STATE OF MINNESOTA
ETHICAL PRACTICES BOARD

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Friday June 27, 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, Perreault, staff; Mike, staff intern; Gretz, counsel.

MINUTES (May 23, 1997)

Mr. Anderson's MOTION: To approve the May 23, 1997, minutes as drafted.

Vote on MOTION: Unanimously passed.

CHAIR'S REPORT

Board Meeting Schedule - Next Board meeting: Friday, July 18, 1997.

Board Mini-retreat - Scheduled for August 22, 1997. Mr. Slocum stated that he would like the Board to consider discussing the Board's expanding leadership role.

Nominating Committee Report - Mr. Slocum reported that the nominating committee met twice and recommends the following slate of officers for Fiscal Year 1998: Chair, Barry Anderson; Vice Chair, Carolyn Rodriguez; and Secretary, Sidney Pauly.

Mr. Slocum's MOTION: To accept the report of the Nominating Committee and declare the election of Mr. Anderson, Chair; Ms. Rodriguez, Vice Chair; and Ms. Pauly, Secretary.

Vote on MOTION: Unanimously passed.

Personnel Committee Report - Mr. Anderson reported that the Personnel Committee met with Ms. Olson for her annual performance review and recommends that due to Ms. Olson's exemplary performance she be accorded an increase in salary and the annual achievement award as allowed under the Manager's Plan.

Mr. Anderson's MOTION: To accept the report of the Personnel Committee and award Ms. Olson the maximum allowable salary increase and annual achievement award based on the Manager's Plan which is currently being negotiated.

Vote on MOTION: Unanimously passed.

EXECUTIVE DIRECTOR'S REPORT

Ms. Olson reported the following:

Staff activities

The staff auditor from the Office of the Legislative Auditor continues the biennial audit of the Board's financial, personnel and public subsidy transactions. The auditor will return in July to complete the audit through the end of fiscal year 1997.

Two meetings were held during June with clients interested in using the Campaign Finance Management System. Staff will attempt to include suggestions made during the meetings in the final product offered to users.

Ms. Olson and Mr. Goldsmith met with representatives of the Department of Revenue concerning methods of electronically providing Political Contribution Receipts for candidates and parties to issue to their contributors.

Personnel items

Mr. Goldsmith reviewed Diana Berg's performance from May, 1996, to May, 1997. Based on the review and in accordance with the MAPE contract, Ms. Berg will receive a step level increase and an achievement award of $1,000.

Ms. Olson introduced:

Nicole Perreault, a recent graduate of Moorhead State University, who began employment in the Board office on June 11th in the position of Clerk Typist III; and

Sara Mike, a student at the University of Wisconsin at LaCrosse, who is working as an unpaid intern in the Board office. Ms. Mike is volunteering 120 hours and will earn 3 credits toward her degree.

Counsel Gretz scheduled a meeting for July 9, 1997, to hear an AFSCME grievance. Barbara Holmes from the Department of Employee Relations, Counsel Gretz, Mr. Goldsmith and Ms. Olson will attend the meeting.

Legislative news

The governor has signed legislation that prevents a sitting legislator who is running for a local office from accepting contributions from lobbyists and political funds during a regular session of the legislature. This provision is in Minn. Stat. §211B.14.

Publications

Copies of the Campaign Finance Summary for election year 1996 were available for Board members.

Miscellaneous items

Staff is working on the Board's Annual Report for fiscal year 1997. Members are invited to call Ms. Swanson at 297-7352 with suggestions about the content or format of the report.

Information was available for Board review about the annual Council on Governmental Ethics Laws (COGEL) conference scheduled September 14 - 17th in Edmonton. The Board agreed by consensus to send Ms. Olson, Mr. Goldsmith, Counsel Gretz, and Mr. Anderson to the conference. Ms. Owens Hayes will be an alternate if Mr. Anderson is unable to attend.

A final update on information about 1997 Legislative action signed by the Governor that has an impact on the Board or Board operations was available for Board members.

Enforcement Report

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

Consent Item

Board Action: Authorization of third certified letter to compel the filing of Lobbyist Disbursement Reports due April 15, 1997, and subsequent legal enforcement action if the report is not filed. A reminder letter and two certified letters have previously been sent to each client.

Bradley N. Clifford, Coalition of Export Minnesota

Bradley N. Clifford, Coalition for the Advance of Telecomm in MN

Robert Lee Fern, Ice Cream Bar Inc. (the)

Conrad E. Lee, VOICE

Mark Nygaard, R-Kids

Peter Hansen Roess, Clean Water Dream Team (the)

Debra A. Williamson, VOICE

Board Action: Authorization of third certified letter to compel the filing of Supplemental Statement of Economic Interest due April 15, 1997, and subsequent legal enforcement action if the report is not filed. A reminder letter and two certified letters have previously been sent to each client.

Marilyn Nelson, Psychology Board

Steve Swonder, Nursing Board

Board Action: Authorization of certified letter to compel the filing of Original Statement of Economic Interest due April 25,1997, and subsequent legal enforcement action if the report is not filed. A reminder letter and two certified letters have previously been sent to the client.

John Nakasone, Urban Initiative Board

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 and to authorize subsequent legal enforcement action if the report is not filed. An amendment letter and one subsequent notice have previously been sent to each client.

Political committee or political fund

Matthew Shay, treasurer, Fran-PAC State Individual

Jerry Beedle, treasurer, Labor Solidarity Committee

Principal Campaign Committee

Bev Berg, treasurer, (Daniel) Stevens for Senate

Geneva Dorsey, treasurer, Friends of Thomas Ross

Carl Borgmann, treasurer, James A. Managan Campaign Committee

Harold T. High, treasurer, United Brotherhood of Fathers, Candidate Harold High for Attorney General

N. Bruce Singer, treasurer, (Bradley) Thorsen for Hennepin County Judge Volunteer Committee

John F. Bonner, treasurer, (James) Weiler Volunteer Committee

Board Action: Authorization of third letter, to be sent by certified mail, to compel the filing of a required amendment to the principal campaign committee's Registration and Statement of Organization and to authorize subsequent legal enforcement action if the report is not filed. An amendment letter and one subsequent notice have previously been sent to the client.

Kevin Correy, candidate, (Kevin) Correy for Senate

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

Report of Receipts and Expenditures due January 31,1997

Laura Spillane, treasurer, Mike Spillane Volunteer Committee: $90

David Meier, treasurer, (David) Meier Volunteer Committee: $100

Donald Cheatham, treasurer, (Donald) Cheatham for State Representative: $30

Harold T. High, treasurer, United Brotherhood of Fathers, Candidate Harold High for Attorney General: $100

Lobbyist Disbursement Report due April 15,1997

Louis Smith, Minnehaha Creek Watershed District: $25

Lisa M. Peterson, Minn. Trucking Association: $5

Statement of Economic Interest Due April 15,1997

M. J. Czarniecki III, Designer Selection Board: $25

William R. Knutson, Medical Review Board: $35

David Beaulieu, Department of Human Rights: $35

Mr. Anderson's MOTION: To authorize the actions specified in the consent matters.

Vote on MOTION: Unanimously passed.

Discussion Items

Waiver Request

William K. Teetzel, candidate, Teetzel For The 90's, #12501 57A - Mr. Teetzel paid a $100 late filing fee for the late filing of the Report of Receipts and Expenditures due January 31,1997, and received on May 27,1997. Mr. Teetzel asks that the late filing fee be waived and refunded to him on the basis that the board had not updated his address in its database.

Ms. Owens Hayes' MOTION: To: 1) grant Mr. Teetzel's request to waive the $100 late filing fee; and 2) refund the $100 late filing fee paid by Mr. Teetzel.

Vote on MOTION: Unanimously passed.

Further Enforcement Action

Tim Knoedler, Knoedler for Minnesota Senate Committee , #13672 6 - The Board imposed a late filing fee of $100 on Mr. Knoedler for the late filing of the pre-primary Report of Receipts and Expenditures due on September 6, 1996, and received on September 13, 1996. A conciliation court hearing is set for July 1, 1997, in Duluth, Minnesota. Staff requests Board direction on whether to proceed with the hearing in Duluth or dismiss the action and proceed only with the Revenue Recapture and Minnesota Collections Enterprise programs.

Mr. Slocum's MOTION: To dismiss the court proceedings against Mr. Knoedler and proceed with the Revenue Recapture and Minnesota Collections Enterprise programs.

Mr. Anderson recommended that staff review the status of the payment of the $100 late filing fee in one year. If the payment has not been recovered, the matter should be brought back to the Board for further discussion. Mr. Slocum accepted this as an amendment to his motion.

Mr. Slocum's AMENDED MOTION: To: 1) dismiss the court proceedings at this time; 2) proceed with the Revenue Recapture and Minnesota Collections Enterprise programs; and 3) direct staff to review payment status in one year and return matter to the Board if the late fee has not been recovered.

Vote on MOTION: Unanimously passed.

Review of Case at Attorney General's Office for further enforcement action.

Joe Block, (treasurer), Kevin Correy, (candidate) and the Correy for Senate Committee, #13655 28 - The Correy for Senate Committee failed to file a pre-general election Report of Receipts and Expenditures due October 28, 1996. The Board obtained a judgment in both Joe Block's and Kevin Correy's names on May 2, 1997. The court order requires the filing of the missing report and the payment of $575 to the Board to be completed within 10 days of the service of the Order. A 20-day notice has been sent and the enforcement of the monetary portion of the judgment can be handled by the Minnesota Collections Enterprise.

On April 3, 1997, Mr. Block sent a letter resigning as treasurer of the committee and stating that he had at no time signed checks for expenditures nor had possession of the receipts of expenditures. Mr. Block moved to Arizona on November 2, 1996. Mr. Correy still resides in Owatonna.

Board records show that $12,933.30 of public subsidy was paid to Mr. Correy in 1996. The Committee had not reported any cash expenditures as of October 7, 1996. Staff requests Board direction in this matter.

Mr. Anderson's MOTION: To: 1) proceed with enforcement action against Kevin Correy for the non-monetary and monetary portion of the judgment; 2) commence a separate legal action to recover the full amount of public subsidy paid; and 3) discontinue enforcement action against Joe Block.

Vote on MOTION: Unanimously passed.

Informational Items

Payment of Late Filing Fees

William A. Bierman, Jr., (Representing Edina Fireman's Relief Association): $50

Kris Jacobs (Representing Jobs Now Coalition): $25

William R. Kennedy (Representing Hennepin County Public Defenders): $20

Greg Knutson, (Representing Greg Knutson): $30 (Revenue Recapture)

Christopher B. Morton (Representing Minnesota Food Share): $55

Joy Sorenson Navarre, (Representing Common Bond Communities): $60

Roger M. Cooper, Former Legislator, House of Representatives: $30

James Gaviser, Board of Medical Practice: $60

Donald L. Moos, treasurer, (Becky) Livermore Volunteer Committee: $75 (partial payment on installment schedule)

Robert Burton, treasurer, (Marc) Heisenfelt for House: $10

Robert Burton, treasurer, Connie Heisenfelt for House: $30

William K. Teetzel, treasurer, Teetzel for the 90's: $100

Payment of Civil Fines

Committee to Elect Kathy Weeks to the Minnesota House, # 13417 32B - During the period of January 1 through December 31,1996, the Committee to Elect Kathy Weeks to the Minnesota House accepted $4,641.15 in contributions from special sources, which are political committees or political funds. The total amount of these contributions exceeded by $84.15 the applicable $4,557 limit on aggregate contributions from special sources. Kathy Weeks entered into a conciliation agreement, effective May 31,1997, to remedy this matter. On June 2, 1997 the Committee paid a civil fine of $84.15, one times the excess amount.

Don Frerichs Volunteer Committee, #11264 31A - During the period of January 1 through December 31, 1996, the Don Frerichs Volunteer Committee made campaign expenditures which exceeded the applicable expenditure limit by $168.35. Don Frerichs entered into a conciliation agreement, effective June 6,1997, to remedy this matter. On June 5, 1997 the Committee paid a civil fine of $336.70, two times the amount by which the expenditures exceeded the applicable expenditure limit.

Koering for Senate Volunteer Committee, #13376 12 - During the period of January 1 through December 31,1996, the Koering for Senate Volunteer Committee accepted aggregate contributions totaling $5,155 from the committees of the Republican Party of Minnesota. The total of these contributions exceeded the $5,000 contribution limit by $155. Paul Koering entered into a conciliation agreement, effective May 31,1997, to remedy this matter. On May 30, 1997 the Committee paid a civil fine of $155, one times the amount by which the contributions exceeded the applicable limit.

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

Return of Public Subsidy

George W. Bateman, treasurer, (George) Bateman for Representative, #12493

$151.77 partial payment through chapter 13 bankruptcy. $2071.82 return of public subsidy financing remains to be paid for 1990.

Financial report and agency deposits - Mr. Goldsmith submitted reports covering July, 1996, through June 26, 1997.

Outstanding Loans in Excess of Contribution Limit - At its meeting of October 25, 1996, the Board reviewed instances in which loans were made to principal campaign committees in excess of statutory limits. The Board voted to review this matter following the 1997 legislative session. Based on reports filed for 1996, staff determined that no committee is in violation of the limits on loans. The Board agreed to continue with the current guidelines and review those guidelines following the Report of Receipts and Expenditures filings due February 2, 1998.

ADVISORY OPINION REQUESTS

Requests for the following advisory opinions are nonpublic data.

Advisory Opinion #271 - Disposition of political committee assets

The Board reviewed a draft response to an advisory opinion request by the treasurer of a political committee (the "Committee") registered with the Ethical Practices Board (the "Board") who asks if the Committee may make contributions of Committee funds to nonprofit organizations which are not political committees or political funds registered with the Board and if the Committee may return contributions to the original sources under the plan proposed by the Committee.

Mr. Slocum's MOTION: To approve Advisory Opinion #271 as drafted.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #271 signed by Chair Carolyn Rodriguez, June 27, 1997:

Issue of whether a political committee may make large contributions to nonprofit organizations arises under Minnesota Statutes, chapter 211B, which is not within the jurisdiction of the Board. Under circumstances described, return of contributions to original sources by the political committee is an appropriate noncampaign disbursement.

Advisory Opinion #272 - Withdrawn by the requester.

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 noted that the matter of EPB v. Charles J. O'Connor should not have appeared on the report per Board action taken May 23, 1997.

LEGISLATIVE RECOMMENDATIONS AND RULES COMMITTEE

Rules Subcommittee

Mr. Goldsmith reported that the Board's rules appeared in the June 23rd issue of the State Register and will take effect July 1, 1997.

MATTERS BROUGHT FORWARD FROM EXECUTIVE SESSION

Findings in the Matter of a Complaint Regarding the (Brian) Skon Volunteer Committee

The Board found that there is no probable cause to believe that the Brian Skon Volunteer Committee violated the Ethics in Government Act, Minnesota Statutes Chapter 10A by contributing to the 40th Senate District Republican Party of Minnesota Committee, exceeding its campaign spending limit in 1996, or failing to report a donation in-kind. The complaint of Erich Russell against the (Brian) Skon Volunteer Committee is dismissed in all respects. The record in this matter and all correspondence is hereby entered into the public record (see findings attached).

Findings in the Matter of the Acceptance of Aggregate Contributions from Political parties in Excess of Contribution Limits by the Connie Heisenfelt for House Committee

The Board found that there is probable cause to believe that the Connie Heisenfelt for House Committee violated the Ethics in Government Act, Minnesota Statutes Chapter 10A by accepting aggregated contributions from committees of the Republican Party of Minnesota which exceeded the applicable limit. The Board was unable to remedy the matter by entering into a conciliation agreement with Ms. Heisenfelt within the time allowed. The legal action required by Minn. Stat. §10A.28, subd. 4, to compel payment of the fine shall be deferred for 30 days from the date of this order. If the fine is paid within this period, no legal action shall be commenced. If the fine is not paid within 30 days, the Executive Director, Pursuant to Minn. Stat. §10A.02, subd. 11, shall report the finding of probable cause to the appropriate law enforcement authority. 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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