- Associated Press - Tuesday, December 18, 2012

IOWA CITY, Iowa — A South Korean businessman and his Iowa metals company gave $500,000 to a university institute honoring Democratic Sen. Tom Harkin, who is pushing for a dollar coin that could generate tens of millions of dollars in new business for the company, according to records obtained by The Associated Press.

The donations to Iowa State University’s Harkin Institute of Public Policy, uncovered through an open-records request, fall into a gray area in rules prohibiting companies that lobby from contributing to charitable funds “maintained or controlled” by sitting senators. Iowa Republicans say such donations to the powerful Democrat’s namesake institute raise questions of a conflict of interest.

Cedar Rapids-based PMX Industries called its $250,000 donation a good-natured gesture to support education. The CEO of the company and its Seoul-based parent, Poongsan Corp., Jin Roy Ryu, also gave $250,000.

Mr. Harkin’s spokeswoman said the senator wasn’t influenced by the contributions and did nothing improper. But PMX, which supplies the U.S. Mint with metal to make the dollar coin as well as nickels, dimes and quarters, stands to make a huge profit should the five-term Democratic lawmaker succeed in his effort eventually to replace the dollar bill with dollar coins. PMX is part of the Dollar Coin Alliance, a group lobbying for Mr. Harkin’s legislation.

“You certainly have an appearance problem. It doesn’t look good,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. “On the other hand, who is going to give money to this? People who love Senator Harkin. And who is going to love Senator Harkin? People whose interests he’s championed.”

Because Mr. Ryu isn’t a U.S. citizen, he isn’t allowed to donate to Mr. Harkin’s campaign. Contributing instead to the institute opens a new avenue for the businessman to curry favor with an influential lawmaker, Ms. Sloan said.

The institute, created last year to house Mr. Harkin’s papers and research domestic and foreign policy, was embroiled in controversy even before questions about the donations. Mr. Harkin is objecting to an order from ISU President Steven Leath that bars agricultural research without approval from the school’s Center for Agricultural and Rural Development. Harkin backers have called that a restriction on academic freedom and discussed moving the institute to Drake University. The two sides are at an impasse.

Concerned about potential conflicts of interest, the Republican-led Board of Regents decided last year that no other academic institutes in Iowa could be named after current politicians.

Nationally, lawmakers routinely have set up charities and honorary institutes. Senate rules bar lobbying firms from donating to a charity controlled by the lawmaker, including situations when relatives serve on the board. Mr. Harkin’s wife, Ruth, has acted as an institute advisory board member, attending meetings and voting, even though university officials say she was never officially appointed to that role. Mr. Harkin’s office says neither the senator nor his wife violated the ethics rule.