Iowa Knows Better

Iowa law requires potential candidates to a file a ”statement of organization” after raising or spending more than $750 in pursuit of elective office. This process puts state ethics officials on notice of campaign activities and makes the candidate accountable.   But Terry Branstad can’t do that and keep his day job too, so he asked his friends for help.

Their first step in creating a Branstad candidacy was for his former chief of staff Doug Gross to build a 527 organization that raises money, conducts pro-Branstad polls, all of which advance Branstad as a “possible” candidate. In this case, the 527 organization is called the Iowa First Foundation (“IFF”).  The “Iowa First Foundation” is headquartered in Branstad’s hometown of Lake Mills, in the law office of Richard Schwarm, Branstad’s former law partner.  Schwarm is president, secretary, treasurer and director of the Iowa First Foundation.  [IFF IRS form 990 6/12/08.] 

We have a tradition of clean elections in Iowa and our legislature has been diligent about passing serious campaign disclosure requirements and holding our candidates to them. Just a few months ago, the Iowa First Foundation paid its President, Rich Schwarm, $10,000 for “coordination fees”!  [IFF IRS Form 8872].  The IFF also regularly pays tens of thousands of dollars to an entity called “Gross Schwarm LLP” for “coordination” efforts. [IFF IRS Forms 990EZ, 990, 8872.] Iowa First Foundation regularly pays Gross’ law firm for legal fees, and even paid $34,000 to the long-defunct “Gross for Governor” campaign to purchase lists.

Schwarm and Gross certainly appear to be running Branstad’s campaign for governor of Iowa, without bothering to file the appropriate disclosures with the state. When Rich Schwarm, IFF President, “volunteers” for Branstad, soliciting financial support and recruiting staff, does his work at some point become a contribution of more than $750, triggering the state ethics filing requirement?  If not, why not?