NEW: Zach Lahn Refuses to Say Who Bankrolled Secret $540K Loan to His Running Mate
Des Moines Register: “Wulf and a spokesperson for Lahn’s campaign did not return requests for comment”
DES MOINES – New reporting from the Des Moines Register reveals that a brand new, mystery LLC is secretly paying off Zach Lahn’s running mate’s $540,000 debt. Lahn is refusing to “return requests for comment,” keeping Iowans in the dark about who is secretly loaning Derek Wulf money to pay off his debts and why.
In August, Lahn falsely claimed that Wulf was “paying his debts … with an Iowa bank.” But according to the Register, a well-connected Iowa attorney and Lahn campaign donor formed an LLC in Illinois to orchestrate a private loan to pay Wulf’s debts just weeks after Wulf joined the ticket. The mystery lender is an Iowa resident and “set up the business in Illinois specifically to issue a loan to Wulf,” even though they already owned an LLC in Iowa with the same name. A former Iowa ethics official said the decision to create a separate Illinois LLC is “significant,” warning that the out-of-state setup would make investigating the loan “very hard.”
This comes on the heels of Wulf being under criminal investigation and accused of stealing from and defrauding farmers. Last week, it was reported that after Wulf’s farm was placed in a receivership, his livestock were found to be malnourished and “in poor physical condition.” It was also revealed that Wulf was fighting with his own family members over business transactions.
From Iowa Democratic Party spokesperson Terra Hernandez:
“Who secretly paid off Zach Lahn’s running mate’s debts, what do they expect in return, and why is Lahn keeping the identity of such a generous individual hidden behind an out-of-state LLC? It’s clear Lahn and Derek Wulf have something to hide. It’s disqualifying, and shows they have no business leading our state.”
Read from the Des Moines Register here, or key points below:
- A week-old limited liability company gave Republican lieutenant governor candidate Derek Wulf a private loan this summer, raising questions about who assisted the politician in the months before November’s pivotal election.
- Wulf received a $540,000 loan from the newly formed University Relocation LLC of Moline, Illinois, in July, according to a mortgage securing the loan. The loan to Wulf came three weeks after Republican gubernatorial candidate Zach Lahn tapped Wulf as his running mate.
- An attorney formed University Relocation in Moline on June 26 on behalf of an unknown lender. The attorney, Richard Davidson of Davenport, told the Des Moines Register in late September that the lender does not want to be identified but offered the loan to Wulf at “market rate.”
- Erika Eckley, executive director of the Iowa Ethics and Campaign Disclosure Board, told the Register that her agency could not determine whether such a loan would violate state laws without knowing who the lender is.
- Wulf and a spokesperson for Lahn’s campaign did not return requests for comment
- Two weeks after Lahn named Wulf as the Republican Party’s lieutenant governor candidate, Davidson formed University Relocation, according to Illinois secretary of state filings. A week later, on July 2, the new company and Wulf signed a promissory note tied to a one-year, $540,000 loan.
- Wulf owed about $3.1 million for lines of credit as of early May, with about $1,100 more in interest accruing every day. A judge granted WCF’s petition to appoint a receiver to take over Wulf’s home and farm on Sept. 1.
- Davidson, the attorney who formed University Relocation, is a prominent attorney in Davenport.
- A lawyer for Lane & Waterman since 1985, he has represented the Davenport city government, the Davenport Community School District, the Diocese of Davenport and several local developers. He also represented Republican U.S. Rep. Mariannette Miller-Meeks during a high-profile recount following the 2020 election, which she won by six votes.
- Davidson has been a modest political donor, giving about $7,900 to state and federal campaigns and political action committees since 2005. The majority of his donations have gone to Republican candidates, including $100 to Lahn’s campaign committee on June 30.
- In an interview with the Register, Davidson said he formed University Relocation in June on behalf of “a single, Iowa-based private lender.”
- He added that the lender does not “generally” want to be known and set up the business in Illinois specifically to issue a loan to Wulf.
- Asked why the Iowa company wanted him to form the business in Illinois, Davidson said, “They just felt it was to their advantage to structure it as they did.”
- Davidson also formed a University Relocation LLC in Iowa in 2009. That business remains active, according to filings with the Iowa Secretary of State.
- Davidson said Wulf’s lender is also behind the Iowa entity. But later, he added that there might be additional managers of the Iowa company who are not involved in the new, Illinois company.
- Iowa laws do not allow statewide political candidates to accept loans from lobbyists unless those lobbyists loan money as part of their normal business. The terms of the loan, such as the interest rate, would also need to be in line with what the lobbyist normally offers.
- Depending on the terms of the loan, the ethics board could also view the transaction as a gift. If so, the board can investigate whether the money came from a “restricted donor,” which could include a government contractor or someone with an active case before a state regulator.
- Zach Goodrich, a former executive director of the state ethics board, told the Register that violations of campaign contribution laws could result in fines of up to $2,000 per violation.
- The fact that Davidson registered a new company in Illinois instead of sending the loan through the Iowa company is significant, Goodrich added. While the board can issue subpoenas for records from Iowa-based companies, he said, the agency would need a judge’s approval before demanding records from a business in another state.
- “Without a subpoena, (investigating) would be very hard,” Goodrich said. “You could always hope for cooperation, but you obviously don’t want to rely on that too much.”
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