STATE OF MINNESOTA
ETHICAL PRACTICES BOARD

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Friday May 23, 1997

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St. Croix Conference Room
Second Floor, Centennial Office Building

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MINUTES

Meeting was called to order by Chair Rodriguez.

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

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

MINUTES (April 25, 1997)

The Board agreed to certain changes in the draft minutes.

Ms. Pauly's MOTION: To approve the April 25, 1997, draft minutes as amended in discussion.

Vote on MOTION: Unanimously passed by five members (Slocum absent).

CHAIR'S REPORT

Board Meeting Schedule - Next Board meeting: Friday, June 27, 1997.

Appointment of Nominating and Personnel Committees - Chair Rodriguez reported making the following appointments:

Nominating Committee - Ms. Pauly, Mr. Slocum, Ms. Rodriguez

Personnel Committee - Mr. Anderson, Ms. Owens Hayes, Ms. Rodriguez

Board Mini-retreat - The Board agreed to hold a mini-retreat following the August 22, 1997, Board meeting at a location to be decided.

EXECUTIVE DIRECTOR'S REPORT

Ms. Olson reported the following:

Staff activities

April 24th - Ms. Olson met with six University of Minnesota students and their professor. The students are in the Community Health Education Masters program and their class is titled Legislative Advocacy Skills for Public Health.

The Office of the Legislative Auditor has notified staff that they will be in the Board office during May and June to conduct the biennial audit of the Board's financial, personnel and public subsidy transactions.

Legislative news - The Government Operations conference committee bill includes the Board's request for the $122,000 for a campaign finance management system. Other provisions in the bill include:

there are changes to the previous report.

Board office matters - The Department of Administration has completed the office remodeling to increase the Board's public area.

Miscellaneous items - The COGEL Nominating Committee has nominated Ms. Olson to the COGEL Steering Committee. The nomination will be voted on by the full membership at the conference in Edmonton.

Authorizing Resolution - A resolution was offered for Board consideration.

Mr. Anderson's MOTION: To adopt the following resolution:

Resolved, that Jeanne Olson, the executive director of the Ethical Practices Board, Gary Goldsmith, the assistant director of the Ethical Practices Board, and Billie Errico, the compliance officer of the Ethical Practices Board, are hereby granted the authority and directed to appear on behalf of the Ethical Practices Board in all Conciliation Court proceedings. All previous delegations of this authority are rescinded.

Vote on MOTION: Unanimously passed.

Board Meeting Dates Fiscal Year 1998 - Board members discussed and agreed upon tentative dates for Board meetings to be held in fiscal year 1998. (See list attached).

Enforcement Report

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

Consent Item

Board Action: Authorization of third letter, to be sent by certified mail, to compel the filing of a required amendment to the Report of receipts and Expenditures for the report covering January 1 through December 31, 1996, and to authorize subsequent legal enforcement action if the report is not filed. An amendment letter and two subsequent notices have previously been sent to this client.

JoAnn Alm, treasurer, Volunteers for (Jerome) DeRose

Ms. Pauly's MOTION: To authorize the actions specified in the consent matter.

Vote on MOTION: Unanimously passed.

Discussion Items

Waiver Request

Karl Anderson, candidate, Friends of Karl Anderson

Mr. Anderson paid a $45 late filing fee for the late filing of his principal campaign committee Report of Receipts and Expenditures due January 31, 1997, filed March 27, 1997. With the payment, he enclosed a letter asking that the late filing fee be waived and refunded to him. Board records indicate that this is the first time this committee has been assessed a late filing fee. The committee terminated its registration, effective December 31, 1996.

Mr. Slocum's MOTION: To: 1) grant Mr. Anderson's request to waive the $45 late filing fee; and 2) refund the $45 late filing fee paid by Mr. Anderson.

Mr. Slocum withdrew his MOTION. No further motion was made.

Review of lobbyist matter for possible administrative termination and/or further enforcement action

Charles O'Connor, representing himself

Charles O'Connor, representing Workers' Compensation Lobby

Mr. O'Connor has never filed itemized lobbyist disclosure reports which are in compliance with the requirements of Chapter 10A. Rather than including specific itemized amounts, his reports have always carried the general statement that total disbursements are less than $500 per year. The last reports filed by Mr. O'Connor were the reports due on April 15, 1996.

Staff has attempted to obtain appropriate disclosure from Mr. O'Connor, however, his consistent response has been that he does not meet the statutory definition of a lobbyist and that his registration is, therefore, voluntary. He further states that because his registration is voluntary, he is not required to comply with the statutory reporting requirements.

The Board has obtained a judgment against Mr. O'Connor requiring amendments to reports filed between January 1, 1991, and April 15, 1996; payment of late filing fees of $400 for the reports due April 15 and July 15, 1996; payment of $30 in costs; and the filing of the reports due July 15, 1996.

Staff requests Board direction on how to proceed with this matter.

Mr. Anderson's MOTION: To: 1) administratively terminate the lobbyist registrations for Charles O'Connor, representing himself and Charles O'Connor, representing Workers' Compensation Lobby with an effective date of June 30, 1996; 2) suspend enforcement activities to obtain amendments to reports filed between January 1, 1991, and April 15, 1996, or to obtain the report due July 15, 1996; 3) continue efforts to collect the late filing fees and costs included in the judgment by placing those items with the state's collections program; 4) place all correspondence in the lobbyist files; 5) continue to maintain the lobbyists files in the active files section of the Board's records; and 6) require all delinquent reports and amendments to be filed by Mr. O'Connor before he registers as a lobbyist in the future.

Vote on MOTION: Unanimously passed.

Informational Items

Payment of Late Filing Fees

Michael Braboy, treasurer, Precinct 19 paid through revenue recapture, including court costs and interest, $155.67.

Greg Dolce, treasurer, 61st Senate District RPM, $100

Harvey Unruh, treasurer, Volunteers for Mitchell Unruh, $55

Scott Goldsmith (Farmers Insurance Group), $100

Robert Lee Fern, (The Ice Cream Bar Assn.), $95

Payment of Civil Fine

(Walt) Filson for House Committee, #13467 47B - During the period January 1 through December 31, 1996, the Filson for House Committee accepted aggregate contributions totaling $5,222.79 from committees of the Republican Party of Minnesota political party. The total amount of these contributions exceeded by $222.79 the applicable $5,000 contribution limit.

Walt Filson entered into a signed a conciliation agreement on May 2, 1997. On May 8, 1997, the committee paid a civil fine of $222.79, one times the excess amount.

All payments of late filing fees and civil fines have been deposited in the general fund of the state pursuant to statute.

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

Spending Plan Fiscal Year 1998 - Board members reviewed a draft spending plan for fiscal year 1998.

Mr. Anderson's MOTION: To approve fiscal year 1998 spending plan as drafted.

Vote on MOTION: Unanimously passed.

ADVISORY OPINION REQUESTS

Requests for the following advisory opinions are nonpublic data.

Advisory Opinion #268 - Gift of transportation

The Board reviewed a draft response to an advisory opinion request by a representative of a Minnesota nonprofit corporation who asks if the nonprofit corporation may give an airline ticket to a public official if the ticket was originally a gift to the corporation from a lobbyist principal.

Mr. Anderson's MOTION: To approve Advisory Opinion #268 as drafted.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #268 signed by Chair Carolyn Rodriguez, May 23, 1997: A gift from a lobbyist principal to a nonprofit corporation which is not a lobbyist principal is not a prohibited gift when later transferred to an official if, at the time of the original gift, the donor was unaware of who would benefit from the gift and the circumstances demonstrate that the underlying purpose of the original gift was not to benefit one or more officials.

Advisory Opinion #269 - Gift of informational audio tape to legislators

The Board reviewed a draft response to an advisory opinion request by the representative of an organization who asks if the organization may provide a free copy of an audio tape of one of its programs to a legislator without violating Minn. Stat. § 10A.071.

Ms. Pauly's MOTION: To approve Advisory Opinion #269 as drafted.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #269 signed by Chair Carolyn Rodriguez, May 23, 1997:

A gift to legislators of an audio tape which costs $1.50 to produce and will be available to the public for between $4 and $6 falls within the exception to the gift prohibitions of Minn. Stat. §10A.071 because it is a gift of informational materials of unexceptional value.

Advisory Opinion #270 - Sale of goods by individual to party unit

The Board reviewed a draft response to an advisory opinion request by a legislator who asks

if the legislator may sell a product to a party unit at less than full retail value price and if the requester's status as a legislator affects the application of Chapter 10A to the sale of this product.

Mr. Slocum's MOTION: To approve Advisory Opinion #270 as drafted.

Vote on MOTION: Unanimously passed by five members (Anderson absent).

SUMMARY: ADVISORY OPINION #270 signed by Chair Carolyn Rodriguez, May 23, 1997:

A sale of a product by an individual to a party unit for less than full retail value results in a donation in kind by the individual to the party unit in the amount which is the difference between the sale price and the full retail value.

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 the United State Supreme Court denied certiorari in the Rosentstiel v. Rodriguez case.

Mr. Goldsmith noted that Sharon Anderson, Sharon Anderson Volunteer (House) Committee, has been sent a demand letter for failure to file the year end Report of Receipts and Expenditures and pay a $100 late filing fee. Board direction is requested as to how to proceed in this matter.

Ms. Owens Hayes' MOTION: Direct staff to: 1) continue collection efforts to obtain the $100 late filing fee; and 2) do not begin a legal action to secure the filing of the Report of Receipts and Expenditures.

Vote on MOTION: Unanimously passed.

LEGISLATIVE RECOMMENDATIONS AND RULES COMMITTEE

Rules Subcommittee

ADJOURNMENT

Meeting adjourned.

Respectfully submitted,

Nancy Wilson, Secretary

(Minutes by staff)

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