Aviva worker charged with embezzlement was big political donor

Phyllis Stevens’ alleged embezzlement of nearly $6 million from Aviva USA left her political allies almost speechless Tuesday as they tried to reconcile whether the political activist who contributed thousands of dollars to candidates over the last four years and formed two Iowa political action committees might also be a crook.

“I am just absolutely astounded by this,” said Diane Krell, a fellow member of the Progressive Coalition of Central Iowa. “I am shocked and really have been since I have heard about it.”

Others who knew Stevens, including former Iowa gubernatorial candidate Ed Fallon, also expressed shock about Stevens’ arrest and the allegation by Aviva officials that the compensation specialist had spent most of the last five years embezzling an estimated $5.9 million from one of the world’s largest insurance firms.

“She struck me as a passionate person who cared deeply about a number of issues,” said Ione Shadduck, a Des Moines lawyer and a member of the Progressive Coalition Board. “She was a big help in getting our organization started. I am in shock.”

Stevens, 58, has been accused by Aviva officials in a civil lawsuit of manipulating the company’s computer system used to pay agent commissions. Aviva’s lawsuit claims she had commissions paid in the name of former agents deposited in an account that she and her spouse, Marla, held in a bank in Indianapolis.

Formal federal charges have yet to be made public, but since news of her arrest broke Monday, a picture of Stevens has emerged as a political activist involved deeply involved in gay and other progressive issues.

Stevens established two Iowa political action committees – Rainbow Equality PAC and Queer Education PAC. She also apparently played an instrumental role in the establishment of the Progressive Coalition of Central Iowa in 2006, and remains listed as the chairwoman of that organization’s board.

Phyllis and Marla Stevens, also gave more than $175,000 to state and federal candidates over the last two election cycles. Most of the contributions went to Democratic candidates and organizations like Moveon.org, but a few female Republican candidates in Iowa also received money.

Fallon, who received $4,875 from the couple to run for governor and another $4,600 in his 2008 primary challenge of Rep. Leonard Boswell, disclosed that he had been involved with them in a venture to establish a housing cooperative in the Sherman Hill district of Des Moines.

“We have known Phyllis Stevens since 2006, yet were totally shocked, as was everyone, at what has happened,” Fallon said in a statement.

“We have received contributions from both Phyllis and Marla Stevens, as have many candidates and organizations, and recently worked with them on starting a housing cooperative, which never got off the ground.”

Fallon said that he is “fully cooperating with the authorities on all aspects of this case, and (is) in the process of gathering any records we think might be relevant and helpful.”

Fallon declined further comment saying that “any additional information we have to share first will be given to the appropriate authorities before being made public.”

Polk County assessor records have disclosed that Phyllis Stevens and Marla Stevens purchased two homes in June in Sherman Hill for a total of $470,000. A review of records filed at the Polk County recorder’s office found no mortgages on the properties.

The Stevenses contributed $144,343 to federal candidates that included Iowa Democratic Reps. Boswell and Bruce Braley, federal campaign records show.

Mark Daley, campaign manager for Boswell, acknowledged that the Stevenses contributed about $4,000 over several election cycles, but also pointed out that Phyllis Stevens had been a co-signer of a Federal Election Commission complaint against Boswell when the veteran lawmaker was challenged by Fallon in the 2006 primary.

“We even tried to send money back to her at one point because she gave us too much. We had to give that money to the U.S. Treasury,” Daley said.

If it is determined that the money contributed to Boswell came from the embezzlement, Daley said the campaign would do “whatever the federal officials tell us to do.”

Jeff Giertz, a spokesman for Braley, said Stevens contributed $1,500 to Braley’s campaign in 2006.

“There should be consequences for those who break the law, and if Phyllis Stevens is proven to have defrauded Aviva, she should be held responsible and punished accordingly. If Stevens if found to have done something illegal, then we’ll take further steps into serious consideration,” Giertz said.

The largest amount of money contributed by the two women, $13,000 over three years, went to U.S. Rep. Betsy Markey, a Colorado Democrat.

Iowa campaign records show the couple and Rainbow Equality gave a total of $33,369 to state candidates, including $1,625 to the campaign of Senate Majority Leader Michael Gronstal of Council Bluffs.

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