STATE OF MINNESOTA

CAMPAIGN FINANCE AND PUBLIC DISCLOSURE BOARD

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Special Board Meeting

Monday, May 4, 1998

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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, staff; Gretz, counsel.

 

CHAIR'S REPORT

 

Board Member Appointments

 

Chair Anderson welcomed Nancy Wilson to the meeting. Ms. Wilson was appointed to the Board effective April 28, 1998. Ms. Olson reported that the open Board position was publicized by the State Register today and the earliest an appointment could be made is June 5th.

 

Request for the following advisory opinion is nonpublic data.

 

Advisory Opinion #290 - Contributions to political committee by Indian tribe (laid over from the April 24, 1998, Board meeting) (see April 24th minutes)

 

A draft advisory opinion was available for public review.

 

Chair Anderson welcomed Robert Hentges, counsel for an Indian tribe to the meeting. Mr. Hentges introduced Kurt Bluedog and Greg Paulson, counsel for the tribe. Mr. Hentges told the Board that he disagreed with the position presented in the draft opinion that an Indian tribe is an association under Minn. Stat. chapter 10A. He cited Advisory Opinion #224 which found that the University of Minnesota is a government entity and, thus, not an association. Mr. Hentges stated that the tribe is also a government entity. He questioned if more disclosure was being required of the tribe than the association that requested Advisory Opinion #257 and if the disclosure would be retroactive.

 

Mr. Bluedog stated that the tribe requesting the opinion did so reluctantly and that the request is not on behalf of all tribes. He questioned the statement in the opinion that all Indian tribes may rely on this advisory opinion. Chair Anderson told Mr. Bluedog that the statement was an attempt to let other tribes know the Boards position in this matter and that the tribes could rely on it as a guide for like situations.

 

Chair Anderson welcomed Larry Kitto, a lobbyist representing tribes in Minnesota, who said that tribes are governments not businesses and it appears that the Board is using a double standard for reporting. Mr. Kitto noted that this opinion could have a chilling effect on the political activities of Indian tribes in Minnesota.

 

Chair Anderson welcomed Tony Trimble, counsel for the Republican Party of Minnesota. Mr. Trimble told the Board that full disclosure should be required from the tribes. The Advisory Opinion as written does not go far enough in guarding against the potential for ear marking contributions or circumvention of the law and Mr. Trimble urged the Board to rewrite the opinion for issue two. Mr. Goldsmith pointed out to Mr. Trimble that disclosure requirements in issue four, on page six, part (D) of the opinion would provide the disclosure necessary to track the potential problems pointed out by Mr. Trimble.

 

The Board reviewed and discussed the draft advisory opinion.

 

Ms. Rodriguez's MOTION: To approve Advisory Opinion #290 as drafted.

 

Ms. Rodriguez's AMENDED MOTION: To amend Advisory Opinion #290 to delete reference to the opinion being deemed to have been requested by all federally registered Minnesota tribes and state that all federally registered Minnesota tribes may rely on this opinion.

 

Vote on MOTION: Unanimously passed.

 

Ms. Rodriguez's AMENDED MOTION: To amend Advisory Opinion #290 to clarify transfers in issue four, on page 7, part (m).

 

Vote on MOTION: Unanimously passed.

 

Ms. Rodriguez's AMENDED MOTION: To approve Advisory Opinion #290 as amended.

 

Vote on MOTION: Unanimously passed.

 

Summary: Advisory Opinion #290 signed by Chair Barry Anderson, May 4, 1998: An Indian tribe is an "association" under Minnesota Statutes Chapter 10A. A political committee or political fund registered with the Board may not accept a contribution from an Indian tribe itself (as distinguished the tribe's registered political committee or political fund) without an accompanying disclosure statement from tribe.

 

Staff requested direction from the Board in staff investigation of other committees that have taken contributions from unregistered committees.

 

Ms. Pauly's MOTION: To direct staff to: 1) continue the investigations of other committees acceptance of contributions from unregistered committees; 2) limit the investigations to the year 1997; and 3) allow committees under investigation 60 days to respond to staff inquiry.

 

Vote on MOTION: Unanimously passed.

 

REPORT FROM EXECUTIVE SESSION

 

Complaint of Republican Party of Minnesota Regarding the Minnesota Democratic Farmer Labor State Central Committee, the Shakopee Mdewakanton Sioux PAC, and the Shakopee Mdewakanton Sioux Community

 

The Board issued findings concerning probable cause in the matter of an investigation regarding the acceptance of contributions from an unregistered committee and alleged circumvention of the law. 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).

 

ADJOURNMENT

 

Meeting adjourned.

 

Respectfully submitted,

  

Sidney Pauly, Secretary

(Minutes by staff)

 

 

attachments (1)

 

State of Minnesota

Campaign Finance & Public Disclosure Board

First Floor South, Centennial Building . 658 Cedar Street . St. Paul, MN 55155-1603

 

 

 

In the Matter of:

 

The Complaint of the Republican Party of Minnesota regarding

the Shakopee Mdewakanton Sioux Community,

the Shakopee Mdewakanton Sioux Community Political Action Committee, and

the Minnesota Democratic Farmer Labor Central Committee

 

  

PROCEDURAL BACKGROUND, STATEMENT OF THE EVIDENCE, FINDINGS CONCERNING PROBABLE CAUSE, AND ORDER

 

  

Procedural background

 

In a routine reconciliation of Reports of Receipts and Expenditures filed for calendar year 1996, staff of the Campaign Finance and Public Disclosure Board (the "Board") noted a discrepancy in the amount the Minnesota Democratic Farmer Labor Central Committee (the "DFL") reported receiving from the Shakopee Mdewakanton Sioux Political Action Committee (the "Committee") and the amount the Committee reported contributing to the DFL. Upon staff inquiry, the parties clarified that $27,500 of the reported contributions had been made by the Shakopee Mdewakanton Sioux Community (the "Tribe") rather than from the Committee.

 

Staff notified the DFL that the contribution from the Tribe, an entity not registered with the Board, was a contribution from an unregistered association and must be returned.

 

The DFL returned the contribution to the Tribe in December of 1997, thus remedying the violation. At the same time, the DFL solicited the Tribe to make another contribution to the DFL through the Committee. Later in December of 1997 the Tribe made a transfer of $27,500 to the Committee and the Committee made a contribution in the same amount to the DFL.

 

In its routine review of reports filed for 1997, Board staff noted the transfer from the Tribe to the Committee and initiated an informal inquiry. Staff suggested that the acceptance of the contribution by the Committee may be prohibited because the contribution was from an unregistered association (the Tribe) and did not appear to be accompanied by the statutorily required disclosure from the Tribe.

 

Although a Board inquiry was already underway and representatives of the Republican Party of Minnesota (the "RPM') were aware of the inquiry and had spoken to Board staff concerning it, the RPM filed a complaint based on the same transactions on April 8, 1998. At its meeting of April 24, 1998, the Board combined its own inquiry with the investigation of the complaint.

 

The Complaint suggests that the contribution from the Tribe to the Committee was for the purpose of circumventing the provisions of Chapter 10A and was, thus, in violation of Minn. Stat. § 10A.29. The RPM argues that the Tribe's contribution to the Committee and the subsequent contribution from the Committee to the DFL were for the purpose of avoiding a requirement that the Tribe itself register with the Board.

 

The complaint also alleges certain violations of Minnesota Statutes, Chapter 211B, which is not administered by the Board and is not considered in these findings.

 

Written responses to the complaint were received from the Tribe and the Committee, jointly, and from the DFL, separately. The responses address the legal and factual issues raised in the complaint.

 

The joint response from the Tribe and the Committee raises issues of tribal sovereignty and of the constitutionality of the disclosure provisions of Minnesota Statutes Chapter 10A. The Complaint also raises issues under Minnesota Statutes, Chapter 211B.

 

The Board has limited its review of this matter to those issues which arise as a result of the application of Minnesota Statutes Chapter 10A .

Tony Trimble appeared before the Board on behalf of the RPM. Robert Hentges and Kurt BlueDog appeared on behalf of the Tribe and the Committee.

 

 

Based on the Complaint and Responses submitted in this matter, filings in the records of the Board, and on the statements of representatives of the parties, the Board states the relevant evidence as follows:

 

Statement of the Evidence

 

    1. The Shakopee Mdewakanton Sioux Community Political Action Committee is registered with the Board as a political committee. The Committee engages in political activity directed off the Tribe's reservation.
    2.  

    3. In 1996, the Tribe made contributions to the DFL totaling $27,500.
    4.  

    5. In October, 1997, the Tribe and the DFL were notified by Board staff that the Board considered these contributions to be from an unregistered association (the Tribe). The Board advised the DFL that it could return the contributions in order to avoid further Board action. As a result, in December, 1997, the DFL returned the contributions to the Tribe.
    6.  

    7. With the return of the contributions to the Tribe, the DFL requested that the Tribe make a contribution of $27,500 from its political committee (the Committee). In late December, the Tribe transferred $27,500 to the Committee. On the same day the Committee made a contribution of $27,500 to the DFL.
    8.  

    9. The evidence suggests that the purpose of the Tribe's contribution to the Committee was to enable the Committee to make the contribution to the DFL. It also suggests that there was direction by the Tribe to the Committee to carry out this purpose.
    10.  

    11. The DFL report for the relevant period states that the December, 1997, contribution was from the "Shakopee Mdewakanton Sioux Community". However, the Committee's report and the surrounding correspondence make it clear that the 1997 contribution was from the Committee rather than from the Tribe.

  

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

 

Findings Concerning Probable Cause

 

    1. The Tribe is an association as defined in Minn. Stat. § 10A.01, subd. 2. Although an Indian tribe also has a special status with respect to sovereignty, that status does not preclude its recognition as an association for the purposes of Minnesota Statutes Chapter 10A. The Tribe itself is not registered with the Board.
    2.  

    3. The Committee is a political committee established by the Tribe and registered with the Board. The Committee engages in political activity directed off the Tribe's reservation.
    4.  

    5. The DFL is a political party unit, which is recognized under Minnesota Statutes Chapter 10A as a political committee.
    6.  

    7. Minn. Stat. § 10A.15, subd. 3c, provides that "An . . . association . . . may establish, finance, maintain, or control a political committee or political fund. One who does this is a ‘parent'. The political committee or fund so established. . . is a ‘subsidiary'". The relation of the Tribe to its Committee is that of parent and subsidiary.
    8.  

    9. Minn. Stat. § 10A.15, subd. 3c, specifically permits an association to control the activities of its subsidiary committee. This control includes the right of the parent to direct contributions made by the subsidiary committee.
    10.  

    11. An association's right to finance its subsidiary committee is subject to other applicable provisions of Minnesota Statutes Chapter 10A. Thus, the Tribe's right to directly finance its Committee is restricted due to the fact that the Tribe is an unregistered association under Minnesota Statutes Chapter 10A.
    12.  

    13. The Committee's acceptance of the contribution from the Tribe constituted the acceptance by a political committee of a contribution in excess of $100 from a unregistered association. The acceptance occurred without the accompanying disclosure required by Minn. Stat. § 10A.22, subd. 7.
    14. There is no requirement in Minnesota Statutes Chapter 10A that the Tribe register in order to make a contribution to its Committee. The only requirement is that it provide specified disclosure with such a contribution.
    15. Based on the relation of the Tribe to its Committee, and the authority conferred by Minn. Stat. § 10A.15, subd. 3c, the Tribe may direct its subsidiary Committee to make specific contributions.
    16. The Tribe made, and the Committee accepted a contribution without the required disclosure. The Committee then made a contribution to the DFL. The DFL is not responsible for determining the appropriateness of contributions to another committee registered with and reporting to the Board.
    17. The otherwise permissible contribution from the Tribe to its Committee does not become a circumvention of Minnesota Statutes Chapter 10A because of the lack of accompanying disclosure.
    18.  

    19. There is no probable cause to believe that the Tribe or its Committee violated Minn. Stat. § 10A.29 by the Tribe directing contributions through its Committee for the purposes of circumventing the provisions of Minnesota Statutes Chapter 10A .
    20. There is probable cause to believe that the Committee as recipient and the Tribe as donor violated the provisions of Minn. Stat. § 10A.22, subd. 7, which prohibits a registered committee from accepting a contribution in excess of $100 from an unregistered association unless the contribution is accompanied by the required financial disclosure statement.
    21.  

    22. There is no probable cause to believe that the DFL violated any provision of Minnesota Statutes Chapter 10A as a result of the transactions described in the complaint.
    23. The Order accompanying these findings does not require any enforcement by the Board directly against the Tribe and the Board does not decide whether it has the authority to enforce Minnesota Statutes Chapter 10A directly against the Tribe. Pursuant to statute, these findings will be reported to the appropriate legal authorities, who will independently determine whether they will elect, or have the authority, to undertake enforcement against the Tribe.

 

Based on the above Findings Concerning Probable Cause, the Board issues the following:

 

Order

 

    1. The Shakopee Mdewakanton Sioux Community Political Action Committee is ordered to return to the Tribe the December, 1997, contribution of $27,500 within 60 days and to within 5 days thereafter furnish to the Board proof of such return.
    2.  

    3. In lieu of returning the contribution to the Tribe, the Committee may remedy the violation for which probable cause was found by obtaining from the Tribe and submitting to the Board within 60 days the disclosure required by Minn. Stat. § 10A.22, as interpreted in the Board's advisory opinion 290,
    4.  

    5. The Executive Director of the Board shall report these findings to the appropriate law enforcement officials pursuant to Minn. Stat. § 10A.02, subd. 11.
    6.  

    7. Copies of these findings and order shall be provided to each of the parties by the Executive Director.
    8.  

    9. The record and proceedings in this matter are hereby made a part of the Board's public records.

 

 

Date: 5/4/98

 

G. Barry Anderson

Campaign Finance and Public Disclosure Board Chair