STATE OF MINNESOTA
CAMPAIGN FINANCE AND PUBLIC DISCLOSURE BOARD

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Friday, October 31, 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 Anderson.Members present: Anderson, Pauly, Rodriguez, Slocum, Wilson.Others present: Olson, Goldsmith, Swanson, Perreault, staff; Gretz, counsel.

Ms. Owens Hayes previously informed the Board that she would be unable to attend the meeting.

MINUTES (September 26, 1997)

Ms. Rodriguez's MOTION: To approve the September 26, 1997, minutes as drafted.

Vote on MOTION: Unanimously passed.

CHAIR'S REPORT

Board Meeting Schedule - Next Board meeting: Friday, November 21, 1997. Ms. Rodriguez informed the Board she would be unable to attend the November 21st meeting.

Board Working Rules - The Board reviewed a draft of the Board Working Rules based on discussion at the Board retreat held August 22, 1997, and suggested changes by Ms. Rodriguez.

Board members considered certain changes in the Board Working Rules.

Ms. Wilson's MOTION: To lay over this matter to the November 21st Board meeting.

Vote on MOTION: Unanimously passed.

EXECUTIVE DIRECTOR'S REPORT

Ms. Olson reported the following:

Staff activities

Staff continues its efforts with the Campaign Finance Management System. Mr. Goldsmith is working closely with the vendor to keep the contract price within budget and ensure that timelines are met.

Ms. Olson attended two meetings of the Minnesota Milestones Project. The meetings were held to discuss relevant indicators. One of the indicators for Milestones is the number of contributions made to political campaigns from small contributors. This issue was discussed and may be eliminated as an indicator as not indicative of real involvement.

On October 16th, staff hosted 13 international visitors and 2 escorts. The visitors were interested in the reasons for enactment of the Ethics in Government Act as well as campaign finance, lobbying, and public official's disclosure provisions. The visitors were from Algeria, Burkina Faso, Estonia, Georgia, Israel, Jordan, Macedonia, Nigeria, Pakistan (2), Palestinian Authority, Philippines, and Zambia.

On October 23rd Ms. Olson was on the faculty of a Minnesota Governmental Relations Council meeting on Campaign Finance, Lobbying, and the Gift Law.

Personnel

Diana Berg, Information Technology Specialist II, has left the Board's employ. Ms. Berg's last day was October 10, 1997. She was provided with an exit interview form. Staff is interviewing candidates to fill the position.

Mr. Goldsmith reviewed Kelly Hansen's performance from October 1, 1996 to October 1, 1997. Ms. Hansen's performance meets or exceeds the standards for all her responsibilities. Ms. Hansen moves to Step 8 in the AFSCME, Executive 1 classification and will receive the corresponding pay increase.

Ms. Swanson reviewed Joyce Larson's performance from October 23, 1996 to October 23, 1997. Ms. Larson's performance meets or exceeds the standards for all her responsibilities. Ms. Larson moves to Step 8 in the AFSCME, Clerk Typist 3 classification and will receive the corresponding pay increase.

Miscellaneous

The Department of Revenue proposed to the Department of Finance (DOF) that the Board take over the administration of the payment of the Political Contribution Refunds. Ms. Swanson prepared a fiscal note for the DOF that includes additional office space, staff, and funding in excess of $100,000 per year. The Executive Budget Officer assigned to the Board will recommend to the DOF that this proposal not be included in the Governor's 1998 supplemental budget.

Council on Governmental Ethics Laws (COGEL)

As a representative of the Steering Committee, Ms. Olson will attend a meeting of the COGEL oversight committee on the Joyce Foundation grant to standardize electronic disclosure. The meeting will be in Chicago the middle weekend in December.

Publications

A Compilation of Advisory Opinions for the period October, 1996, to June 30, 1997, was previously mailed to Board members. Staff will be publishing this report on a fiscal year basis in the future.

Copies of MAPA's Buy-Partisan Report; the updated Independent Expenditures issues handout; the revised Lobbyist Disbursement Summary news release with corrected pages; and a letter from Commissioner Wayne Simoneau commending the agency for its fine work and the favorable report by the Legislative Auditor's Office, Financial Audit Division were previously mailed to Board members.

A publication by lobbyist Jim Erickson using information taken from the Board's website was available for Board review.

Enforcement Report

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

Discussion Items

Waiver request

Conrad Lee, (Representing VOICE), #0293- 4349

Debra Williamson, (Representing VOICE), #0294- 4349 - Mr. Lee requests that the Board waive the $265.50 in late filing and service of process fees that have accrued against him and Ms. Williamson. Mr. Lee and Ms. Williamson each accrued a $100 late fee for the late filing of their Lobbyist Disbursement Reports due April 15,1997, and filed October 1, 1997. Additionally, Ms. Williamson accrued a $10 late fee for the late filing of her Lobbyist Disbursement Report due January 15, 1997. In attempting to obtain the missing reports, a $55.50 service of process fee accrued.

Mr. Lee states that no money was spent on lobbying and no lobbying was ever done by Mr. Lee or Ms. Williamson. Staff records indicate that Mr. Lee verbally informed staff on June 10, 1997, that both he and Ms. Williamson were no longer lobbying. At that time, Mr. Lee was told that it was necessary to file a report and the appropriate forms were mailed. Following notification from the Attorney General's Office, Mr. Lee filed all required reports for both himself and Ms. Williamson. Both lobbyists have terminated their registration. No motion was made.

Request to reconsider waiver request

Amy Bodnar, chair, 19th Senate District DFL - On October 23, 1997, staff received a letter from Ms. Bodnar requesting that the Board reconsider the decision made at it's meeting of September 26, 1997, to deny the waiver request of the 19th Senate District DFL. The Senate District accrued $1,215 in late filing and service of process fees. The Pre-Primary, Pre-General, and year-end Reports of Receipts and Expenditures for 1996 were filed July 22, 1997. In her letter, Ms. Bodnar states that the committee will be electing a new treasurer on November 1, 1997.

Chair Anderson welcomed Ms. Bodnar to the meeting. Ms. Bodnar explained the set of circumstances that she believed led to the accumulation of the late filing fees and requested that the late filing fees be waived.

Mr. Slocum's MOTION: To waive the $1,100 late filing fees but to require payment of the $115, the cost of the service of process fees.

Ms. Rodriguez suggested that in addition to the service of process fees, the Board impose a $50 late filing fee. Mr. Slocum accepted this as an amendment to his motion.

Mr. Slocum's AMENDED MOTION: To waive $1,050 of the late filing fees, impose a $50 late filing fee and require payment of $115 for the cost of the service of process fees.

Vote on MOTION: Unanimously passed.

Ms. Bodnar thanked the Board and departed from the meeting.

Employment Disclosure Information Update (See July 18, August 22, and September 26, 1997, Board minutes)

Staff contacted, by telephone, eleven committee treasurers who have not responded to the third letter sent on September 3, 1997, requesting further information.

Staff requests Board direction in this matter.

Ms. Rodriguez's MOTION: To direct staff to send a letter to the eleven noncomplying committees informing them that: 1) the Board will proceed with the matter as an investigation of potential reporting violation; 2) failure to provide additional disclosure could result in the Board issuing a finding concerning probable cause; 3) the Board will consider this matter in executive session at its next meeting on November 21, 1997, to determine whether to make a finding; and 4) if the Board finds probable cause to believe that a violation of Minnesota Statutes, chapter 10A, has occurred, that finding will be reported to the appropriate law enforcement authorities as required by Minn. Stat. §10A.02, subd. 11.

Vote on MOTION: Unanimously passed.

Reconciliation Update (See September 26, 1997, Board minutes)

On October 9, 1997, nine certified letters were sent to those committee and fund treasurers whose reports still had outstanding discrepancies. Staff attempted to contact by telephone treasurers of all committees and funds that have discrepancies remaining. To date there are 11 individual discrepancies, which involve six committees, that have not been corrected. Staff requests Board authorization of a third letter, to be sent by certified mail, to compel the filing of a required response to the reconciliation audit and/or an amendment to the Report of Receipts and Expenditures and to authorize subsequent legal enforcement action if the report is not filed.

Ron Carey, Republican Party of Minnesota

Karen Harris, 47th Senate District RPM

Les Prescott, Lower Sioux Political Fund

Edmond Hanson, Political Education Fund of Local 21

Mary Igo, treasurer, (Patrick)Igo for Senate Volunteer Committee

Ms. Rodriguez's MOTION: To authorize staff to send a certified letter to committees and funds that have outstanding discrepancies to compel the filing of a required response to the reconciliation audit and/or and amendment to the Report of Receipts and Expenditures and to authorize subsequent legal enforcement action if the report is not filed.

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

Reconciliation summary of individual discrepancy counts :

There were 56 discrepancies identified as registration number problems, accounting for 8% of the total discrepancies. Reporting discrepancies resulting from returned contributions account for 9% of the total discrepancies.

Cash Balance Discrepancy

Lynn Crosby, treasurer, MN NOW PAC - On October 29, 1997, staff received a letter from Ms. Crosby requesting that the Board allow a new 1996 beginning cash balance. The committee reported having $2,071.27 as the 1995 ending cash balance. The beginning cash balance on the 1996 report, which was taken from the committee's bank records, was reported as $2,990.48. Since the 1996 beginning cash balance should be the same as the 1995 ending cash balance there is a $919.21 discrepancy. Ms. Crosby states that she has reviewed all income and expenses for 1995 and 1996 and that, to her knowledge, they are correct. However, the beginning balance for 1995 did not agree with the savings and checking account balances.

Ms. Crosby assumes that the error was made prior to 1995 and the amounts showed on the filings with the Board office and the actual cash in bank amounts got out of sync. In her letter, Ms. Crosby states that she is confident that the income and expenses for 1996 and for 1995 are correct. Ms. Crosby has been treasurer since May of 1997.

Ms. Pauly's MOTION: To direct Ms. Crosby to review committee records for 1993 and 1994, in an effort to reconcile the cash balance discrepancy; amend any reports necessary; and report back to Board staff on the results of her review not later than January 12, 1998.

Vote on MOTION: Unanimously passed.

Informational Items

Payment of Late Filing Fees

Mark Nygaard (Representing Remember Kids in Divorce Settlements) : $125

Donald Moos, treasurer, (Becky) Livermore Volunteer Committee: $ 50 (Partial Payment on an Installment Plan)

Return of Public Subsidy

George Bateman, treasurer, (George) Bateman for Representative - $202.84 partial payment through Chapter 13 bankruptcy. $ 1,248.50 return of public subsidy financing remains to be paid for 1990.

All payments have been deposited in the general fund of the state pursuant to statute.

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

ADVISORY OPINION REQUESTS

Request for the following advisory opinion is public data.

Advisory Opinion #277 - Gift of travel and lodging; use of principal campaign committee funds

The Board reviewed a draft response to an advisory opinion request by State Representative Ken Wolf who asks if: 1) the payment of an official's travel, lodging, and conference costs under the described facts are prohibited by Minn. Stat. §10A.071; and 2) principal campaign committee funds can be used to pay travel, lodging, and conference costs to attend these meetings and be reported as noncampaign disbursements.

Mr. Slocum's MOTION: To approve Advisory Opinion #277 as drafted.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #277 signed by Chair Barry Anderson, October 31, 1997:

A gift from a lobbyist principal of travel and lodging, even when passed through a non-lobbyist entity, is prohibited. Costs of attending the described meeting, which is directly related to legislative duties, are expenses of serving in public office. Such costs are noncampaign disbursements for which principal campaign committee funds may be used.

Request for the following advisory opinion is nonpublic data.

Advisory Opinion #278 - Application of gift prohibition exception for program participant

The Board reviewed a draft response to an advisory opinion request by a legislator who asks if the legislator may accept a dinner given by, or at the request of, a lobbyist principal if the legislator speaks about legislative issues during a portion of the event set aside for that purpose.

Mr. Slocum's MOTION: To approve Advisory Opinion #278 as drafted.

Vote on MOTION: Unanimously passed.

SUMMARY: ADVISORY OPINION #278 signed by Chair Barry Anderson, October 31, 1997:

The exception to the gift prohibition for meals given to program speakers or participants requires that the individual participant accept an invitation to be a formal part of the program and thereby incur an obligation to appear and participate in a specific and significant manner.

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 copy of memo attached). Counsel Gretz noted that the 61st Senate District DFL (#5 on the report) has filed the required year end Report of Receipts and Expenditures.

LEGISLATIVE RECOMMENDATIONS COMMITTEE REPORT

Committee Chair Rodriguez reported that the committee met prior to the Board meeting. Committee members will ask House staff to support a recodification of Chapter 10A. The committee scheduled its next meeting on Tuesday, November 18th, in Apple Valley.

OTHER BUSINESS

Two nonpublic advisory opinion requests were provided to Board members. These requests will be considered at the November 21st Board meeting.

REPORT FROM EXECUTIVE SESSION

Findings in the Matter of an Investigation Regarding the Elect Matt Begeske Committee

The Board issued findings concerning probable cause in the matter of an investigation regarding the Elect Matt Begeske 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 copy of findings attached).

Request for Advice from Legal Counsel

The Board reviewed the advice of Counsel Gretz regarding the Board's authority and obligation to enforce certain statutory filing requirements that are outside Chapter 10A for the State Board of Investment, Minnesota Technology, Inc., and the Public Employee Retirement Association. The Board directed staff to enforce only those provisions outside of Chapter 10A which are clearly under the Board's authority (see copy of memo attached).

Correspondence from Senator Marty

The Board reviewed a copy of a letter from Senator John Marty regarding enforcement of the provisions of Minn. Stat. §10A.20, subd. 3(b) and a draft response from Chair Anderson. The Board agreed by consensus to send the letter as drafted (see copy attached).

ADJOURNMENT

Meeting adjourned.

Respectfully submitted,

Sidney Pauly, Secretary

(Minutes by staff)

STATE OF MINNESOTA

Office of the Attorney General

TO       :    JEANNE OLSON                            DATE   :    October 22, 1997   
              Executive Director, Campaign Finance                                   
              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. Transfer of CFPDB Enforcement Work to Government Services Section of AGO. On October 8, 1997, Assistant Attorneys General Shelley Roe and Jennifer Tichey and I met with Joel Schoenecker and Sharon Phillipson to transfer Board enforcement work to my section of the AGO. This should allow me to keep better tabs on the status of enforcement matters.

II. ENFORCEMENT MATTERS.

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. We are awaiting receipt of certified judgment from Ramsey County for docketing in Olmsted County. (Roe)

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 with summons and complaint, attempts at service on Stebbens have been unsuccessful. Drafting default judgment papers. (Roe)

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 last known address (we personally served Schultz by leaving summons and complaint with his mom at that address). He is the only registered representative of the Committee. We are awaiting information from the U.S. Postal Service in his whereabouts.

CFPDB v. Jeanette Smith and the 19th Senate District DFL. Failure to file YE Report of Receipts and Expenditures and pay $1,000.00 late filing fee. 19th Senate District DFL is requesting waiver of late filing fee. Also, service fees of $85 have not been paid.

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. Although we had heard Stafford was quite ill, we have also heard that he is working. We await word from Staff as to whether 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. Statement has been filed and Board staff is following up for payment of late filing fee.

CFPDB v. Debra Williamson. Failure to file Lobbyist Report due 4/15/97 and pay $110.00 late filing fee. Demand letter sent. Report filed and registration terminated. We will close our file.

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. Attempting to find better address for Swonder, and drafting summons and complaint. (Tichey)

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. Drafting summons and complaint. (Tichey)

CFPDB v. Conrad Lee. Failure to file Lobbyist Disbursement Report due 4/15/97 and pay $100.00 late filing fee. Demand letter sent. Report filed and registration terminated. We will close our file.

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. Returned to Board to pursue through conciliation court.

12. CFPDB v. Heisenfelt. Failure to pay fine for acceptance of contributions in excess of statutory limits. Demand letter sent on 10/16/97. (Roe)

13. CFPDB v. Kevin Correy: Action for return of public subsidy money. Reviewing file. (Tichey)

14. CFPDB v. Dougas Hofman: awaiting filing of satisfaction of judgment. (Schoenecker)

15. Files Referred to MCE for Post-Judgment Collection:

Roger Anderson

Stephen Baretz

Dale Ubelhoer and the Paul Revere PAC

George Bateman

Diane Listerud and the Paul Revere PAC

Charles J. O'Connor

Mark G. Nygaard and R-KIDS

Al LaFontaine

Jill Block, Kevin Correy and the Kevin Correy for Senate Committee

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

cc: Christie Eller

Jennifer Tichey

Shelley Roe

AG:37052

STATE OF MINNESOTA

CAMPAIGN FINANCE AND PUBLIC DISCLOSURE BOARD

(formerly Ethical Practices Board)

FINDINGS IN THE MATTER OF A CONTRIBUTION MADE BY

THE ELECT MATT BEGESKE COMMITTEE

TO ANOTHER PRINCIPAL CAMPAIGN COMMITTEE

Procedural Background

During a telephone conversation on September 8, 1997, Jim Ruzic, treasurer for the Elect Matt Begeske Committee ("Committee"), stated that during October 1996 the Committee made a contribution of $150 to the (Stephen) Khalar Volunteer Committee. The Khalar Volunteer Committee is a principal campaign committee registered with the Campaign Finance and Public Disclosure Board ("Board"). The Report of Receipts and Expenditures ("Report") for the period covering January 1 through December 31, 1996, filed on behalf of the Committee, did not disclose this contribution.

By memorandum dated September 8, 1997, staff notified Mr. Ruzic 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 contributing candidate's committee is being dissolved. Staff requested that Mr. Ruzic provide a written response regarding the violation and amend the Committee's Report by September 18, 1997, to disclose the contribution.

Mr. Ruzic did not respond to the request. Staff sent a certified letter on September 23, 1997, again requesting that a response and amended Report be submitted on behalf of the Committee. The certified letter was received by Mr. Ruzic on September 30, 1997. Mr. Ruzic did not respond to the second request.

This matter was considered by the Board in executive session on October 31, 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 Elect Matt Begeske 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 treasurer, Jim Ruzic, acknowledged that it made a $150 contribution in October 1996 to the (Stephen) Khalar Volunteer 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.

5. The $150 contribution was not disclosed on the Committee's Report of Receipts and Expenditures for the period covering January 1 through December 31, 1996. Minn. Stat. §10A.20, subd. 3(j), requires all transfers in excess of $100 to a principal campaign committee be itemized on a committee's Report of Receipts and Expenditures. Minn. Stat. §10A.23 requires the treasurer to amend a report within ten days of being notified of an inaccuracy.

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 Elect Matt Begeske Committee violated Minn. Stat. §10A.27, subd. 9(a), when it made a $150 contribution to the (Stephen) Khalar Volunteer Committee in October 1996.

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

3. There is probable cause to believe that Jim Ruzic, treasurer for the Elect Matt Begeske Committee, violated Minn. Stat. §10A.20, subd. 3, when he failed to disclose on the Committee's Report of Receipts and Expenditures covering January 1 through December 31, 1996, a $150 contribution it made to the Khalar Volunteer Committee.

4. There is probable cause to believe that Jim Ruzic violated Minn. Stat. §10A.23 when he failed to amend the Report of Receipts and Expenditures for the Elect Matt Begeske Committee within 10 days of being notified of the inaccuracy in his report.

ORDER

1. Jim Ruzic is ordered to amend the Elect Matt Begeske Committee's Report of Receipts and Expenditures for the period covering January 1 through December 31, 1996, to disclose the $150 contribution made to the Khalar Volunteer Committee within ten days from the date of this order.

2. The Executive Director shall report the findings of probable cause to the appropriate law enforcement authorities.

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 Matt Begeske and Jim Ruzic.

October 31, 1997

The Honorable John Marty

State Senator, District 54

325 State Capitol

75 Constitution Avenue

St. Paul, MN 55155

Dear Senator Marty:

On behalf of the Campaign Finance and Public Disclosure Board, I am happy to respond to your letter of October 8, 1997.

The Board agrees that the provisions of Minn. Stat. § 10A.20, subd 3(b) should be enforced. The Board is charged with enforcement of all of the provisions of the Ethics in Government Act and, in accomplishing that enforcement, must use its resources wisely. We believe that the best approach to strengthening enforcement in any area is to do so prospectively and with adequate notice to those clients who will be affected by the Board's actions.

Taking this approach, the Board has made significant progress toward obtaining full compliance with the employment and address disclosure requirement for reports covering 1996. Presently, only 15 committees have not provided full disclosure of employment information for 1996. Of the approximately 3850 itemized individual donors reported, only approximately 160 are still missing employment information. Virtually 100% compliance has been obtained with respect to address and contribution date disclosure.

The Board continues to work with eleven of the involved committees to resolve the remaining reporting issues. Further enforcement actions are pending against the other four committees for failure to provide full employment and address disclosure as well as for other violations.

Having begun vigorous enforcement of this disclosure requirement, the Board expects to obtain nearly full compliance in subsequent years. However, obtaining the same levels of compliance retroactively is a different matter. As people move and old information becomes more difficult to obtain, enforcement efforts produce diminishing results.

Undertaking enforcement of this requirement for prior years against only selected committees would contradict the Board's objective of providing fair and consistent enforcement of the act. On the other hand, initiating enforcement actions against each committee or fund not in full compliance in a prior year would consume significant resources which might better be directed toward improving future compliance in this and other areas.

October 31, 1997

The Honorable John Marty

State Senator, District 54

Page Two

The Board will continue its efforts to improve overall compliance with the Ethics in Government Act. However, those efforts must be taken in ways which have been shown to be effective and which are fair and consistent across the Board's client population.

The Board appreciates your interest in its work and your continuing efforts to improve Minnesota's campaign finance laws.

Sincerely,

G. Barry Anderson, Chair

Campaign Finance and Public Disclosure Board

STATE OF MINNESOTA

Office of the Attorney General

TO       :    JEANNE OLSON                            DATE   :    October 14, 1997   
              Executive Director, Campaign Finance                                   
              and Public Disclosure Board                                            


FROM    :     SUSAN C. GRETZ                         PHONE   :   296-2424 (Voice)   
              Assistant Attorney General                         296-1410 (TTY)     
              Manager, Labor Division                                               


SUBJECT  :    Board Authority to Enforce Filing Requirements Outside Chapter 10A  


CONFIDENTIAL - ATTORNEY CLIENT COMMUNICATION

You asked that I advise the Board regarding its authority and obligation to enforce certain statutory filing requirements that are embodied outside Chapter 10A. The filing requirements affect members and employees of the State Board of Investment (SBI), candidates for the Public Employee Retirement Association (PERA), and directors of Minnesota Technology, Inc. Although these statutes authorize the Board to develop and receive completed disclosure forms, they do not explicitly authorize the Board to enforce the receipt of the filing or impose penalties for noncompliance. Compare Minn. Stat. §§ 10A.04, subd. 5, 10A.065, subd. 3, 10A.09, subd. 7.

Your question is whether the Board is authorized and/or obligated to bring enforcement actions against those who do not meet the filing requirements in these statutes. Generally speaking, any enforcement action that requires an investigation can be undertaken only with specific statutory authorization. State v. Lloyd A. Fry Roofing Co., 310 Minn. 528, 246 N.W.2d 696 (1976). That authority is lacking in the statutes noted above.

For violations that do not necessitate an investigation, such as a failure to file a form, a different rule applies: although agencies can infer certain authority based on powers granted, courts have held that "any enlargement of express powers by implication must be fairly drawn and fairly evident" from powers the legislature has given the agency. Peoples Natural Gas Co. v. MPUC, 369 N.W.2d 530, 534 (Minn. 1985).

The Board's powers to require filings and impose penalties is not broadly drafted, but is limited to specific filing requirements of Chapter 10A. See, e.g. Minn. Stat. §§ 10A.04, subd. 5, 10A.065, subd. 3, 10A.09, subd. 7. In addition, Minn. Stat. § 10A.02, subd. 9 requires the executive director or staff to inspect filed materials as promptly as necessary to comply with "the provisions of this chapter, and other provisions of law requiring the filing of a document with the board," which suggests that the legislature consciously gave the Board authority over non-10A statutes when it wanted to do so, and did for a very limited purpose. This limited authority suggests that broader authority cannot be fairly drawn from the powers granted. Enforcement is likewise not fairly evident from the silence of the three statutes with respect to Board enforcement. However, the mention of the penalty provisions of Minn. Stat. §§ 10A.09 and 10A.10 in the SBI statute may suggest Board enforcement of at least that provision.

In sum, whether authority can be reasonably drawn from the Board's powers is largely a determination on which reasonable minds could differ. I think the statutes, read as a whole, do not evidence a legislative intent that the Board take enforcement action with respect to these actions. In any event, it is important to note that if the Board has the authority but nonetheless determines not to take enforcement action with respect to these statutes, that decision likely will be accorded great deference should any court be asked to consider the Board's determination. The U.S. Supreme Court has held: "An agency's decision not to prosecute or enforce, whether through civil or criminal process, is a decision generally committed to an agency's absolute discretion. Heckler v. Chaney, 470 U.S. 821, 831, 105 S.Ct. 1649, 1655 (1985). Indeed, the Heckler court recognized that an agency generally cannot act against each technical violation of the statute it is charged with enforcing, given resource constraints and priorities. Id., 105 S.Ct. at 1656.

Accordingly, the Board could decline to take enforcement action with respect to these statutes.