Another Iowa soil district reports possible misuse of funds

IOWA CITY, Iowa (AP) — Authorities have launched a second investigation into the suspected misuse of public money by an employee at an Iowa soil and water conservation district, The Associated Press has learned.

The latest investigation centers on the Jasper County Soil and Water Conservation District in Newton.

The Iowa Department of Agriculture and Land Stewardship, which provides support to the state's 100 soil and water districts, was notified May 25 of concerns involving a district employee's use of funding, spokesman Dustin Vande Hoef told AP. He said those concerns were discovered during an audit of the district's financial records by its private accountant.

State Auditor Mary Mosiman's office is now looking into the case along with law enforcement officials.

"Any misuse of district or public funding is completely unacceptable and we are anxious for anyone who is found guilty of engaging in criminal activity around the misuse of conservation funding to be held accountable," Vande Hoef said.

Jasper County district chairman Jim Johnston declined to provide further details, citing the ongoing investigation. Soil and water conservation districts are governed by elected commissioners but receive funding and staff from state and federal agencies.

A similar audit and criminal investigation have been going on for months into an employee who allegedly embezzled funds while working as an assistant in the districts based in Black Hawk and Bremer counties. Both that employee and the one being investigated in Jasper County have resigned.

Mosiman aide Bernardo Granwehr said the office has completed its review of financial transactions in the Black Hawk and Bremer districts but has no date set for issuing its report. He said a similar review will soon begin in the Jasper County case.

The investigations come as more state funding is expected to flow through the districts in coming years as part of a $282 million water quality initiative approved by lawmakers in January.

The amount that went missing in Black Hawk is expected to be "sizable," said James Gillespie, who left his job as director of the Soil Conservation Division at the state agriculture department in January, shortly after those financial irregularities were discovered. Gillespie said that he voluntarily retired after a 35-year state government career but declined comment on whether the timing was linked to that case.

Gillespie had implemented new financial management policies in 2013 for the districts after a secretary at the Mahaska County Soil and Water Conservation District was caught embezzling nearly $280,000 dollars over a seven-year period. That employee, Jessica Strasser, was later sent to prison after she was convicted of theft.

Gillespie called the new cases "disappointing and surprising" but said they are hard to stop given the local control of the districts and their complicated funding streams. He said the districts' finances are reviewed but not audited by the state and that it falls to local board members who meet monthly to oversee them, which can give employees such as Strasser the chance to hide their thefts.

Rob Sand, who prosecuted Strasser as an assistant attorney general and is now running for state auditor as a Democrat, had pushed for a prison sentence in her case, saying it would serve as a deterrent at a time when government embezzlement cases were on the rise. She received an indeterminate 10-year prison term, but was granted parole after about five months behind bars.

Sand said Wednesday that state officials should have required every conservation district to be audited by the state after the Mahaska case.

"They've had three or four years to say we need to do regular audits of these entities and nobody has done anything about it? That's crazy to me," he said.