Iowa treasurers review vendor-funded scholarship program
IOWA CITY, Iowa (AP) — County treasurers said Thursday that they are reviewing whether to continue a vendor-sponsored college scholarship program that benefits their children and grandchildren, amid criticism that it has long violated Iowa ethics law.
The review comes one day after The Associated Press reported that two treasurers recently vacationed to Florida with the CEO of GovTech Services, which runs the tax collection website used by 88 counties.
GovTech and another vendor used by dozens of counties, SRI, Inc., for years have sponsored scholarships that are open only to the children and grandchildren of treasurers and their employees.
The Iowa Ethics and Campaign Disclosure Board issued an advisory opinion in 2015 finding that the program violated an ethics law that bars public employees and their immediate family members from accepting gifts. The opinion warned that taking the scholarships would violate the gift law since they are funded by vendors and not open to the public.
After that finding, the executive board of the Iowa State County Treasurers Association decided to continue the program with minor changes that members thought would make it legal.
One key change called for the group to raise more private donations so that the scholarships would not be funded solely by two vendors. But the companies continue to provide the bulk of the funding.
Just last week, association board member Kelly Busch sent treasurers an announcement from SRI vice president Joe Edwards saying that applications are due April 26 and scholarships will be awarded at their May conference. The announcement, obtained by AP, noted that SRI and GovTech “are pleased to offer, again this year, four $500 scholarships to children or grandchildren of treasurers or your staff.”
“SRI and GTS are happy to be able to sponsor this scholarship and other association activities,” Edwards wrote. SRI operates tax auctions for about half of Iowa’s 99 counties.
Busch, the Union County treasurer, said Thursday that the association hasn’t determined whether scholarships will be granted this year amid questions about their legality. She said only that “we are following up on details prior to awarding further scholarships.”
Union County Attorney Tim Kenyon told the AP he would make “some preliminary inquiries” into the program’s legality, which has awarded 20 scholarships since 2015.
Floyd County Treasurer Frank Rottinghaus, whose inquiry prompted the 2015 advisory opinion, has complained to the ethics board and fellow treasurers on multiple occasions that the program continued even after it was deemed unlawful.
The Iowa State Association of Counties will discuss the program with the treasurers’ association, one of its affiliates, said executive director Bill Peterson. He said his group, which administers the scholarships, wants to ensure that changes it recommended after the 2015 ethics board opinion were implemented by the treasurers.
“If we’re unsatisfied, I would say that we would refuse to assist them further with the administrative details of how they handle their scholarship funds,” he said.
Meanwhile, Peterson said that Dubuque County Treasurer Eric Stierman and Winneshiek County Treasurer Wayne Walter have asked the ethics board to review their relationship with GovTech CEO Marc Carr, whom they helped secure the lucrative, long-running tax website contract. The two vacationed with Carr in Florida last November and stayed for two nights free of charge at a beach condominium he owns — an apparent violation of the ethics law. Both said they had vacationed with Carr previously, calling him a longtime friend.
GovTech on Thursday removed from its website a video endorsement that had been up since 2014 in which Stierman praised Carr’s customer service and called the company “wonderful.” Another video testimonial featuring Jones County Treasurer Amy Picray was also removed.
Peterson said that Stierman and Walter do not believe they did anything wrong.
“But there are nuances to the ethics law and they probably weren’t really thinking about that in this case,” he said. “I think they have taken the right steps to clear that up and pay any penalty or correct things that they should have done differently.”