STATE OF MINNESOTA
CAMPAIGN FINANCE AND PUBLIC DISCLOSURE BOARD

. . . . . . . . .

Friday September 26, 1997

. . . . . . . . .

Camden Conference Room
Second Floor, Centennial Office Building

. . . . . . . . .

MINUTES

Meeting was called to order by Chair Anderson.Members present: Anderson, Owens Hayes, Pauly, Rodriguez, Slocum, Wilson.Others present: Olson, Goldsmith, Swanson, Perreault, staff; Gretz, counsel; Simonett, special independent counsel.MINUTES (August 22, 1997)Ms. Rodriguez's MOTION: To approve the August 22, 1997, minutes as drafted.

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

ADVISORY OPINION REQUESTS

Requests for the following advisory opinions are nonpublic data.

Advisory Opinion #273 - Gift to members of a group of conference receptions or meals

(laid over from the August 22, 1997, meeting) (see August 22nd Board minutes)

The Board reviewed two draft responses to the advisory opinion request.

Ms. Owens Hayes' MOTION: To make certain language changes in the first paragraph on page three in Advisory Opinion #273, draft #1.

Vote on MOTION: Unanimously passed.

Ms. Owens Hayes' MOTION: To amend Advisory Opinion #273, draft # 1 to delete the last paragraph on page four.

Vote on MOTION: Unanimously passed.

Ms. Wilson's MOTION: To approve draft #1 of Advisory Opinion #273 as amended.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #273 signed by Chair Barry Anderson, October 13, 1997:

Gift of meal or reception by lobbyist principal to all members of a membership organization may be exempt from gift prohibition if each criteria for application of Minn. Stat. § 10A.071, subd. 3(b)(1), is met.

Advisory Opinion #274 - Definition of "opponent" for application of Minn. Stat. § 10A.25, subd. 10, releasing candidates from expenditure limits in certain situations.

The Board reviewed a draft response to an advisory opinion request by a representative of a candidate with a principal campaign committee registered with the Board who asks for a definition of "opponent" of a candidate for the purpose of Minn. Stat. § 10A.25, subd. 10, which provides for the release of a candidate from expenditure limits based on specified actions of the opponent and how does a candidate know if the candidate is released from the expenditure limit.

Former Supreme Court Justice Simonett advised the Board in this matter and was present for consideration of the draft response.

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

Ms. Rodriguez's MOTION: To approve Advisory Opinion #274 as amended in discussion.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #274 signed by Chair Barry Anderson, September 26, 1997:

"Opponent", as used in Minn. Stat. § 10A.25, subd. 10, means a candidate's opponents in a general election. The Board will notify an affected candidate when it becomes aware that the candidate is released from the expenditure limit as a result of the application of Minn. Stat. § 10A.25, subd. 10.

Chair Anderson thanked Justice Simonett for reviewing the advisory opinion and being available at the Board meeting for questions and comments.

Mr. Slocum suggested that the Board's Legislative Recommendation Committee consider including this matter in the 1998 recommendations to the legislature.

Advisory Opinion #275 - Definition of constituent services

The Board reviewed a draft response to an advisory opinion request by a legislator who asks if the cost of signs, as described in the facts, may be reported on the Report of Receipts and Expenditures as noncampaign disbursements for constituent services.

Ms. Rodriguez's MOTION: To approve Advisory Opinion #275 as drafted.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #275 signed by Chair Barry Anderson, September 26, 1997:

The cost of signs advertising a legislator's status as an official, name, and telephone number must be reported as campaign expenditures.

Advisory Opinion #276 - Consideration for transaction which would otherwise be a prohibited gift

The Board reviewed a draft response to an advisory opinion request by the representative of an association which is a lobbyist principal who asks if a trip, as described in the facts, is excluded from the definition of a gift under Minn. Stat. § 10A.071 based on the consideration to be paid for it, and if consideration of equal or greater value is not paid, does the gift, nevertheless, fall within any exception to the general prohibition of gifts under Minn. Stat. § 10A.071.

Ms. Owens Hayes MOTION: To approve Advisory Opinion #276 as drafted.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #276 signed by Chair Barry Anderson, September 26, 1997:

Payment of consideration of equal or greater value for food and lodging removes the benefit from the definition of a gift under Minn. Stat. § 10A.071.

CHAIR'S REPORT

Board Meeting Schedule - Next Board meeting: Friday, October 31, 1997, 1:30 p.m.

1998 Board Objectives - The Board reviewed a draft of the 1998 Objectives of the Campaign Finance and Public Disclosure Board based on discussion at the Board retreat held August 22, 1997.

Ms. Rodriguez's MOTION: To approve the 1998 Objectives of the Campaign Finance and Public Disclosure Board as drafted.

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

Appointment of Legislative Recommendations Committee - Chair Anderson announced the following appointments to the Board's 1998 Legislative Recommendations Committee: Ms. Rodriguez, chair, Ms. Pauly, and Mr. Slocum.

Conference on Governmental Ethics Laws (COGEL) Conference - Chair Anderson, Ms. Owens Hayes, Counsel Gretz, and Ms. Olson each gave a brief report on the COGEL Conference. Chair Anderson noted that Ms. Olson was elected by the membership of COGEL to a three year term on the Steering Committee.

Ms. Olson reported that the Steering Committee members elected her as Secretary for a term from September, 1997 to September, 1998. She will also serve as chair of the site selection committee, reviewing applications from those members who wish to have the Annual COGEL Conference in their cities both for 2000 and 2001. In addition, Ms Olson was selected as the Steering Committee representative to a committee funded by a Joyce Foundation grant that COGEL is administering. The purpose of the grant is to establish a standardized format for electronic filing for all jurisdictions.

EXECUTIVE DIRECTOR'S REPORT

Ms. Olson reported the following:

Staff activities

Staff continues its negotiations with McMullen Software Corporation to award the contract for the Campaign Finance Management System. Gary is working on a prototype of the application in an attempt to keep the contract price within budget.

Ms. Hansen, Programs Administrator, notified the State Treasurer's Office about public subsidy available for the candidates in the special election in House District 11B.

Personnel

Ms. Olson reviewed Mr. Goldsmith's performance from September, 1996, to August, 1997, and rated his overall performance as above standards. Mr. Goldsmith will receive a salary increase based on the Manager's Plan which is currently being negotiated.

No response was received to Ms. Olsons written response regarding the Step 3 grievance procedure. The 60 day appeal time ran out on September 12, 1997.

Miscellaneous

The legislative auditor released a report on their biennial review of Board operations and public subsidy. The report finds that controls are in compliance and issues no findings or suggestions. Board members should be receiving a copy of the report directly from the Office of the Legislative Auditor.

Publications

Copies of the Board's Annual Report for fiscal year 1997, and the Lobbyist Disbursement Summary were provided to Board members.

Board Resolution - The Board reviewed a draft resolution relating to procedures to notify candidates of release from campaign expenditure limits pursuant to Minn. Stat. §10A.25, subd. 10.

Ms. Rodriguez's MOTION: Resolved, that the Executive Director of the Campaign Finance and Public Disclosure Board shall monitor filings under Minnesota Statutes, chapter 10A, filings of affidavits of candidacy, and certifications of canvassing boards, to determine whether the conditions are met for release of a general election candidate from campaign expenditures limits pursuant to Minn. Stat. §10A.25, subd. 10. When the Executive Director has sufficient information to reach a definitive conclusion with respect to such a release, the Executive Director shall notify all affected candidates of their release. The Board will not take action against a candidate who exceeds the candidate's campaign expenditure limits in reliance on such a notice.

Vote on MOTION: Unanimously passed.

Enforcement Report

Ms. Perreault presented the following enforcement matters for Board action:

Consent Items

Board Action: Authorization of third certified letter to compel the filing of Lobbyist Disbursement Report due July 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 the client.

Kenneth E. Hardy, (Representing National Association of Minority Contractors -Emerging Small Business Program)

Board Action: Authorization of a certified letter to compel the filing of an amendment to the Report of Receipts and Expenditures covering the period January 1 through December 31, 1996, and subsequent legal enforcement action if the amended report is not filed. Two notices have been previously sent to the client.

Steven Ringsmuth, treasurer, 16th Senate District RPM

Board Action: Authorization of a certified letter to compel the filing of an amendment to the Lobbyist Disbursement Report due July 15,1997, and subsequent legal enforcement action if the amended report is not filed. Two notices have been previously sent to each client.

Carol Overland (Representing Florence Township)

Board Action: Authorization of a certified letter for nonpayment of a $80 service of process fee and subsequent legal action in the event the fee is not paid. Two notices have been previously sent to the client.

Grant Lebens, treasurer, (Patrick) Rosensteil for Legislature

Ms. Rodriguez's MOTION: To authorize the actions specified in the consent matters.

Vote on MOTION: Unanimously passed.

Discussion Items

Inactive Committees

The following committees have been identified as inactive. Treasurers of the committees have been requested by staff to terminate committee registration with the Board. Staff requests authorization of a certified letter to compel the termination and subsequent action, as directed by the Board, if the termination is not filed. Two notices have been previously sent to each client.

Principal Campaign Committees:

Donald Cheatham, candidate, (Donald) Cheatham for State Representative, ending cash balance $0, outstanding loan of $10,561 owed to the candidate.

Mary Jane Reagan (Rachner) candidate, (Mary Jane) Reagan Campaign Committee, ending cash balance $0, no outstanding debts, owes $60 late filing fee being pursued through revenue recapture.

Ms. Rodriguez's MOTION: To direct staff to: 1) send a certified letter requesting the (Donald) Cheatham for State Representative committee and the (Mary Jane) Reagan Campaign Committee terminate their committee registrations with the Board by October 15, 1997; and 2) administratively terminate the (Donald) Cheatham for State Representative committee and the (Mary Jane) Reagan Campaign Committee if the treasurers do not terminate their committee registration with the Board by October 15, 1997.

Vote on MOTION: Unanimously passed.

Political Committee:

Jackie Stevenson, treasurer, Minnesota Voters for Choice, ending cash balance $0, outstanding loans totaling $4,000 owed to two individuals.

Mr. Slocum's MOTION: To direct staff to: 1) send a certified letter requesting the Minnesota Voters for Choice committee terminate the committee registration with the Board by October 15, 1997; and 2) administratively terminate the Minnesota Voters for Choice

committee if the treasurer does not terminate the committee registration with the Board by October 15, 1997.

Vote on MOTION: Unanimously passed.

Waiver Request

Amy Bodnar, chair, 19th Senate District DFL - $1,215 late filing and service of process fees for the late filing of the Pre-Primary, Pre-General, and year-end 1996 Reports of Receipts and Expenditures. No motion was made.

Request to Terminate with Balance in Excess of $100

Concerned Citizens for Lincoln County - On June 23,1997, the Concerned Citizens for Lincoln County Committee was notified by staff that the committee was identified as an "inactive" committee and must terminate the committee registration by August 23, 1997. On August 18,1997, staff received a letter from the committee requesting that they be allowed to terminate with a balance of $629.36. The committee registered February of 1992, and has been filing "no change" reports since 1993. The letter states that the committee has never given money to a candidate or political committee, and that its only purpose is to have a voice within the county for agricultural purposes.

Ms. Rodriguez's MOTION: To grant the Concerned Citizens for Lincoln County's request to allow the committee to terminate with a cash balance in excess of $100.

Vote on MOTION: Unanimously passed.

Review of Non-Filing Lobbyist Principals

At its August 22,1997, meeting the Board directed staff to send a news release to the appropriate news media reporting those Lobbyist Principals who had not filed their Lobbyist Principal report due March 15,1997. Prior to doing so staff again contacted all of those Lobbyist Principals with active lobbyists who still had outstanding principal reports. As a result of these efforts all Lobbyist Principals who have active lobbyists have filed their reports, with the exception of the Lower Sioux Community which has indicated that it will be filing the report shortly. Staff did not attempt further contact with the nine non-filing principals who no longer have any active lobbyists.

Ms. Rodriguez's MOTION: To direct staff to not send a news release in this matter.

Vote on MOTION: Unanimously passed.

Request to Maintain Active Status

Benjamin Thompson, Jr., Chair, Independent American Party of Minnesota - On June 23, 1997, Mr. Thompson was notified that the Independent American Party of Minnesota was identified as inactive and must terminate the committee registration by August 23,1997. The committee registered in June of 1994, and has never made any expenditures nor received any funds. According to Mr. Thompson, the only reason that the committee registered was to make the organization "official". Mr. Thompson verbally requests that the Independent American Party of Minnesota be allowed to maintain active status.

Mr. Slocum's MOTION: To direct staff to: 1) send a certified letter requesting that Mr. Thompson, chair, Independent American Party of Minnesota terminate the committee registration with the Board by October 15, 1997; and 2) administratively terminate the Independent American Party of Minnesota if the committee does not terminate the committee registration with the Board by October 15, 1997.

Vote on MOTION: Unanimously passed.

Sharon Gibbons, treasurer, Minnesota Interior Design Legislative Action Committee (MIDLAC)

On June 23,1997, Ms. Gibbons was notified that the Minnesota Interior Design Legislative Action Committee (MIDLAC) was identified as inactive and must terminate the committee registration by August 23,1997. Ms. Gibbons requests that the committee be allowed to maintain active status because there is legislation that the committee is currently involved with and they will be making contributions during the next year. The letter states that the committee had been inactive because the legislation that it is pursuing was put on hold for two sessions.

Ms. Pauly's MOTION: To grant Ms. Gibbons request to allow the Minnesota Interior Design Legislative Action Committee (MIDLAC) to remain in the Boards active files.

Vote on MOTION: Unanimously passed.

Request to Terminate with a Cash Balance Discrepancy

Devin Rice, treasurer, (James) Rice Campaign Committee - On March 6, 1997, the James Rice Campaign Committee was notified that there was a discrepancy of $4,723.60 between the 1995 ending cash balance and 1996 beginning cash balance. By letter dated April 2, 1997, Devin Rice states that he has been the treasurer of record for the committee since 1986, however, Representative Rice maintained all of the records and filed all reports with the Board. Subsequent to Representative Rice's death, Mr. Rice contacted the bank to obtain the records to file the 1996 year-end report. Mr. Rice has been able to locate the records for the last five years and has worked with staff to correct the cash balance. It appears that the discrepancy could be from more than five years ago and Mr. Rice is unable to obtain records for that time period. After reviewing all possible bank records and adjusting previous reports, the committee shows a balance discrepancy of $236.24. The committee has a remaining cash balance of $0. The James Rice Campaign Committee requests that it be allowed to terminate with a discrepancy between the 1995 ending cash balance and the 1996 beginning cash balance.

Ms. Rodriguez's MOTION: To grant Mr. Rice's request and allow the James Rice Campaign Committee to terminate it's registration with the Board with a cash balance discrepancy of $236.24.

Vote on MOTION: Unanimously passed.

Further Enforcement

Connie Janssen, candidate, (Connie) Janssen Volunteer Committee - The Janssen Volunteer Committee accrued late filing fees totaling $750 for the late filing of the 1996 Pre-Primary and Pre-General Report of Receipts and Expenditures. The matter was referred to the Attorney General's office and several attempts were made to serve a summons and complaint upon Ms. Janssen, without success. Accordingly, a $45 service of process fee has accrued.

A judgment has been obtained against Steve Wright, the treasurer of record at the time for the accrual of the $150 late filing fee for the Pre-Primary Report of Receipts and Expenditures. However, he verbally resigned as treasurer in October and is not responsible for the subsequent filing fees. Ms. Janssen did not receive public subsidy for the 1996 election. The committee reports an ending cash balance of $22.38 as of August 27, 1996.

Staff requests Board direction for further enforcement action.

Ms. Wilson's MOTION: To direct staff to: 1) discontinue efforts to obtain the 1996 Pre-general Reports of Receipts and Expenditures from the (Connie) Janssen Volunteer Committee; and 2) pursue the monetary portion of the accrued late filing fees of $750 and the process serving fee of $45 through conciliation court.

Vote on MOTION: Unanimously passed.

Informational items

Employment Disclosure Update

At its meeting of August 22, 1997, the Board directed staff to continue efforts to gain full disclosure of employment information for donors who contributed $100 or more. Pursuant to Board direction, staff sent each of the committees that had incomplete donor employment disclosure a letter requesting further employment information. The committees were informed that they must continue their efforts to obtain disclosure, and that the Board requests itemized information concerning each missing donor employment. Thus far, only three committees have responded. Staff will report further on this matter at the October Board meeting.

Reconciliation Project

On August 28,1997, staff sent 313 letters to candidates, political committees, political funds, and political party units regarding discrepancies between contribution amounts reported by donors and recipients discovered during a routine reconciliation audit on the Report of Receipts and Expenditures covering the period January 1 through December 31, 1996. On September 19, 1997, staff sent 62 second letters requesting information to the committees who had not replied to the initial inquiry or whose reply did not eliminate the discrepancy. Staff will report further on this matter at the October Board meeting.

Reported Individual Campaign Contributions Compared to Political Contribution Refunds Paid

Staff has completed its comparison of individual contributions reported by candidates with political contribution refunds reported by the Department of Revenue. The analysis was begun by calculating the total of unitemized contributions and the first $50 of each itemized contribution. This total represents the theoretical maximum of refunds which could be paid. It is a theoretical maximum because it assumes that each unitemized contribution does not exceed $50.

This calculated total was compared to refunds actually paid, as reported by the Department of Revenue. Staff analysis did not disclose any candidate for whom refunds actually paid exceeded the theoretical maximum for that candidate.

Payment of Late Filing Fees

M.J. Czarniecki, member, Designers Selection Board: $25

Joe Weis, member, MN Technology Inc: $40

Jeanette Marie Smith, treasurer, Minnesota NOW: $1,130 ($1,100, late fee; $30, service fee)

Herminia Cardenas, treasurer, Neighbors for (Carlos) Mariani Committee: $205 ($100, late fee; $105, service fee)

Grant Lebens, treasurer, Rosensteil for Legislature: $100

Kristen Jacobs (Representing Jobs NOW Coalition): $5

Jack LaVoy (Representing MN Timber Producers Assn. and Minn. Forest Industries Inc.): $130

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: $208.86 partial payment through chapter 13 bankruptcy. Public subsidy totaling $1,451.34 remains to be returned from 1990.

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).

REPORT FROM EXECUTIVE SESSION

Findings in the Matter of an Investigation Regarding the (Douglas) Hofman Volunteer Committee

The Board issued findings concerning probable cause in the matter of an investigation regarding the (Douglas) Hofman Volunteer Committee. The Board ordered that the findings and the record of the investigation be made a part of the public records of the Board (see findings attached).

Findings in the Matter of an Investigation Regarding the (David) Meier Volunteer Committee

The Board issued findings concerning probable cause in the matter of an investigation regarding the (David) Meier Volunteer Committee. The Board ordered that the findings and the record of the investigation be made a part of the public records of the Board (see findings attached).

ADJOURNMENT

Meeting adjourned.

Respectfully submitted,

Sidney Pauly, Secretary

(Minutes by staff)

attachments (4)

1998 OBJECTIVES OF THE CAMPAIGN FINANCE AND PUBLIC DISCLOSURE BOARD

The Campaign Finance and Public Disclosure Board will facilitate easier and more universal compliance with the Ethics In Government Act, Minnesota Statutes, chapter 10A.

The Board will work to accomplish this objective by:

The Campaign Finance and Public Disclosure Board will provide fair and consistent enforcement of the Ethics In Government Act.

The Board will work to accomplish this objective by:

The Campaign Finance and Public Disclosure Board will help citizens become better informed about public issues related to the Ethics in Government Act.

The Board will work to accomplish this objective by:

  1. Evaluating and improving the effectiveness of the educational programs and information that the Board provides to the public

H:98FYBDOB.DOC

STATE OF MINNESOTA

Office of the Attorney General

TO       :    JEANNE OLSON                            DATE   :    September 12,      
              Executive Director, Campaign Finance                1997               
              and                                                                    
              Public Disclosure Board                                                


FROM    :     SUSAN GRETZ                            PHONE   :   297-2424 (Voice)   
              Assistant Attorney General                         296-1410 (TDD)     
              Labor Law Division                                                    


SUBJECT  :    Status Report of Campaign Finance and Public Disclosure Board       
Matters                                                             


I. MAJOR CASES/MAJOR ISSUES:

1. Jurisdictional Question on Referred Matters: The Ramsey County Attorney's Office has clarified with staff that it lacks jurisdiction to prosecute matters that constitute misdemeanors or gross misdemeanors under Chapter 10A. Minn. Stat. § 388.051, subd. 1(c) limits the county attorney's jurisdiction to misdemeanors for which jurisdiction is specifically prescribed by law. The practice of the Ramsey County Attorney's Office has been to determine whether the CFPDB findings suggest violations of 211A or 211B, for which the county attorney does have jurisdiction and, if not, refer the matter to the City of St. Paul for prosecution. Accordingly, in the future probable cause determinations should be forwarded to both the City of St. Paul and to the Ramsey County Attorney.

II. COMMERCIAL LITIGATION DIVISION.

CFPDB v. Donna Meigs. Board has indicated we should not pursue this matter. Close file.

CFPDB v. Connie Janssen. (Referred 12/11/96) Janssen failed to file the Pre-General Report of Receipts and Expenditures and untimely filed the Pre-Primary Election Report of Receipts and Expenditures, with $650.00 in late filing fees accrued. We then amended summons and complaint to include the year end report due January 31, 1997, and $100.00 late filing fee. Sent to Metro Legal on June 24, 1997 to attempt service again. Efforts to serve Janssen have been unsuccessful, in view of which we have asked the Board to let us know how it would like to proceed.

CFPDB v. Mark Nygaard, R-Kids (Remember Kids in Divorce Settlements). The file involves Nygaard's failure to file a Lobbyist Disbursement Report and pay a $100.00 late filing fee. Default judgment was granted at 9/9/97 hearing.

CFPDB v. Amy des Parois and the People for (Michael) des Parois Committee. Failure to file YE Report of Receipts and Expenditures and pay $100.00 late filing fee. Treasurer filed report but did not pay late filing fee, in view of which the matter was returned to the Board to pursue the late filing fee in conciliation court. Close file.

CFPDB v. Michael Forbes and the Olmstead County DFL Women's Club. Failure to file YE Report of Receipts and Expenditures and pay $100.00 late filing fee. Default judgment was granted at 9/9/97 hearing.

CFPDB v. Jill Henderson, the Stebbens for State Senate Committee, and the Stebbens for State Representative Committee. Failure to file YE Report of Receipts and Expenditures and pay $200.00 in late filing fees. While we have served Henderson and the Committees, attempts at service on Stebbens have been unsuccessful. We will do some locate work on Stebbens.

CFPDB v. Grant Lebens and the Rosenstiel for Legislature Committee. Failure to file YE Report of Receipts and Expenditures and pay $100.00 late filing fee. The Board received report and $100.00 late filing fee on 8/28/97. Close file.

CFPDB v. Shelly Martin and the (Kevin) Chandler for Senate Committee. Failure to file YE Report of Receipts and Expenditures and pay $100.00 late filing fee. Report and late filing fees received. Close file.

CFPDB v. Michael Schultz and the Schultz Volunteer Committee. Failure to file YE Report of Receipts and Expenditures and pay $100.00 late filing fee. As of 9/9/97, we have been unable to complete service on the Committee because Schultz is never at home (we personally served Schultz by leaving summons and complaint with his mom at his last known address). He is the only registered representative of the Committee.

CFPDB v. Jeanette Smith and the Committee to Elect Bonnie Walters. Failure to file YE Report of Receipts and Expenditures and pay $100.00 late filing fee. The Board received report and late filing fee. Close file.

CFPDB v. Jeanette Smith and the 19th Senate District DFL. Failure to file YE Report of Receipts and Expenditures and pay $100.00 late filing fee. The Board received report. 19th Senate District DFL is requesting waiver of late filing fee. Close file.

CFPDB v. Jeanette Smith and the Minnesota NOW PAC. Failure to file YE Report of Receipts and Expenditures and pay $100.00 late filing fee. The Board received report and late filing fee. Close file.

CFPDB v. Rick Stafford and the 61st Senate District DFL. Failure to file YE Report of Receipts and Expenditures and pay $100.00 late filing fee. Metro Legal was unable to locate Stafford, so summons and complaint was returned. We have heard that Stafford is quite ill. Service has been unsuccessful, in view of which we have asked the Board to decide whether they want to continue to attempt service.

CFPDB v. Marilyn Nelson. Failure to file Supplementary Statement of Economic Interest due 4/15/97 and pay $100.00 late filing fee. Demand letter sent.

CFPDB v. Debra Williamson. Failure to file Lobbyist Report due 4/15/97 and pay $110.00 late filing fee. Demand letter sent.

CFPDB v. Steve Swonder. Failure to file Supplementary Statement of Economic Interest due 4/15/97 and pay $100.00 late filing fee. Demand letter sent.

CFPDB v. Harold High. Failure to file Amended Report of Receipts and Expenditures due 1/31/97 and pay $100.00 late filing fee. Demand letter sent.

CFPDB v. Conrad Lee. Failure to file Lobbyist Disbursement Report due 4/15/97 and pay $100.00 late filing fee. Demand letter sent.

CFPDB v. Laura Spillane. Failure to pay $90.00 late filing fee for untimely filing of Report of Receipts and Expenditures due 1/31/97. Demand letter sent.

III. ACTIONS FOR INJUNCTIVE RELIEF.

1. CFPDB v. Phil Ratte: Bench warrant remains for Ratte.

cc: Christie Eller

Joel Schoenecker

AG:34345 v1

STATE OF MINNESOTA

CAMPAIGN FINANCE AND PUBLIC DISCLOSURE BOARD

(formerly Ethical Practices Board)

FINDINGS IN THE MATTER OF A COMPLAINT REGARDING DOUGLAS HOFMAN

Procedural Background

On December 14, 1994, LeRoy Imsande ("Complainant"), treasurer for the (Douglas) Hofman Volunteer Committee ("Committee"), filed a Complaint with the Campaign Finance and Public Disclosure Board ("Board") expressing concern about reported information supplied by Douglas Hofman ("Respondent") and disclosed on the Committee's Reports of Receipts and Expenditures covering the period of January 1 through October 24, 1994 ("Reports").

Complainant's concerns were based on three issues.

  1. Complainant stated that, although he was treasurer for the Committee, he never had access to bank statements, canceled checks, receipts, or proof of deposits. All of these items were in the possession of Respondent, and were not made available to Complainant, who requested them several times.
  2. Complainant stated that receipts and disbursement information needed to complete the Reports for the Committee were faxed to him by Respondent, on Respondent's letter head. Complainant then used this information to complete the Committee's Reports.
  3. Complainant stated that he was concerned about this situation.

The evidence submitted in support of the complaint consisted of copies of faxed correspondence between Complainant and Respondent dated September 7, October 24, and December 13, 1994; a newspaper article from the Star Tribune, and the Reports.

By letter dated December 20, 1994, Respondent was advised of the complaint and offered an opportunity to address the issues raised by Complainant. The letter also requested copies of the Committee's financial and expenditure records. Respondent did not reply to the Board's request. Copies of the Committee's financial records were obtained through subpoena from the Circle Pines Federal Credit Union, the depository for the Committee.

By letter dated December 27, 1994, Complainant resigned as treasurer for the Committee. Respondent did not file the final Report of Receipts and Expenditures covering January 1 through December 31, 1994,("Final Report") which was due January 31, 1995.

During election year 1994 Respondent received $8,112.59 in public subsidy. Since the Final Report was not filed, at its June 2, 1995, executive session the Board determined that, based on expenditures disclosed on the 1994 pre-general Report of Receipts and Expenditures filed November 4, 1994, $1,475.95 of public subsidy received must be returned. The Board requested the Attorney General's office to seek return of this amount through a legal action. At the same time the Board laid over the complaint matters until the Final Report was filed and a comparison could be made between financial records and the Final Report.

On December 22, 1995, a judgment was obtained to compel Respondent to file the Final Report. A second judgment was obtained on August 26, 1996, to compel Respondent to return $1,475.95 of the public subsidy.

The Final Report was filed on March 24, 1997, and the Committee's registration was terminated, effective December 31, 1994, with the filing of this report. Respondent stated that exact dates for transactions after October 24, 1994, were unavailable because campaign records were destroyed. Respondent further stated that dates and figures were based on best estimates available by himself and his staff.

The matter was considered again by the Board in executive sessions on August 22, and September 26, 1997. The matter was reviewed based on the compliant, the Reports for election year 1994, including the Final Report filed by Respondent, and staff review of the financial documents.

Based on the record before it, the Board issues the following:

STATEMENT OF THE EVIDENCE

1. The (Douglas) Hofman Volunteer Committee ("Committee"), a principal campaign committee, was registered with the Campaign Finance and Public Disclosure Board ("Board") during election year 1994.

2. A total of $8,112.59 in public subsidy was paid to Douglas Hofman ("Respondent") during election year 1994.

3. The Report of Receipts and Expenditures covering January 1, through December 31, 1994, ("Final Report") disclosed total receipts of $14,547.59, which included all public subsidy received. Records from the Circle Pines Credit Union ("Depository") disclosed total deposits of $12,293.99 credited to the Committee's account.

4. On the Final Report, Respondent disclosed 1994 election year campaign expenditures of $14,428.84 and non-campaign disbursements of $100, for a total of $14,528.84.

5. Staff review of the Committee's financial records and the Final Report disclosed that $10,981.77 of the reported campaign expenditures and $432 of non-campaign disbursements are reasonably supported by bank records, for total documented expenditures and disbursements of $11,413.77 in election year 1994.

6. Records from the Depository disclosed that debits to the account included $3,590 in cash received back at times of deposits, bank charges of $332, and an automatic account withdrawal of $98.96 to Primerica Life.

7. Depository records disclosed that $3,566.51 of the documented campaign expenditures were unpaid as a result of checks returned to the Depository for insufficient funds. Therefore, only $7,847.26 of the documented expenditures were actually paid. The checks returned for insufficient funds remain as unpaid campaign expenditures.

8 The difference between reported receipts (contributions and public subsidy totaling $14,547.79) and the amount of valid expenses actually paid ($7,847.26) is $6,700.53. There is insufficient evidence to explain the purposes for which these funds were used.

Based on the above Statement of the Evidence, the Board makes the following:

FINDINGS CONCERNING PROBABLE CAUSE

1. The (Douglas) Hofman Volunteer Committee received $8,112.59 in public subsidy and made 1994 campaign expenditures of $10,981.77. A campaign expenditure is made when the obligation to purchase goods or services is incurred, regardless of when it is actually paid.

2. There is no probable cause to believe that Douglas Hofman must return any portion of public subsidy received because 1994 campaign expenditures exceeded the amount of subsidy received.

3. Douglas Hofman reported expenditures and disbursements totaling $14,528.84 for election year 1994. Financial records disclosed that $11,413.77 can be documented as campaign expenditures and non-campaign disbursements, and that $7,847.26 of this amount was actually paid.

4. There is probable cause to believe that, by not accurately reporting expenditures and disbursements made on behalf of his committee for the election year 1994, Douglas Hofman violated Minn. Stat. §10A.20, subd. 3. This statute requires the disclosure of the name and address of each entity to whom aggregate expenditures have been made in excess of $100, together with the date, amount and purpose of each expenditures.

5. Depository records disclosed total receipts of $12,293.99 credited to the Committee's account for election year 1994. The Depository records also disclosed that $3,566.51 of the valid allowable campaign expenditures were returned for non-sufficient funds.

6. The difference between receipts reported by Douglas Hofman and paid documented expenditures and disbursements is $6,700.53.

7. It appears that the use of $6,700.53 of funds collected in election year 1994 by Douglas Hofman can not be satisfactorily documented as being used for political purposes. Minn. Stat. §211B.12, states that money received for political purposes may not be converted to personal use. The Board has no jurisdiction over Minn. Stat. §211B.

Based on the above Findings, the Board issues the following:

ORDER

1. All public subsidy paid to Douglas Hofman on behalf of the (Douglas) Hofman Volunteer Committee in election year 1994 has been accounted for and the Attorney General's office shall provide a satisfaction of judgment.

2. The Executive Director shall report the findings of probable cause and the possible violation of Minnesota Statutes, Chapter 211B to the appropriate law enforcement authorities.

3. The complaint of LeRoy Imsande regarding Douglas Hofman is dismissed in all respects. The Board investigation of this matter is hereby made a part of the public records of the Board pursuant to Minn. Stat. §10A.02, subd. 11.

Copies of this document shall be provided to the complainant and the respondent.

STATE OF MINNESOTA

CAMPAIGN FINANCE AND PUBLIC DISCLOSURE BOARD

(formerly Ethical Practices Board)

FINDINGS IN THE MATTER OF A CONTRIBUTION MADE BY THE

(DAVID) MEIER VOLUNTEER COMMITTEE

TO ANOTHER PRINCIPAL CAMPAIGN COMMITTEE

Procedural Background

The (David) Meier Volunteer Committee ("Committee") filed a Report of Receipts and Expenditures ("Report") for the period covering January 1 through December 31, 1996, with the Campaign Finance and Public Disclosure Board ("Board"). Review of the Report by staff disclosed that on August 1, 1996, the Committee made a contribution of $500 to the Friends of Rob Hafiz Committee, a principal campaign committee registered with the Board.

Staff notified David Meier of a potential violation of Minn. Stat. §10A.27, subd. 9(a), which prohibits a principal campaign committee from making a contribution to another principal campaign committee, unless the donating candidate's committee is being dissolved.

Mr. Meier responded by letter dated September 3, 1997, in which he acknowledged that the committee made the contribution. Mr. Meier stated that he had intended to dissolve the Committee, but was unable to do so because of a lost check.

This matter was considered by the Board in executive session on September 26, 1997. No one from the Committee asked to appear before the Board.

Based on the record before it, the Board issues the following:

STATEMENT OF THE EVIDENCE

1. The (David) Meier Volunteer Committee ("Committee") is a principal campaign committee registered with the Campaign Finance and Public Disclosure Board ("Board").

2. The Committee did not terminate its registration with the Board in calendar year 1996.

3. The Committee made a $500 contribution to the Friends of Rob Hafiz Committee, another principal campaign committee registered with the Board.

4. Minn. Stat. §10A.27, subd. 9(a), prohibits a principal campaign committee from making contributions to another principal campaign committee, unless the donating candidate's committee is being dissolved. Minn. Rules Chapter 4503.0300, subp. 2, provides that when such a contribution is made, the dissolution must be completed in the same filing period.

Based on the Statement of the Evidence, the Board makes the following:

FINDINGS CONCERNING PROBABLE CAUSE

1. There is probable cause to believe that the (David) Meier Volunteer Committee violated Minn. Stat. §10A.27, subd. 9(a), when it made a $500 contribution to the Friends of Rob Hafiz Committee on August 1, 1996.

2. Minnesota Statutes, Chapter 10A provides no penalty for this violation.

3. The Board investigation of this matter is entered into the public record in accordance with Minn. Stat. §10A.02, subd. 11.

A copy of this document shall be provided to David Meier.