Government

Candidates for governor debate executive leadership records

DES MOINES — Who is the better chief executive to lead Iowa through the next four years?

That question is playing out in the race to become Iowa’s next governor, as Republican Kim Reynolds and Democrat Fred Hubbell have engaged in a campaign-trail debate over leadership styles and records.

The debate has spilled onto Iowans’ television sets in the form of campaign advertisements. During the back-and-forth, the candidates have extolled their own resumes and criticized their opponent’s.

Republican Kim Reynolds’ campaign and the state party have been critical of Democrat Fred Hubbell’s tenure as Younkers chairman in the late 1980s and early 1990s, when the retailer closed some stores in small towns.

Hubbell’s campaign, in turn, has criticized the reduction of state government jobs under Reynolds and former Gov. Terry Branstad.

Reynolds, who took over as governor in 2017 when Branstad became U.S. ambassador to China, faces Hubbell and Libertarian Jake Porter in the Nov. 6 election.

REPUBLICANS’ CLAIMS

Hubbell served as Younkers chairman from 1985 to 1992. In 1985, Younkers closed its store in Ottumwa, and in 1990 the chain closed stores in Newton and Spencer.

Reynolds and Republicans have highlighted those closures, creating a website FiredByFred.com and billboards with the same slogan, and airing their grievances in a television campaign ad.

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Republicans assert those store closures, because they happened in smaller towns, do not agree with Hubbell’s statements that as governor he would support rural areas of the state. They point out the stores closed even though they were profitable.

Then-Younkers president in 1990, Hubbell told the Des Moines Register the company decided to close the stores to focus the franchise on larger markets.

Beyond the closures, Republicans criticize Hubbell for his executive salary during that time, including that he received raises in years when those stores were closed. Republicans cite executive salaries published in the Des Moines Register in 1986 — when Younkers cut employees’ hours — and 1987, and again in 1990 through 1992. They show Hubbell received a raise of more than $88,000 in 1987, and of nearly $93,000 in 1991.

Republicans say the fact Hubbell accepted pay raises while stores were cutting hours or closing shows Hubbell put personal profits ahead of workers.

But executive pay raises in times of sluggish business are common, even if the optics to the public are bad, two state business experts said.

“It is not all that uncommon for executives to achieve bonuses during times of layoffs and restructuring,” said Daniel Connolly, dean of Drake University’s College of Business and Public Administration. “Perceptually, this does not always bode well or look good.”

Connolly and Samuel DeMarie, an associate professor of management and director of Iowa State University’s Executive Master of Business Administration program, said executive salaries often are written into multiyear contracts with complicated compensation points such as stock options.

“Without knowing all the specifics and if other executives also received bonuses at the same time, one should not rush to draw conclusions,” Connolly said.

Connolly and DeMarie also said more attention is paid now to executive salaries than in the 1980s and early 1990s.

“I think most CEOs get a pay raise every year. They’re just paid differently,” DeMarie said. “Does it happen when something is going poorly? Usually it does. Is it fair? Probably not. Is it unusual? No.”

The Republican charges also note a comment Hubbell made to the Register in a 1986 story detailing the reduction of store hours. Hubbell called workers’ loss of two work hours per week “not much” and said of the workers, “I’d think they should be happy they still have jobs.”

Republicans paint that statement as callous and insensitive to workers, while the Hubbell campaign says Republicans are “cherry-picking” the quote to smear Hubbell.

The Hubbell campaign said while Younkers closed some stores in the late 1980s and early 1990s, the chain’s overall number of stores was flat during Hubbell’s tenure.

Younkers had 29 stores in December 1984, according to a Waterloo Courier report, and had 29 stores when the company was sold in 1992, according to an Associated Press report.

DEMOCRATS’ CLAIMS

Hubbell’s campaign counters that it is Reynolds with the questionable executive record. They have highlighted a 2017 Register analysis that showed there were nearly 2,100 fewer full-time state government jobs than in 2011, when Branstad began his second run as governor.

Of the nearly 14,000 workers who left state government positions during that time period, layoffs accounted for only 527 — just 4 percent — according to the state Department of Management. Any other staff reductions were achieved through attrition.

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Democrats say the staff reductions — which mostly were in the human services, transportation, workforce development, and corrections offices, according to the Register analysis — have hurt the state’s ability to effectively deliver necessary services to Iowans. They point in particular to the state’s $5 billion Medicaid program, which has been rife with complaints since its management was shifted to private, for-profit companies in 2016.

Democrats also note those staff reductions include the closures of two state-run mental health care facilities, the state juvenile home for girls in Toledo, and dozens of workforce development centers.

The Hubbell campaign last week released its own ad highlighting these criticisms.

Branstad closed the mental health institutes in 2015 as part of an effort to create more community-based mental health care. Critics said that may have been a sound plan, but it was not supported at the time by proper action to fill the gaps left by the closures.

The Legislature and Reynolds this year passed what advocates are calling landmark legislation to improve the state’s mental health care system.

Republicans often suggest that a leaner, more efficient government can better serve the people and save taxpayers money.

LIBERTARIAN view

Libertarian candidate Porter has stayed out of the fray but described his executive leadership style to the Gazette-Lee Des Moines Bureau. Porter said that as a manager — he has been a small business consultant and retail store manager — he has had to make difficult staffing decisions.

“It is important that when we make important decisions that we try to include all stakeholders in the discussions,” Porter said, saying that did not happen with laws recently passed by the governor and Republican-led Legislature. “The governor is not a dictator and should work with political adversaries to do what is right for the state and carefully consider the potential consequences of their decisions.”

l Comments: (515) 422-9061; erin.murphy@lee.net

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