IOWA CITY, Iowa (AP) — Two Iowa county treasurers recently vacationed with a businessman they have supported for a lucrative tax website contract, staying at his Florida beach property for free in an apparent violation of state ethics law.
Dubuque County Treasurer Eric Stierman and Winneshiek County Treasurer Wayne Walter confirmed the trip to The Associated Press, highlighting a long, cozy and ethically questionable relationship between county officials and an important vendor.
The longtime elected officials flew to Florida last November. There they met Marc Carr, founder and CEO of GovTech Services, which hosts the website used by most Iowa counties to collect property and motor vehicle taxes. For three nights, the trio stayed at a Florida home with Stierman's brother-in-law. For two nights, they stayed at Carr's condominium in St. Pete Beach, a resort town on a barrier island near St. Petersburg.
Stierman and Walter denied any wrongdoing, describing Carr as a friend with whom they had previously vacationed in Florida.
"Just three buddies going on a trip," said Stierman, who acknowledged sending Christmas cards featuring a photo of the men to other county officials.
But the treasurers have long wielded their influence to benefit Carr's company, which has collected millions since 2011 under a contract with the Iowa County Treasurers eGovernment Alliance.
Stierman was a board member for the alliance when the contract — now worth $460,000 annually — was awarded. Both have served as alliance president and have known Carr since he was Adams County treasurer in the 1990s.
Since 2014, Stierman has appeared in an online testimonial praising GovTech's work as "wonderful" and Carr's customer service.
"Would I hesitate to ever go with them again? No, I would not. I'm extremely happy with the service that we get from them," he says. "Marc calls you back or he answers the phone directly and your problems are taken care of."
Building on his exclusive contract with 88 of Iowa's 99 counties, Carr, 48, has expanded his business into other states.
He said that he believed the use of his condo by county treasurers was legal but that he'd ask a state panel for an opinion.
State Auditor Rob Sand said Wednesday that his office recently opened an investigation into the matter.
The Iowa ethics law bans public employees from accepting gifts and favors worth $3 or more from "restricted donors," who include vendors, lobbyists and others affected by their official actions. Vendors are barred from offering gifts, and the law doesn't contain an exception for friends.
"Even where there is a genuine personal friendship, the acceptance of personal benefits from those who could gain advantage by influencing official actions raises suspicions that tend to undermine the public trust," it warns.
St. Pete Beach condos rent anywhere from $100 to $200 a night in November. Carr and his wife, who live in Glenwood, Iowa, purchased the condo in 2015. Stierman said he had stayed there once previously. Walter said the stay last November was his only but that the trio previously vacationed together in Daytona Beach.
Stierman and Walter suggested that the free lodging did not amount to a gift because they accepted it in exchange for the free stay that Carr received from Stierman's brother-in-law. Walter later claimed that he bought drinks and "other stuff" for Carr during the vacation to offset the free lodging, adding that he paid cash and couldn't remember details.
"I'm convinced, appropriately so to my personal satisfaction as an honest person, that I did not take anything free from Marc," he said.
Gov. Kim Reynolds recently appointed Walter to a second six-year term on the investment board for the Iowa Public Employees' Retirement System. Walter, who has held office since 1984, faces an upcoming Senate confirmation.
Stierman, who has held office since 1994, said he wasn't "that familiar with" ethics law.
The Iowa Ethics and Campaign Disclosure Board previously ruled that another perk funded by GovTech Services' for county treasurers is illegal. The board issued an opinion in 2015 concluding it was a gift law violation for the company and another vendor to sponsor a college scholarship program that is only open to the children and grandchildren of treasurers and their staffs. Despite the advisory, the program has continued.
Floyd County Treasurer Frank Rottinghaus, who has called the scholarships unethical, said that vacationing with the vendor was also problematic.
"I certainly have a problem with the appearance," he said. "The law tells us that we should avoid the appearance of any type of relationship that would affect decisions that we would make on behalf of our citizens."
Anyone who knowingly violates the law is guilty of a serious misdemeanor and can be removed from office, but enforcement action is rare. Complaints against local officials are handled by prosecutors where they reside. County attorneys in Dubuque and Winneshiek had no immediate comment.
The governor has known Walter, Stierman and Carr since she was the Clarke County treasurer in the 1990s. She and her now-disgraced ally, Dave Jamison , were involved in forming the alliance, which initially contracted with ABC Virtual to host the website. Reynolds was hired by ABC Virtual immediately after leaving the treasurer's office in 2008. Carr also worked for ABC Virtual, which lost the contract in 2011 amid financial difficulties. He then founded GovTech, which was awarded the deal and has kept it since.