Branstad reports financial assets as part of ambassador application

Former Gov. Terry Branstad reported at least $1 million in assets — and possibly as much as $3.3 million — as part of a federal financial disclosure report required for his application to be U.S. ambassador to China.

Branstad stepped down as Iowa's longest-serving governor Wednesday before taking the oath as U.S. ambassador.

Included among more than 50 companies in which Branstad owns stock are 14 he says he will divest to avoid a potential conflict of interest in China.

'I am committed to the highest standards of ethical conduct for government officials,' Branstad wrote in a March 23 letter to the U.S. State Department.

The two-page letter with the subject line 'Ethics Undertakings' was one of two documents The Gazette obtained last week through the federal Freedom of Information Act (find both at the bottom of this article). The other was Branstad's Public Financial Disclosure Report, filed with the U.S. Office of Government Ethics, which outlines the former governor's assets, including investments, savings accounts, real estate holdings and liabilities.

The disclosure is required of people seeking senior level positions in the U.S. government.

'You can't be in a position to benefit from your ambassadorship,' said Ron McMullen, a career diplomat who served as U.S. ambassador to Eritrea from 2007 to 2010. McMullen is now the University of Iowa's ambassador in residence, teaching courses on comparative politics, diplomacy and international politics.

'The rule of thumb is an ambassador can't actively be managing investments that happen to deal with the country to which he or she is ambassador to,' he said. 'So if an asset is doing business with China or investing in China, and you're ambassador to China, you can't actively manage that, so it has to be put in a trust or you have to divest in it.'

Avoiding conflict of interest

Branstad's promise to sell stock in 14 companies, including Apple, PayPal, Deere and Co. and Wal-Mart, within 90 days of confirmation came because those companies 'have been deemed to present a significant risk of a conflict of interest,' according to a State Department response to The Gazette.

'The assets that Ambassador Branstad is retaining have either been deemed not to present a significant risk of a conflict of interest at this time, or are currently subject to a de minimus

exemption under the ethics regulations,' the agency reported, referring to exemptions for small investments.

Deere and Co., based in Moline, Ill., has extensive manufacturing operations in China as well as other countries. Ken Golden, global public relations director for the company, said in March he was pleased to see Branstad considered as ambassador because Branstad knows agriculture and has been an advocate for international trade.

Branstad says in the March 23 letter he will have a 'covered relationship' with the state of Iowa for one year, which means he'll need to seek specific permission to participate in any matters involving Iowa and China. The State Department said this is 'standard language' for someone who has previously served as a state governor.

'Ambassador Branstad will receive ongoing guidance about the matters that federal ethics law permit him to participate in,' the agency said.

Financial disclosure

Branstad's financial disclosure report, at eight pages, is significantly less complicated than the 104-page report filed by Donald Trump last year when he was running for president. The reports provide some idea of a senior government official's assets — but because each asset is listed with a value range, the grand total also has a wide range.

For example, the value of Branstad's stock in Casey's General Stores, headquartered in Ankeny, is listed as $15,001 to $50,000. His total assets are valued at as little as $1.08 million and as much as $3.33 million, according to the report.

Branstad lists 55 companies in which he owns stock, with the total value of those investments between $114,000 and $885,000.

The companies include automotive (Axalta Coating Systems and Advance Auto Parts), medical (Diplomat Pharmacy, GlaxoSmithKline and Allscripts Healthcare Solutions), energy (Whiting Petroleum, TransCanada and Kinder Morgan) and financial (Wells Fargo and Co., West Bancorporation and Comerica Inc.).

Chris Branstad, Branstad's wife, has investments in Berkshire Hathaway ($1,001 to $15,000) and Diplomat Pharmacy ($1,001 to $15,000), the report states.

Real estate

While Trump's real estate holdings include Trump Tower in Midtown Manhattan and Mar-a-Lago golf resort in Palm Beach, Fla., Branstad's commercial real estate is in places such as Lake Mills, a northern Iowa town of 2,000 where Branstad operated a law office and served as state representative before becoming lieutenant governor in 1979, and Joice, near Lake Mills.

Branstad also owns parcels in Bode, Dunlap, Exira, Guttenberg, Lake Park, LeClaire, Lohrville, Manly, North English, Olin, Packwood, Seymour and Sibley, all sites of those towns' post offices. The total worth of this land or property is $960,015 to $2.35 million, the report states.

Also listed among Branstad's assets is an annual salary of $150,000. Branstad's official salary as governor was $130,000 in fiscal 2016, but it's possible he was including travel and subsistence — an additional $14,282 last year. He doesn't give the value of his state of Iowa defined benefit plan, but said it yields about $2,900 per month in retirement payments.

For liabilities, Branstad listed two mortgages, one for a personal residence valued at $100,001 to $250,000 and one for a rental property valued at $50,001 to $100,000.

'Very lengthy process'

The Gazette requested from the State Department and the Office of Government Ethics all of Branstad's application materials. The OGE responded March 23 saying it was withholding 53 pages of notes and emails between the office and the State Department as 'predecisional deliberative process material,' which is exempt from FOIA.

'The disclosure ...

would constitute a clearly unwarranted invasion of personal privacy,' the OGE said in the letter.

McMullen, a Northwood, Iowa, native who has lived in, worked in or traveled to 105 countries, remembers filling out his financial disclosure report to be considered as a foreign ambassador.

'It's a very lengthy process,' he said. 'It's like filing a tax return and having it audited twice.'

l Comments: (319) 339-3157; erin.jordan@thegazette.com

State Department letter:

   Branstad State Department ethics letter by Source Media Group News on Scribd