Iowa taxpayers spend millions covering state workers' bad behavior

Claims of discrimination, harassment and retaliation drive $11.7M payout

$100 banknotes. REUTERS/Valentyn Ogirenko/Illustration
$100 banknotes. REUTERS/Valentyn Ogirenko/Illustration

DES MOINES — Workplace discrimination, harassment and retaliation by state employees were key factors in pushing the cost of legal payouts footed by Iowa taxpayers to more than $11.7 million in fiscal 2019 — ranking as the third-highest total in yearly settlements and judgments in a decade.

“Unfortunately, you can’t fix stupid, right?” said Joseph Barry, the state’s risk manager within the Iowa Department of Management who tracks settlements and judgments for the State Appeal Board. “I don’t know what they’re thinking.”

State Treasurer Michael Fitzgerald, a West Des Moines Democrat who serves on the three-member appeal panel, expressed concern the payouts represent a culture of arrogance and disrespect by a small number of supervisors and employees in state government that is “costing taxpayers dearly.”

The number of complaints resulting in negotiated settlements or court judgments were generally unchanged at just under 40 for the 12 months ending June 30. But a handful of claims topping the $1 million threshold caused the overall payments to spike compared with recent years, Barry noted.

“I think it’s a bad sign,” said Fitzgerald.

Topping the list of fiscal 2019 payouts were $4.15 million paid to settle allegations from two women that they were sexually harassed on the job by the former Iowa Finance Authority Director David Jamison; and $4 million covering damages, lost wages and attorney fees for a former Iowa State Penitentiary correctional officer who said officials discriminated against her after she complained about inmates watching sexually graphic movies.

While discrimination, harassment and retaliation on state time drove most of the $11.7 million total, there were claims for other matters that cost taxpayers.

Another $1.25 million was paid to cover half of the settlement costs stemming from allegations of “insufficient escort” by University of Iowa Hospitals and Clinics staff after a woman fell from the top floor of a parking garage and eventually died from injuries she suffered in the fall.


The good news for fiscal 2019 was that the allegations of medical malpractice or other wrongdoing at the state’s hospital in Iowa City were comparable to recent years. But three of the complaints over discrimination came via the regent universities’ system, Barry said.

Among the claims settled in the past fiscal year were cases where an Iowa State trooper was accused of “rear-ending” another car with a patrol cruiser resulting in injuries involving a $975,000 payout; a man sustained $27,732 in personal injuries due to improper snow and ice removal; and a former Iowa State University employee who was paid $27,500 after she was denied transgender care through the school’s health insurance.

The cost of settling claims and resolving disputes lodged against the state government for workplace misconduct, employee mistakes or other malfeasance processed through the State Appeal Board has ranged as low as $2.16 million in fiscal 2000 up to $23.53 million in fiscal 2008.

The state’s largest totals occurred in years when payments were made to resolve claims tied to the shutdown of the Iowa Lottery’s TouchPlay program in fiscal 2008, judgments and settlements stemming from the now-defunct state film tax credit programs in fiscal 2012, and disputes over construction of the new maximum-security prison in Fort Madison in fiscal 2015.

Overall, Barry described the spike in fiscal 2019 state payouts stemming from discriminatory actions of state employees as “anomalies” or “oddities” in a workforce of about 70,000 public employees.

Gov. Kim Reynolds’ administration has been ramping up training in recent years to address workplace concerns and behaviors. In response to ongoing issues, Reynolds told reporters earlier this year that no policy can eradicate sexual harassment, but her administration is working constantly to create a safe working environment in state government.

“Unfortunately you can’t legislate morality (and) giving people respect,” Reynolds said. “But what you can do is say that you have a zero-tolerance policy, you do everything you can to change the culture, you make sure that employees know that the expectation is for them to come to work and have every expectation of working in a safe environment, that they know what the process is if they see or experience sexual harassment, they know who they report that to, and they know that those allegations will be heard, and if they’re substantiated, action will be taken. And I did that,” the governor said last February.

Along with well-publicized cases of sexual harassment by Jamison and others, there have been allegations of discrimination involving disabilities, racial, gender and gender identity with related claims of negligent supervision, improper discharge and civil-rights violations.

Fitzgerald expressed concern the Jamison settlement was part of a pattern that has developed in state government since the State Appeal Board in October 2017 approved a $1.75 million payout to Kirsten Anderson, a former Iowa Senate Republican staff member who said she was fired the day she lodged a sexual harassment complaint.

“The Republican officials cost us a ton of money last year and there’s no guarantee that this is the end of it,” the state treasurer noted. “I don’t know if there are any more people who want to come forward and claim Jamison harassed them.

“It has opened the door wide open. It has told anybody if you’ve been harassed, come to the state because we have deep pockets and the potential is a real bonanza if you sue the state and I would say employees will,” Fitzgerald said. “I’m afraid it’s a situation where more will be coming because I think people are going to test it.”

State Auditor Rob Sand, another Democratic Appeals Board member who is a former prosecutor in the Iowa Attorney General’s Office, said there hasn’t been an uptick in discriminatory behavior but rather “just some really bad cases” that have moved the workplace issues to the forefront.

“Having spent the better part of a decade doing a lot of financial crime prosecution and sexual crime prosecution, there’s not a lot that surprises in terms of what people will do to each other. What surprises me is the lack of accountability for it,” Sand said in an interview.

“Certainly it’s something that’s been in headlines nationwide, but accountability has always been the right thing to do,” he added. “I think that has made it easier for victims to step forward, which is a good thing.”

In the Jamison case, Sand was a dissenting vote in a 2-1 board decision to pay damage settlements to $2.35 million to Beth Mahaffey, the authority’s business development director, and $1.8 million to Ashley Jared, the authority’s communications director.

Sand said he didn’t oppose paying the women who accused Jamison of sexually harassing them over several years at the state agency, but questioned whether taxpayers should foot the bill.


“I think it’s hard to dispute that a part of this is just a pattern of mismanagement by the (Reynolds) administration,” Sand said. “If they want to get serious about reducing it, then they have to do what I’ve suggested doing with Dave Jamison, which is use the law that already exists to hold their own people accountable for the losses they cause to the taxpayers.

“That’s allowed under the law,” he added. “There’s a medium-high standard. It was to be willful and wanton misconduct.”

The State Appeal Board also could see more workplace complaint activities in the current fiscal year that began July 1.

A jury recently awarded $1.5 million to Christopher Godfrey, a former Workers’ Compensation commissioner who sued then-Gov. Terry Branstad, alleging Iowa’s previous governor cut his salary and tried to force him out because Godfrey is gay.

Attorneys for the Des Moines law firm serving as outside counsel for Branstad — now the U.S. ambassador to China — have indicated the state plans to appeal the jury award in Godfrey’s sexual orientation discrimination lawsuit.

But Fitzgerald noted the Iowa Executive Council already has authorized legal fees after approving Branstad’s 2012 request for the state to hire private attorneys to defend him against Godfrey’s lawsuit — partly out of concern the Attorney General’s Office had a possible conflict of interest.

Officials in the State Treasurer’s Office said members of the Iowa Executive Council already have paid $1,309,643 in invoices submitted by Branstad’s counsel and requests for another $609,462 in legal fees through May were submitted but were not yet approved before the six-week trial began in June.

Democrat Fitzgerald said there has been a “culture of disrespect” for years under the Republican administrations of Branstad and Reynolds.


“The state’s in jeopardy right now and it’s important that the state have people — supervisors and leaders — who know how to behave,” he said.

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