Mark Chelgren’s Murky Business Dealings

The lawmaker also known as Chickenman last year threatened to relocate his companies over a minimum wage ordinance, and in 2000 sought to prevent athletes from using a competitor’s products at the Sydney Paralympic Games

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The building outside Ottumwa where state Sen. Mark Chelgren's businesses are registered. Photo: Beacon

Earlier this month, after the Informer raised questions about state Sen. Mark Chelgren’s 2006 domestic assault arrest and a company the GOP lawmaker founded the following year that manufactures AR-15s, we began receiving tips about some of his other business dealings — including a threat he allegedly made last year to move his businesses out of Wapello County if the Board of Supervisors passed an ordinance to raise the minimum wage and, long before that, a federal court dispute that could have adversely impacted athletes set to compete at the Paralympic Games in Sydney, Australia.

As we previously reported, Chelgren has registered a network of six companies — five of which remain active, according to secretary of state records — at 14470 Terminal Avenue, a property with an Ottumwa address that online real estate listings indicate is for sale. After we published that story, Chelgren took down several company websites and Facebook pages, including the website for his AR-15 manufacturing business, Epic Defense (or Fizzix Firearms, as he’s also called it), for reasons unclear.

The reason he is selling his Terminal Avenue property may be connected to an ordinance passed by the Wapello County Board of Supervisors last September to gradually raise the minimum wage to $10.10 by Jan. 1, 2019. The city of Ottumwa opted out of the increase, but Chelgren’s property is located near the Ottumwa Regional Airport outside city limits, placing it under the jurisdiction of the supervisors, who oversee rural Wapello County.

Related article: Chelgren Founded AR-15 Business Despite Domestic Violence Arrest
Related article: Chelgren Founded AR-15 Business Despite Domestic Violence Arrest

The county’s ordinance, along with those of four others, was struck down Wednesday when Gov. Terry Branstad signed a bill passed Monday by the state Senate that was supported by Chelgren and prevents local governments from increasing the minimum wage above the state’s current $7.25 level.

But last August, when Wapello County passed its ordinance on the first of three readings required before it became law, the current legislative session was still five months away, and Chelgren was not pleased. Shortly after the first passage, Supervisor Jerry Parker, a Democrat and former Ottumwa mayor, said he was at an event in the nearby town of Eldon when he received a call on his cellphone. It was Chelgren. “He said, ‘I’ll just tell you, if you go ahead and pass this I’m moving my businesses out of Wapello County,” Parker recalled. “I said, ‘Well, thanks for the call.’” Parker said he hadn’t spoken with Chelgren since but had been told the lawmaker had put local properties up for sale.

Chelgren, who previously dismissed the Informer as fake news and said he wouldn’t answer questions from our “blog site,” did not respond to requests for comment on this article.

It’s unclear if the bill freezing the minimum wage at $7.25 across the state will influence Chelgren’s decision to sell his Terminal Avenue property — that is, if he could find a buyer willing to pay the $380,000 asking price, which is well above its assessed value of $214,793. A sale is pending on another of his Ottumwa properties, the building where his massage and spa businesses operated. An empty lot he owns on Traul Avenue was listed for sale Dec. 1, five days before the city opted out of the county’s minimum wage increase. A fourth property with an Ottumwa address, his Hutchinson Avenue residence, does not appear to be for sale.

By September 2015, a year before Wapello County adopted the ordinance to raise its minimum wage, Chelgren had already purchased a warehouse similar to his Terminal Avenue property in Bloomfield, a town in neighboring Davis County, also in his Senate District 41, for his Fizzix Manufacturing company, through which the Epic Defense AR-15 business was established. (His wife, Janet, has a federal firearms manufacturing license for the address.) According to whispers around District 41, the lawmaker may have already been contemplating before his re-election in 2014 moving some of his businesses in the event he lost Wapello County to his Democratic opponent, then-county Supervisor Steve Siegel. He did, by 159 votes, but prevailed overall by a slim 374-vote margin.

If Mark and Janet Chelgren do end up in Bloomfield, it wouldn’t be the first time in the relatively recent past that the couple moved. In 2006, a few months after the domestic assault incident, which happened in Benton County and involved Mark’s stepson, the Chelgrens purchased their home in Ottumwa and left behind the town of Vinton. They still own their house in Vinton and have rented it out in the past, but efforts to sell it have fallen through, in part because of a high asking price. The house is now in need of repairs and often neglected; the next-door neighbors sometimes mow the property’s lawn to keep up appearances for the rest of the neighborhood.

Before they moved to Ottumwa, the Chelgrens operated businesses in Vinton, too. One was Hilda’s Flower Shop, which was owned by Janet and competed for customers with another shop, Nature’s Corner, which at the time was run by Vinton resident Cindy Elwick. “From time to time, they came down and told me that I needed to drop lines that I was carrying they also happened to carry that I did not know,” Elwick told the Informer, adding with a chuckle, “I guess I’m not as competitive as they were.”

When the Chelgrens moved away from Vinton in 2006, they sold the Hilda’s Flower Shop building to Elwick for $108,000. They also left behind significant unpaid bills the business owed, which one resident familiar with the situation estimated were in the low five figures — evidence of the couple’s inattentiveness in their business dealings. “For over a year, people were still calling me trying to collect from them,” Elwick said. “We had a lot of trouble with their bad debts — which I did not have to pay.” Last year, Elwick sold her shop to Emily Cashman, a recent graduate of Kirkwood Community College’s floral program.

In Vinton, the Chelgrens were also involved in the management of Frog Legs Inc., a wheelchair parts manufacturer that Mark co-founded in 1997 with fellow RAGBRAI enthusiast Dave Carr. The company’s claim to fame, a shock absorber resembling the shape of a frog’s leg whose design was inspired by members of a quadriplegic rugby team Chelgren and Carr met during a trip to Colorado, also became the subject of a lawsuit Chelgren filed in a federal Ohio district court in July 2000 against Invacare, a corporation headquartered in the state that manufactures medical care products. (See the court documents embedded below.)

Related article: Mark Chelgren's Greatest Hits
Related article: Mark Chelgren’s Greatest Hits

According to his complaint, Chelgren had established a business relationship with Invacare at a 1997 trade show in New Orleans, where a company official expressed interest in adding Frog Legs shock absorbers to wheelchairs it manufactured. Frog Legs provided confidential information to Invacare for product testing purposes and later entered into distribution deals with Invacare’s Australian and New Zealand subsidiaries. At the same trade show two years later, Chelgren alleged that an Invacare employee refused to show him a wheelchair on display because it had been fitted with “knock-off” shock absorbers of inferior quality marketed without permission using the Frog Legs brand name. (The judge hearing the case wrote that Chelgren had presented no evidence of their inferior quality.)

Chelgren further claimed that since April 2000, Invacare had sharply reduced its purchases of Frog Legs products and otherwise broken promises with his company. Invacare was sponsoring 18 wheelchair-bound athletes for the Paralympic Games that year in Sydney, Australia, 15 of whom used Frog Legs shock absorbers and the other three of whom had Invacare’s alleged knock-offs.

Invacare attorneys largely sidestepped Chelgren’s allegations of trademark violations, arguing that the Ohio court did not have jurisdiction over its Australian subsidiary with whom Chelgren had signed a distribution agreement. Invacare, and not its Australian subsidiary, the attorneys argued, were sponsoring the athletes and advertising their products at the Sydney games.

On Oct. 10, just eight days before the games began, Chelgren requested a temporary restraining order against Invacare that would have prevented the three athletes whose wheelchairs were equipped with the “knock-off” shock absorbers from competing using the product. Three days later, Judge Donald C. Nugent denied the request.

“On the eve of the worldwide Paralympics, Plaintiff comes to this Court … asking it to issue an Order that would alter the mode of performance for athletes which they had chosen months, and possibly even years, ago to use in to compete,” Nugent ruled. “Such an Order would clearly cause inconvenience by creating the necessity of contacting representatives on another continent, in a time zone substantially ahead of this Court’s time zone, and requiring alterations on equipment needed for imminent use in the events … [and] cause substantial harm to others.”

Invacare spokesperson Lara Mahoney did not respond to requests for comment about the lawsuit, which led to a court-ordered mediation process resulting in a settlement whose terms were not publicly disclosed. The two companies continue to advertise each other’s products on their websites, and Frog Legs is one of the five active companies headquartered at Chelgren’s Terminal Avenue property outside Ottumwa.

 

 

 

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Gavin Aronsen is an editor and reporter for and founding member of the Iowa Informer. He previously worked as a city reporter for the Ames Tribune, research assistant to investigative journalist Wayne Barrett at the Village Voice, and in various roles at Mother Jones, where his work contributed to a National Magazine Award nomination for the magazine's digital media coverage of the Occupy Wall Street movement. Email: garonsen [at] iowainformer [dot] com.