State Auditor: Southwest Iowa town mishandled flood recovery funds

DES MOINES, Iowa (Gray Media Iowa Capitol Bureau) – A new special investigation from State Auditor Rob Sand’s office raises questions about how the southwest Iowa city of Hamburg spent disaster relief funds. Sand says he’s found conflicts of interest with a grant program designed to help a the town recover after flooding five years ago.

Sand says family members of a city council member and a city employee unfairly benefitted.

The city provided funding to build two new homes. One of them was owned by City Council member Kent Benefiel, who transferred ownership to a relative. The second home was privately owned and the owner was not related to anyone involved in city government, but Sand’s audit says city officials were unable to provide any reason as to why the funds were used on lots that weren’t owned by the city. Sand’s report says they couldn’t find any records that show either of the two owners had repaid anything on the loans.

“This is pretty egregious. We’re talking about a town here where we had tens of thousands of dollars given out for flood recovery work for these houses and there’s really no excuse for it to have been going to people connected to city government,” Sand said during a press conference Wednesday. “It’s common in our small towns for many people to wear different hats, but these examples of conflicts of interest are pretty egregious.”

Benefiel no longer sits on the City Council.

One of the programs to help rebuild was called the Nuisance Property and Abandoned Building Remediation Loan Program. It provided financial assistance for the demolition or remediation to buildings which are hazardous to public health and health. Four of the six property owners who received NPAB funds were related to Hamburg’s Public Works Director, Alan Dovel. Of the $128,000 paid out, $95,000, or 75%, of funds were paid to siblings and a parent of Dovel.

Dovel no longer works for the city.

Additionally, a different property was acquired under the NPAB program who died during their term. Sand found no relationship in any capacity with the sixth property owner.

Furthermore, the city made a duplicate payment of $50,000 that wasn’t permitted or explained.

Now that Sand’s special investigation is finished, it’s at the hands of the Iowa Economic Development Authority and Iowa Department of Homeland Security and Emergency Management to decide what to do next.

IEDA says their legal team will consult with the Fremont County Attorney’s Office on next steps.

HSEMD says they reviewed Sand’s report and notes the auditor had no findings specific to their agency.

Sand wouldn’t comment on any potential criminal cases but says his report has been given to the Attorney General’s Office, Freemont County Sheriff and County Attorney, as well as the Iowa Division of Criminal Investigation.

READ THE REPORT:

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Conner Hendricks covers state government and politics for Gray Media-owned stations in Iowa. Email him at conner.hendricks@gray.tv; and follow him on Facebook at Conner Hendricks TV or on X/Twitter @ConnerReports.

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