You should never under-estimate the importance of timing in business decisions. Or the importance of “optics”.
We’re seeing an example of that playing out now in Ames with Iowa State University President Steven Leath and the Iowa State University Foundation.
Leath has been in the news recently for an incident that occurred in July 2015 when he banged up a university airplane, causing $12,000 in damage. He was at the controls of the single-engine Cirrus SR22 when the incident occurred.
Leath was trying to land in Bloomington, Ill., for refueling during a cross-country trip with his wife. They were flying back to Ames following an 11-day vacation trip to North Carolina.
In the world of business and politics, the “optics” of the incident — meaning how the matter looks to the public — are embarrassing.
The Leaths own a home and a Christmas tree farm in North Carolina. They have made four trips there in 2015 and 2016 flying the university’s Cirrus, rather than going by airline. Leath has reimbursed the university for these trips, but the per-hour reimbursement rate he pays is only half what it would cost him to rent a similar airplane at a commercial flying service.
The July 2015 incident was not made public when it occurred 19 months ago. In fact, at least one member of the Iowa Board of Regents, which oversees the three state universities, did not learn of the incident until an Associated Press reporter was wrapping up work two weeks ago on a story disclosing the events.
When the AP reporter got wind of the incident and began asking questions, the university tried to subtly discourage his inquiry by saying it would cost him $400 for the university to produce copies of records he wanted.
Then the university had trouble sorting out how long the airplane was out of service after the incident. Officials first said the airplane was stored at the Bloomington airport for three or four weeks for repairs. Later, the AP reporter learned the airplane actually sat in Illinois for 10 weeks before being flown back to Iowa for repairs.
There was more.
The university has insurance that covers the two airplanes it owns. But the $12,000 repair bill was not turned over to the insurer for payment. Officials said the university paid the charges itself for “business reasons.” The money came from earnings on university investments and not from tuition or state tax money, officials said.
Reporters have asked for a copy of the university’s airplane insurance policy, but so far, officials have not made it available.
Iowa State University employee policies and an Iowa law prohibit personal use of school equipment or property by employees. Administrators say Leath’s use of the Cirrus for vacations in North Carolina falls outside that policy because he conducted university business on those trips, too.
During that 11-day vacation last year, Leath and his wife had dinner one evening with two prospective donors.
Retired ISU Senior Vice President Warren Madden compared Leath’s travels that combine business with personal to an employee who has a business meeting in Chicago on Monday and flies in early and spends the weekend there at his own expense.
But Madden’s example involves commercial air travel. His example doesn’t envision that employee tying up a university airplane for 11 days, preventing it from being used for other university trips during that time.
The Cirrus is one of two airplanes Iowa State University owns for transporting faculty, administrators and coaches. The university purchased the Cirrus in 2014 for $470,000. The school bought a twin-engine Beechcraft King Air that year for $2.4 million.
There are more optics. The university employs three pilots, but Leath has flown the Cirrus more than any of the professional pilots, the school said.
This is all interesting, because the University of Iowa does not own any airplanes to transport President Bruce Herrald, faculty members or the Hawkeye coaches. The charter flights at the local airport when airline travel won’t work.
That brings me to the matter of timing.
Leath’s decision to stop flying the university Cirrus, to reimburse the school for the repair costs, and the comments from some lawmakers who want to look into Iowa State’s planes came as the Iowa State University Foundation was preparing to roll out a $1.1 billion fund-raising campaign last week.
Money raised during the campaign will go for scholarships, faculty support, facilities and programs. But the optics and the timing of the airplane news mean it will be more of a challenge to persuade alumni and other prospective donors that their money is vital to the success of Iowa State University, even though the foundation had $3 million just laying around that was available for buying airplanes.
That $3 million would have provided 450 full-tuition scholarships to Iowa students. And the salaries of the three pilots would cover a few dozen more.
by Randy Evans
Reprint from Bloomfield Democrat