IOWA CITY, Iowa – The agribusiness owned by Board of Regents President Bruce Rastetter was awarded $480,000 in no-interest loans from an Iowa State University center a few months after he joined the school’s governing board, records show.
The loans from the Iowa Energy Center helped Summit Farms LLC finance the $990,000 cost of installing wind turbines at its corporate office and two hog confinements. Rastetter owns the Alden-based producer of crops, beef and pork, which grew out of his family farm. The turbines were expected to generate $44,000 in annual energy cost savings for Summit Farms, according to documents obtained by The Associated Press under the public records law.
Iowa State officials said they didn’t give special treatment to Rastetter’s company and that the turbines met the criteria for a longstanding renewable energy loan program. Rastetter said Friday he had no regrets about seeking the assistance, saying he should have the same opportunity as every other farmer even if he faces “additional scrutiny” due to his powerful state position.
“It didn’t have anything to do with me being a regent,” he said. “Those application processes were exactly the same thing for everyone. I think wind energy is a good thing for Iowa and we participated with it.”
But the disclosure gives new ammunition to Rastetter’s critics, who have scrutinized his ethics after he became financially entangled with Iowa State in an investment in a controversial Africa land deal.
“It’s definitely a questionable venture at best, if not a full-fledged conflict of interest, that he’s utilizing this loan program for his personal gain,” said Adam Mason, of the liberal activist group Iowa Citizens for Community Improvement.
Critics spent months in 2011 accusing Rastetter of using his influence with Iowa State to help his private investment group build a large farming development on land in Tanzania where the government was removing thousands of squatters. Iowa State announced in 2012 that its employees would cease involvement, and the development was ultimately tabled.
Rastetter, whom Gov. Terry Branstad appointed to the board in February 2011, said he had only good intentions. An ethics panel dismissed a complaint after Rastetter amended a required disclosure form to list the Tanzania investment, which had been omitted.
Since becoming president last year, Rastetter has tried to emphasize transparency on the board, which governs Iowa’s public universities. After the Tanzania scandal, regents agreed to post their conflict of interest disclosures online. The loans were listed in a recent disclosure, and the AP obtained related documents from the university.
They show that Summit Farms applied for five $160,000 loans – $800,000 total – from the center’s Alternative Energy Revolving Loan Program for turbines in October 2011. The program, created by lawmakers in 1996 to promote renewable energy production facilities, awards no-interest loans on a quarterly basis based on merit and funding availability. Open to everyone, its guidelines call for prioritizing projects with the shortest loan terms and quickest energy payback.
Program officials awarded Summit Farms three of six loans granted in late 2011. They denied Summit Farms’ other two applications when money ran out, and three competing proposals were rejected as “noncompetitive” because they had 15-year loan terms.
Iowa Energy Center officials say they were unaware that Rastetter owned Summit Farms when they ranked the projects and that they only learned of the connection when Rastetter signed loan documents in January 2012. Rastetter disclosed the loans as a conflict to the regents’ office that month. He said he would recuse himself from any future votes related to the program if necessary.
Iowa State vice president Warren Madden said he approved the loan agreements after concluding that proper procedures had been followed. He spoke with center officials and a university lawyer before reaching that conclusion.
“We didn’t believe it was a conflict of interest,” Madden said, adding that Summit Farms is current on its repayments.
Center officials departed from guidelines in one way. Because money was available for only three of five turbines, they allowed Summit Farms to choose which were funded instead of awarding those based on highest energy production. One that was picked had the longest energy payback time of any application – 29.9 years – but was easier to finance. Center officials said that was a “common courtesy” they would extend to anyone.
“From where I sit, he wasn’t given any special treatment because of who he was,” loan program director Bill Haman said.