Mike Carroll got a raw deal
Thursday, April 24, 2014 7:00 AM
I have difficulty believing that Mike Carroll, the former director of the Iowa Department of Administrative Services, approved paying hush money to fired state workers to persuade them to sign confidentiality agreements.
I’ve known Carroll for more than a decade, and he’s one of the most ethical people I know. He’s nothing like the character you’ve read about recently in the newspaper.
The scandal that has swirled around Carroll for the past month is a big misunderstanding created by reporting that’s long on innuendo and short on facts. What’s really disappointing is that Gov. Terry Branstad allowed himself to be bullied by that reporting into firing Carroll on April 8 without even giving him a chance to explain.
If he had, the governor would have discovered that, politics aside, the situation is not that complicated. It began on March 16, when The Des Moines Register reported “secret payouts” had been made to laid-off state workers.
The story began: “The state of Iowa has paid more than $282,000 over the past three years in secret settlement deals with six former employees, most of whom claimed their jobs were eliminated because they have Democratic ties.”
But that wasn’t true. Only two of the six were Democrats who claimed they were cut for political reasons. The others were Republicans and independents.
The story never said how much of the $282,000 was “hush money,” although it later became clear that the vast majority was paid to settle legitimate claims for back pay, retirement benefits and such. Finally, only two of the six said they were offered money to sign a confidentiality clause, and only one said she signed it.
Documents published by the newspaper later showed that Carol Frank received $6,500 for signing a confidentiality clause, although she told lawmakers on April 2 the amount was $5,000. Why she said that is not clear.
Documents also showed that even though another worker, Dean Ibsen, refused to sign a similar confidentiality clause, his refusal had no effect on the negotiated settlement he received.
The March 16 story described the confidentiality clause as “tightly worded,” which is a stretch because all it said was: “Confidentiality. Frank and DAS shall undertake reasonable efforts to maintain the confidentiality of this Agreement, subject to Iowa law. The Parties further agree not to make communications or statements, written or oral, which disparage or damage the reputation of the other party.”
Similar confidentiality clauses are used in the private sector, where Carroll worked for 35 years before joining state government in 2011.
Apparently this same two-sentence clause was included in the termination agreements of other state workers. Its use shows poor judgment, which Carroll admitted, by state executives who failed to recognize the difference between public- and private-sector employment.
But there was nothing sinister about it. And except for Frank, it does not appear that workers were paid for their silence.
Carroll was fired for allegedly lying to the governor and lawmakers about the payment to Frank, but it is entirely plausible that he did not know about it. Emails show that the payment to Frank was solicited by her lawyer, Luke DeSmet, and approved by Ryan Lamb, a Carroll subordinate who no longer works for the state.
DeSmet pointed out the confidentiality clause in an email to Lamb that said: “As no confidentiality provision was requested or discussed during our mediation, we do not believe it should be included in the agreement. Please however give us a call if you would like to make an offer on this matter, and we will expeditiously contact our client.”
Lamb offered $6,500 and Frank took it.
Apparently Lamb made a similar offer that Ibsen turned down. There is no evidence Carroll knew of either offer. In fact, it’s unlikely that he did know, because he’s smart enough to realize that the clauses were legally meaningless and not worth paying people to sign.
The Depot at 4th, 100 4th Street, Des Moines, Iowa 50309 | (515) 288-3336 | © 2016 Business Record. All Rights Reserved. | Legal disclaimer