The Tom Harkin Institute of Cronyism

Allegations of improper donations, rushed implementation dog Tom Harkin Institute

Harkin Institute, Tom Harkin /, AP
January 9, 2013

The Harkin Institute for Public Policy’s short life has been riddled with controversy from its secretive inception within the Iowa Board of Regents to ethical questions about its namesake’s relationships to the institute’s donors.

The Harkin Institute is named for sitting United States Sen. Tom Harkin (D., Iowa). The institute will house Harkin’s papers and serve as a venue for public policy research on issues related to the left-wing senator's work.

Harkin’s wife Ruth sits on the Iowa Board of Regents and pushed hard for the institute to house her husband’s papers. She reportedly worked behind the scenes to develop the plans for the institute and win support for it from the board, which oversees three public universities and two special needs schools.

However, Ruth Harkin's secrecy also heavily politicized the institute and raised ethical questions, according to one regent.

"I opposed the institute for two reasons," wrote current board president Craig Lang in an email to the Free Beacon. "These reasons are documented by the minutes and transcripts of the board meeting. 1. The secrecy around the creation of the institute on campus. 2. The enormous risk of ethics violations that could happen and at the time could have already occurred."

Mrs. Harkin excluded him and one other regent from discussion about the institute, Lang wrote.

"The other regent and I are considered conservative Republicans and for some reason we were not included in any of the early discussion that normally takes place before this kind of request is being placed on a consent agenda," he wrote.

The agenda was amended to exclude the institute, which the regents voted on separately.

Lang moved to table the motion to approve the institute, saying he had heard only about the institute the previous week and did not have enough time to review it.

His motion failed three to five with Mrs. Harkin abstaining.

"I was informed by the past Iowa BoR chair Dave Miles that Ruth Harkin was to talk to all regents before the public was informed. She did not call me. When she was confronted by former chair Miles why she did not talk to me, she replied ‘he would not support it anyway.’ Which angered Miles [sic]," wrote Lang.

When asked for comment, Miles referred questions to the Board office. The Board approved the institute six to two, with Harkin abstaining. Lang spoke out against the institute before the final vote, according to the meeting minutes, "citing ethics and other reasons."

"I would say the Harkin Institute vote became very politically charged," wrote Lang. He said politics usually do not affect the Board’s decisions although "of course we are concerned about the political majority."

The institute’s approval may have been rushed because of the changing political majority on the Board, individuals close to the controversy said.

Mrs. Harkin allegedly pushed to have the board vote on the Institute before two Democratic allies of her husband left the board, according to the Associated Press. Republican Gov. Terry Branstad’s appointees replaced them.

Branstad tried to delay the vote, which would have allowed his appointees to vote on the institute, according to the AP. Branstad’s office did not return a request to confirm this report.

Ethics concerns have dogged the institute. PMX Industries and its South Korean chief executive have donated half a million dollars to the institute despite having a vested interest in Sen. Harkin’s legislative agenda.

Harkin sponsored legislation that would replace the one-dollar bill with a one-dollar coin months after the donations were made. The legislation would be a boon for PMX, which is based in Cedar Rapids, Iowa, and provides metal to the U.S. Mint.

The U.S. Mint has paid PMX Industries $458 million since 2008, according to the Associated Press, $94 million of which was for production of the dollar coin. Harkin has reportedly visited PMX multiple times as a senator.

The legislation sought to reduce the government’s cost by replacing paper bills with more durable coins. The Government Accountability Office has issued multiple reports on the potential benefits of the switch, with the most recent report estimating "a net benefit to the government of approximately $4.4 billion over 30 years."

However, some have questioned that analysis. NPR’s Planet Money noted that the government’s benefit comes from "seigniorage," which is "the profit the government makes from having money out in the economy."

The GAO report calculated the government’s profit using a replacement rate of 1.5 coins for every one dollar bill, meaning that the government would actually be creating more money to offset the fact that dollar bills sit idle less than coins.

"More money out there means more profit for the government," Planet Money said, and the money comes from "the public." Economists score seigniorage as a kind of tax, Planet Money noted.

PMX Industries is a member of the Dollar Coin Alliance, which "is dedicated to saving American taxpayers billions of dollars by transitioning to a one dollar coin."

PMX spent $100,000 on lobbying in 2011, the same year it and its owner donated to the Harkin Institute. Senate ethics rules generally prohibit "gifts from lobbyists and foreign agents to entities controlled by, designated by, or established for the benefit of Members, officers, and employees." The AP reported that the gift falls into an ethical "gray area."

Sen. Harkin’s office did not return a request for comment.

The Iowa Board of Regents has since voted to prohibit any institute from being named after an active member of Congress or the Senate, Lang said.