An independent investigator’s report on misconduct at the Iowa Finance Authority included an appendix with detailed notes on witness interviews. One recounted that after DAS refused to reclassify a favorite employee (which would have cleared the way for a promotion and large pay increase), “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.”

In her own interview with investigators, Phipps acknowledged helping to work out the reclassification after getting a call from Reynolds’ chief of staff. (The agency’s director Dave Jamison had contacted the governor’s office about the matter.) Phipps said she had informed Reynolds that IFA was giving some employees large pay increases, but she does not appear to have passed along that “she had generally observed that Mr. Jamison looked more favorably on upgrading the job positions of young pretty women, which Ms. Phipps found concerning.”

Several Democratic lawmakers flagged problems with new rules on sexual harassment that DAS fast-tracked last year. In addition, State Representative Amy Nielsen filed a complaint with the Iowa Public Information Board in March, saying the agency had not provided information Nielsen requested about sexual harassment complaints and investigations in state government.

“Running government like a business” may not be the right answer for every state agency, but under these circumstances, Reynolds should have searched for a DAS director with solid private sector HR experience. Some corporations have been ahead of government bodies in improving hiring and supervisory procedures, as well as combating hostile work environments.

The governor also would have done well to find someone without an intensely partisan political background.

With Kurtenbach, she missed the mark on both counts.

YOU CAN’T FIND WHAT YOU DON’T LOOK FOR

The governor’s office listed the director’s job at DAS for three weeks in May. The “minimum qualification requirements” were vague.

• Experience and/or education of five or more years in management in public and/or private sector.
• High-level organizational experience in operational management in areas of employment, financial management, and policy development and implementation.
• Agile business mind with a focus on developing creative solutions.
• Excellent management, project management, and communication skills. 

In a May 29 letter enclosed in full below, Petersen urged Reynolds “to appoint a qualified candidate with a clean employment history.” The top Senate Democrat warned that the job listing

does not include any specific requirement or expectations of the new DAS Director to address the serious problems Iowans faced with recent directors. Hiring a new DAS Director without experience or a proven track record would not only send a bad message, it will likely lead to more mismanagement, cronyism, and multi-million dollar settlements.

The governor’s staff used some sleight of hand in crafting the job posting. Iowa Code requires the DAS director to “be professionally qualified by education and have no less than five years’ experience in the field of management, public or private sector personnel administration including the application of merit principles in employment, financial management, and policy development and implementation.” (emphasis added)

In contrast, the job listing mentions “Experience and/or education of five or more years in management in public and/or private sector.”

Kurtenbach has been an ISU faculty member since the early 1990s but has spent far less time in management roles. He was an associate engineering dean at ISU from 2010 to 2013 and worked as vice president and chief information officer from January 2015 until resigning in December 2017.

Why the governor didn’t find a candidate with stronger HR credentials is hard to fathom–especially when one considers how Kurtenbach became a VP at ISU.

AN IRREGULAR HIRING

Kurtenbach had left Iowa State at the beginning of 2013 for a job with Workiva, a tech company in Ames. He didn’t have to compete with other applicants when he came back to the university.

ISU announced in October 2014 that chief information officer Jim Davis was stepping down, adding that “The provost’s office will launch a national search” to fill the position. But Provost Jonathan Wickert conducted no search before choosing Kurtenbach as interim CIO a few weeks later, to start working in January 2015.

While serving in an interim capacity, Kurtenbach began implementing a major restructuring of the university’s information technology unit. He landed the CIO job on a permanent basis in the summer of 2016, again with no open search process. Vanessa Miller reported for the Cedar Rapids Gazette shortly after the Iowa Board of Regents approved the hiring,

Iowa State policy — created to ensure employment diversity, equal opportunity, and broad candidate pools — states “the filling of all positions shall be accomplished through a process that includes announcement of the opening as widely as appropriate in terms of the level of duties and responsibilities.”

The policy indicates exceptions can be granted by the president based on a written request that is endorsed by a vice president and reviewed by the director of equal opportunity — which occurred in [Kraig] Paulsen’s hire [to lead a university program that didn’t yet exist].

But, [ISU’s senior communications staffer John] McCarroll said, the advertising requirement applies only for positions involving a search, and the president can decide not to conduct a search. That means, in Kurtenbach’s case, no written request for exception was submitted.

“President Leath asked him to continue serving in that capacity on a permanent basis because of his significant experience and institutional knowledge,” McCarroll said.

Kurtenbach, when asked about concerns with his appointment, said he was involved in two open searches with Iowa State — one before his appointment as associate professor in 1991 and one before his appointment as associate dean in 2010.

“I was hired in a public setting twice,” he said. “I think the university’s had a significant opportunity to vet my skills.”

Kurtenbach didn’t mention that he had given then ISU President Steven Leath free piloting lessons in the fall of 2014. Leath revealed that fact months later in an interview with the Iowa State Daily, while his use of university aircraft was under scrutiny.

Leath told the Iowa State Daily in an interview Friday morning [October 7, 2016] that Kurtenbach began flight lessons with him in late 2014, before he was announced as interim CIO in November. Leath said the timing worked nicely because they could fly over Thanksgiving and Christmas breaks.

Leath said the lessons ended on either Jan. 10 or Jan. 12, 2015, after Kurtenbach, who previously worked at the Ames-based tech company Workiva, was hired as interim CIO. At the time, Kurtenbach and the IT department reported to Provost Jonathan Wickert.

“The Provost started talking to Jim [Kurtenbach] in early October, when Jim Davis announced his retirement, about coming back to the university in an interim [CIO IT] position,” Leath said. “During those discussions, Jim [Kurtenbach] realized he was going to come back and have some flexibility in the fall.

“And [he] asked me if we wanted to fly together and that [he] might be able to help me finish up the IFR [instrument flight rules] training,” Leath said.

Iowa State later said,

Jim Kurtenbach, who is one of the most respected pilots in the state, offered to give him lessons. President Leath took lessons under Jim from Oct. 18, 2014, to Jan. 12, 2015. The university has not paid for any flight training received by President Leath.

University staff initially refused to clarify whether Leath paid for the lessons out of pocket or received free training from Kurtenbach. Leath later said during a press conference that he had offered to pay for the training, but “as [Kurtenbach] said to dozens and dozens and dozens of students before me, he normally does not charge or accept any money for his lessons. He does it out of a passion for flying. So I felt really fortunate to be able to fly with him, and he’s been very kind and generous to me as he’s been to dozens of other pilots.”

I was unable to confirm any other instance, let alone “dozens,” of Kurtenbach giving flight lessons for free over an extended period. Tim Busch, one of Iowa’s leading flight instructors, told Bleeding Heartland in March 2017, “The cost of getting to the point where a person can provide instruction to others eliminates the possibility of ‘free flight training’ in the industry. You won’t find it anywhere.”

Even if Kurtenbach had routinely volunteered to train other pilots, his lessons for Leath appeared to violate ISU policy and the state’s gift law. The university prohibits employees from receiving money, services, or “anything else of value” from anyone whose interests “may be substantially and materially affected, in a manner distinguishable from the public generally,” by the employee performing official duties.

Similarly, Iowa Code Section 68B bars gifts from “restricted donors” to public employees. Restricted donors include those who could be “directly and substantially affected financially by the performance or nonperformance of the donee’s official duty in a way that is greater than the effect on the public generally.”

Leath was getting free piloting lessons from someone under consideration for a lucrative university job. While the provost made the interim hiring (Leath claimed he wasn’t involved in those discussions), the university president had the power to waive any search for the CIO position–which he subsequently did. He later ordered Kurtenbach’s department to report directly to him. (That is no longer the case under Wendy Wintersteen, Leath’s successor as ISU president.)

Whether the huge favor to Leath constituted an illegal gift was never explored, because no one filed a complaint with the Iowa Ethics and Campaign Disclosure Board (which has the authority to enforce that code chapter) within three years. Nevertheless, the optics were terrible and raise questions about Kurtenbach’s judgment.

“IT’S DEGRADING TO THE EMPLOYEES”

Kurtenbach’s work as interim CIO made him “uniquely qualified” to hold the position permanently, university officials said when explaining why he was hired with no search. Before the Board of Regents signed off on that decision, Kurtenbach began cutting the university’s IT staff. Vanessa Miller’s July 2016 report for the Cedar Rapids Gazette is essential reading on that topic. Excerpts:

The 23 eliminated ITS positions include 11 employees who are classified as “professional and scientific” — or P&S — and covered by a “workforce reorganization policy.” They have been told to stay at home. The remaining 12 are considered “merit” workers covered by American Federation of State County and Municipal Employees Iowa Council 61. They report to campus each work day, but sit in a room for eight hours. […]

Danny Homan, president of AFSCME Council 61 — which represents the “merit” employees — calls the situation, “an embarrassment.” […]

“It’s degrading to the employees. It’s shameful that Iowa State is treating long-term, dedicated employees the way they are because a former Republican legislator [Kurtenbach] is trying to privatize the job.” […]

“They are calling it a ‘restructuring,’ that is the word they are using, but it’s privatization,” he said. “It’s people hired from the outside to do the work that these people would have done.

“It’s an interesting shell game.”

McCarroll said the university hasn’t hired any company to perform “the specific jobs of the employees.”

“However, ITS works with firms, and there may be overlapping tasks that are being handled,” he said.

State senators should thoroughly explore what happened here when considering whether to confirm Kurtenbach during the 2020 legislative session.

A STRONGLY PARTISAN BACKGROUND

The DAS job listing included Iowa Code language stating, “The director shall not be a member of any local, state, or national committee of a political party, an officer or member of a committee in any partisan political club or organization, or hold or be a candidate for a paid elective public office.”

While governors have a free hand in choosing agency directors, the statute was written that way because legislators recognized that DAS should not be led by someone with a highly partisan profile.

Kurtenbach hasn’t held Republican office lately, but he served in the Iowa House from 2003 to 2007 and was co-chair of the Republican Party of Iowa from 2009 to 2011. If he had otherwise superb credentials to run DAS, his past work for the party might not be an issue, but Reynolds would have done better to choose a less ideological figure for this position.

Earlier this year, Reynolds picked former Iowa House Speaker Kraig Paulsen to run the Department of Revenue, another job that traditionally has gone to people with a less partisan reputation. Paulsen had landed a well-paid, unadvertised position at ISU after resigning from the legislature in 2015.

Speaking of pay, Iowa Code limits the salary for the DAS director, and last month’s job listing showed a salary range of $100,840 to $154,300. That’s in line with what Phipps has earned (about $148,000 in fiscal year 2017 and $150,000 in fiscal year 2018), but considerably less than Kurtenbach made for the last several years at ISU. State data show his annual salary as chief information officer was $252,794. Even after returning to a tenured faculty position, he was earning $181,800.

The governor’s staff did not respond to Bleeding Heartland’s inquiry about whether Reynolds intends to award large bonuses to Kurtenbach to protect him from experiencing a cut in total compensation. She offered Debi Durham a $50,000 annual bonus to lead the Iowa Economic Development Authority and the Iowa Finance Authority and offered a $30,000 annual bonus to Homeland Security and Emergency Management Director Joyce Flinn.

UPDATE: I requested copies of all applications to be DAS director, to see whom Reynolds passed over for Kurtenbach. The governor’s office declined to provide any responsive records, saying they were exempt under Iowa Code Chapter 22.7(18). That provision in Iowa’s open records law covers communications from someone outside of government who might be discouraged from applying for a job if such records became public knowledge. Readers with information about other candidates who sought the position are encouraged to contact Laura Belin confidentially.

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*Phil Hemingway was the only other Reynolds appointee not to win Senate confirmation during the 2019 legislative session. Petersen told Bleeding Heartland in May, “Because of problems during his tenure on the Iowa City School Board, there were concerns about his ability to handle confidential personnel information if he was allowed to serve on the Board of Educational Examiners.”

Appendix 1: June 20 news release from governor’s office

Gov. Reynolds appoints Jim Kurtenbach to lead Iowa Department of Administrative Services
DES MOINES – Today, Gov. Kim Reynolds announced the appointment of Jim Kurtenbach to serve as director of the Iowa Department of Administrative Services, effective July 1, 2019.

“Appointing Jim to this vital position is another important step in assembling a proven team to carry out my priorities for Iowa. He will do an outstanding job at the department,” said Gov. Reynolds. “His leadership, depth of experience and distinguished career in public service will greatly benefit Iowans.”

“It’s an honor to serve the State of Iowa in this important role,” said Jim Kurtenbach. “At the Iowa Department of Administrative Services, I will continue to build upon Iowan’s expectations for transparency, accessibility, and assistance at every level.”

Kurtenbach is a former state representative, vice president and chief information officer of Iowa State University, associate dean of ISU’s College of Engineering and associate professor of Accounting. Kurtenbach has a doctorate and a master’s degree in Accounting as well as a bachelor’s degree in Industrial Administration. Kurtenbach has also served various industries in corporate leadership roles. He lives in Nevada, Iowa with his wife Annmarie.

Appendix 2: June 20 news release from Iowa Senate Democrats

Statement from Senate Democratic Leader Janet Petersen on new DAS Director appointment

“The biggest job for Governor Reynolds and Jim Kurtenbach in the coming months is to restore taxpayers’ faith in the Department of Administrative Services.

“In a May 29 letter, I encouraged Governor Reynolds to appoint a new Director with the experience and proven track record necessary to write a new chapter. The Department must establish higher expectations than what we’ve seen over the past several years.

“It’s unclear at this time whether she has accomplished that goal with the appointment of Mr. Kurtenbach.

“The Governor and Mr. Kurtenbach will need to explain to Iowans how his background is suitable for this new job. We have seen numerous problems in recent years – multi-million dollar harassment settlements, hush money payments, understaffing that puts at risk the safety of state workers, and unfair bargaining tactics, and biased hiring and procurement practices – that need to be addressed, not ignored.

“Mr. Kurtenbach must explain to Iowans what specific plans he has for addressing those problems and ensuring that all state employees and Iowans are safe and treated with dignity, and that tax dollars are not abused.”

Attached letter from Petersen to the governor, dated May 29: