STATE OF MINNESOTA

ETHICAL PRACTICES BOARD

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Friday, April 26, 1996

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Blazing Star Room

Ground Level, Centennial Office Building

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MINUTES

Meeting was called to order by Acting Chair Rodriguez.

Members present: Anderson, Owens Hayes, Pauly, Rodriguez, Wilson.

Others present: Olson, Goldsmith, Swanson, Maloney, staff; Eller, counsel.

MINUTES (March 15, 1996)

Ms. Wilson's MOTION: To approve the March 15, 1996, minutes as drafted.

Vote on MOTION: Unanimously passed.

CHAIR'S REPORT

Board Appointment - Notice of open appointment for the Boards vacant position will appear in the May 6th issue of the State Register. The Governor cannot appoint a new member prior to June 7, 1996.

Next Board Meetings - Friday, May 31, 1996 and June 21, 1996 (following the Board retreat).

Board Retreat - Tentative dates: June 20 and 21,1996. Board members reviewed a proposed agenda for the retreat. A subcommittee consisting of Acting Chair Rodriguez and Ms. Owens Hayes will make the final decisions regarding the retreat and report to the Board at its next meeting. Counsel Eller suggested a short presentation by the Attorney General's office on the open meetings law and state rules that affect Board members since so many Board members are new.

Appointment of Nominating Subcommittee - Acting Chair Rodriguez appointed the following Board members to the nomination subcommittee: Ms. Owens Hayes, Ms. Pauly, and Ms. Rodriguez. The subcommittee will meet following adjournment of this meeting to nominate candidates to serve as Board officers for the remainder of fiscal year 1996 and fiscal year 1997.

EXECUTIVE DIRECTOR'S REPORT

1996 Legislative Action - A memo from Ms. Olson informing Board members about 1996 Legislative action signed by the Governor that has an impact on the Board or staff was provided to Board members (see copy attached).

Senate and House Journals - Ms. Olson had Journals from the House and Senate which listed the vote on the confirmation of Board members available for review.

Thank You - Ms. Olson reported that a letter was sent to Jim Nobles, Legislative Auditor, under Acting Chair Rodriguez' signature thanking him for the use of the Robert Whittaker Conference Room for March Board meeting.

Subscription Renewal - It was decided that one subscription to the COGEL Guardian be ordered and kept in the Board office.

Campaign Finance Summary 1996 - Copies of the Campaign Finance Summary for 1996 were provided to Board members.

Staffing Matters - Ms. Olson reported that Diana Berg will begin employment with the Board on May 6, 1996, replacing Weiren Xie who resigned as the staff Information Systems Specialist. Joyce Larson, Clerk Typist III, received a six month performance review and was awarded a step increase as allowed under the AFSCME contract. The position description of LuAnn Swanson, Office Services Supervisor I, was updated to reflect her present duties and was upgraded by the Department of Employee Relations to Office Services Supervisor II. Ms. Swanson will be receiving a step increase as allowed under the Middle Management contract retroactive from March 26, 1996.

Senator Marty - Ms. Olson said that Senator Marty called the Board office and expressed concern about the Board's interpretation Minn. Stat. 10A.071 in advisory opinions and possible 1997 legislation to clarify that law.

Correspondence

. Elsa Carpenter - Ms. Olson directed Board members attention to a letter received in the Board office from former Board member Elsa Carpenter.

. Carol Noteboom, Executive Director, Minnesota Institute of Legal Education (MILE) - Board members reviewed correspondence from Ms. Noteboom received in the Board office on April 19, 1996, requesting permission to use the Board's list of lobbyists to mail notices about an upcoming Legislative Update 1996 seminar sponsored by MILE.

Ms. Owens Hayes' MOTION: To permit MILE to use the Board's list of lobbyists for the requested mailing.

Vote on MOTION: Unanimously passed (see copy of correspondence attached.)

Enforcement Report

Mr. Maloney presented the following enforcement matters for Board action:

. Waiver Requests

CAMPAIGN FINANCE PROGRAM

Principal Campaign Committee report due 1/31/96

Jual Carlson, treasurer, The Committee to Elect (Jual) Carlson Minnesota State Auditor,

1-3164 Auditor, $100; first waiver request. No motion was made.

Political Committee or Political Fund report due 1/31/96

Shelley Cash, treasurer, 2nd Congressional District RPM, 2-0471, $80, first waiver request. No motion was made.

Jerry Beedle, treasurer, Labor Solidarity Committee, 4-0303, $55; third waiver request. First waiver request of $500 was granted on November 29, 1988, for the late filing of the Report of Receipts and Expenditures due October 31, 1988. Second waiver request of $100 was granted on April 27, 1990, for the late filing of the Report of Receipts and Expenditures due January 31, 1990, provided the submission of an amendment correcting a cash balance discrepancy would be filed in the Board office within ten days of the Board meeting. The amendment was not filed, within the time frame requested by the Board, therefore the $100 late filing fee was imposed.

No motion was made.

Lobbyist Disbursement Report due 1/16/96

Albert Garcia, (Classic Affairs dba Sheiks Gentleman's Club), $40; Albert Garcia, (Knutson/Barton Mallow), $40; Albert Garcia, (Miller and Schroeder Financial Incorporated), $40; Albert Garcia, (Minneapolis Firefighters Relief Association), $40; Albert Garcia, (Minneapolis Taxi Federation), $40; and Albert Garcia, (Municipal Parking Incorporated), $35; total late fees of $235, first waiver request. No motion was made.

. Nonpayment of late filing fee for the late filing of the Lobbyist Disbursement

Report due 1/16/96

This matter is before the Board for the authorization of a third certified letter to be sent for the nonpayment of the late filing fee for the late filing of the lobbyist disbursement report due January 16, 1996. The lobbyists listed below have been sent two late filing fee notices, including notice that this matter would be referred to the Board at its meeting of April 26, 1996. Staff has attempted telephone contact with each of these lobbyists.

Mary Lewis Grow, (Citizens for a Safer Minnesota), $100; Lee Ann Mitchell, (Minnesota Coalition for the Homeless), $95; Mark Nygaard, (Remember Kids in Divorce Settlements - R-Kids), $35; and Philip W. Schrader, (Citizens Alliance for Legal Moderation - CALM), $60.

Mr. Anderson's MOTION: To send Third Official Notice of Delinquency to Ms. Grow, Ms. Mitchell, Mr. Nygaard, and Mr. Schrader.

Vote on MOTION: Unanimously passed.

. Nonpayment of late filing fee for the late filing of the Report of Receipts and

Expenditures due 1/31/96

This matter is before the Board for the authorization of a third certified letter to be sent for nonpayment of the late filing fee for the late filing of the report of receipts and expenditures due January 31, 1996. The treasurers listed below have been sent two late filing fee notices, including notice that this matter would be referred to the Board at its meeting of April 26, 1996. Staff has attempted telephone contact with each of these treasurers.

Herminia Cardenas, treasurer, Neighbors for (Carlos) Mariani Committee, $70; David K. Meier, treasurer, (David) Meier Volunteer Committee, $60; Mary Jane Reagan, treasurer, (Mary Jane) Reagan Campaign Committee, $20; Mary Jane Reagan, treasurer, (Mary Jane) Reagan Campaign Committee, $20; and Mary Jane Reagan, treasurer, (Mary Jane) Reagan Campaign Committee, $20.

Ms. Wilson's MOTION: To send Third Official Notice of Delinquency to Ms. Cardenas, Mr. Meier, and Ms. Reagan.

Vote on MOTION: Unanimously passed.

. Nonfiling of an amended Registration and Statement of Organization

This matter is before the Board for the authorization of a third certified letter to be sent for the nonfiling of an amended Registration and Statement of Organization. The former treasurer has resigned. Correspondence was sent to the current chair. The correspondence requested the chair to notify the new treasurer to inform the Board office of the current status of the officers of this committee. Ms. Bougie has been sent two notices, including notice that the matter would be referred to the Board at its meeting of April 26, 1996. Staff has called the former treasurer for his assistance in resolving this matter.

Mary Bougie, chair, St. Cloud State YDFL, 4-0383.

Mr. Anderson's MOTION: To direct staff to call the Minnesota DFL State Central Committee and request help in securing the required amendment and send Third Official Notice of Delinquency to Ms. Bougie.

Vote on MOTION: Unanimously passed.

Mr. Maloney presented a report regarding payment of the following late filings fees:

. Annual Report of Lobbyist Principal due March 15, 1996

Report forms and notice of the report due March 15, 1996, for calendar year 1995 were mailed in February, 1996, to 1,214 individuals or associations identified by registered lobbyists as their "principals". To date 1,143 principals have filed the reports (94%). Staff sent notice to each of the remaining 71 principals reminding them about the requirement to file and informing them that the matter would be reported to the board at its meeting of April 26, 1996. Staff provided a list of the nonfiling lobbyist principals that will be reported to the legislative leadership.

. Payment of late filing fees

George W. Bateman, treasurer, (George) Bateman for Representative, #1-2493 37B, $238.35 (paid through Chapter 13 bankruptcy; $4,992.12 return of public financing remains to be paid for 1990). The Board is on a payment plan through the bankruptcy trustee. It is valid until 1997. Partial repayment of the return of public subsidy based on the 9/19/90, Affidavit of Contributions and the 1/31/91, Report of Receipts and Expenditures.

George Gregorich, treasurer, (George) Gregorich Campaign Fund, #1-3213 7A, $250 for the late filing of the Pre-Primary Election Report of Receipts and Expenditures due 9/6/94. Monthly installments of $25 began October 1, 1995, to date payments totaling $175.55 have been paid.

Richard Villella, treasurer, 4th Congressional District RPM, #2-0051, $320 (paid through Revenue Recapture Claim; $300 late filing fee plus $20 court costs) for the late filing of the Pre-General Election Report of Receipts and Expenditures due 10/31/94.

Francis X. Viggiano, (Minnesota State University Student Association), $70 for the late filing of the Lobbyist Disbursement Report due 4/17/95.

Henry Helgen, (Crown Health Care), $30 for the late filing of the Lobbyist Disbursement Report due 1/16/96.

Laura Spillane, treasurer, (Mike) Spillane Volunteer Committee, #1-3068 39A, $60; Jeanette M. Smith, treasurer, Committee to Elect (Bonnie) Walters, #1-3044 19A, $75; Jeanette M. Smith, treasurer, 19th Senate District DFL, #2-0571, $75; David Schaaf, treasurer, 56A House District DFL, #2-0715, $15; Margaret Erickson, treasurer, Kandiyohi County RPM, #2-0241, $35; James H. Stock, treasurer, Stevens County RPM, #2-0367, $5; James Bernstein, treasurer, Metropolitan Good Government Coalition, #4-0594, $35; Jeanette M. Smith, treasurer, Minnesota NOW PAC, #4-0285, $100; all for the late filing of the Report of Receipts and Expenditures due 1/31/96.

All payments have been deposited in the general fund of the state under Minn. Stat. §10A.34.

Financial Report and Agency Deposits - Mr. Goldsmith submitted reports covering through March, 1996.

ADVISORY OPINION REQUESTS

Requests for the following advisory opinions are nonpublic data.

Advisory Opinion #234 - Relationships between lobbyist principal and legislators

The Board reviewed a draft response to the advisory opinion request from an individual representing a group of officials, as defined in Minn. Stat. §10A.071, who are drawn together as a result of their mutual concerns about certain issues affecting Minnesota State Government who asks questions about officials serving on boards of nonprofit corporations, solicitation by officials of gifts of money to nonprofit corporations, and registration of lobbyists.

Mr. Anderson's MOTION: To approve Advisory Opinion #234 as drafted.

Vote on MOTION: Unanimously passed.

Ms. Owens Hayes cited the potential abuse and circumvention of the law in the situation described in this advisory opinion request and suggested that the matter be brought to the attention of the legislature.

SUMMARY: ADVISORY OPINION #234 as signed by Acting Chair Carolyn Rodriguez, April 26, 1996: An official is not prohibited from being a member of the board of directors of a nonprofit corporation or from receiving reimbursement of actual and reasonable expenses associated therewith. Serving as an uncompensated board member does not make the corporation and associated business of an official so serving. Minn. Stat. § 10A.065 does not apply to solicitation of gifts of money to a nonprofit corporation which do not fall within the statutory definition of contributions. An official is not prohibited by Minn. Stat. § 10A.071 from soliciting gifts of money to a nonprofit corporation as long as the official does not directly benefit from the gift and no part of the gift is transferred to the official. Research and analysis materials related to pending or recommended legislation are generally exempt from the gift prohibition of Minn. Stat. § 10A.071 as services in connection with legislation. A corporation's executive director must register with the Board upon meeting the statutory definition of a lobbyist.

Advisory Opinion #236 - Gift prohibition, future employment

The Board reviewed a draft response to the advisory opinion request from an official who asks if Minn. Stat. 10A.071 prohibits an official who is retiring from public office from seeking employment and from soliciting or accepting employment offers from lobbyists or lobbyist principals.

Ms. Owens Hayes' MOTION: To approve Advisory Opinion #236 as drafted.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #236 as signed by Acting Chair Carolyn Rodriguez, April 26, 1996: The provisions of Minn. Stat. § 10A.071 prohibiting a promise of future employment made by a lobbyist or lobbyist principal to an official do not prohibit bona fide employment search activities, including the making and accepting of offers of employment.

Request for the following advisory opinion is public data.

Advisory Opinion #235 - Gift prohibition, mouse pads to officials

The Board reviewed a draft response to the advisory opinion request from Ronald B. Sieloff, a registered lobbyist, who asks if a computer mouse pad with the name of a company on it is prohibited under the gift prohibitions of Minn. Stat. 10A.071.

Board members discussed and agreed to certain amendments to the draft advisory opinion.

Mr. Anderson's MOTION: To approve Advisory Opinion #235 as amended in discussion.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #235 as signed by Acting Chair Carolyn Rodriguez, April 26, 1996: A gift to an official requested by a lobbyist of a computer mouse pad described by the requester is exempt from the prohibition of Minn. Stat. § 10A.071 because it is of insignificant value.

LEGAL COUNSEL'S REPORT

The Board reviewed a memo from Joan Wood, Assistant Attorney General about the enforcement of injunctive relief in judgments in nine cases presently at the Attorney General's office (see memo attached).

The Board directed staff to review each case and bring a proposal of disposition for Board consideration to the next Board meeting.

STANDING COMMITTEE REPORTS

Personnel Subcommittee Report

Ms. Owens Hayes' MOTION: To accept the recommendation of the Personnel Subcommittee to grant a salary increase of 3% to Jeanne Olson, Executive Director, as allowed under the Manager's Contract, retroactive from January 10, 1996.

Vote on MOTION: Unanimously passed.

Publications and Forms Subcommittee Report - No report.

Legislative Recommendations and Rules Subcommittee Report - Ms. Owens Hayes gave an update on the 1995-96 rulemaking procedure and described the anticipated schedule for the next rulemaking procedure. Ms. Owens Hayes reported that the subcommittee also discussed with staff the possible scope of the next rulemaking procedure.

REPORT FROM EXECUTIVE SESSION

FINDINGS IN THE MATTER OF A COMPLAINT AGAINST THE BELTRAMI COUNTY REPUBLICAN COMMITTEE

The Board found that there was no probable cause to believe that the Beltrami County Republican Committee had violated the provisions of Minn. Stat. Chapter 10A by accepting a contribution with the expressed or implied condition that the contribution be directed to a particular candidate and that the record of the investigation be brought forward into public record (see findings attached).

OTHER BUSINESS

Advisory Opinion #214 - Mr. Goldsmith reported that the answer given to the requester of Advisory Opinion 214, regarding an official's request for a donation from a lobbyist or a lobbyist principal of a nonprofit organization seems to be inconsistent with the issue of Advisory Opinion #234. The Board directed staff to inform the requester of Advisory Opinion #214 by letter of Advisory Opinion #234.

ADJOURNMENT

Meeting adjourned.

Respectfully submitted,

Jeanne Olson, Executive Director

(in absence of secretary)

If you would like to reeive any attachment referred to in these minutes please contact the board office.