STATE OF MINNESOTA

CAMPAIGN FINANCE AND PUBLIC DISCLOSURE BOARD

. . . . . . . . .

Friday, September 25, 1998

. . . . . . . . .

Ladyslipper Conference Room

Ground Floor, Centennial Office Building

. . . . . . . . .

  

MINUTES

 

Meeting was called to order by Chair Rodriguez.

 

Members present: Fluegel, Heffelfinger, Pauly, Rodriguez, Wilson.

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

 

Mr. Slocum informed Board members he would be unable to attend the meeting.

 

MINUTES (August 28, 1998)

 

Ms. Wilson's MOTION: To approve the August 28, 1998, minutes as drafted.

 

Vote on MOTION: Unanimously passed.

 

CHAIR'S REPORT

 

New Board Member

 

Chair Rodriguez welcomed Tom Heffelfinger to the Board. Mr. Heffelfinger's appointment was effective September 12, 1998.

 

Board Meeting Schedule

 

Next meeting will be on October 30, 1998.

 

Legislative Recommendations and Personnel Committee Appointments

 

Chair Rodriguez announced the following appointments:

 

Personnel Committee, Ms. Pauly and Chair Rodriguez.

 

Legislative Recommendations Committee will be appointed at the Board retreat.

 

EXECUTIVE DIRECTOR'S REPORT

 

Ms. Olson reported the following:

 

Staff activities:

 

September 1st - Mr. Goldsmith and Ms. Olson met with Terese Koenig and Mark Pederson from the Department of Revenue. Ms. Koenig is interested in the expanding the Board's responsibilities in enforcement of the Political Contribution Refund program. Staff explained that the lack of Board resources and appropriate staffing would negate the Board's ability to voluntarily accept the added tasks. Staff agreed to provide space in regularly scheduled mailings for the Department of Revenue to inform candidates and political party units of program requirements.

 

September 22nd - Mr. Heffelfinger met with Ms. Olson and discussed Board procedures and current issues.

 

Finance 98 was used by 22 candidate committees and 5 political party committees to electronically file the pre-primary report. Staff believes that additional candidates, committees, and funds are using the software for recordkeeping and will eventually file reports electronically. Staff receives many compliments on the software and Mr. Goldsmith's dedication to the project is to be commended.

 

Legislative staff continues to meet regarding recodification of Chapter 10A.

 

Personnel:

 

On September 28, Ms. Swanson begins a week of jury duty in Ramsey County.

 

Miscellaneous:

 

The following items were available for Board members:

 

 

 

 

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, 1998, 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 Clifford, Representing Coalition for the Advance of Telecom in Minn

 

Bradley Clifford, Representing Coalition of Export Minn

 

Kenneth Hardy, Representing National Association Minn Cont-Emerg Small Business Program

 

Mary Teas, Representing American Diabetes Association

 

Board Action: Authorization of third certified letter to compel the filing of Statement of Economic Interest for Candidates for Elective Office, 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.

 

Sharon Anderson

Pat Muggenborg

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

 

Vote on MOTION: Unanimously passed.

 

Discussion Items

 

Waiver Requests

 

 

 

Ms. Pauly's MOTION: To reduce Mr. Walz' $200 late filing fee to $100.

 

Vote on MOTION: Unanimously passed.

 

Lobbyist Termination Request

 

Clair Budke, Executive Director, Minnesota Society of Certified Public Accountants - Ms. Budke informed Board staff that Thomas Walsh, a lobbyist registered as representing the Minnesota Society of Certified Public Accountants terminated his employment with the organization and has moved to Arkansas. Ms. Budke states that on September 4, 1998, Mr. Walsh tried to fax the report to the Campaign Finance and Public Disclosure Board office. However, the report did not go through and the original was removed from their fax machine and misplaced. They were able to print out a partial first page of the report indicating termination. The association has no way to contact Mr. Walsh. Ms. Budke requests that the Board accept the partially filed termination report and her letter as a confirmation of Mr. Walsh's termination.

 

Mr. Fluegel's MOTION: To accept the partially filed termination report and Ms. Budke's letter as a confirmation of Mr. Walsh's termination.

 

Vote on MOTION: Unanimously passed.

 

Administrative Termination of Lobbyist

 

John Clark, Representing Minn Consumer Health Care Council Inc. - Mr. Clark registered as a lobbyist in January of 1998, and reported no disbursements on his April 15, 1998, report. The July 15, 1998, Lobbyist Disbursement Report has not been received in the Board office to date. Following the appropriate procedures, staff attempted to obtain the report. However, all correspondence for Mr. Clark was returned as "moved left no address". The address for the association and the address for Mr. Clark were the same, and the phone number provided on Mr. Clark's registration form has been disconnected. Staff contacted the Secretary of State's office on August 12, 1998, to try to obtain more information regarding the association, however, the Minn Consumer Health Care Council in not a registered Minnesota corporation.

 

Ms. Wilson's MOTION: To: 1) administratively terminate the lobbyist registration for John Clark, representing Minn Consumer Health Care Council Inc.; 2) suspend enforcement activities to obtain the Lobbyist Disbursement Report due April 15, 1998; 3) place all correspondence in the lobbyist files; 5) continue to maintain the lobbyists files in the active files section of the Board's records; and 6) require the delinquent report to be filed by Mr. Clark before he registers as a lobbyist in the future.

 

Vote on MOTION: Unanimously passed.

 

Administrative Termination of Political Committee

 

Independent Conservative Liberal Coalition - The Independent Conservative Liberal Coalition registered in November of 1996 and has had a balance of $6.00 since that time. The Report of Receipts and Expenditures due February 2, 1998, has not been received in the Board office to date. Following the appropriate procedures, staff attempted to obtain the report. However, all correspondence sent to the treasurer, Joseph Bronzin, was returned as "attempted not known" or "no forward order on file" Staff then contacted the chair, who stated that he did not want any part in the organization and that he had no information regarding the treasurer. Subsequent to the Board's approval, staff referred the matter to the Attorney General's Office. While attempting to contact Mr. Bronzin, the Attorney General's office was informed that he was deceased. Staff has attempted to contact the deputy treasurer, but he is no longer at the address or phone number specified on the registration form. Staff requests further direction.

 

Mr. Fluegel's MOTION: To: 1) administratively terminate the political committee registration for the Independent Conservative Liberal Coalition; and 2) suspend enforcement activities to obtain the Report of Receipts and Expenditures due February 2, 1998.

 

Vote on MOTION: Unanimously passed.

 

Staff request for direction for imposing late filing fees for electronically filed reports

 

Pursuant to Board resolution adopted on July 26, 1996, late filing fees are automatically imposed in cases where the statutory requirements for the imposition of such fees have been met. Staff has been notified by fewer than ten committees that they attempted to file their report timely by electronic means. Staff can document that the committees did attempt to file their report and that it was an error in the system that was at fault for the unsuccessful filing. Staff has also been contacted by one committee which produced documentation that the committee's report was faxed on the day it was due, but it was never printed from the Board's fax machine. Staff recommends that the automatic imposition of fines against these committees be suspended.

 

Mr. Heffelfinger's MOTION: Late filing fees against the committees that attempted, unsuccessfully to file the required reports electronically or by fax, will not be automatically imposed. Staff is directed to bring to the Board any such matter where the treasurer did not subsequently and promptly file a written version of the report.

 

Vote on MOTION: Unanimously passed.

 

Acceptance of Contributions from Unregistered Association without Proper Disclosure

Fond du Lac Band Committee of Political Education, Lower Sioux Political Education Fund, Prairie Island Community PAC, MAH MAH WI NO MIN - I, Shakopee Mdwakanton Sioux - Pursuant to Board direction at its August 28, 1998, meeting, staff informed the representatives of the committees and funds who accepted contributions from Indian Tribes that any action regarding this matter would be suspended until the outcome of the motion for a temporary injunction in the litigation between the Shakopee Mdwakanton Sioux Community and the Campaign Finance and Public Disclosure Board has been determined. On September 9, 1998, the court denied the tribe's motion for a temporary injunction. Staff requests further direction on how to proceed with further enforcement of this matter.

 

Ms. Wilson's MOTION: To authorize staff to proceed with enforcement against political committees and funds that have not met the disclosure requirements in Minn. Stat. ch 10A.

 

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

 

Informational Items

 

Reconciliation Calendar Year 1997 Report of Receipts and Expenditures

 

On June 16,1998, staff sent 159 letters to candidates, political committees and funds, and party units regarding 305 discrepancies between contribution amounts reported by donors and recipients which were discovered during a routine reconciliation audit. On July 13, 1998, staff sent 35 second letters requesting information to the committees who had not replied to the initial inquiry or whose reply did not eliminate the remaining 35 discrepancies. On August 3, 1998, 6 certified letters were sent to those who still had 11 outstanding discrepancies. All discrepancies have now been cleared.

 

Payment of Late Filing Fees

 

 

Joseph Quinn, Minneapolis Fire Department Pensioners' PCF: $55

William Lever, Committee to Elect Jeff Aakhus: $100

 

Pamela Morse: $25

Tom Huntley: $20

 

 

Lillian Ortendahl, 11th Senate District DFL: $50

Donna Bohlke, Sibley County RPM Party Exec Committee: $50

 

Anonymous Contributions

 

 

Revenue Recapture

 

Tim Knoedler, $100 for the late filing of the 1996 Pre-Primary Report of Receipts and Expenditures.

 

All payments of late filing fees and civil fines have been deposited in the general fund of the state pursuant to statute. The anonymous contributions have been deposited in the general account of the state elections campaign fund pursuant to statute.

 

Agency deposits - Ms. Errico submitted a report covering July 1 through August 31, 1998.

 

Standards for Committee Disclosure of Reimbursements

 

Third party reimbursements occur when a person pays for an item on behalf of a committee and then seeks reimbursement for that payment or when a purchase from a vendor is charged on a credit card. Minn. Stat. §10A.20, subd. 13, states that when an itemized expenditure is a reimbursement to a third party, the treasurer must "report the purpose of each expenditure or disbursement for which the third party is being reimbursed."

 

By administrative rule the Board has stated that when the reimbursement is to a credit card company, the treasurer must disclose the name and address of the vendor from whom the original purchase was made as well as the description and amount of the original expenditure. However, the rule does not apply to reimbursements paid to individuals. The statute alone does not provide a strong basis for requiring the names of vendors underlying an individual reimbursement. The fact that the purpose "of each" reimbursed expense must be disclosed leads to a logical conclusion that if a single reimbursement includes multiple purposes, the amount of each should be broken out with its purpose.

 

Ms. Pauly's MOTION: Be it resolved that:

 

Pursuant to Minn. Stat. §10A.20, subd. 13, disclosure of an itemized reimbursement to an individual is complete is it discloses the purpose of the underlying payment being reimbursed. If more than one underlying payment is included in a single reimbursement, the disclosure shall list the purpose and amount of each underlying payment. Pursuant to Minn. Rules Part 4503.0600, itemized reimbursements to credit card companies shall include the above information and, in addition, must disclose the name and address of the original vendor from which the purchase was made.

 

Vote on MOTION: Unanimously passed.

 

Board members agreed that this matter should be considered in future rulemaking.

 

Payment of Party Account Public Subsidy

 

Mr. Heffelfinger's MOTION: Be it resolved that:

 

The Executive Director shall determine which candidates are eligible for party account public subsidy payments, shall verify all eligibility requirements, shall determine the amount of each payment to which the candidate is entitled, and shall do all things necessary to make the payment within the time period specified in statute.

 

Further resolved that:

 

After the general election, the Executive Director shall determine which candidates are eligible for general account public subsidy payments, shall verify all eligibility requirements, and shall determine the amount of each payment to which the candidate is entitled.

 

That the Board recognizes that the final day for a candidate to file an affidavit of contributions is December 1, 1998; that an affidavit of contributions may be filed by mail, in which case the postmark date is the date of filing; and that all affidavits of contribution must be received before calculation of the general account payments can be completed. Therefore, the Board instructs the Executive Director to make final calculations and process the general account payments on December 7, 1998, recognizing that this date may be beyond the statutory date for payment of the general account public subsidy amounts.

 

Vote on MOTION: Unanimously passed.

 

Council on Governmental Ethics Laws Conference (COGEL)

 

Ms. Olson and Mr. Goldsmith attended the annual conference held in Seattle. Mr. Goldsmith gave a presentation on electronic filing. Ms. Olson has been named as president-elect of COGEL. She will be president from December, 1999, to December. 2000.

 

Expenses for Ms. Olson and Mr. Goldsmith to attend the conference will exceed Board recommended $1,000 per person. This year's hotel costs were 50% greater than in the past. In addition, the airline strike made travel costs more expensive. Staff requests permission to reimburse staff members for all work related expenditures connected to the COGEL conference. It is anticipated that these additional expenditures will not exceed $500.

 

Ms. Wilson's MOTION: To approve reimbursement of actual costs the staff incurred attending the Council on Governmental Ethics Laws Conference.

 

Vote on MOTION: Unanimously passed.

 

ADVISORY OPINION REQUESTS

 

Request for the following advisory opinion is public data.

 

Advisory Opinion #304 - Lobbying Municipal Governmental Units

 

The Board reviewed a draft response to an advisory opinion request from John H. Herman, an attorney in a firm which represents clients in a variety of matters before metropolitan governmental units ("MGU"), who asks when an attorney's activities on behalf of a client, as described in the facts, require the attorney to register with the Board as a lobbyist, and if an attorney representing a client in the process of selling insurance, financial services, business consulting, or educational services to a MGU is excluded from the definition of a lobbyist.

 

Mr. Fluegel's MOTION: To approve Advisory Opinion #304 as drafted.

 

Board members discussed and made certain changes to the draft opinion.

 

Mr. Fluegel withdrew his MOTION.

 

Staff will rewrite the opinion to reflect the discussion.

 

Mr. Fluegel‘s MOTION: To lay over Advisory Opinion #304 to the October 30th meeting.

 

Vote on MOTION: Unanimously passed.

 

LEGAL COUNSEL'S REPORT

 

Counsel Gretz introduced Joan Eichhorst, Assistant Attorney General in the Attorney General's Office. Counsel Eichhorst will be assisting Counsel Gretz in Board matters. 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).

 

Tribal Sovereignty (see April 24th, May 4th, June 26th, July 24th, and August 28th Board minutes)

 

Mdewakanton Sioux v. G. Barry Anderson - Counsel Gretz reported that Judge Marrinan denied the plaintiffs request for a temporary injunction. Copies of the motion for appeal by the plaintiff were available for Board members.

 

Laura Spillane, Treasurer, Mike Spillane Volunteer Committee - Ms. Spillane contacted Counsel Gretz' office and stated that she never worked on Mr. Spillane's campaign or had access to the committee records. Counsel Gretz asked for Board direction on whether to pursue the treasurer or the candidate to compel the filing of the delinquent reports. It was agreed that Counsel Gretz should pursue both parties.

 

OTHER BUSINESS

 

Request to donate portrait - Ms. Olson reported that Ralph Ebbott, husband of former Board member Elizabeth Ebbott, would like to commission a portrait of Ms. Ebbott to hang in the Board office. Chair Rodriguez will notify Mr. Ebbott by letter of Board member concerns about the portrait and their decision to lay over discussion of the matter to the October 30th meeting.

 

REPORT FROM EXECUTIVE SESSION

 

Findings in the Matter of the Complaint of Phyllis Kahn Regarding Wes Lane

 

The Board issued findings of probable cause to believe that the Tobacco Institute was an original source of funds used for the purpose of lobbying to influence legislative action and that Wes Lane intentionally failed to disclose the Tobacco Institute as an original source of funds on his lobbyist disbursement reports for Minnesota D.R.I.V.E. between the years of 1988 and 1992. The Executive Director shall report the findings of probable cause to the appropriate law enforcement authorities. 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).

 

Findings in the Matter of the Complaint of (Ted) Mondale for Governor Committee Regarding the (Hubert) Humphrey for Governor Committee

 

The Board issued findings of no probable cause to believe that the (Hubert) Humphrey for Governor Committee failed to either report contributions or expenditures related to a website maintained on the internet. 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,

 

 

Wil Fluegel, Secretary

(Minutes by staff)

 

attachments (3) To receive the attachments, please contact the Board office.