IOWA CITY, Iowa — A court has upheld the firing of a judge who helped expose improper political pressure in Gov. Terry Branstad’s administration, agreeing with an arbitrator that she lied to get her daughter state-funded health benefits.
Iowa district judge Douglas Staskal on Thursday rejected a union’s arguments that the arbitrator who upheld Susan Ackerman’s January 2015 firing was biased and lacked “substantial evidence.”
Staskal acknowledged the decision by arbritrator John Sandy was “very poorly written” and filled with spelling and grammatical errors. But he said the “core fact findings” showed Ackerman falsely certified that her married 27-year-old daughter was single to make her eligible for Ackerman’s health insurance in 2013 and 2014.
Ackerman, who worked 15 years at Iowa Workforce Development as an administrative law judge ruling on unemployment benefits cases, was charged last month with felony insurance fraud over the same issue. Her supporters have questioned whether the charges were retribution, but prosecutors have denied that claim. The 56-year-old is set to be arraigned next month.
Ackerman’s firing came weeks after she and other judges testified to lawmakers that they faced pressure from Workforce Development director Teresa Wahlert, a Branstad appointee, to favor businesses over workers in their rulings. Their concerns prompted an investigation by the U.S. Department of Labor, which ordered the state to prevent judges from facing any pressure from political appointees as required by law.
Ackerman is pursuing a lawsuit, alleging her firing was retaliation against a whistleblower. She has denied any fraudulent intent and noted that a human resources employee gave her permission to add her daughter, who was separated from her husband, to her insurance. An attorney disciplinary board ruled Ackerman’s conduct was troubling but not an ethical violation.
Separately, the state employees’ union, AFSCME, had asked Staskal to overturn the arbitration decision, arguing that Sandy was biased against Ackerman and ignored evidence that other employees were treated more leniently for similar or more serious infractions.
The Public Employment Relations Board in August suspended Sandy six months for his unprofessional handling of the case, saying his decision contained “substantive inaccuracies and omissions” that were aggravated by embarrassing spelling and grammar errors. But the board said it had no power to overturn his conclusion that Ackerman’s firing was justified.
Staskal said a 2012 email exchange between Ackerman and a human resources employee who had added the daughter revealed that the two discovered she was ineligible but kept that quiet. Ackerman later signed a form falsely certifying that her daughter was single. An insurer paid $7,300 in claims for Ackerman’s daughter, Staskal said.
The appeal focused on another embarrassing error by Sandy: After the hearing, he kept his recording device running and captured two phone calls. The audio, later turned over to parties in the case, featured Sandy accusing Ackerman of “badmouthing” Branstad’s administration and contradicting his claim that he knew nothing about the high-profile case. Staskal rejected AFSCME’s argument that those statements showed bias.