STATE OF MINNESOTA
ETHICAL PRACTICES BOARD

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Friday, February 28, 1997

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Blazing Star Conference Room
Ground Floor, Centennial Office Building

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MINUTES

Meeting was called to order by Chair Rodriguez.

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

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

Mr. Slocum informed Board staff that he would be unable to attend the meeting.

MINUTES (January 24, 1997)

Mr. Anderson's MOTION: To approve the January 24, 1997, minutes as drafted.

Vote on MOTION: Unanimously passed by four members (Owens Hayes absent).

CHAIR'S REPORT

Board Meeting Schedule - Next Board meeting: Friday, March 21st.

EXECUTIVE DIRECTOR'S REPORT

Staff activities - Ms. Olson reported the following staff outreach:

February 4 - Ms. Olson met with Steve Dornfeld from the Pioneer Press and 12 members of a legislative reporting class that he is teaching this semester. The class visited the Board office and became familiar with available public information.

Board members and Ms. Olson met with Representatives Sviggum, Winter, and Milbert to discuss the Board's legislative recommendations.

Ms. Olson presented information to the Senate Elections Committee about various bills the committee is considering.

Ms. Olson and Mr. Goldsmith presented the Board's FY98/99 budget and technology request to members of the House appropriations committee.

February 19 - Ms. Olson spoke to a Legislative Practicum class of students in the Masters in Public Administration program at Hamline University.

Personnel issues - LuAnn Swanson received an annual performance review from March, 1996, to February, 1997. Ms. Swanson's job was reclassified last year, therefore she was not eligible for a step increase. However, an Achievement Award was approved under provisions of the Middle Management Association contract.

Board office matters (see May 31st, June 21st, September 20th and October 25th minutes) - The Department of Administration continues to work on the office remodeling to increase the Board's public area.

Informational materials for Board members - A compilation of Board Decision's made during 1996 was available for Board members.

Request for information: Jeff Anderson, legal counsel for Mary Hennessey requested to meet with Ms. Olson and Mr. Goldsmith. Counsel Gretz advised Ms. Olson that if Mr. Anderson calls again, he should be referred to Counsel Gretz.

Enforcement Report

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

Consent Items

Board Action: Authorization of a third letter, to be sent by certified mail, for nonpayment of late filing fees and subsequent legal enforcement action, in the event the fee is not paid. Two notices have previously been sent to each client.

(Mike) Schultz Volunteer Committee, $500; and

(Dean) Urdahl for 15B Volunteer Committee, $450.

Board Action: Authorization of a third letter, to be sent by certified mail, requiring filing of an amendment to the Registration and Statement of Organization and subsequent legal enforcement action, in the event the amendment is not filed. Two notices have previously been sent to the client.

Joy Reis, Aitkin County DFL Club, $0.

Board Action: Authorization of a third certified letter for nonfiling of the Lobbyist Disbursement Report and subsequent legal enforcement action, in the event the report is not filed. Two notices have previously been sent to each client.

Richard D. Aspenwall, Self, $0;

Val Baertlein, Minnesota Coalition for the Homeless, $0 ;

William Bierman Jr., Edina Fireman's Relief Association, $25 and accruing;

John F. Bonner, Minnesota Manufactured Housing Association, $0;

Denise M. DeVaan, Minnesota Community Action Association, $0;

Carol Jean Engel, Hennepin County Community Corrections, $20 and accruing;

Robert Lee Fern, Ice Cream Bar Association (The), $25 and accruing;

Scott K. Goldsmith, Farmers Insurance Group, $30 and accruing;

Kim Zikovich Mastro, Association of Minnesota Counties, $30 and accruing;

Mark Nygaard, R-Kids (Remember Kids in Divorce Settlements), $30 and accruing;

Charles J. O'Connor, Self, $5 and accruing;

Charles J. O'Connor, Workers' Compensation Lobby, $5 and accruing;

Marcia L. Opstad, Minnesota Association of Professional Employees (MAPE), $10 and

accruing; and

Brent W. Primus, International Express Corporation, $10 and accruing.

Ms. Wilson's Motion: To authorize the actions specified in the consent matters.

Vote on MOTION: Unanimously passed by four members (Owens Hayes absent).

Discussion Items

Waiver Request - Campaign Finance Program Report of Receipts and Expenditures due 10/28/96

Don Koenig, treasurer, Elect Don "Dr. Freedom-532 Million" Koenig, 1-3623 12, report filed 11/13/96, $200. No motion was made.

Request to Terminate Registration With an Unpaid Bill

Carla Behnke, treasurer, Friends of (Betsey) Whitbeck, 1-3042 60A - This committee has one outstanding bill to Lavigne Design reported as $255, incurred on July 21, 1994. The committee has challenged this bill and Ms. Whitbeck believes it should only be about $28 to $30. Ms. Whitbeck states messages were left for the sole proprietor and that the last attempt resulted in notification that the company has gone out of business. This committee tried to terminate on the January 31, 1996, report, but was notified by Board staff that due to the unpaid bill the committee could not terminate. The committee's cash balance is $0 as of the January 31, 1997, report.

Ms. Wilson's MOTION: To grant Ms. Whitbeck's request to allow the Friends of (Betsey) Whitbeck committee to terminate with an unpaid bill.

Vote on MOTION: Unanimously passed by four members (Owens Hayes absent).

Board Recommendation on Cases Returned From the Attorney General's Office

Information about the following individuals, returned to the Board office from the Attorney General's Office, is included for the Board to review and to consider administrative termination:

Nick Tretinyak, treasurer, (Nick) Tretinyak Election Committee, 1-2979 30A - The last report filed for the (Nick) Tretinyak Election Committee, due January 31, 1994, for the calendar year 1993, shows an ending cash balance of $0.

Nick Tretinyak, treasurer, (Nick) Tretinyak for State Auditor Committee, 1-3073 AC - A Report of Receipts and Expenditures was never filed for the (Nick) Tretinyak for State Auditor Committee. The candidate did not receive public subsidy in the 1994 election year. Mail is currently being returned with no forwarding address on file.

Two judgments, one for each of these committees, have been obtained for the nonfiling of the Reports of Receipts and Expenditures, due January 31, 1995, covering the period January 1 through December 31, 1994, and the subsequent late filing fees.

At its meeting of May 31, 1996, the Board reviewed these matters and decided to only pursue the collection of the monetary portion of the judgments. The monetary portions of the judgments were referred to the Minnesota Collection Enterprise and revenue recapture for enforcement. Late filing fees and judgment interest, totaling $262.50, are currently at revenue recapture for collection. The Minnesota Collection Enterprise and the attorney general's office have returned these items to the Board office.

Ms. Pauly's MOTION: To: 1) administratively terminate the (Nick) Tretinyak Election Committee and the (Nick) Tretinyak for State Auditor Committee; 2) place all correspondence in the committee files; and 3) retain the files in the active file should either committee become active in the future.

Vote on MOTION: Unanimously passed by four members (Owens Hayes absent).

Dale Ubelhoer, treasurer, Paul Revere PAC, 4-0706 - The last Report of Receipts and Expenditures filed for this committee covered the period January 1 through December 31, 1994, and shows an ending cash balance of $0. The committee registered on February 2, 1994.

Dale Ubelhoer, lobbyist, (Paul Revere PAC) - The Lobbyist Disbursement report due on January 17, 1995, covering the period July 1 through December 31, 1994, was the last report filed and disclosed no activity.

Judgments have been obtained for the nonfiling of the Report of Receipts and Expenditures due January 31, 1996, covering the period January 1 through December 31, 1995, for the Paul Revere PAC and the Lobbyist Disbursement Report due April 17, 1995, covering the period January 1 through March 31, 1995, and the subsequent late filing fees.

At its May 31, 1996, meeting the Board reviewed this matter and decided to only pursue the collection of the monetary portions of the judgments. The monetary portions of the judgments were referred to revenue recapture and the Minnesota Collection Enterprise for enforcement. All late filing fees and judgment interest for Mr. Ubelhoer total $254.69. The matter is currently in the revenue recapture process for collection. The Minnesota Collection Enterprise and the attorney general's office have returned these cases to the Board office.

Mr. Anderson's MOTION: To: 1) administratively terminate the Paul Revere PAC and the lobbyist registration of Dale Ubelhoer, for the Paul Revere PAC; 2) place all correspondence in the committee and lobbyist files; and 3) retain the files in the active file should either the committee or the lobbyist become active in the future.

Vote on MOTION: Unanimously passed by four members (Owens Hayes absent).

Diane Listerud, lobbyist, (Paul Revere PAC) - The Lobbyist Disbursement report due on July 15, 1994, covering the period April 1 through June 30, 1994, was the last report filed and disclosed no activity.

A judgment had been obtained for the nonfiling of the Lobbyist Disbursement Report due January 17, 1995. On June 11, 1996, the Board received $160 in late filing fees and court costs from revenue recapture for the nonfiling of the Lobbyist Disbursement Report due January 17, 1995.

Ms. Pauly's MOTION: To: 1) administratively terminate the lobbyist registration of Diane Listerud for the Paul Revere PAC; 2) place all correspondence in the lobbyist file; and 3) retain the file in the active file should the lobbyist become active in the future.

Vote on MOTION: Unanimously passed by four members (Owens Hayes absent).

Board Recommendation Whether to Proceed With Collection Process

Sharon Anderson, candidate - Ms. Anderson filed for the 64th Senate District seat on July 3, 1996. A Statement of Economic Interest was due July 17, 1996. As of today, Ms. Anderson has not filed the required Statement. At the November 22, 1996, executive session the Board voted not to pursue the filing of the Statement in court, but to pursue the $100 late filing fee. The next step in this process is to send the matter to revenue recapture. If the Board proceeds in this manner Ms. Anderson is allowed the opportunity to request a hearing before the Board. Staff requests Board direction in this matter.

The Board directed staff to notify Ms. Anderson that the Board will be pursuing the $100 late filing fee through the revenue recapture process and give her the opportunity to request a hearing to contest the validity of the Board's claim.

Report To Board

Resolution of matter

Edmond Hanson, treasurer, Political Education Fund of Local 21, 3-0154 (laid over from the January 24, 1997, meeting) (see January 24th minutes)

Staff is in receipt of the required amendment. This matter is resolved.

Informational Items

Payment of Civil Penalty

(Bill) Hilty Volunteer Committee, #1-3556 8B - The Board investigated in executive session, on January 24, 1997, the committee's acceptance of contributions from registered lobbyists and political committees and funds during 1996, which exceeded the applicable contribution limit. On February 11, 1997, the (Bill) Hilty Volunteer Committee paid a civil fine of $43, one times the excess amount. Representative Hilty entered into a conciliation agreement with the Board to remedy the matter that was signed by the Board Chair on February 12, 1997.

(Steve) Smith Volunteer Committee, #1-2385 34A - The Board investigated in executive session, on May 31, 1996, the committee's acceptance of contributions from registered lobbyists and political committees and funds during 1995, which exceeded the applicable contribution limit. On January 27, 1997, the (Steve) Smith Volunteer Committee paid a civil fine of $2,658, three times the excess amount. Representative Smith entered into a conciliation agreement with the Board to remedy the matter that was signed by the Board Chair on July 26, 1996.

All payments of these civil fines have been deposited in the general fund of the state under Minn. Stat. §10A.28.

Conciliation Agreement

(Paula) Hanson for Senate Committee, #1-2821 50 - The Board investigated in executive session on January 24, 1997, the committee's acceptance of contributions from registered lobbyists and political committees and funds during 1996, which exceeded the applicable contribution limit. Senator Hanson entered into a conciliation agreement with the Board to remedy the matter that was signed by the Board Chair on February 15, 1997. A civil fine of $2,031 must be paid within 30 days of the date that the agreement was signed by the Board Chair.

Payment of late filing fees

George W. Bateman, treasurer, (George) Bateman for Representative, #1-2493 37B, two partial payments of $252.95 and $202.36 for the return of public subsidy paid through Chapter 13 bankruptcy ($2,628.31 return of public financing remains to be paid for 1990).

Donald L. Moos, treasurer, (Becky) Livermore Volunteer Committee, #1-3282 4 - $25 partial payment on installment payment schedule for a $500 late filing fee for the late filing of the Report of Receipts and Expenditures due 10/28/96 ($225 remains to be paid).

James H. Stock, treasurer, Stevens County RPM, #2-0367, $50;

Roger E. Battreall, treasurer, AFSCME Local 2938, #3-0343, $500;

William McManus, treasurer, Republican National State Elections Committee,

#4-0464, $500.

Roger E. Battreall, treasurer, AFSCME Local 2938, #3-0343, $100;

Harold Anderson, treasurer, Tenth Ward & Rural Ramsey DFL Donut Booth, $400;

Deon D. Stuthman, treasurer, U of M Faculty Candidate Support , #4-0245, $450.

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

Return of Public Subsidy - Public Subsidy Received was Greater Than Campaign Expenditures

(Ellen) Anderson for Senate Volunteer Committee (Sen. - 66) $3,329.80;

(David) Bishop Volunteer Committee (Rep. - 30B) $1,200.83;

(Jack) Downer for Senate (Sen. - 45) $9,629.46;

Committee to Elect (Charles) Finck (Rep. - 19B) $969.22;

(Alice) Hausman Volunteer Committee (Rep. - 66B) $3,256.20;

Committee to Elect (Bill) Kuisle (Rep. - 31A) $1,618.69;

(Steve) Lagoon for Senate Campaign Committee (Sen. - 57) $3,321.23;

(Jess) Lehman for Representative 45A (Rep. - 45A) $5,147.10;

(Margaret) Leppik Volunteer Committee (Rep. - 45B) $512.00;

(Mike) Mann Volunteer Committee (Rep. - 42B) $913.20;

(Jane) Ranum Volunteer Committee (Sen. - 63) $2,795.28;

(Steve) Thibault for State Representative Committee (Rep. - 66B) $2,308.84;

(Kenneth) Wohlford Volunteer Committee (Rep. - 67B) $406.30;

(Paul) Wright Volunteer Committee (Rep. - 20A) $1,284.73; and

Citizens for (Lynn) Wuytowicz (Rep. - 60B) $2,227.75.

Fifteen candidates returned $38,920.63 under Public Financing Agreement, 1996 election. All payments have been deposited in the general fund of the state under Minn. Stat. §10A.324.

Return of Public Subsidy - Excess Carry Forward Amount

(Alice) Hausman Volunteer Committee (Rep. - 66B) $672.21;

(Margaret) Leppik Volunteer Committee (Rep. - 45B) $2,462.00;

(Bill) Macklin Volunteer Committee (Rep. - 37B) $1,472.32;

(Myron) Orfield Volunteer Committee (Rep. - 60B) $1,270.44; and

(Sam) Solon Volunteer Committee (Sen. - 7) $920.82.

Five candidates returned $6,797.79 under Public Financing Agreement, 1996 election. All payments have been deposited in the general fund of the state under Minn. Stat. §10A.324.

Financial report and agency deposits - Mr. Goldsmith submitted a report covering July, 1996, through January, 1997.

Discussion about use of campaign funds (laid over from January 24, 1996, meeting) (see January 24th minutes) - The Board reviewed and discussed a memo from staff requesting direction from the Board in dealing with questions related to use of campaign funds for both campaign expenditures and noncampaign disbursements. (See copy of memo attached).

The Board directed staff to draft proposed guidelines based on the Board's discussion for Board review at the March 21st meeting.

ADVISORY OPINION REQUESTS

Request for the following advisory opinion is public data.

Advisory Opinion #258 - Gift exception for members of a group

The Board reviewed a draft response to an advisory opinion request by Peter J. Orput, a representative of the Minnesota Chiefs of Police Association who asks if entertainment and mementos purchased by the Association with a contribution from a lobbyist principal are prohibited by Minn. Stat. § 10A.071 when they are provided to Association members who are local officials of metropolitan governmental units; and if the described gifts are prohibited by Minn. Stat. § 471.895?

The Board agreed to certain language changes to the draft response.

Mr. Anderson's MOTION: To approve Advisory Opinion #258 as amended in discussion.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #258 signed by Chair Carolyn Rodriguez, February 28, 1997: The gift prohibition of Minn. Stat. § 10A.071 does not apply to gifts given to members of an association if the gifts are given because of membership in the association; the same gift is given to each member; and a majority of the members are not officials as defined in the statute.

Requests for the following advisory opinions are nonpublic data.

Advisory Opinion #259 - Gift of a dinner to legislators

The Board reviewed a draft response to an advisory opinion request from a legislator who asks if the gift of a dinner is permitted under an exception to the gift prohibition of Minn. Stat. § 10A.071 if attending officials participate in a program consisting of an informal, open dialog, which includes questions and answers? John Aptiz, a registered lobbyist, appeared before the Board to present additional information about the event in question.

Ms. Owens Hayes' MOTION: To approve Advisory Opinion #259 as drafted.

The Board discussed certain language changes to the draft response.

Mr. Anderson's AMENDED MOTION: To approve Advisory Opinion #259 as amended in discussion.

Vote on MOTION: Yes - Anderson, Owens Hayes.

No - Pauly, Rodriguez, Wilson.

Motion failed.

Ms. Owens Hayes' withdrew her MOTION.

The Board agreed to certain language changes to the draft response.

Ms. Pauly's MOTION: To approve Advisory Opinion #259 as amended in discussion.

Vote on MOTION: Unanimously passed by four members (Owens Hayes abstained).

SUMMARY: ADVISORY OPINION #259 signed by Vice Chair Barry Anderson, March 8, 1997: Informal discussion, including questions and answers at a dinner, does not meet the requirements to except the dinner from the gift prohibition, even if invitations indicate that participants are expected to engage in this interaction.

Advisory Opinion #260 - Fundraising for local office campaign by Chapter 10A candidate

The Board reviewed a draft response to an advisory opinion request from a legislator who asks if the Minn. Stat. § 10A.065 prohibition on certain fundraising during the legislative session applies to a candidate with respect to solicitation or acceptance of money or benefits to support the candidate's local office campaign; and if a transfer of money or benefits from, or at the request of, a lobbyist or a lobbyist principal to an official's campaign for local office is a prohibited gift under Minn. Stat. § 10A.071?

The Board agreed to certain language changes to the draft response.

Ms. Owens Hayes' MOTION: To approve Advisory Opinion #260 as amended in discussion.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #260 signed by Chair Carolyn Rodriguez, February 28, 1997: Minn. Stat. § 10A.065, which prohibits certain fundraising by candidates during the legislative session is not applicable to fundraising for a local campaign. Minn. Stat. § 10A.071, which prohibits gifts from lobbyists to officials is not applicable to a contribution by a lobbyist to an official's campaign for local office.

LEGAL COUNSEL'S REPORT

Board members reviewed a memo from Counsel Gretz outlining the status of cases which have been turned over to the Attorney General's office (see memo attached).

Counsel Gretz reported that since the memo was written a bench warrant was issued for the arrest of Phil Ratté for contempt of court.

LEGISLATIVE RECOMMENDATIONS AND RULES COMMITTEE

Committee Chair Owens Hayes reported that Ms. Rodriguez, Ms. Olson, and she had attended a series of meetings with members of the legislative leadership to present and discuss the Board's Legislative Recommendations for 1997. Committee Chair Owens Hayes, Ms. Olson, and Mr. Goldsmith also attended and presented information to the House appropriation committee hearing on the Board's budget.

A draft of the formal rules proposal was published in the State Register on February 24th.

MATTERS BROUGHT FORWARD FROM EXECUTIVE SESSION

Complaint of Mel Duncan Regarding the Republican Victory Club

The Board found that there is probable cause to believe that a reporting violation exists because the Republican Victory Club did not disclose occupational or employment information for all individual contributors itemized on amended reports filed for calendar years 1994 and 1995. Pursuant to Minn. Stat. §10A.02, subd. 11, the Executive Director shall report the finding of probable cause to the appropriate law enforcement authority. The complaint of Mel Duncan regarding the Republican Victory Club is dismissed in all respects. The record in this matter and all correspondence is hereby entered into the public record (see findings attached).

ADJOURNMENT

Meeting adjourned.

Respectfully submitted,

Nancy Wilson, Secretary

(Minutes by staff)

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