ECU Requests Investigation Into Zach Lahn-Derek Wulf Campaign Over Secret $540,000 Loan

End Citizens United (ECU), a leading national anti-corruption organization, called on the Iowa Ethics and Campaign Disclosure Board to investigate Derek Wulf, Republican candidate for lieutenant governor, and the Lahn for Governor campaign over alleged violations involving a secret $540,000 loan from an unidentified lender.

The complaint centers on a $540,000 loan made to Derek Wulf, who was facing millions of dollars in outstanding debts and foreclosure proceedings, just weeks after joining the Republican gubernatorial candidate Zach Lahn’s ticket. The money came through University Relocation LLC, a company formed in Illinois shortly after Wulf became a statewide candidate, specifically to facilitate the loan. The identity of the lender and the terms of the loan remain undisclosed.

“Derek Wulf’s financial woes created an opportunity ripe for corruption,” said End Citizens United President Tiffany Muller. “It appears a wealthy donor saw a politician drowning in debt and decided to throw him a $540,000 lifeline just as he was running for statewide office. While Lahn and Wulf want voters to believe this arrangement is all a coincidence, nobody hands a politician that kind of money without an expectation of a return. We call on the Iowa Ethics and Campaign Disclosure Board to immediately investigate this shady arrangement. Iowans deserve to know whether someone is trying to buy themselves a lieutenant governor.”

The Complaint Identifies Three Possible Violations of Iowa Law:

Prohibited Loan from a Lobbyist: Section 68B.24 prohibits an official, member of the General Assembly, state employee, legislative employee, or candidate from directly or indirectly seeking or accepting a loan from a person who is a lobbyist. The only exception is for a loan made in the ordinary course of business by a person regularly engaged in lending to the general public, Iowa Code § 68B.24(3); a single-purpose LLC formed after Mr. Wulf’s nomination to make one loan does not qualify. In the Des Moines Register article, the attorney for the lender said "I don't have the faintest idea" when asked if the undisclosed lender was a lobbyist. As a candidate for statewide office, Mr. Wulf is under the jurisdiction of the Board. The Board should investigate the identity of the lender and any connections they may have to lobbying activities in Iowa.
Prohibited Gift from a Restricted Donor: Section 68B.22 prohibits a public official, member of the general assembly, or candidate from accepting any gift from a restricted donor, defined in § 68B.2(24) as a person seeking contracts or business with the state, or who will be substantially affected financially by the official’s performance of duties. If the $540,000 loan to Mr. Wulf was made at below-market rates or on terms unavailable to others, it could be a prohibited gift disguised as a loan. The timing, just after Mr. Wulf’s nomination, and the use of an out-of-state LLC to obscure the lender’s identity raise suspicions that Mr. Wulf, the Lahn campaign, and a restricted source may have intentionally evaded the gift law. As executive branch candidates, Mr. Lahn and Mr. Wulf are positioned to take official actions substantially affecting the unknown lender’s interests. The Board should subpoena records to identify the source and determine if they are a restricted donor under § 68B.22.
Failure to Disclose Campaign Contribution: Iowa law defines “contribution” broadly to include a “gift, loan, advance, deposit, rebate, refund, or transfer of money.” (§ 68A.102(10)). Candidates must disclose all contributions on periodic reports filed with the Ethics Board (§ 68A.402A). The $540,000 loan to Mr. Wulf, made just after his nomination for Lieutenant Governor, should have been reported as a contribution on the Lahn-Wulf campaign’s filings, but it was not. Although made to Mr. Wulf personally, the loan’s timing and context strongly suggest it was intended to shore up his candidacy by relieving him of significant debts and legal liabilities that would have been a major campaign liability. By providing a substantial benefit to the campaign at a critical juncture, the loan constitutes a reportable contribution under § 68A.102(10). The failure to disclose it is a clear violation warranting investigation by the Board.

Click here to read the full complaint.

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For 11 years, End Citizens United (ECU) has been dedicated to combating the two biggest challenges facing our democracy: the corrosive impact of Big Money in politics and attempts to block access to the ballot box. Since its founding in 2015, ECU has had over 1.4 million donors with an average donation of just $14. The group has more than four million members nationwide and is one of the nation’s leading anti-corruption organizations.