Reynolds flew to Tennessee to watch the Cyclones play in the Liberty Bowl on Dec. 30 on a plane owned by Sedgwick, a Memphis-based company that administers workers' compensation claims filed by injured state employees. Reynolds' office received approval from the state ethics board director to accept the flight for herself and three family members as a campaign donation from Sedgwick's CEO, who says he reimbursed his company for the plane's use. Her office said "bona fide campaign events" would take place during the brief, half-day trip, records show.
The previously unreported flight and others that the Republican governor has taken on corporate-owned airplanes are coming under scrutiny before the Nov. 6 election, in which Reynolds is seeking a four-year term against Democrat Fred Hubbell. The Iowa Ethics and Campaign Disclosure Board will consider complaints next week alleging that board staff has allowed Reynolds and prior governors to improperly disclose the flights in a way that masks the role of the corporation lending the plane.
Board director Megan Tooker advised on Dec. 9 that Reynolds and her family could accept the flight, although Tooker now says she was unaware the airplane was owned by Sedgwick. Tooker also says she doesn't know what campaign activity Reynolds engaged in during the trip, which would be required for the flight to be considered an allowable campaign contribution instead of an illegal gift to a public official.
Reynolds campaign spokesman Pat Garrett said the trip included "campaign donor meetings" and that the governor paid for game tickets personally. He said the campaign reported the flight as a personal in-kind contribution as required.
Longtime Sedgwick CEO Dave North said he and his wife reimbursed Sedgwick for the fair market value of the flight as determined by the company's general counsel - costs Reynolds' campaign reported as $2,880. The Norths live in Bellevue and are among Reynolds' biggest campaign donors, having given $110,000 since December 2016. He's also a trustee for the University of Memphis, whose team lost 21-20 to the Cyclones in the bowl game.
Iowa resident Nancy Dugan argues in complaints to the ethics board that there is no proof that all donors have actually repaid their corporations for campaign flights. If they don't, the flights would be illegal corporate campaign contributions under Iowa law. If they do, Dugan argues that campaigns should have to disclose the corporation as a lender who is repaid.
Sedgwick has administered workers' compensation claims filed by injured Iowa executive branch employees since 2001. The company received $1.4 million from the state last year for its work, data show, and is among the largest third-party administrators of workers' compensation benefits nationwide. The company routinely faces allegations from lawyers for injured workers that it is unreasonably delaying or denying benefits.
"Somebody who has that much business in front of the state should not be that close to the governor. I think it's a conflict of interest," said personal injury attorney Sara Riley, who called Sedgwick the most despised claims administrator in the industry.
Riley and other workers' compensation lawyers said Sedgwick also stands to benefit from a 2017 law change backed by Reynolds that reduced benefits for some injured workers.
Sedgwick has also been awarded more than $1 million in funding and tax breaks since 2006 for office projects that added jobs in Coralville, Dubuque and Bellevue, Iowa Economic Development Authority records show. The most recent assistance was approved in 2012 when Reynolds was lieutenant governor.
Colin Smith, a lawyer in the governor's office, sought guidance from Tooker in a Dec. 8 email on whether Reynolds could accept a flight to the bowl game paid for by an unnamed donor. Tooker responded that Reynolds and her husband could accept the flight in order "to campaign" and agreed that the other family members weren't covered by ethics laws.
In an invitation to the game, Iowa State President Wendy Wintersteen had warned Reynolds: "The Iowa Gift Law stipulates that you must be responsible for all costs associated with the game and bowl events." That law says officials and their immediate family members cannot accept anything of value from people who have state business, but it doesn't apply to political donations.
The flight marks the second that Reynolds has taken that raised questions about her relationship with someone involved in state business. After becoming governor in May 2017, she traveled the state on a plane owned by casino magnate Gary Kirke, who was seeking the license to open a Cedar Rapids casino.
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