Top business executive’s new task: Restoring economic development agency’s luster

DES MOINES – Des Moines business executive Fred Hubbell's recent leap into full-time government work was a baptism by fire.

Shortly after arriving as interim director of the embattled state Department of Economic Development, he got the word that Gov. Chet Culver was ordering a 10 percent spending cut for all executive-branch agencies. That was followed a few days later by another directive that the governor also wanted department heads to join him in taking a voluntary pay cut to lead by example.

“It was no surprise. It was clear the state was going to have to make across-the-board cuts,” said Hubbell, 57. “I didn't know what the percentage was going to be but everybody knew there was going to be one.”

One of Hubbell's first tasks was to decide how the new department he leads would cut nearly $1.86 million between now and next June 30 – including the unsavory chore of designating seven current DED employees to be laid off if Culver accepts the proposed cuts next week.

By and large, Hubbell said his initial assessment of the agency that serves as Iowa's economic development engine and chief sales staff when looking to attract job prospects, tourists or international business links has been very positive.

Hubbell, who has led global companies as well as civic initiatives in Iowa, said the agency has good people doing good work with excellent results – with the exception of a recent problem that flared in the agency's film office over state tax credits to moviemakers that led to one firing, two resignations and a full-blown criminal and civil probe into the program's management. The film office fiasco has tended to overshadow a department that otherwise is in good shape, he noted.

“There's one area that has some problems, some serious ones but those are being dealt. But that's just one area. The rest of the department, by and large, is doing a very good job,” Hubbell said. “That's what happens. One bad thing always overwhelms everything else that was good.”

Culver turned to Hubbell as an interim director – Hubbell puts extra emphasis on the “interim” part of his time since he is not interested in a permanent appointment – to right a DED ship that had been rocked by allegations of impropriety, sloppy oversight and questionable financial transactions. Those developments prompted Culver to accept the resignations of Mike Tramontina as DED director and Vince Lintz as deputy director and to dismiss film office head Tom Wheeler in September.

“We couldn't have a stronger, more capable business leader at the Department of Economic Development,” said Culver, who previously had tabbed Hubbell in 2007 as chairman of the Iowa Power Fund Board to oversee a four-year, $100 million initiative the governor considers a top priority. He continues to serve on that board as the DED's representative.

Culver also tabbed Hubbell and former Principal Financial Group CEO Barry Griswell to co-lead the Iowa Disaster Collaborative, which raised millions of dollars privately on behalf of victims of the state's 2008 natural disasters.

Hubbell was formerly chairman, president and chief executive officer of Equitable of Iowa Companies through 1997 and played a key role in a $2.2 billion buyout of Equitable by Dutch insurance and banking giant ING Group.

He served in several executive capacities with ING's Netherlands-based operations before retiring in 2006 and returning to Iowa.

Hubbell's name occasionally surfaces as a possible political candidate – most recently as a possible 2010 “mystery” challenger to U.S. Sen. Charles Grassley, R-Iowa, but he has not sought statewide office.