- Associated Press - Friday, April 25, 2014

IOWA CITY, Iowa (AP) - State Auditor Mary Mosiman says she objected to Secretary of State Matt Schultz’s decision to pay his chief deputy for months after eliminating the job, but that her concerns were ignored by Schultz and the office she now runs.

Mosiman was a Schultz deputy in 2012 when he cut Jim Gibbons‘ job and transferred the duties to her in a cost-saving move. Rather than dismiss Gibbons as he did four union workers who were laid off, Schultz let the Republican appointee keep his $126,000 annual salary for seven months even though it wasn’t clear what he was doing. The former Iowa State wrestling coach collected roughly $77,000 in salary before resigning - and $4,000 more after cashing out unused vacation.

Democrats accused Schultz, a Republican congressional candidate, of cronyism after The Associated Press revealed Gibbons‘ arrangement Wednesday. The scandal also quickly has become a problem for Mosiman, who left Schultz’s office when appointed auditor last year by Gov. Terry Branstad. Mosiman replaced David Vaudt, who left for another job after 10 years as auditor. Mosiman is running in the November election for a four-year term leading the office, which reviews finances of state and local governments.

Mosiman said she now expects her office, which she calls the “taxpayers’ watchdog,” will review the appropriateness of Gibbons‘ employment after earlier deciding against any action. Mosiman, a certified public accountant, was Story County auditor when Schultz appointed her as elections deputy in 2011. She said she’ll recuse herself from any review, which she did when her office recently concluded Schultz might have to repay federal grant money used for a voter fraud investigation.

Her Democratic opponent for auditor, retired state management analyst Jon Neiderbach, questioned why Mosiman didn’t blow the whistle on Gibbons‘ arrangement in 2012 and why she didn’t launch an investigation sooner. He said the fact that Gibbons‘ kept getting paid as a Public Service Executive 6 - a rank typically reserved for the hardest-working deputies - was disturbing. And he said Gibbons‘ benefits likely pushed the cost higher than $100,000.

“Why that doesn’t deserve a special audit as much as a theft allegation of $40,000 in some small town is bewildering to me,” said Neiderbach, who’s trying to become the first Democrat to hold the office in 48 years. “Other than the political sensitivity of it. Thinking about the politics, then it makes sense.”

Neiderbach criticized Mosiman’s initial reaction, when she said Monday it was up to Schultz to document what benefit taxpayers received from Gibbons. He said that statement “revealed a deference or timidity” toward elected officials that an auditor shouldn’t have.

Mosiman revealed Thursday that Schultz only required Gibbons to show up four days a week, and sometimes Gibbons was there very briefly. She said that she raised concerns with Schultz about how Gibbons‘ employment and the layoffs hurt office morale.

Schultz denied her claim Tuesday, saying: “She never said that to me.”

Mosiman went into more detail Thursday, saying she raised her objections during meetings in Schultz’s office, her office and telephone calls. She recalled one meeting toward the beginning of Gibbons‘ seven-month stint.

“I was expressing frustration and anger and I rarely do that. It was memorable to me,” she said. “I would not have made the same decision as the secretary made. And I did communicate that to him. But he’s an elected official. Who else does one talk to about this?”

Mosiman said that she raised the issue in 2012 to a state auditor conducting an annual review of the Secretary of State’s Office. Mosiman said she was asked, per the standard script, whether she was “aware of any fraud.” She said she didn’t consider it fraud, but told the auditor that she was troubled by Gibbons‘ situation.

It’s unclear what, if anything, the auditor did with that information. Audit reports in 2012 and 2013 - including one after Mosiman became auditor - do not raise concerns about the office’s employment matters. She declined to identify the auditor, who’s since resigned.

Mosiman said she discussed Gibbons internally after becoming auditor in 2013, but opted against action because the office had other priorities such as investigating theft allegations and completing state-mandated reports. She said it isn’t clear whether Schultz’s employment deals with aides can be challenged, since he’s an elected official.

“Why would we have state resources going into something that we don’t know is auditable?” Mosiman said.

Story Continues →