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Capitol hearing on secret payments called off, official not prepared to answer questions

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DES MOINES, Iowa — A state official abruptly backed out of testifying before a legislative hearing Wednesday into secret payments to fired employees who agreed to remain silent about their settlements, saying she was not prepared to answer lawmakers' questions.

That comes a day after Gov. Terry Branstad changed course and fired Mike Carroll, the director of the Iowa Department of Administrative Services, over the payments. The Senate Government Oversight Committee was expecting to hear Wednesday from the department's top human resources officer about state hiring and firing practices.

Committee Chairwoman Janet Petersen said she was informed by Branstad's office shortly before the meeting was to start that Michelle Minnehan, human resources enterprise chief operating officer at DAS, would not appear.

"The purpose of today's hearing was to find out the truth of the hush money payments and allegations of cronyism in the Branstad administration," Petersen said in a statement.

The department's spokesman did not immediately respond to a message inquiring why Minnehan canceled.

Branstad said Carroll had led him to believe no payments were made to former employees to keep quiet about their settlement agreements with the state. When he learned Tuesday that documents clearly showed payments were made to a woman laid off in 2011, Branstad said he sent his chief of staff and a staff attorney to inform Carroll of his dismissal and ask him to leave immediately.

More than 320 state workers have entered settlement agreements since Branstad, a Republican, took office in 2011, and more than two dozen were asked to sign confidentiality agreements. The total paid exceeds $500,000.

Petersen said Branstad should ask the Iowa State Patrol to secure paper and electronic records at DAS relevant to secret payments made to former state workers so that they are not destroyed or altered. She also called on the governor to place on administrative leave two additional supervisors, Doug Woodley, DAS general services enterprise chief operating officer, and Paul Carlson, DAS chief resource maximization officer "until the full extent of their involvement in these matters can be determined."

Branstad told reporters Wednesday he's confident the woman he's named as interim head of DAS, Janet Phipps, will handle those issues. Phipps, a retired National Guard general, led the department once before.

"I have full confidence in her and that she will see that things are done appropriately and that all records are preserved and protected," Branstad said.

PHOTO: Iowa Gov. Terry Branstad speaks to reporters outside his formal office, Wednesday, April 9, 2014, at the Statehouse in Des Moines, Iowa. Branstad, who fired Iowa Department of Administrative Services director Mike Carroll on Tuesday, says he's confident his interim director will protect records and will thoroughly review the staff to ensure the agency functions properly. (AP Photo/Charlie Neibergall)
Iowa Gov. Terry Branstad speaks to reporters outside his formal office, Wednesday, April 9, 2014, at the Statehouse in Des Moines, Iowa. Branstad, who fired Iowa Department of Administrative Services director Mike Carroll on Tuesday, says he's confident his interim director will protect records and will thoroughly review the staff to ensure the agency functions properly. (AP Photo/Charlie Neibergall)

He said Phipps will make a thoughtful and careful review of staffing.

Branstad said the only name he's seen in documents involved in negotiating secret settlements was former DAS attorney Ryan Lamb, who left the agency about six weeks ago and now works for The Weitz Co., a construction general contractor. Branstad said his Chief of Staff Matt Hinch talked with Lamb last month while investigating allegations of secret settlements. It's unclear why the issue of settlements didn't surface then.

Lamb did not return messages left Tuesday and Wednesday.

At a hearing of the Democratic-led Senate Oversight Committee on April 3, Carroll said no offers were made to pay the former workers for their silence — even though at least two workers had testified the day before that they had been offered money.

One of the workers, Carol Frank, authorized her attorney to release emails Tuesday showing that after she lost her job in a 2011 government reorganization, she was clearly offered $6,500 for her silence in a settlement agreement.

Sen. Matt McCoy, D-Des Moines, a member of the Oversight Committee, said on the Senate floor Wednesday that Carroll claims he was misled by his staff, which he said raises more questions about who was behind the agreements.

"It occurred to me that if Director Carroll was bamboozled by his staff, who was involved in bamboozling Director Carroll? And who was involved in bamboozling the governor's secret investigative team?"

Petersen set another meeting for Thursday and invited Woodley and Carlson to appear. The DAS spokesman said he didn't know whether they would.


Associated Press writer Tom Beaumont contributed to this report.


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