What might have been a slow news week in state government took an unexpected turn on September 3. Governor Kim Reynolds announced that Lieutenant Governor Adam Gregg was resigning, effective the same day. Minutes later, the Iowa Bankers Association revealed that Gregg would join the association as president and CEO, beginning on October 1.

There’s a lot to unpack here.

THE GOVERNOR WAS ALMOST AS SURPRISED AS THE REST OF US

I’ve heard plenty of speculation that Reynolds will choose a new running mate if she seeks another term. But few Iowa politics watchers knew what was coming after Labor Day.

Even Reynolds had little warning. The day after the resignation, she said “Gregg told her last Friday” (August 30) about his opportunity to lead the bankers group. The move was likely in the works for weeks, if not months. Iowa Bankers Association spokesperson Jenica Lensmeyer declined to answer my questions about the hire, such as when Gregg applied or was recruited for the position, and when he was interviewed.

Despite having a long holiday weekend to prepare, the governor’s office didn’t seem ready to drop the news. Whereas Reynolds often announces personnel departures at the same time as new hires, this release said the governor will appoint Gregg’s successor “later this fall.” Until then, Iowa Senate President Amy Sinclair will be next in line to serve as governor. (I have been unable to find out whether the security detail previously assigned to Gregg will protect Sinclair in the meantime.)

Shortly after the announcement, a source sent reporter Zachary Oren-Smith a photo of a display case at the capitol, which used to contain information about the lieutenant governor. Someone had already emptied it.

On the Iowa Down Ballot podcast, longtime political reporter Douglas Burns described the rollout as “a bit clumsy.” I think most public relations professionals would agree.

Gregg’s exit seemed sudden, but it was a long time in the making. It’s been an open secret for years that he wasn’t happy in his role—for good reason.

ADAM GREGG WAS NEVER THE HEIR APPARENT

In the September 3 statement, Reynolds said Gregg “has been a tremendous partner and an important part of my team over the last seven years, and I greatly appreciate his service to Iowans.”

For his part, the lieutenant governor said, “It has been a great honor to serve alongside Governor Reynolds for seven years. I have enormous respect for her and her leadership, and she will always be one of the most important mentors in my life. I don’t have the words to express the profound gratitude I feel toward Governor Reynolds.”

Let’s get real: Reynolds has never treated Gregg like a true partner in governing.

Although the lieutenant governor’s resignation letter thanked Reynolds for “the assignments and responsibilities you gave me,” that record over seven years was thin. In 2019, she named Gregg to chair the FOCUS Committee on Criminal Justice Reform—a natural fit, given his previous work leading the State Public Defender’s office under Governor Terry Branstad. The committee was short-lived, and while the Reynolds administration implemented some of its recommendations on reentry after incarceration, the governor did nothing to advocate for its proposals on reducing racial profiling or disparate treatment in policing.

Gregg co-chaired the Governor’s Empower Rural Iowa initiative, which worked on issues ranging from rural broadband to housing, workforce, and emergency management services. During the COVID-19 pandemic, the governor put him in charge of the Feeding Iowans Task Force, which used federal pandemic relief funds to support food banks, livestock producers, and Iowans needing food assistance. That’s important work, but the task force was already “scaling back its efforts” in May 2021, when it released its final report.

Gregg spoke at only a handful of the dozens of televised press conferences Reynolds held to discuss her administration’s pandemic response. Looking through the official Facebook pages for the lieutenant governor and the governor this week, I found few photos of the two together. Longtime political reporter Dave Price commented on the Iowa Down Ballot podcast that he has covered “numerous events with the governor” and couldn’t remember many where Gregg was allowed to speak. In fact, Price recalled, reporters had to fight to get the lieutenant governor’s events included in the public schedules the governor’s office regularly distributes to the media.

What blew my mind was that Reynolds didn’t give Gregg any visible role in the state’s response to this summer’s severe flooding.

Then Lieutenant Governor Patty Judge led the Culver administration’s flood recovery programs, beginning in 2008. It would make sense to involve Gregg in the latest rebuilding effort, especially since his hometown of Hawarden (Sioux County) was inundated, as seen in this aerial photo the governor’s office released on June 22.

At a rare Sunday afternoon press conference on June 23, Reynolds was joined by leaders of the state departments of Homeland Security and Emergency Management, Public Safety, Transportation, Health and Human Services, and Natural Resources as well as the Iowa National Guard’s adjutant general and a meteorologist from the National Weather Service. Gregg was not present, but I didn’t think much of it at the time, since he was with the governor on a tour of northwest Iowa the following day.

Two and a half weeks later, Reynolds convened a longer news conference about her administration’s flood recovery efforts. Gregg stood behind her for more than an hour as reporters heard from the governor and nine other officials: Major General Stephen Osborn of the Iowa National Guard, Department of Transportation Director Scott Marler, Department of Education Director McKenzie Snow, Department of Inspections, Appeals, and Licensing Director Larry Johnson, Iowa Insurance Commissioner Doug Ommen, Department of Health and Human Services Director Kelly Garcia, Homeland Security and Emergency Management Director John Benson, Department of Natural Resources Director Kayla Lyon, and Iowa Finance Authority Director Debi Durham.

Guess who didn’t say a word?

After that press conference, I emailed the governor’s spokesperson to ask whether Gregg was working on any aspect of the disaster relief, or assigned to any relevant committee or task force. I didn’t get an answer.

The contrast between this partnership and Reynolds’ rapport with her own mentor couldn’t be greater. Branstad continually sought to elevate his second in command. He put her in charge of some major initiatives, like the Iowa Energy Plan. His messaging often credited the lieutenant governor as well as himself for policy successes.

Perhaps more important, Branstad regularly let Reynolds speak at his press conferences and other events. I wrote about that practice several times in 2013. It struck me as newsworthy because it was so different from a lieutenant governor’s traditional job: handle events that don’t fit into the governor’s schedule. During one two-week period in 2013, Branstad and Reynolds made fourteen joint public appearances. That was typical, as you can confirm by browsing Branstad’s public schedules on the Wayback Machine.

Years before Donald Trump became president and sent Iowa’s governor to China as U.S. ambassador, I believed Branstad intended to step down before the end of his sixth term, to allow Reynolds to run for governor as an incumbent. That wasn’t any great insight: during a January 2014 interview on Iowa Public Television, Branstad literally said, “We’re grooming her to be the next governor.”

Reynolds never boosted her own running mate that way, or talked him up as a potential leader. Look what she told reporters this week when asked if she was surprised Gregg was leaving politics:

“There’s always the assumption when you bring in a lieutenant governor they’re going to be ready and willing to take that next step to serve as governor, but there’s never any guarantees that’s going to be the process,” Reynolds said. “And ultimately it’s going to be the people of Iowa who will decide who the next governor is going to be.”

Even if he had wanted to run, Gregg wasn’t well-positioned to win a statewide GOP primary—in part because his boss did little to raise his profile or help him build a power base.

GREGG’S ABOUT TO START EARNING A LOT MORE MONEY

Gregg wrote in his resignation letter and public statement about stepping down, “This season of my life needs to be focused on my family. My kids are growing up too fast, and statewide elected offices force me to miss more of their lives than I can accept. While difficult, the decision to resign from this role allows me to honor my most important commitment – my family.”

No doubt he will enjoy more family time with less stress and work-related travel.

The new position also will deliver a massive salary hike.

The latest publicly available 990 filing for the Iowa Bankers Association indicates that outgoing president John Sorensen earned $620,465 “from the organization and related organizations” in 2022.

Lensmeyer declined to answer my questions about Gregg’s salary. It’s possible he won’t initially be paid as much as Sorensen was after 20-plus years on the job. The Iowa Bankers Association’s tax filing for 2012 indicates Sorensen’s total compensation that year was $335,711. That’s more than triple the $103,212 annual salary Gregg has been earning—fixed under Iowa law, with no realistic chance for a raise. Most of the bankers association’s revenue comes from membership dues, which are stable. It’s less risky than trying to build a legal practice from scratch.

My father used to say, “When the pie is being passed around, that’s the time to take a slice.” No wonder Gregg seized this opportunity instead of looking for a job after his term as lieutenant governor ends.

In addition to earning more than enough to support his family, Gregg will probably wield more influence in his new position than he did as next in line to be governor.

THE IOWA BANKERS ASSOCIATION IS A HEAVY-HITTER IN GOP CIRCLES

The lieutenant governor is generally well-liked but not considered a power broker. That may change soon.

The Iowa Bankers Association is an influential lobbying force at the capitol and a major donor to state legislative campaigns, overwhelmingly backing Republicans.

During 2023, the Bankers Unite in Legislative Decisions (BUILD) PAC donated $109,000 to GOP candidates and committees—mostly campaigns of influential state legislators. The group contributed nothing to Democrats.

During the first four and a half months of this year, the PAC donated $14,500 to GOP campaigns—$1,000 to Governor Reynolds, the rest to Republican legislators.

From mid-May to mid-July, BUILD contributed $31,000 to GOP campaigns and committees, $2,500 to the Iowa Democratic Party, and $6,500 total to the campaigns of five Democratic legislators. Only one of those Democrats (State Senator Eric Giddens) faces a competitive election in November.

I asked Zachary Goodrich, executive director of the Iowa Ethics and Campaign Disclosure Board, whether Iowa Code Chapter 68A on campaign finance prohibits Gregg from weighing in on the BUILD PAC’s contributions. He replied by email that the code doesn’t restrict a former statewide elected official’s activities with a PAC.

IMPACT OF TWO-YEAR LOBBYING BAN UNCLEAR

A different Iowa code section bans some former state employees, including statewide elected officials, from becoming a lobbyist “within two years after the termination of service or employment.” How much that will constrain Gregg is unclear.

The Iowa Bankers Association’s outgoing president has been a registered lobbyist. Sorensen registered for or against about two dozen bills introduced during the 2023 or 2024 legislative sessions. But he wasn’t his organization’s only face at the capitol. The bankers group also hires contract lobbyists from Cornerstone Government Affairs.

The association’s spokesperson Lensmeyer told reporters this week, “We plan to follow the law as it relates to lobbying efforts.” I asked three more specific questions:

• Does that mean Adam Gregg will have no conversations with state lawmakers about public policy or pending legislation?
• Does it mean that for two years, he will not communicate with the association’s lobbyists about which bills they are registering for or against?
• Does it mean that for two years, he will take no part in any decisions by the BUILD PAC on campaign contributions?

Lensmeyer replied by email, “We will follow applicable law.”

I posed the same questions to Goodrich, who clarified that the ethics board only enforces Iowa Code Chapter 68B provisions on lobbying as they relate to lobbying the executive branch. The Iowa House and Senate Ethics Committees have jurisdiction to enforce state lobbying laws when it comes to the legislature.

Goodrich also pointed out that “the restrictions in 68B for former officials/employees are narrowly tailored, primarily prohibiting services rendered in relation to any ‘case, proceeding, or application with respect to which the person was directly concerned and personally participated during the period of service or employment [with the state].'”

An Iowa Ethics and Campaign Disclosure Board advisory opinion from 2013 addressed those lobbying restrictions with respect to Branstad’s former chief of staff Jeff Boeyink. That opinion was geared toward executive branch lobbying, but it may hint at how the legislature’s ethics committees would interpret the same statute.

The opinion gave Boeyink the green light for many kinds of influence peddling that may not meet a narrow legal definition of “lobbying.” For instance, he could make calls to set up meetings between a lobbyist colleague and a member of the governor’s office staff, or between a lobbyist colleague and a “state agency, official, or employee with whom he had substantial and regular contact” as the governor’s chief of staff, as long as Boeyink himself did not make “any persuasive statements regarding a particular bill, rule, or order that may be the subject of the meeting.”

The opinion also found Boeyink could encourage the governor’s office to take certain kinds of actions (like appointing someone to a particular state board) as long as he did not advocate for action on “a piece of legislation, an administrative rule, or an executive order.”

He could even represent “clients who have cases, proceedings, or applications before the state government that he was involved in during his time in the Governor’s Office, but whose representation he confines to matters separate and apart from those particular cases, proceedings, or applications that he was involved in.”

Presumably Gregg will refrain from registering as a lobbyist for the next two years. And it would be wise for him to steer clear of any appearance of lobbying for the next two years. But if state regulators stick with the approach outlined in the 2013 advisory opinion, Gregg could legally use his connections in many ways during the cooling-off period. He could set up meetings with executive branch staff or state lawmakers, where others representing the Iowa Bankers Association would advocate for or against policies.

He wouldn’t need to talk directly with legislators about pending legislation. Every lawmaker can see how the Iowa Bankers Association’s other lobbyists are registered on any given bill. Leaders are well aware of the BUILD PAC’s campaign contributions.

REYNOLDS MAY WAIT MONTHS BEFORE NAMING A NEW LG

The governor hasn’t clarified when she plans to name a new lieutenant governor or hinted at who is on her short list.

I expect her to hold off until after the November election. If Trump wins, she will need someone with strong Trumpworld connections in her administration. The GOP presidential nominee famously holds grudges, as Reynolds is known to do. No matter how hard she tries to show her loyalty—to the point of wearing a MAGA sequin jacket at the Republican National Convention—Trump may take revenge on Reynolds for endorsing and actively campaigning for Florida Governor Ron DeSantis last year.

Conversely, if Vice President Kamala Harris becomes the next president, Reynolds may choose a less polarizing figure, or someone with bipartisan connections in Washington. That could be especially helpful if Democrats regain control of the U.S. House of Representatives.

Waiting until after the election could expand the pool of candidates. Sitting state legislators or members of Congress may not find the lieutenant governor position attractive now. Whole different story if they lose their re-election bids.

On the Iowa Down Ballot podcast, Iowa Capital Dispatch editor-in-chief Kathie Obradovich speculated that Reynolds’ future plans could affect her choice. If she intends to run for another full term, she will probably choose someone “a lot like Adam Gregg, who’s not going to upstage her, or challenge her,” but will be happy to stay in the background, Obradovich said. If she’s not planning to run for re-election in 2026, Reynolds may look for someone who could be a strong gubernatorial candidate.

I expect Reynolds to seek another term, which would make this gig less desirable. If you’ve got an influential or well-paying job, why spend the next several years doing ribbon cuttings? State Representative Bobby Kaufmann may have higher ambitions and was a senior advisor to Trump’s Iowa caucus campaign. But he can accomplish more as chair of the Iowa House Ways and Means Committee. State Senator Mike Bousselot held senior positions in the governor’s office under Branstad. Now he’s a rising star in the Iowa Senate.

Any comments about Gregg’s departure or speculation about Iowa’s next lieutenant governor are welcome below—or feel free to send confidential tips.

LATE UPDATE: Reynolds confirmed during an October 2 news conference that she will not name a new lieutenant governor until after the November 5 election. Marissa Payne reported for the Des Moines Register,

[Reynolds] said the selection process for a new lieutenant governor will involve interviews with people she thinks “might be a good partner.”

In those conversations, Reynolds said she would like to know: “What are some of their visions for moving the state forward and what are some of the areas they’re interested in working on? What are they passionate about? How does that fit into what we’re working on?”

Gregg provided additional comments to the Cedar Rapids Gazette regarding his compliance with the two-year ban on lobbying by former statewide elected officials. Erin Murphy reported on October 6,

“I intend to fully comply with applicable Iowa law and guidance from the Iowa Ethics and Campaign Disclosure Board. I have no plans to register as a state-level lobbyist during the two-year period required under Iowa law, and I was hired with the knowledge that I would be subject to these rules,” Gregg said in a statement to The Gazette through the Iowa Bankers Association. “The Iowa Bankers Association has a strong and respected team at the Iowa Capitol that will continue to represent the interests of Iowa bankers.”

Gregg went on to note that in addition to lobbying on legislation, the Iowa Bankers Association operates two for-profit subsidiaries — a mortgage company and an insurance company — and provides services to banks including compliance education and guidance, marketing services, human resources support and development programs for new banking leaders.

Gregg said he also will represent Iowa’s banking industry on numerous community- and business-focused boards.

“In sum, there are plenty of non-lobbying responsibilities to keep me busy leading a large and complex organization like the IBA,” he said.

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Top image of Adam Gregg is cropped from a photo the Iowa Bankers Association posted on Facebook on September 3.