Reynolds declares ‘Lutheran Services in Iowa Day’ as layoffs, federal interference imperil organization

DES MOINES — Iowa Gov. Kim Reynolds declared Tuesday Lutheran Services in Iowa Day as layoffs and the federal government's refusal to pay more than $1.5 million in outstanding reimbursements are imperiling the religious organization.

Reynolds made the declaration during Lutheran Day on the Hill at the Iowa Capitol.

"For 160 years, LSI has been providing important services throughout our state, supporting families and communities in need," Reynolds said about the organization, which has programs covering: behavioral health, early childhood, foster care and adoption, disabilities, refugee resettlement and more.

Just last week, The Sioux City Journal reported that LSI was laying off employees at its locations in Sioux City, Waterloo and Des Moines about a month after President Donald Trump issued an order to halt the U.S. Refugee Admissions Program. In tandem with the order, the Department of State pushed for every resettlement agency in the country to stop offering services to recent arrivals.

The stop work order from the federal government effectively severed funding which organizations such as LSI said they were using to help get refugee families settled in communities. At a Sioux City Council meeting Monday, LSI Director of Immigrant and Refugee Community Services Nick Wuertz drew a direct line between the lack of reimbursements and the need to layoff staff.

"Because the federal government is not fulfilling its commitment to reimburse us for services, it is forcing LSI to pause our services and, unfortunately, let go several of our talented team members and staff," Wuertz said.

Along with the pauses by the federal government, Lutheran-based organizations such as LSI have been the subject of baseless claims about money-laundering by past and present federal officials such as Elon Musk and Gen. Mike Flynn.

When asked about those claims during a U.S. House panel in February, Reynolds said she couldn't speak to them.

"Every program should be looked at and that's what we're trying to do," she said.

Reynolds later spoke to the public and clarified her remarks.

"I absolutely do not think that Lutheran Services is a money laundering organization," she said. "I support their work and I always have. They provide a whole host of charitable services to hundreds of thousands of people."