Lahn’s Running Mate Receives $540,000 Mystery Loan

Three weeks after Republican gubernatorial candidate Zach Lahn selected state Rep. Derek Wulf as his running mate, Wulf secured a $540,000 private loan from a company that had been formed just days earlier. The money arrived as Wulf faced mounting debts, lawsuits from agricultural suppliers, and foreclosure proceedings involving his home and farm.

According to an investigation by the Des Moines Register, the lender was University Relocation LLC, an Illinois company established June 26 by Davenport attorney Richard Davidson. On July 2, the company signed a one-year promissory note with Wulf. Shortly afterward, Wulf paid off several outstanding debts to agricultural suppliers.

But there’s one rather important detail nobody seems willing to disclose: Who actually provided the money?

A lender who prefers anonymity

Davidson told the Register that University Relocation represents an Iowa-based private lender who regularly makes loans. He insisted the transaction was legitimate and conducted at market rates. “There’s nothing nefarious,” Davidson said. Yet the lender’s identity remains undisclosed. Davidson also could not specify the interest rate Wulf agreed to pay.

The company was established in Illinois specifically for the Wulf transaction, even though Davidson had formed an Iowa company with the same name years earlier. That distinction matters. Former Iowa Ethics and Campaign Disclosure Board executive director Zach Goodrich explained that obtaining records from an Illinois company could require judicial approval, making an investigation more complicated than one involving an Iowa-based business.

Financial trouble before the loan

Wulf’s financial difficulties were substantial. Agricultural suppliers had obtained judgments against him over unpaid bills. Meanwhile, WCF Financial Bank sued to foreclose on his home and farm. Court documents indicated that Wulf owed approximately $3.1 million on lines of credit in early May, with interest accumulating at roughly $1,100 per day.

A judge appointed a receiver to take control of Wulf’s home and farm on September 1. The $540,000 loan helped Wulf settle several supplier debts, but it did not resolve his larger dispute with WCF Financial Bank.

Is the loan legal?

Possibly. Iowa law generally permits political candidates to obtain personal loans. But the identity of the lender and the terms of the transaction matter.

Iowa Ethics and Campaign Disclosure Board executive director Erika Eckley told the Register that her agency could not determine whether the arrangement violated state law without knowing who provided the money. Depending on the lender’s identity and the loan terms, restrictions involving lobbyists, government contractors, or other prohibited sources could become relevant. An unusually favorable loan might also raise questions about whether part of the transaction constitutes a gift.

None of that establishes that Wulf or the lender violated the law. It does establish why the unanswered questions deserve attention.

The $540,000 question

A candidate for one of Iowa’s highest elected offices received more than half a million dollars from an unidentified private lender through a newly established out-of-state company.

The attorney arranging the transaction says there’s nothing nefarious about it. Perhaps he’s right.

But Iowa voters have a reasonable interest in knowing who is providing substantial financial assistance to candidates seeking statewide office, particularly when the circumstances make independent scrutiny difficult.

If this was simply an ordinary business loan, why must the lender remain a mystery?

Source: USA TODAY Network / Des Moines Register investigation, “Lender a mystery for $540,000 loan to GOP lieutenant governor candidate Derek Wulf.”