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Gov. Branstad Fires Dept. of Admin Services Director Over Secret Settlements

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DES MOINES, Iowa - Gov. Terry Branstad fired Mike Carroll as director of the state Department of Administrative Services Tuesday just hours after evidence surfaced that Carroll lied when he told lawmakers last week that no "hush money" was paid to ex-state workers.

Branstad told reporters Monday he would take decisive action if there were indications his DAS director was not truthful about confidentiality clauses included in settlement agreements for laid-off employees and Tuesday he made good on that promise.

"Director Carroll told me that employees were not paid an additional amount in exchange for confidentiality provisions. In light of recent developments, I learned the information presented to me by Director Carroll was not accurate," Branstad said in a statement.

"I am deeply troubled and disappointed by this. As I stated at my press conference Monday, if I learned of new information there would be harsh consequences," he added. "I terminated Director Carroll today because new facts directly contradict what he told me and what he stated before the Government Oversight Committee. This is unacceptable."

Carroll's termination was effective immediately. Branstad named Janet Phipps to serve as DAS' interim director.

Petersen said that Tuesday that Carol Frank, a DAS senior construction design engineer who was laid off, provided documents to Sen. Janet Petersen, D-Des Moines, and Rep. Kevin Koester, R-Ankeny, co-leaders of the Legislature's Government Oversight Committee, from her attorney that prove she was offered "hush money" by the Branstad administration.

The documents include emails between DAS top officials and Frank's attorney in which she is offered $6,500 in additional money if she would sign non-disclosure clauses, Petersen said.

"Ms. Frank accepts your offer to add the confidentiality provision for an additional $6,500," attorney Luke DeSmet says in a March 7 email to former DAS legal counsel Ryan Lamb. Documents detailed two settlement agreements with Frank, one for $70,826 and a revised version with a $77,326 payout.

Frank, one of the 10 DAS employees who were fired, testified last week that she settled for $5,000 to keep quiet about the dismissal. She provided emails this week between her lawyer and a DAS attorney that appear to document $6,500 in hush money. Carroll testified at an Oversight Committee last week that "disgruntled" employees lied about the nature of the payments.

"Confidentiality provisions in personnel settlements should have never been used," Branstad said in his statement. "The use of such provisions was wrong. Taxpayer dollars should have never been used in relation to confidentiality provisions.

"The citizens of Iowa deserve a government as open and honest as them. Confidentiality provisions run contrary to my priority of an open and transparent government," he added.

Last week Carroll denied his agency paid laid-off employees "hush money" to keep secret their settlements or broke any laws in executing confidentiality agreements that ran afoul of Branstad's goals of open and transparent government.

Carroll told Oversight Committee members that he "made a mistake" by allowing confidentiality clauses to be included in employment settlement agreements. He apologized that the provisions although legal did not comply with the governor's transparent government initiatives and pledged "it will not happen again."

Carroll's insistence that money was not included in settlement negotiations in exchange for employees' silence directly contracted testimony offered one day before by ex-DAS workers who insisted they were offered extra payment if they agreed to include a confidentiality clause in the agreement.

Also included in the documents released Tuesday is a Request for Proposal the state issued in late summer 2011 seeking construction management/consulting firms to work with DAS.

New documents released Tuesday by DAS officials show the agency's leader wanted to fire 10 facilities and construction management employees in 2011 so he could replace them with independent contractors.

"Construction management companies have the staff, technology and training that enable them to push construction projects to be completed on time and on budget," DAS Director Mike Carroll wrote in an August 2011 layoff plan.

Carroll estimated the reorganization would save $400,000. Gov. Terry Branstad's office signed off on the plan Aug. 18, 2011.

Carroll criticized parts of his agency involved with architecture and engineering, lease and space management, vertical infrastructure program and mechanical & electrical/automation.

"These areas... are not operating effectively/efficiently from a human equity, budgetary and scheduling standpoint," he wrote.

Last week Carroll told legislators that former state employees lied when they said they were offered additional money in exchange for confidentiality clauses in their employee settlements.

Branstad told his weekly news conference Monday that he stands behind his DAS Director and believes his version that no money was offered to former workers in exchange for silence about their dismissals. The governor added that he would discipline any of his appointees if he became convinced that they lied about secret pay for silence provisions, "but I've been told that's not the case."

"I specifically asked director Carroll about this matter and he assured me that was not true. He also went before the (Oversight) committee and said the same thing and I believe him," Branstad told reporters.

"I do understand that you do have a disgruntled employee and his lawyer who have made contradictory statements to that," he added. "Attorneys represent their clients and oftentimes will make all kinds of accusations and that's why you have courts of law to determine what the facts are."

Branstad said Iowans should not "assume as fact" the allegations of two former state workers who testified to being offered extra cash to keep their settlements secret.

The five-term Republican governor said he did not know that 24 confidential settlements 10 with lump-sum payments -- had been signed with dismissed state workers since January 2011 until the practice came to light in a newspaper story. In response, Branstad issued an executive order to bar confidential employee settlements going forward.

During floor debate Tuesday on an infrastructure funding bill, senators voted 26-23 along party lines to de-appropriate $22 million in DAS money to be used for routine maintenance of state buildings and facilities.

Sen. Matt McCoy, D- Des Moines, who proposed the amendment, said the DAS officials have not provided information requested by lawmakers and that withholding agency funding was the appropriate action.

"We have little or no confidence in the director of the Department of Administrative Services and we believe the only appropriate thing to do at this time is to withhold this money until such time as there are changes or information is forthcoming," McCoy said.

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