Lee Rood

lrood@dmreg.com

© COPYRIGHT 2016, DES MOINES REGISTER AND TRIBUNE COMPANY

Iowa State University President Steven Leath confirmed he purchased land this year with help from Summit Farms, a private company run by Iowa Board of Regents President Bruce Rastetter.

Leath told The Des Moines Register there was nothing improper about the transaction. Rastetter did not return a telephone call seeking comment.

But Sen. Rob Hogg, a Democrat who chairs the Senate's Oversight Committee, says the deal suggests "a cozy personal relationship" with one of the state's top Republicans that some might think is part of an "old boys' network."

"The problem is, it creates the appearance of something funny going on. We really count on the Board of Regents to provide independent oversight and governance for a public university," Hogg said.

A Hardin County farmer asked the Reader’s Watchdog this month whether it was true that Leath purchased land in the county from Summit Farms and, if so, whether Leath and Rastetter violated ethics policies.

According to ISU policy, conflicts of interest exist for employees when they “could be influenced by considerations of personal gain, usually of a financial nature, as a result of interests outside his/her university responsibilities.”

The regents’ code of conduct requires the senior management team to “avoid actual or apparent conflicts of interest involving personal and professional relationships.”

County records show Summit Farms, which has substantial agricultural land holdings in Hardin County, purchased 180 taxable acres in November for almost $1.14 million. In January, a limited liability corporation called SLS Holdings purchased 140 of those acres for $623,325.

When questioned about his interest in SLS Holdings and the land purchase, Leath at first refused to answer, saying the Register's inquiry was an invasion of his personal privacy.

“My personal life, and my wife’s personal life, are nobody else’s business,” he said. “If I addressed every concern of every single uninformed person that was brought to me, I wouldn’t have time to run the university.”

Later, however, Leath addressed the purchase when asked about the potential conflict of interest.

Leath said he contacted a few major agricultural landowners about recreational property he was hoping to buy within an hour of his home and the university in Ames. “I was looking for some property to get away, and maybe build a house someday,” he said.

One of the people he contacted was Eric Peterson, president of Summit Agricultural Group, of which Rastetter is chief executive officer. An umbrella company, Summit Agricultural Group includes Summit Farms, Summit Ag Investors and Summit Ag Management.

Summit Farms located a potential property and wanted to buy a portion of the tillable acreage. It offered the remaining timber and farmland to Leath. After purchasing the 180 acres at public auction, Summit Farms had the land surveyed for the first time in 100 years, and sold eight of 11 parcels to SLS Holdings, a company belonging to Leath's family.

Peterson sent the Watchdog a statement that read:

"In late 2015, Summit found a potential property in Hardin County that included river frontage, timber, and tillable farmland. Steve and Janet Leath had no interest in the crop land and only wanted the river frontage and timber. Therefore, Summit purchased the land and the parcel was divided between the two entities."

During the interview, Leath initially told the Register he consulted a university attorney at the time and paid the same price per acre as Summit. Later, in an email, he said, he consulted his private attorney before purchasing the land. He said the cost was "at a rate directly proportionate to the price Summit paid at the auction."

Leath said questions about the purchase "crossed the line" into private matters. He added that he is protective of his family's privacy because his family was stalked by an individual two years ago.

Summit Farms "bought it at public auction," he said. "There was no special deal."

Leath added that he and his wife both enjoy the outdoors, and are excited about expanding their roots in Iowa after five years in the state.

County records show Summit paid $6,330 per taxable acre for the 180 acres, and Leath's SLS Holdings paid $4,452 per taxable acre for his 140 acres.

But Hardin County Assessor Don Knoell said farmland is worth more than timber, so it would be difficult to say whether Leath got a deal on the land.

“It’d be between them, and they were probably following what the market is doing,” Knoell said.

Peterson said Rastetter, who lives in Hardin County, gave the Leaths a tour of the county but was not involved in the land transaction. "No fees were paid to Summit Agricultural Group by Steve and Janet Leath. We are pleased the Leath family has purchased a farm and are planning to call Iowa home," he said.

Asked why Leath didn't just buy the land he wanted at public auction, Peterson said it had to be purchased and surveyed to create two separate legal descriptions for the newly separated property.

"Once a survey is completed, a new abstract must be created to show chain of title. Both the survey and abstracting take quite a bit of time, and this auction required a faster close (most require 30 days). Once the survey was complete and recorded, and the abstract created, the separate parcel was purchased by SLS Holdings," he said.

Typically, properties that are sold or “split” at auction already have separate legal descriptions, so selling them at auction is a simpler process, he said.

Hogg said he's glad Leath and his family want to stay in Iowa but believes nonetheless that the Legislature should consider taking some action on the ethics front.

Hogg noted that news of the land deal comes amid other questionable moves recently at Iowa's regent universities.

The Cedar Rapids Gazette last week reported that ISU never conducted a candidate search before hiring former Republican lawmaker and Republican Party co-chair Jim Kurtenbach in June to be its vice president and chief information officer, at an annual salary of nearly $252,800.

Late last year, ISU also hired another top Republican, former House Speaker Kraig Paulsen, for another unadvertised position. At about the same time, The Associated Press discovered through an open records request that the University of Iowa issued no-bid contracts worth nearly $320,000 to The Strawn Co., owned and operated by former Iowa Republican Party Chairman Matt Strawn.

"I don't think this calls for urgent action ... but there are ways to handle something like this without having a cozy relationship with the president of the Board of Regents," Hogg said of the land purchase.

Hogg said the conflict was also avoidable because Leath could have hired a Realtor who specializes in finding recreational land.

"He's paid enough to hire someone professionally," Hogg said. State records show Leath's 2015 fiscal year salary was $835,461.

Lee Rood's Reader's Watchdog column helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Contact her at lrood@dmreg.com, 515-284-8549, on Twitter @leerood or at Facebook.com/readerswatchdog.