Curious Iowa: How much does the state spend settling claims?

Led by claims against the University of Iowa Hospitals and Clinics and the Department of Corrections, the state has paid out more than $108 million over the past decade to settle legal disputes against it.

Since January, the state has paid out an additional $10 million, which includes nearly $175,000 paid to settle three public records lawsuit brought against Gov. Kim Reynolds and her administration. The settlement, which paid for legal fees, came after the administration — citing the increased workload that accompanied the onset of the COVID-19 pandemic — took months to comply.

However, the state was reimbursed for $2 million it had agreed to pay in March to settle a racial discrimination case over the Hawkeye football program. The State Appeal Board approved a $4.17 million settlement, with the UI originally covering all but $2 million that the state would have to pay.

But after concerns raised at the appeal board meeting about personal accountability of those accused, UI President Barbara Wilson said the campus’ athletics department would reimburse the state for the $2 million after all — leaving the UI to cover the whole settlement.

Twelve former Hawkeye players had sued the football program and coaches in November 2020 following an outcry and accusations of racism on social media and years of internal and external investigations into allegations. A federal judge dismissed individual defendants — including Athletic Director Gary Barta and head football coach Kirk Ferentz — from the suit, leaving only the Board of Regents as a defendant by the time of the settlement.

The issue brought national headlines and caused one curious Iowan to wonder how much the state has spent on settling lawsuits in the past decade. Curious Iowa is a series from The Gazette that seeks to answer your questions about the state, its culture and the people who live here.

Settlements over claims against the state and its agencies and departments are decided by the three-member State Appeal Board, which meets monthly to consider recommendations from the Attorney General’s Office.

The board’s current make up is Roby Smith, the Republican state treasurer, Kraig Paulsen, the Department of Management director, who is appointed to that job and not elected, and Democrat Rob Sand, the state auditor.

Records show the state has agreed to pay $108,182,885.20 between fiscal 2014 and fiscal 2023, which ended in June, out of the state’s general fund. Typically, when approving a deal, the state does not admit wrongdoing.

The office of the Iowa Treasurer, the Iowa Department of Management and the Iowa Attorney General’s Office did not respond to The Gazette’s emails and calls for comments.

Sand, who has voted against settlements that would have taxpayers pick up the cost of racial discrimination or sexual harassment perpetrated by a state employee, suggested the state aim to reduce its liability by holding employees who act with such malfeasance personally responsible.

UIHC settlements cost $32.9M

Since 2013, the state of Iowa has paid over $32 million in claims against the UI Hospitals and Clinics, the largest health care provider in the state.

In addition to the $32 million paid by the state, the UI Physicians, the group practice that represents doctors and surgeons at the university, has paid over $35 million of its own money during the same period.

In the most recent budget year that ended June 30, the state paid $9 million for claims against the university while the physicians group paid nearly the same amount.

Next to the UI hospital, the state agency with the most claims paid by the state over the last decade is the Iowa Department of Corrections, with over $20 million in claims against it since 2013.

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‘Willful and wanton conduct’

Since 2013, the state has paid over $11 million in claims of its total resulting from allegations of sexual harassment by state employees.

Almost half that — $4.15 million — settled claims in 2019 that then-Iowa Finance Authority Director Dave Jamison sexually harassed two employees. The board voted to pay Beth Mahaffey, former business development director for the authority, $2.35 million. Ashley Jared, communications director for the authority, received $1.8 million.

An investigation found that Jamison sexually harassed women on his staff, in one case grabbing a subordinate's breasts and in another watching a pornographic video while he and a woman were alone on a work-related trip.

Another settlement of $1.75 million in 2017 ended lawsuits and appeals after the former communications director of the Iowa Senate Republicans, Kirsten Anderson, said she was fired after complaining about a “toxic” work environment at the Capitol.

Sand, in an interview, said the state should look to recoup money lost on massive settlements that result from “willful and wanton conduct” by state employees. He said that seeking repayment or compensation from the employee’s state pension would help deter such behavior.

“That's exactly why in three different sexual harassment settlements, I voted against the settlement, because no one was willing to commit to holding the person who committed the harassment personally accountable for it,” Sand said. “And I just think that's ridiculous.”

Sand pointed to a provision in Iowa code that allows the state to seek repayment from employees who commit “willful and wanton” acts, or employees who commit intentional malice.

This provision allows the Iowa Attorney General’s Office to sue the state employee for remittance for the settlement, typically from the employee pension. However, Sand said the state hasn’t done so in decades.

Sand said the state should not go after all defendants to recoup money. Most settlements by the state, such as the millions for UIHC, are for mishaps that many employees learn from.

“I think the bigger question in each individual case, you have to be looking to make sure that if someone is a some state employee that has taken some action, or done something for which they're playing in the wrong, you need to be willing to hold them personally accountable,” Sand said. “And that is the best way to prevent taxpayers from being held accountable for something that at the end of the day, was really more of someone's choice than simply an accident or mistake.”

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Comments: liam.halawith@thegazette.com