Investigation needed into misuse of federal COVID funds

Iowa Senate News Release
September 16, 2020

Key Democratic Legislators call for investigations into misuse of federal COVID funds

Key Democratic legislators are calling for investigations into reports that Governor Reynolds diverted nearly $450,000 to pay her staff instead of using the funds for COVID-19 relief efforts. 

“At a time when the number of jobless Iowans is through the roof and many Iowa businesses are hurting because of the pandemic, Iowa taxpayers should have confidence that federal COVID relief funds are being used only to help them,” said Sen. Joe Bolkcom, Ranking Member of the Senate Appropriations Committee.

“Instead of using funds that are desperately needed to provide relief to hard-working Iowans and closed or struggling businesses hurt by the pandemic, the Governor is diverting the relief funding for other purposes.  That’s not right.”

A report by Bleeding Heartland uncovered public documents showing that Reynolds directed that $448,449 in funding received through the federal Coronavirus Aid, Relief and Economic Security (CARES) Act were used to cover salaries and benefits for staff already working in her office.

The diversion is even more puzzling because the Legislature approved and the Governor signed legislation to appropriate more than $4.6 million to cover the cost of running the Governor’s office – including salaries and benefits – over the past two years. 

“We need to find out what the Governor did with the extra money. The intent of the federal aid was not to allow the Governor to set up a slush fund,” Bolkcom said. “We also need to find out if this diversion is continuing.”

For the past six months, none of the documents released to the public and legislators contained any information about this diversion of funds.

“Instead of transparency by the Governor and her staff, they are hiding the ball from Iowa taxpayers,” Bolkcom said.

Democratic Senators called for a three-pronged effort to investigate this misuse of public funds:

  • First, Senator Claire Celsi of West Des Moines, Ranking Member of the Administration and Regulation Budget Subcommittee, will request that the State Auditor immediately investigate the diversion of funds. The Subcommittee appropriated $2,303,954 for the Governor’s office during Fiscal Year 2020 (July 1, 2019, through June 30, 2020) and $2,315,344 for Fiscal Year 2021 (July 1, 2020, through June 30, 2021).
  • Second, Senator Tony Bisignano,  Ranking Member of the Government Oversight Committee, will request that the Oversight Committee convene to allow Republican and Democratic lawmakers to question the Governor, the Director of the Department of Management and other key officials with knowledge of this diversion.
  • Third, federal officials in U.S. General Accountability Office (GAO) will be contacted to investigate whether paying existing staff is an appropriate use of COVID relief funds.