IOWA CITY — Gov. Kim Reynolds said Tuesday she has asked an ethics board to review whether two of her supporters who are Iowa government officials violated any laws by working on the side as agents of Saudi Arabia.
Reynolds said that, regardless of the outcome of the review, lawmakers should change state law next year to ban Iowa's public servants from moonlighting for foreign governments.
The governor's comments come amid scrutiny over Kim and Connie Schmett, a husband-and-wife who hold important state appointments and recently hosted a Reynolds campaign fundraiser.
Disclosure filings show the Schmetts' consulting firm collected $101,500 from a Saudia Arabia-funded public relations campaign against a new law allowing victims of the Sept. 11, 2001 terrorist attacks to sue the kingdom. The Schmetts were involved in recruiting veterans — some who later claimed they were misled into participating — to warn Congress that the law would have unintended consequences on military personnel overseas. Their work went from October 2016 through March.
Gov. Terry Branstad appointed Connie and Kim Schmett to state boards when Reynolds was lieutenant governor. Connie Schmett is on the Health Facilities Council, which reviews plans for hospitals and nursing homes. She's also a trustee of the Iowa Cultural Trust Board, which awards grants. Her husband is chairman of the three-member Employment Appeal Board, which rules on appeals of disputes over unemployment benefits for government employees and other matters.
Connie Schmett, unlike her husband, failed to list her work in the consulting firm on her recent personal financial disclosure form required for executive branch officials, calling that an "oversight on my part." She also asked a veteran who became aware of her work as a foreign agent last February not to discuss the matter on Facebook because she could get in "BIG trouble."
Kim Schmett may have issues of his own. He listed his occupation as a "consultant" when he registered as a foreign agent —omitting his role as an $80,000 per-year administrative law judge whose board receives 96 percent of its budget from the federal government. He doesn't appear to have reported donations he made to Branstad's campaign and GOP groups during the period when he was a foreign agent as required by the law. He told Bleeding Heartland, a blog that covers Iowa politics, on Monday that his lawyers were reviewing the donations and "we'll file an amended return if they feel that that's legally required."
Connie Schmett hung up on a reporter Tuesday. Kim Schmett's phone rang unanswered.
Reynolds said she wants to see the findings of a review by the Ethics and Campaign Disclosure Board before deciding whether to take additional steps, such as calling for their resignations or returning a $100 donation the couple recently gave her campaign.
The governor said she was unaware of their foreign work when she attended the fundraiser and disagreed with the Schmetts' opposition to the law. She noted the Schmetts don't serve at her pleasure since they've been confirmed for terms that last until 2019, 2020 and 2021.
"Legally we don't know if they have done anything wrong. That's why we have asked a third party to review that and report back," Reynolds said.
She said the couple might be benefiting from a "loophole" in Iowa's conflict-of-interest laws, which don't address work as a foreign agent. She said lawmakers should ban such work to "eliminate this happening moving forward."
Any official who "knowingly and intentionally" violates Iowa's personal financial disclosure law can be convicted of a misdemeanor and removed from office. Ethics board director Megan Tooker says it's more likely that Connie Schmett would simply be asked to amend her disclosure to list her consulting.
"Our main mission is to make sure that people are in compliance," Tooker said.