Iowa Gov. Reynolds seeks to clarify, says she does not think Lutheran Services charity launders money

DES MOINES — Seeking to clarify comments that have drawn criticism, Iowa Gov. Kim Reynolds said Monday she does not think the charity organization Lutheran Services, which has a chapter in Iowa, is a “money-laundering organization” as a former Trump administration official alleged without evidence.

During a news conference Monday at the Iowa Capitol, Reynolds said she wanted to clarify an exchange that took place last week when she testified to a U.S. House Government Oversight Committee hearing on government efficiency.

House Republicans invited Reynolds to provide her perspective to the committee, given she oversaw a reorganization of Iowa’s executive branch of government and given President Donald Trump’s goal of restructuring the federal government in his second term in the White House.

During the hearing Wednesday in Washington, D.C., many Democrats on the committee used their speaking time to criticize Elon Musk, who has been tasked by Trump to find ways to reduce federal spending and make the federal government leaner.

Democratic U.S. Rep. Raja Krishnamoorthi, a Democrat from Illinois, asked Reynolds a series of questions about Musk and the new federal Department of Government Efficiency, or DOGE, that Musk leads. Krishnamoorthi then asked Reynolds about a social media post by Musk, in which he reposted Trump's former national security adviser, Lt. General Michael Flynn. In the post, Flynn called Lutheran Services a “money laundering operation.”

Krishnamoorthi asked Reynolds if she believes Lutheran Services is a money-laundering operation, and Reynolds declined to answer directly. Reynolds instead said Iowans and Americans voted for Trump for president in 2024 and said that “every program should be looked at.”

Krishnamoorthi pressed Reynolds, talking over her responses and insisting his was a yes or no question. Reynolds disagreed, and when Krishnamoorthi again asked for a yes or no answer, Reynolds said, “I can’t speak to that.”

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Democrats criticized Reynolds for the exchange, saying she should have been able to say in the moment that Lutheran Services is not a money-laundering operation.

Lutheran Services in Iowa provided more than 400,000 hours of direct care service to help individuals receive in-home care and avoid hospitalization or residential care, according to the state chapter’s 2023 impact report. And the charity organization’s refugee services department helped more than 400 refugees from around the world settle in Iowa, according to the report.

Flynn has provided no evidence that Lutheran Services has committed any kind of fraud, and the organization has not been charged with any wrongdoing.

Speaking to Iowa statehouse reporters Monday, Reynolds said she wanted to clarify her exchange with Krishnamoorthi at the U.S. House hearing, which she said was taken out of context.

“I want to be clear this morning that I absolutely do not think that Lutheran Services is a money laundering organization,” Reynolds said. “They provide a whole host of charitable services to hundreds of thousands of people. And it’s not just refugee resettlements they do. They do mental health work. They do foster care work. They make sure that our kiddos have the resources that they need to be successful.

“I have worked with them for years.”

Reynolds said she plans to do a proclamation to highlight Lutheran Services’ 160th anniversary.

“But I do believe, and what I was trying to say, is that you can’t start a holistic, complete review of government by taking things off of the table. That doesn’t work,” Reynolds said. “You don’t make change and you don’t do disruptive things when you start deciding who it’s going to apply to and who it’s not.”

Reynolds said she believes that in that federal review, Lutheran Services will underscore “the great work” they do, and in the meantime that she supports the organization.

“I support their work and I always have,” Reynolds said.

Reynolds said she also reached out to Lutheran Services in Iowa, and the organization’s leader confirmed that Monday.

Renee Hardman, president and CEO of Lutheran Services in Iowa, said Reynolds reached out to her and the two spoke Monday morning. Hardman described it as “a very positive conversation.”

“(Reynolds) congratulated us on all the great work we do throughout the state and indicated her support for our work and admiration for our work,” Hardman told The Gazette.

Hardman said ever since Lutheran Services has been put in the spotlight by Flynn’s and Musk’s social media posts, she has been working to “elevate and amplify” the work the organization does.

“We have touched hundreds and thousands of lives, so my role as a CEO is to stay in a position that continues to shine the light,” Hardman said. “We’ve been answering calls, we’ve been talking with people, we’ve been meeting with stakeholders to shine the light on what we do.”

Iowa Sen. Sarah Trone Garriott, a Democrat from Waukee who is a Lutheran minister, has criticized Reynolds’ testimony at the U.S. House hearing.

“Whatever was going on there, she made a huge mistake,” Trone Garriott said Monday after the governor’s news conference. “She harmed the reputation of Lutheran services in Iowa and Lutherans in our state.”

Reynolds on Monday signed an executive order creating a state task force on government efficiency.

Comments: (515) 355-1300, erin.murphy@thegazette.com

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