On the day Iowa Republican governor candidate Zach Lahn announced Derek Wulf as his lieutenant governor pick, a conservative Iowa political operative warned Lahn’s campaign field director that Wulf faced lawsuits from his main lender, which was seeking to foreclose on his home and farm, and from two agricultural suppliers, text messages obtained by Iowa Starting Line show.
That Friday, June 12, Kurtis Bower, the operative, told the campaign’s field director Elijah Bluhm that Wulf’s finances were dire.
“He is in really bad trouble, and I’m very concerned,” Bower wrote.
The next day, the Republican Party of Iowa met for convention and named Wulf the party’s nominee for lieutenant governor. But based on Bower’s text message with Bluhm, the campaign was still internally discussing the possibilities for Lahn’s second-in-command, after Wulf was already selected.
On June 15, Bower asked, “Is Bobby Kaufmann a possibility for LG?”
“Yes he is,” Bluhm responded. Kaufmann is the Iowa House Majority Leader and son of Republican Party of Iowa Chair Jeff Kaufmann.
Over the next five weeks, the debts moved from court dockets into the news. Heartland Co-op and Four County Pig Placement were paid in July. Court filings showed hundreds of thousands of dollars owed to three creditors, including a bank seeking to foreclose on Wulf’s farm.
Former US Rep. Steve King also texted about wanting Wulf replaced. He texted Bower, “This makes me sick to my stomach. … The $500K+ is still outstanding. Next bail out may be bail money.”
King did not return comment for this story.
Iowa Starting Line reached out to Bower about the text messages. In response, Bower said, “I am uncertain how you got those communications, which were private. However, my objective was having a solid running mate for Lahn, and I did not believe that Derek Wulf was that person.”
Despite these emergent concerns, Wulf remained on the ticket. The Lahn campaign has since described Wulf’s money troubles as routine, that no one involved would “lose a dime,” and that the whole story was a “politicized witch hunt.”
The texts show Republicans raised concerns about Wulf on the day he was picked. Court filings and a court-appointed receiver’s report show a more complicated picture than the campaign described.
Who warned the campaign, and what did they say about Derek Wulf’s debts?
Kurtis Bower is a veteran and former mayor of Roland, Iowa. As a lobbyist at the Iowa Statehouse, he’s become a voice in issues involving divorce and custody issues as well as the use of eminent domain for CO2 pipelines. But over the summer he became interested in pushing for Wulf to be replaced.
Bower texted Bluhm a breakdown of suits against Wulf and his company, Shallow Creek Land & Livestock, on Friday, June 12. Four County Pig Placement, a hog broker, sued Wulf in February, and a Sioux County District judge ordered a default judgment in the amount of $182,000 plus court costs and interest. Heartland Co-op sued Wulf and Shallow Creek in April for about $149,000. WCF Financial Bank, Wulf’s primary lender, sued May 13 to foreclose on his home and farm, the Des Moines Register reported. Exhibits in that case indicate Wulf owed about $3.1 million on lines of credit as of early May.
Bower told Bluhm that Wulf “likely needs to decline the offer and Lahn pick someone else.”
Bluhm wrote back: “Anything we can do about this? What would you recommend professionally? I’ll be bringing this to exec team soon.”
Bluhm and Bower spoke by phone on Sunday, June 14, and the next morning, Bower asked: “Is Bobby Kaufmann a possibility for LG?”
“Yes he is,” Bluhm replied. In separate messages he added: “This is now on the right path forward,” “I’m optimistic on a swift resolution” and “We have an opportunity to get ahead of it.”
The texts do not indicate whether a “resolution” meant replacing Wulf or resolving his debts.
Iowa Starting Line reached out to the Lahn campaign and Bluhm for comment on this story. Neither returned comment by press time.
What the campaign said publicly
On June 15, the Lahn campaign told Bleeding Heartland that it “is aware that Derek, like many Iowa farmers, has faced financial challenges.” A campaign spokesperson called it “a routine refinancing.”
On July 16, campaign manager Paul Cordes told the Register that “all of the debts to creditors have been paid in full.” Court records show otherwise. That same day, Wulf’s attorney signed a conditional consent to a receiver in the WCF case. A receiver is a neutral party appointed by a judge to take charge of a borrower’s property, in this case Wulf’s farm and livestock, while a lender’s claim is sorted out. New Century was paid July 20 and Heartland’s judgment was satisfied July 23, court documents show.
On July 22, Wulf told the Westside Conservative Club in Urbandale, “We were able to refinance our farm.”
Asked by KCCI in September whether creditors would be paid, Lahn said: “At the end of this, nobody’s going to lose a dime.”
Who lent Derek Wulf $540,000?
Wulf received a $540,000 loan from University Relocation LLC, a company based in Moline, Illinois, the Register first reported. The lender has not been named. Davenport attorney Richard Davidson formed the company June 26, two weeks after Lahn picked Wulf, and told the Register it acted for “a single, Iowa-based private lender” who wants to stay anonymous and offered “market rate.”
Wulf’s in-laws signed a mortgage to secure it July 13. He paid off Four County, Heartland, and a roughly $139,000 debt to New Century FS soon after, according to filings from their attorneys. He has not paid WCF, which won appointment of a receiver Sept. 1.
Without knowing the source of the loan, it is unknown whether the loan was legal for Wulf to accept. State law bars statewide candidates from taking loans from lobbyists unless the loan is part of their normal business. Asked whether the lender is a lobbyist, Davidson said: “I don’t have the faintest idea.”
What did the receiver find on Derek Wulf’s farm?
Hertz Farm Management, the WCF case’s receiver, reported to the court on Oct. 2 that Wulf’s obligations are “substantial relative to the value of the assets.” The line appears in the receiver’s recommendation to authorize cattle sales, not as a finding of insolvency.
The receiver compared its livestock counts with Wulf’s balance sheet dated Aug. 6 and found discrepancies. The sheet listed 150 cows, 130 calves, 85 feeder cattle, five bulls, and 800 market hogs. The receiver counted 121 cows, 86 calves, 32 feeder cattle, three bulls and no hogs. Of the feeder cattle, 19 more were sold Aug. 27 and three died.
The receiver also could not locate 10 items of equipment listed on the sheet, including feeding stations, a generator, and an ultrasound machine. The report does not allege that anything was taken.
The report says ownership of some cattle and calves among Wulf and two other people is “disputed or uncertain,” and that animal counts are approximate.
At Wulf’s Holmes Road lot in Black Hawk County, the receiver wrote, the cattle “appeared to be in poor physical condition and inadequately nourished,” with no shelter and a pasture and lot that were “extremely muddy.” It also says cattle in Black Hawk County “lack adequate shelter as winter approaches.”
The sheet lists $3.07 million in assets. Its $2.07 million in liabilities does not represent Wulf’s current debt.
Lahn told KCCI that nobody would “lose a dime.” The bank that holds the loan on Wulf’s farm hasn’t been paid in full, and a court has put his cattle under a receiver’s control.
The midterm election is on November 3. Early voting began in Iowa Wednesday.
