116 3rd St SE
Cedar Rapids, Iowa 52401
If state budget cuts were coming, Gary Hinzman, the then-correctional services director for Iowa's 6th Judicial District, advocated raising fees, threatening building closures and reclassifying positions as 'mission critical' to avoid layoffs.
When it looked like a pet project wouldn't get support from the Department of Corrections, Hinzman went straight to friendly lawmakers who helped him get state funding.
Hinzman, 66, believed in his ideas — mostly programs designed to keep at-risk juveniles out of prison. Supporters describe him as innovative, visionary and tenacious.
Others say Hinzman's ego, secrecy and poor management hindered his 24-year tenure and led to a State Auditor's review of the agency that oversees parole and probations for six counties, including Linn and Johnson.
State auditors renewed the probe this spring to determine if there was criminal activity.
'Hinzman created a culture where his message was loud and clear that management came first and he was untouchable,' Michelle Reese, a probation and parole officer in Cedar Rapids, said at a February meeting of the district's board of directors.
Longtime friend Pat Cobb disputes this portrayal of Hinzman: 'All the things he did, he did with good intentions and hope he could change some people's lives.'
Hard worker who climbed the ranks
Cobb, a retired businessman and Zach Johnson Foundation board member, remembers going to Wilson Middle School with Hinzman and hanging out at the former Texaco station at 22nd Avenue and Sixth Street SW, where the teens pumped gas and filled tires.
'We shared that strong dislike of being poor and desire to work hard not to be poor,' Cobb said.
Hinzman joined the Cedar Rapids Police Department in 1970 and, at the age of 37, became police chief in 1985. He raised educational requirements for officers, established a mentoring program and expanded the use of police helicopters.
But Hinzman clashed with the newly elected public safety commissioner in 1988 and was demoted back to patrol. He soon left to take the top job with Correctional Services.
The district has 180 employees and between 4,200 and 4,500 clients in programs of pretrial release, probation, parole, pre- and post-prison residential treatment.
Under Hinzman's leadership, the district built a correctional campus that includes two residential facilities, a classroom building, central office and kitchen. A 23,000-square-foot halfway house opened in 1996 bears Hinzman's name.
These facilities — and the programs delivered inside — help offenders get back on their feet after prison.
But Hinzman wanted to keep young people out of the system.
Non-profit partner, different rules
He founded the Community Corrections Improvement Association (CCIA) in 1991. The not-for-profit runs several successful programs, including Children of Promise, which provides mentors for children with a parent in prison, and Home to Stay, which offers low-cost housing for offenders who want to live with their families while they work toward self-sufficiency.
Breaking the cycle of prison recidivism saves money — prison costs $30,000 a year per inmate — and prevents further victimization.
'We were trying to run some of the most-effective programs in the country,' Hinzman told The Gazette Friday. 'We kept hundreds of young people from going to prison over the years.'
CCIA's purpose was to tap into revenue streams not open to the public sector. A 2002 article Hinzman wrote for on his website, Garyhinzman.com, he called 'Short Sightedness Can Cause Budgetcide' outlined some other reasons, including subverting labor laws.
'Your own employees who can't volunteer or work additional part-time hours for the department because of FLSA (Fair Labor Standards Act) can do for a private foundation,' Hinzman wrote.
Private foundations, Hinzman also noted, may immediately hire retired state workers.
That's what happened in 2011, when Hinzman signed an agreement with Cynthia Engler, a 37-year employee with the district. Engler agreed to terminate her district employment so she could work a part-time job for CCIA.
The problem was the district was reimbursing CCIA for Engler's $51,000 salary, which violated rules on 'double dipping,' or state employees receiving both a pension and a salary. Retired workers who return to public employment before age 65 have their monthly retirement earnings reduced by 50 cents for every dollar they earn over $30,000 under Iowa law.
'It appears this arrangement between the 6th District and CCIA has been designed to circumvent the IPERS (Iowa Public Employees' Retirement System) re-employment rule,' state auditors noted.
The district stopped paying Engler in 2012. She sued for breach of contract last July.
The lawsuit was dismissed with prejudice in January after Engler settled with the district and CCIA for two payments totaling $70,000.
Lack of trust
The last sentence of Hinzman's 2002 'budgetcide' piece, which he said he wrote somewhat tongue-in-cheek, shows he didn't trust corrections officials in Des Moines.
'I do have other strategies, but would never write them down where someone who might control my budget would see them,' Hinzman wrote. 'If you have a need, call me!'
One of the people from whom Hinzman kept secrets was John Baldwin, who worked 30 years in the state Department of Corrections before he was named director in 2007. Baldwin told The Gazette he's known Hinzman since 1977.
'We've had some really good times and really awkward times,' Baldwin said.
One of those awkward times was in 2006, when Hinzman circumvented Baldwin to get funding for a residential facility for parolees and probationers with mental illness.
The Anchor Center, at 3115 12th St. SW in Cedar Rapids, is a halfway house specifically for offenders who have mental, behavioral and substance abuse issues. The goal is to help them receive proper treatment and learn life skills that will stabilize their behavior and keep them from returning to the prison system.
Instead of working with corrections officials to include the Anchor Center in the fiscal 2007 budget, Hinzman went to Eastern Iowa lawmakers, including Sen. Rob Hogg, D-Cedar Rapids.
'He told me he had this interest in a facility for people with significant mental health problems,' Hogg said. 'It's something I thought would be good for state corrections policy.'
Hinzman has strong ties to other lawmakers, including Sen. Bob Dvorsky, D-Coralville, who worked for the correctional services district and serves on the CCIA board of directors. Dvorsky did not return several phone messages and an email seeking comment for this story.
Sen. Wally Horn, D-Cedar Rapids, and Rep. Vicki Lensing, D-Iowa City, also serve on the CCIA board.
Baldwin said he was blindsided by the proposal.
'Imagine my surprise when I got called over and asked why the governor didn't put the Anchor Center in his budget,' Baldwin told correctional services staff in February. 'What the heck is the Anchor Center?'
Hinzman's backchanneling caused friction between the department and Gov. Tom Vilsack, Baldwin said. 'That wasn't very nice.'
Lawmakers paid to build the 26-bed Anchor Center but not open it to residents. The district needs between $2.1 million and $2.3 million a year to staff the facility, but has only gotten about two-thirds of that.
So far, only outpatients have used the center. But district leaders hope to open it to some residents later this year.
Retired Johnson County Attorney J. Patrick White said he appreciated Hinzman's tenacity.
'The state always viewed Gary as a bit of a rogue trying to get around the Legislature,' White said. 'Everything I saw him try to do was good, constructive and innovative.'
One very bad year
Things went sour in fiscal 2011, when the district had a year-end deficit of $160,000. Fiscal 2012 was worse, and the district asked for $1.4 million in supplemental funding from the corrections department.
Baldwin ordered an internal review. He then asked the State Auditor to study the district's finances and relationship with CCIA.
Emails obtained by The Gazette through an open-records request to the Department of Corrections showed administrators selling cars, reviewing who had state cellphones and worrying about making payroll in the first half of 2012.
'I deleted CCIA references in expenses,' former finance officer John Hannaford wrote in a June 4, 2012, email to Hinzman and two others.
Laura Strait, a supervisor, wrote to Hinzman in May 2013 asking if he knew when state auditors would make a decision about whether the district was appropriately handling vacation and sick leave.
'If they decide the district cannot proceed with the current practice (which I fully expect) and they make it retroactive, that just might push me over the edge,' Strait wrote. 'I'm just saying …
this issue really bugs me.'
The Jan. 10 report identified $776,000 in improper disbursements from fiscal years 2009 through 2012.
More than $440,000 of these disbursements came from district managers spending part of their time doing CCIA duties. The not-for-profit also used state vehicles, cellphones and office space for free.
'Because of decisions implemented by the former district director, including the sharing of staff and how certain costs are paid, what should be distinct lines between the district's and CCIA's operations are blurred,' auditors said about Hinzman.
The report showed $170,000 in improper vacation payouts to former employees and $40,000 in vacation paid before it was earned.
The report doesn't indicate any outright criminal acts, but the Iowa Attorney General's Office agreed to review it. State auditors returned for two days in March to interview more staff and the AG subpoenaed testimony from seven current and former administrators.
Hinzman retired last May, planning to focus on CCIA as well as some collaboration with Mount Mercy University and St. Ambrose University, according to emails. He is interim director of CCIA until the not-for-profit hires a full-time director after July 1.
'We'll have to — I don't know why I say 'we' because I'm not there any longer — people will have to negotiate a resolution to all of this,' Hinzman said.
Hinzman's successor, Bruce Vander Sanden, who served 24 years in the agency and was Hinzman's right-hand man, has tried to rebuild relations with unionized staff, who voiced no confidence in both men in March 2013.
Vander Sanden leveled the amount of sick time provided to line staff and administrators and will spend $5,000 to hire a mediator to help the district develop shared values and plans for the future.
He'll try, as did his former boss, to keep his cool.
'Gary taught me to be the calm that staff look to in the middle of a storm,' Vander Sanden said.
District/CCIA settlement with Cynthia Engler