Iowa Gov. Terry Branstad's administration is shelling out nearly $150,000 a month for a Kentucky firm to serve as cheerleader for his "Connect Every Iowan" initiative aimed at expanding high-speed Internet service to rural communities.
The $730,506 six-month contract with Connected Nation of Bowling Green, KY is to "preserve the foundation of the federal investment in Iowa's broadband leadership programs while advancing Governor Branstad's vision to Connect Every Iowan," according to the contract signed by the Iowa Economic Development Authority (IEDA) in February.
Connected Nation has been the recipient of huge federal subsidies via the American Recovery and Reinvestment Act of 2009. Between 2009 and 2013, the organization has received more than $61 million in tax dollars for development of geographic maps to show where high-speed (broadband) Internet access is available in fewer than two dozen states.
The firm was awarded more than $5 million in federal dollars to develop Iowa broadband access maps. In 2013, the latest year tax information from the company's 990 return (required of non-profit organizations not paying income tax), the federal government paid Connected Nation more than $1 million for work in Iowa.
Even before receiving its first grant award in 2009, Connected Nation's role as a broadband map developer came under question because of its close ties to the telecommunication industry.
The non-profit also has spent lavishly on salaries with eight executives of the the 100-employee firm making in excess of $100,000 a year.
Its past president and CEO Brian R. Mefford left the firm in mid-2012 to form a for-profit company, according to the Bowling Green newspaper. Yet, he has remained on the Connected Nation board of directors as chairman and received $197,225 in consulting fees in 2013, according to the 990 IRS report.
Connected Nation's current President and CEO Thomas Ferree, who replaced Mefford, was paid $238,169 in 2013, while the firm's "Chief Policy" executive Thomas Koutsky was paid $216,242. Kentucky attorney R. Eric Mills serves as secretary on the Connected Nation board and his Mills Law Firm, of Inez, KY was paid $350,440 to handle the company "legal services" in 2013. Connected Nation also paid another legal firm, KWH Law of Louisville, KY, $160,339 for legal services that same year.
The non-profit Connected Nation tax return also lists a $1.8 million "loan or loan guarantee" to CN Ventures, Inc., a for-profit company whose directors include Ferree (president) and Mills (secretary). Mefford served as chairman and a director of CN Ventures until late 2014, according to Kentucky Secretary of State records.
CLICK HERE to download the 2013 990 Tax Return for Connected Nation.
CLICK HERE to download the 2012 990 Tax Return for Connected Nation.
In Iowa, the firm operates as Connect Iowa and its most recently state coordinator was given office space in the IEDA office valued at $21,000 in 2014. She has since resigned from Connect Iowa and now works full-time for IEDA. Connect Iowa has been advertising to fill the position of state coordinator.
The agreement between the IEDA and Connected Nation calls for payment of $438,4567 for "Connected Leadership," defined as community engagement, executive leadership and staff support for the govenor's STEM Broadband Committee, as well as serving as a technology development "catalyst."
Another $182,794 under the agreement is to be paid for "Connected Insights," defined as "preserving broadband data collection, mapping and analytics," maintaining its web-based broadband data (www.connectiowa.org), and providing monthly policy briefings to the governor and Iowa Office of Chief Information Officer.
The remaining $109,256 in the contract was described as "Connected Solutions," technical assistance to help local communities on broadband connectivity issues and serving as a clearinghouse on local broadband initiatives.
The Connect Iowa's web site includes numerous photos of the governor with public officials from various Iowa communities which have attained a so-called "Connected Community" designation developed by Connected Nation.
