Nonprofit Newswire | FBI Probes Iowa Association, Pols Pile On

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March 16, 2010; Des Moines Register | How odd that in the state whose senator, Republican Charles Grassley, is one of the nation’s foremost political advocates of nonprofit accountability (remember his Senate Finance Committee hearings in 2004) that yet another high profile nonprofit is banner headline news—for a shortfall in accountability. (Note: the last truly big nonprofit scandal in Iowa was with the Central Iowa Employment and Training Consortium, which was a might bit overly generous with federally funded salaries to three of its executives.)

This one involves the Iowa Associations of School Boards, which apparently suffered a major financial implosion and some evidence of misuse of federal funds. Our favorite was the (mis)use of federal dollars for the organization’s Chief Financial Officer’s vacation in Bora Bora, though there’s plenty of outrage about the executive director’s self-authorized one-year raise of her salary from $210,000 to $367,000 (without board knowledge, much less involvement and approval), and her attempt to prevent the Association’s accounting firm from talking to the board of directors.

Hell hath no fury like a politician scorned, and Iowa politicians are lining up to express their rage: The comment of State Senator Rich Olive [D], that “Iowans” and the members of his senatorial oversight committee were “pissed” about the Association’s “fiscal malfeasance” pales compared to the scathing analysis of State Senator Tom Courtney (D) about the Association’s leadership: “these people that are no more than common thieves” and “I hope the all wind up in prison…for 100 years.”

Although the vocal critics of the Association are Democratic legislators, the federal investigation may actually lead to an earmarked program of Senator Tom Harkin, Grassley’s Democratic counterpart. The Association receives federal funds for a program called Skills Iowa, which the Association describes “a special project by Sen. Tom Harkin.” A personal friend of Harkin runs Skills Iowa, which has received several million in federal funds. Skills Iowa has spent $6.2 million purchasing educational software from a Rhode Island software company run by one Michael Perik who has given over $1 million to Democratic Party campaign efforts, including $13,800 to Harkin’s campaign committee and to his Political Action Committee (Tom PAC). The Association’s board is a collection of school board members from around the state. School boards, as many people know, are frequently highly political, often used as stepping stones for politicians working their way up in electoral politics.

This story seems to combine themes of nonprofit fiscal mismanagement and politically-based earmarks. So, for the federal agency through which the earmarks to Skills Iowa flowed, what did it know, when did it know it, and why didn’t it do anything prior to the Association’s fiscal freefall and the announcement of an FBI investigation?—Rick Cohen