Investigation links missing Iowa Athletic Commission funds to ex-employee

An investigation launched after a complaint alleging financial improprieties by a since-fired Iowa Athletic Commission employee links her to more than $17,000 of uncollected or undeposited funds from athletic events, Iowa State Auditor Rob Sand's office reported Wednesday.

It said that because records were inadequate, it could not determine whether even more funds might be missing, and recommended tightening accounting procedures and improving communications.

Fired employee focus of investigation

The investigation centered on Dawn Chamberlain, a former program planner for the athletic commission. Part of Iowa Workforce Development until it was transferred to the new Iowa Department of Inspections, Appeals and Licensing in July, the commission's functions include issuing permits and collecting fees for professional and amateur sporting events in Iowa.

Previously: Gov. Kim Reynolds signs law restricting Iowa State Auditor Rob Sand's powers. Here's how:

The auditor's office said it launched the probe at the request of workforce development after that agency received and investigated a complaint in November 2022 alleging Chamberlain was “taking money under the table” and accepting bribes in her position as "head of athletics."

At a news conference, Sand credited both workforce development and the person who provided the tip.

"Workforce development deserves credit here for an internal investigation that was performed and performed well. They called us in to make sure they had independent investigation as well, which I always think is best practice," said Sand.

The auditor's report said the agency placed Chamberlain, a state employee since 2007, on paid administrative leave starting Nov. 16, 2022. Following its internal investigation, it fired her Dec. 15.

Chamberlain could not be reached for comment Wednesday. She had been with the athletic commission since March 2020.

Review finds missing licensing fees, taxes

The auditor's report said Chamberlain's duties with the commission included collecting checks, tracking payments received and forwarding checks for processing. It said that in an interview with investigators, Chamberlain denied handling checks, but that information provided to the auditor's office showed otherwise.

Checking on license fees for 203 boxing, kickboxing, mixed martial arts and wrestling events, investigators found $12,925 of $54,950 owed had not been deposited, and $4,281 of $237,491 in tax receipts for the events also were missing, the report said, for a total of $17,206. It said it could not be determined whether the money was actually paid.

Previously: Audit of small Iowa town finds nearly $100,000 in improper transactions

In addition, it said the investigators determined Chamberlain had received a $4,325 check for paying Xtreme Fighting Championship officials and deposited it in her personal bank account, and that only $2,550 of the money actually was paid to the officials. Though Chamberlain told the investigators that the officials also had received payments in cash, the remainder of the funds from the check were not deposited with the Iowa Athletic Commission, the report said.

Further, the report said, Chamberlain received gifts valued at $1,742, including airfare, hotel accommodations and a ringside seat at an event in Denver, and admitted to receiving from a promoter $1,000 and a payment of a hotel bill for acting as a "deputy" at an event in Michigan. At that event, it said, she issued a suspension for an athlete, even though she isn't authorized in her job to do so.

It said that when questioned about the gifts, which are forbidden under state policy, Chamberlain said "everyone else in the office accepts insane amounts of gifts." But aside from saying a former athletics commissioner had accepted a plane ride, which he later explained was part of an Iowa National Guard thank-you program for bosses who support their employees' military service, she provided no names of people who may have accepted gifts.

Iowa Workforce Development and the Department of Inspections, Appeals and Licensing said they were unaware of any other instances of gifts being accepted, the report said.

The investigations turned up various other irregularities, including a spreadsheet provided to a promoter that indicated payment of fees was to be made at an event, instead of before, as Iowa requires, and that athlete bloodwork could be turned in after an event. It also must be turned in before, the report said.

It also said Chamberlain at times appeared to misrepresent her position with the athletic commission, in one case claiming to be director of the commission, and attended athletic events without the athletic commissioner's consent.

Next steps in investigation unclear

Sand's office can investigate cases, but it is up to law enforcement agencies to decide whether to file criminal charges. Sand said in the report that the findings were sent to the Iowa Division of Criminal Investigation, the Polk County Attorney’s Office and the Iowa Attorney General’s Office. But he said in the news conference that it is his policy not to make recommendations about whether to prosecute.

He also said it also would be possible to seek reimbursement of the lost funds through a civil action.

"My hope certainly would be that the promoters who have not paid to the state what they owe do the right thing and true up their accounts with the state of Iowa," he said. "If they didn't, the state could determine that they had the ability to go after them civilly."

He said the case illustrates why cash transactions with the state are a bad practice.

"We see this regularly in our reports where items that are paid in cash do not end up making it to the bank account that they are supposed to be getting to," he said. "It's impossible when you're dealing with cash for anyone to tell you what exactly happened to that money."

At least one of the promoters his office talked to during the investigation said he typically brought an envelope full of cash to events for taking care of his expenses, Sand said.

"That's obviously not a great way to make sure your i's are dotted and your t's are crossed," he said.

Sand, the sole elected Democratic statewide officeholder in Iowa, said the investigation was "mostly completed" prior to passage of a bill in the last legislative session that stripped him of many powers, including the ability to obtain some information from state agencies as part of investigations.

"An office like the State Auditor's Office is where you have someone whose job it is to look when we get a tip like this and find out whether or not there's something going on there that shouldn't be going on," he said.

This article originally appeared on Des Moines Register: Auditor: Ex-employee linked to missing Iowa Athletic Commission funds