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Emails Show Regent's Conflict in Africa Land Deal

June 14, 2012
Waterloo Cedar Falls Courier

IOWA CITY, Iowa (AP) -- Regent Bruce Rastetter participated in discussions with Iowa State University about its partnership with a company he founded that is developing a huge commercial farming operation in Tanzania, a project critics call a land grab, records show.

Rastetter blurred the line between his role as investor in AgriSol Energy, which was working with ISU on the land deal, and his position on the Board of Regents, which governs the university, according to emails released to The Associated Press. Rastetter later recused himself and Iowa State pulled out of the deal, but only after both received criticism.

While the project already has been scrutinized, the records provide details about how Rastetter's dual roles complicated matters for ISU and could embolden critics who say he tried to use the university's expertise for a profit motive.

Gov. Terry Branstad appointed Rastetter, an agribusiness executive who donated $160,000 to the governor's 2010 campaign, to the board in February 2011. Rastetter had been working on behalf of AgriSol with ISU since 2009 on a plan to develop 800,000 acres of Tanzanian farmland for crop production.

Investors stood to earn millions if the project was successful. But critics opposed the plan because the land had for decades housed 160,000 refugees from Burundi who were being relocated by the Tanzanian government. Investors said the plan would help residents by improving food production and farming techniques, adding they had no role in the relocation.

Officials with ISU's College of Agriculture and Life Sciences — which had received a $1.75 million gift from Rastetter in 2007 — traveled to Tanzania and hosted the country's prime minister. Their role would be to implement an AgriSol-funded program to provide a range of services and training to help farmers living near the development.

Board policy says regents must act in the interest of the board, not their own, and be free of any appearance of conflict. The policy says conflicts include a personal business that partners with a university, and should be disclosed and managed appropriately.

Rastetter waited until June 17, 2011 — six weeks after his term started and four months after his appointment — to disclose the conflict, doing so after the project received publicity. He waited until September before recusing himself from discussions related to ISU's involvement, which happened the same day the university dropped plans to seek a multimillion-dollar federal grant with AgriSol.

Rastetter's dual roles could "create confusion about which entity Mr. Rastetter is representing," a business partner wrote in announcing the recusal.

Rastetter spokesman Joe Murphy said Rastetter promptly disclosed the conflict after becoming a regent. He said he continued to discuss the project with ISU before his recusal because he wanted to make sure "it would be operating on a successful basis."

"This is about lifting people out of the poverty cycle in a country that needs help," he said.

The Iowa Ethics and Campaign Disclosure Board hasn't received complaints about Rastetter, but will review emails obtained by the AP, said executive director Megan Tooker. She is also looking into why Rastetter's financial disclosure form filed with the board does not list AgriSol.

Rastetter participated in discussions with ISU last summer after the nonprofit Oakland Institute slammed the project as a land grab, emails show. Rastetter asked David Acker, an assistant dean, on July 20 for a "write up on the division of responsibilities between the university and our commercial side."

"I appreciate the discussion last week and our relationship and look forward to making a difference together," wrote Rastetter, who had just become the board's No. 2 official.

Acker proposed AgriSol guarantee ISU a five-year financial commitment for nonprofit work in Tanzania, which would be limited to lands where refugees weren't present. He said the school couldn't be associated with the for-profit business, but employees and students could work as AgriSol consultants and interns.

"We can't risk raising expectations and then abandon the project abruptly," Acker wrote. "We will be working with people who have very little means living on a razor-thin line between survival and true misery."

The same day, an AgriSol official proposed ISU seek an international food assistance grant from the U.S. Department of Agriculture to support the project. ISU Vice President Warren Madden warned that Rastetter's conflict "should be addressed in the early stages" while the proposal was developed.

"Is it even possible to have AgriSol as a formal partner on the USDA grant given that it would be viewed as a conflict of interest (ISU helping to get government monies that will help an enterprise partially owned by a Regent?)" Acker asked on Aug. 18.

A purchasing official warned that any subcontract for AgriSol would have to be a competitive bid because of Rastetter's conflict. ISU then proposed AgriSol take the lead on the grant with the university acting as subcontractor, an idea abandoned when Rastetter announced his recusal.

ISU official Mark Westgate said the school would only serve as an advisor to avoid "any misperceptions or confusion that could arise because of Mr. Rastetter's status as a regent."

But criticism continued, and ISU ended its involvement in February. Critics have signed a petition demanding Branstad censure Rastetter for the conflict, but Branstad spokesman Tim Albrecht said the governor was confident in Rastetter's judgment.