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.

AUDITORS CITE “SELF-PROMOTION” LAW

The state auditor’s special investigation of the “Step Up, Stop the Spread” media campaign is enclosed in full below, along with the governor’s news release and Sand’s response. The review focused on federal funds received through the CARES Act, which were spent to air this advertisement.

Reynolds speaks near the beginning, in the middle, and at the end of the 60-second spot. Each time, her name and title are on screen, along with the state’s official seal. The governor’s voice track was used for a radio ad as well.

State auditors concluded that using the governor’s name, likeness, and voice in a “paid advertisement or promotion” violated Iowa Code Chapter 68A.405A. Republican lawmakers approved that code section on the final day of the 2018 legislative session, and Reynolds signed the provision into law (though she flouted its spirit by continuing to use an Iowa State Fair booth plastered with her name and photos).

The auditors’ investigation found that newspaper ads produced for the same public awareness campaign “did not violate the law prohibiting self-promotion with public moneys,” because they didn’t include the governor’s voice, name, or image.

The auditor’s office recommended that the legislature expand the law to cover local government officials as well as the use of public funds an office-holder does not directly control. It also asked the Iowa Ethics and Campaign Disclosure Board, which enforces provisions in Chapter 68A, to review the matter.

GOVERNOR’S STAFF: REPORT RESTS ON “SIGNIFICANT ERROR”

In today’s news release, Reynolds said she was proud of the “Step Up, Stop the Spread” commercial. “I felt it was important for me and other leaders to address Iowans during the height of the pandemic. And the law clearly allows it.”

The governor’s staff highlighted the opening passage of the code section:

“Except as provided in sections 29C.3 and 29C.6, a statewide elected official or member of the general assembly shall not permit the expenditure of public moneys under the control of the statewide elected official or member of the general assembly, including but not limited to…”

Ignoring that clause was “a significant error,” the statement said, “as 29C.6 relates to the powers and authority of the Governor during a public health disaster emergency.”

The governor’s chief of staff Sara Craig Gongol said in the news release, “Auditor Sand didn’t once ask to meet with our team regarding his concern or his investigation. If he had, we would have pointed him to this essential part of the law that he clearly missed.”

The statement also claimed, “Neither the Governor’s Office nor the Iowa Ethics & Campaign Disclosure Board were consulted prior to the issuance of Auditor Sand’s report. If that had happened, anyone within those offices could have directed the Auditor to the plain language of Iowa’s image-and-likeness statute and pointed out that, during a disaster emergency, the Governor may address Iowans in a public service announcement.”

GOVERNOR “COULD HAVE SUSPENDED THE LAW” BUT “DID NOT”

In a late-morning news release, Sand defended the investigation’s findings.

68A.405A allows that Governor Reynolds could have suspended the law in one of her many COVID-19 disaster proclamations. She did not. Every proclamation issued by the Governor during the pandemic contained the following language: “Nothing contained in this declaration shall be construed as an exemption from any other portion of the Iowa Code or Iowa Administrative Code not specifically identified in this proclamation.” 68A.405A was never mentioned in any of those proclamations. Therefore, the law prohibiting statewide elected officials from self-promotion through the use of public moneys applies. […]

CLARIFICATION: The proper name of the statute in Iowa Code is “self-promotion with taxpayer funds prohibited.” Calling it a “name and likeness statute,” as the Governor did, tries to distract from what the Governor did: Promote herself with taxpayer funds.

Sand’s chief of staff John McCormally, who used to work in the Iowa Attorney General’s office, further argued the point in a Twitter exchange with Alan Ostergren, a former Muscatine County attorney who has done lots of legal work for Iowa Republicans. When Ostergren accused the auditors of overlooking the phrase “Except as provided in sections 29C.3 and 29C.6,” McCormally advised him to read 29C.

Let’s take a look at Iowa Code 29C.6(6). After proclaiming a disaster emergency, the governor may:

Suspend the provisions of any regulatory statute prescribing the procedures for conduct of state business, or the orders or rules, of any state agency, if strict compliance with the provisions of any statute, order or rule would in any way prevent, hinder, or delay necessary action in coping with the emergency by stating in a proclamation such reasons.

McCormally summed it up this way: “29C provides that [t]he governor may suspend provisions of law during an emergency. During the pandemic, she suspended provisions for everything from food safety and nursing home inspections. But never the self-promotion law.”

Ostergren countered that the governor “doesn’t have to suspend a law that doesn’t apply in the first place.” He characterized the argument as “a rationalization after the fact” to cover for the auditors’ misreading of the statute.

McCormally wasn’t buying it. “The code doesn’t say ‘the law doesn’t apply in an emergency,’ It says there’s an exception if you follow the rules provided in 29C. And, if you read 29C, it’s pretty clear she didn’t follow it here.”

But Ostergren noted that “Section 29C.6(10) says she can spend state resources to deal with the emergency,” which is what happened here.

I was raised by an attorney who often said, “Reasonable minds can differ.” To my mind, state lawmakers intended to exempt public emergency situations from the restrictions on self-promotion by state officials, and the governor has broad powers to handle disaster emergencies under 29C. So I’m inclined to think the code allows Reynolds to spend public funds on a COVID-19 safety message featuring her on camera.

On the other hand, 29C refers to suspending provisions of statutes, orders, or rules. So the auditor’s position might be a fair reading of the law.

What’s clear to me is that staff for Reynolds and Sand should have had these conversations before the investigation was released, and analysis of the governor’s emergency powers should have been included in the report.

TOO LITTLE TIME, TOO LITTLE FEEDBACK

According to the auditor’s office, the governor’s staff and Iowa Ethics and Campaign Disclosure Board received copies of the investigation on June 2, consistent with standard operating procedure to send reports to audited entities one day prior to publication.

Asked approximately when the report was provided to those entities, spokesperson Sonya Heitshusen replied, “3:08 pm.”

The auditor’s office sent the report to their press list at 7:21 am on June 3.

That’s not nearly enough time to give the governor and her staff before accusing Reynolds of “willfully” violating state law.

This investigation wasn’t time-sensitive. The State Auditor’s office should give others at least one or two full days to respond to reports before publication. It would also be fair to circle back at least once to remind audited entities that this is their chance to dispute any findings or suggest corrections.

By the same token, the governor’s staff don’t appear to have acted in good faith here. Today’s news release claimed, “Neither the Governor’s Office nor the Iowa Ethics & Campaign Disclosure Board were consulted prior to the issuance of Auditor Sand’s report. If that had happened, anyone within those offices could have directed the Auditor to the plain language of Iowa’s image-and-likeness statute […].”

The governor’s spokesperson Pat Garrett did not respond to my attempts to clarify whether their office received the report on June 2, and if so, why no one raised the points mentioned in the news release. (Heitshusen told me none of the governor’s staff contacted the auditor’s office.)

It seems that instead of trying to correct the record before the investigation was published, Reynolds chose the path of a public fight with Sand, her possible challenger in the 2022 gubernatorial election. The governor’s news release hit my inbox at 7:47 am, just 26 minutes after the report went live. In all likelihood staff drafted most of it yesterday.

DID THE ETHICS BOARD APPROVE THE AD CAMPAIGN?

State auditors recommended that the Iowa Ethics and Campaign Disclosure Board “review this matter in accordance with its obligations under Iowa Code Section 68A.405A.” But they don’t seem to have looked into whether that board had already reviewed the matter and given its blessing.

The ethics board’s executive director Mike Marshall told me via email,

The Ethics Board has received the Auditor’s report and will be reviewing it.  Our office was not contacted by the Auditor’s office regarding this matter.  I can confirm that I spoke with the Governor’s chief legal counsel last October regarding the parameters of the disaster emergency exception in section 68A.405A that would permit the Governor to appear in ads paid for by the state.

Marshall has not responded to follow-up questions, including: did he receive a copy of the report on June 2? If so, did he read it that day?

If so, why didn’t he mention to state auditors that he had discussed the proposed advertising campaign with Reynolds’ senior legal counsel Sam Langholz last fall? (Heitshusen says the auditor’s office didn’t hear from anyone at the ethics board prior to publication.)

Did Marshall advise Langholz in October that 68A.405A allows the governor to appear in paid advertising related to the public health emergency? That would be important context for any analysis of whether Reynolds violated the self-promotion ban.

Did the governor’s office instruct Marshall on June 2 not to communicate with the auditor’s office or suggest revisions to the findings?

Before publishing the investigation, auditors should have checked in with Marshall to make sure he’d seen the report, in case he had anything to add. There was no pressing reason to break this news today.

I’ll update this post as needed if I am able to confirm any disputed facts.

UPDATE: The ethics board’s executive director Marshall confirmed on June 3 that he had received a copy of the report the previous afternoon, adding,

At no time during their investigation was I contacted by the Auditor’s office.  Given its wording, I did not read this attached email as a request for me to review or otherwise weigh in on what certainly appeared to be an already completed report; rather, by its own terms, I viewed it as a courteous “heads-up” to allow for adequate responses to any inquiries. 

Marshall said he has not received any instructions from the governor’s staff. “Governors of both parties have respected the independence of the Ethics Board, including the Reynolds administration. The Governor’s office only asked me whether I had been contacted by the Auditor’s office as part of its investigation and the answer was no.”

McCormally offered additional thoughts via email on June 4.

In your article last night, you wrote:

“But Ostergren noted that “Section 29C.6(10) says she can spend state resources to deal with the emergency,” which is what happened here.”

It’s not what happened here. The full text [of] 29C.6(10) says:

Utilize all available resources of the state government as reasonably necessary to cope with the disaster emergency.

That doesn’t mean the Governor can do whatever she wants. 29C must be narrowly construed. The statute does not give her absolute power. She can redirect money, she can suspend laws, but she still has to follow certain procedures when she does so. She has to say what she is doing and why she is doing it in a disaster proclamation. She didn’t do that.

Reading 29C.6(10) the way you suggest would nullify the rest of the 29C– if she can do whatever she chooses with any state “resource” when she declares an emergency, the rest of the statute is superfluous. It might as well say “When she declares an emergency, the Governor is the only law.” That would amount to unconstitutional delegation of legislative power to the executive. Even in an emergency, she is still subject to the law.

You may think a paid ad featuring her face was a reasonable thing for her to spend money on, or that this is too technical. Those are reasonable positions. However, there are rules for spending taxpayer money. And she didn’t follow them. Making sure Is are dotted and Ts are crossed when it comes to the spending of taxpayer money is the entire job of the state Auditor.

Representatives of the governor’s office have not responded to questions.

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Appendix 1: State Auditor’s office special investigation of “Step Up, Stop the Spread” Coronavirus Media Campaign, released at 7:21 am on June 3

Appendix 2: Full text of news release the governor’s office emailed at 7:48 am (emphasis in original)

Gov. Reynolds releases statement on COVID-19 public service announcement 

DES MOINES- Today, the Auditor released a report on a special investigation of the “Step Up, Stop the Spread” public service announcement campaign that occurred in November 2020, the height of the Coronavirus (SARS-CoV-2), or COVID-19, Pandemic in Iowa. The campaign was designed to raise public awareness in order to slow the spread of COVID-19. 

“I’m proud of the Step Up, Stop the Spread” public service announcement,” Gov. Reynolds said. “I felt it was important for me and other leaders to address Iowans during the height of the pandemic. And the law clearly allows it.”

In his report, the Auditor claims the Governor mishandled CARES Act dollars by using those funds for video advertisements containing the likeness, voice, or name of the Governor in violation of Iowa Code section 68A.405A.

That statute reads, in part:

“Except as provided in sections 29C.3 and 29C.6, a statewide elected official or member of the general assembly shall not permit the expenditure of public moneys under the control of the statewide elected official or member of the general assembly, including but not limited to…”

The auditor’s report ignores the opening clause: “Except as provided in sections 29C.3 and 29C.6.” That is a significant error, as 29C.6 relates to the powers and authority of the Governor during a public health disaster emergency.

The Step Up, Stop the Spread campaign promoted social distancing and mask-wearing in November 2020, which was the peak of positive cases of COVID-19 in Iowa. Hospitals and health care facilities were filling with patients being treated for COVID-19. And significantly, the Governor’s Public Health Proclamation of Disaster Emergency mandated (in certain situations) mask-wearing and required social distancing. 

Promoting the requirements and recommendations of a disaster proclamation in a public awareness campaign is a clear example of the public-emergency exemption in Iowa’s image-and-likeness statute. And in case of any confusion, Section 29C.6(10)–which, again, is specifically mentioned in section 68A.405A– provides for the use of “all available resources of the state government as reasonably necessary to cope with the disaster emergency and of each political subdivision of the state.”

“Auditor Sand didn’t once ask to meet with our team regarding his concern or his investigation. If he had, we would have pointed him to this essential part of the law that he clearly missed,” said  Chief of Staff Sara Craig.

Any competent reading of the plain language of state code would have acknowledged the role of the Governor in promoting an emergency order. Neither the Governor’s Office nor the Iowa Ethics & Campaign Disclosure Board were consulted prior to the issuance of Auditor Sand’s report. If that had happened, anyone within those offices could have directed the Auditor to the plain language of Iowa’s image-and-likeness statute and pointed out that, during a disaster emergency, the Governor may address Iowans in a public service announcement.

Appendix 3: Statement from State Auditor Rob Sand, released at 11:36 am on June 3

AUDITOR OF STATE OFFICE RESPONDS TO GOVERNOR REYNOLDS’ STATEMENT ON THE INVESTIGATION OF THE “STEP UP, STOP THE SPREAD” COVID-19 MEDIA CAMPAIGN

June 3, 2021

68A.405A allows that Governor Reynolds could have suspended the law in one of her many COVID-19 disaster proclamations. She did not. Every proclamation issued by the Governor during the pandemic contained the following language: “Nothing contained in this declaration shall be construed as an exemption from any other portion of the Iowa Code or Iowa Administrative Code not specifically identified in this proclamation.” 68A.405A was never mentioned in any of those proclamations. Therefore, the law prohibiting statewide elected officials from self-promotion through the use of public moneys applies.

A copy of this report was provided to the Governor’s Office, the Iowa Attorney General’s Office, the Iowa Campaign Ethics and Disclosure Board, the Division of Criminal Investigation, and the Polk County Attorney’s Office on June 2, 2021.

“With this type of report, it is standard operating procedure in the State Auditor’s Office to provide a copy of the report to the examined entity the day prior to the public release of the report. If there is an issue, it is raised in that frame of time and corrective action is taken if needed,” said Annette Campbell, Deputy Auditor of State.

CLARIFICATION: The proper name of the statute in Iowa Code is “self-promotion with taxpayer funds prohibited.” Calling it a “name and likeness statute,” as the Governor did, tries to distract from what the Governor did: Promote herself with taxpayer funds.

Top image: On left, photo of State Auditor Rob Sand by Greg Hauenstein, available via Wikimedia Commons. On right, cropped screenshot of Governor Kim Reynolds from the “Step Up, Stop the Spread!” video released in November 2020.