STATE OF MINNESOTA
CAMPAIGN FINANCE AND PUBLIC DISCLOSURE BOARD

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Friday, February 26, 1999

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Ladyslipper Conference Room

Ground Floor, Centennial Office Building

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MINUTES

 

Meeting was called to order by Chair Rodriguez.

 

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

Others present: Olson, Goldsmith, Swanson, Klingner, staff; Gretz, counsel.

 

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

 

MINUTES (January 8, 1999)

Ms. Pauly's MOTION: To approve the January 8, 1999, minutes as drafted.

 

Vote on MOTION: Unanimously passed.

 

CHAIR'S REPORT

 

Board Meeting Schedule

 

Next meeting will be on March 19, 1999.

 

EXECUTIVE DIRECTOR'S REPORT

 

Ms. Olson submitted the following written report:

 

Staff Activities:

 

January 12 - Ms. Olson attended a University of St. Thomas, Center for Nonprofit Management, Board Breakfast on the Relationship Between Board and Executive Director.

 

January 29 - Ms. Olson was on the faculty of a Minnesota Continuing Legal Education session on the Legislative Process.

 

February 8 - Mr. Goldsmith and Ms. Olson testified before the Senate Governmental Operations Budget Division about the Board's FY00/01 budget, the request for an additional

staff person, and the appropriation for technology enhancements. Prior to that meeting, the fiscal analysts from the Senate and House visited the Board office and discussed the budget.

 

February 8 - Mr. Goldsmith and Ms. Olson met with the new Republican House members to discuss the gift ban and economic interest reporting.

 

February 15 - Ms. Olson discussed lobbyist registration and reporting and the gift ban with the students at a Hamline University Graduate School class on Legislative Bill Tracking.

 

February 23 - Mr. Goldsmith and Ms. Olson testified before the House State Government Finance Committee about the Board's FY00/01 budget and request for additional staff and one-time appropriation.

 

February 23 - Mr. Goldsmith and Ms. Olson met with Secretary of State Mary Kiffmeyer and Joe Mansky, Elections Division Director, about election and political party issues.

 

February 23 - Mr. Goldsmith met with members of the Minnesota Farm Bureau Federation to discuss registration and reporting by political committees.

Mr. Goldsmith is again training clients who are using or intending to use Finance 98. Current training is in St. Paul. Out-state clients wishing on-site training are requested to contact the Board office. Staff will accommodate these training requests as appropriate.

 

Council on Governmental Ethics Laws (COGEL):

 

Ms. Olson attended a COGEL conference planning meeting in Providence, R.I., on January 31st and February 1st.

Legislation:

 

Chapter 1 of the 1999 legislative session remedies the problem of the make up of the Board with language that states: two members shall be former members of the legislature who support different political parties. The chapter was signed by Governor Ventura on February 17th and is effective February 26th.

 

Both legislative bodies have introduced a recodification bill. The House passed the bill out of committee on February 22nd with no substantive changes.

 

The Governor's budget includes funding the Board's request for a one-time appropriation for technology and a new staff person.

  

A bill was introduced in the House to repeal the Board's rule making authority.

 

Correspondence:

 

A letter from Steven Bosacker, Chief of Staff, Governor Ventura's office thanking the Board for their dedication to state service and the patience exhibited regarding the appointment process during this transition period was available for Board members.

 

Enforcement Report

 

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

 

Consent Items

 

Board Action: Authorization of a certified letter for late filing fee which accrued because of the late filing of a Lobbyist Disbursement Report due April 15, 1998, and subsequent legal enforcement action if the fees are not paid. A reminder notice and several phone attempts have previously been made.

 

Forrest Wilkinson, Forrest Wilkinson: $100

Authorization of a certified letter for late filing fee which accrued because of the late filing of a Lobbyist Disbursement Report due July 15, 1998, and subsequent legal enforcement action if the fees are not paid. A reminder notice and a phone attempt have previously been made.

 

Kenneth Hardy, treasurer, National Association of Minority Contractors and Emerging Small Business Program: $100

 

Authorization of a certified letter for late filing fees which accrued because of the late filing of Report of Receipts and Expenditures due October 26, 1998, and subsequent legal enforcement action if the fees are not paid. A reminder notice and a phone attempt have previously been made to each client.

 

Karen Asfeld, treasurer, Todd County DFL: $100

Timothy Bonham, treasurer, 62 Senate District DFL: $100

Timothy Bonham, treasurer, Minneapolis DFL Committee: $100

Sharleen Morniville, treasurer, Red Lake County RPM: $50

  Rev. John Bowens, treasurer, Coalition of Black Churches: $200

Carol Rosengren, treasurer, 54B House District RPM: $50

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

 

Vote on MOTION: Unanimously passed.

 

Discussion Items

Waiver requests

 

Wilda Obey, treasurer, Pine Country DFL: $450 (request for reconsideration, see October 30 and December 11, 1998, minutes)

 

At its meeting of October 30th Board members considered a request from Wilda Obey to waive the $450 fee accrued for the late filing of the Pre-primary Report of Receipts and Expenditures due September 8th. No motion was made on the request. The matter was then referred to the Attorney General's office and a demand letter was sent to Ms. Obey on January 12th. Ms. Obey also has a $50 late filing fee for the Pre-general Report of Receipts and Expenditures due October 26, 1998.

 

Chair Rodriguez welcomed Mr. Obey, who appeared on behalf of his wife. Mr. Obey explained that as a new treasurer, Mrs. Obey was not aware there was a report due and that they were out of the country when the report was received in the mail. The committee had no activity during the time period covered on the reports.

Ms. Wilson's MOTION: To approve Mr. Obey's request to waive the $450 late filing fee for the Pre-primary Report of Receipts and Expenditures and the $50 late filing fee for the Pre-general Report of Receipts and Expenditures.

 

The Board discussed the motion.

 

Ms. Wilson's AMENDED MOTION: To reduce Ms. Obey's late filing fees for the Pre-primary and Pre-general Reports of Receipts and Expenditures to $250.

 

Vote on MOTION: Unanimously passed.

  

Jual Carlson, treasurer, Together for Term Limits: $100 (request for reconsideration see December 11, 1998, minutes)

 

At its meeting of December 11th Board members considered a request from Jual Carlson to waive the $100 fee accrued for the late filing of the Pre-general Report of Receipts and Expenditures due October 26th. No motion was made on the request. In his second request, Mr. Carlson points out that the October report contained no changes from the previously filed report and that the report was only two days late, due to circumstances outlined in his previous request. Upon further review of the file, staff found that Together for Term Limits has been registered with the Board since November 1992, and that all previous reports were filed on time. Mr. Carlson informed staff that he would like to terminate the committee, however, they have an outstanding debt. The committees ending cash balance for calendar year 1998 is $93.56. No motion was made.

 

Authorization to terminate a political action committee with an ending cash balance greater than $100.

 

Matthew Shay, treasurer, Fran-PAC State - On January 14th, staff received a letter from Mr. Shay stating that the committee has no plans in the near future to support Minnesota State candidates and requests to terminate the committee's registration in Minnesota. Mr. Shay also stated that Fran-PAC will continue to exist and file with the Federal Elections Commission. After review of the file, staff found that Fran-PAC has been registered with the Board since June 1991, and has never made a contribution to a candidate for state office in Minnesota. Fran-PAC's ending cash balance for 1998 is $40,844.32.

Ms. Pauly's MOTION: To approve Mr. Shay's request to terminate Fran-PAC State committee with an ending cash balance greater than $100.

Vote on MOTION: Unanimously passed.

 

Board direction for further action for committee that has failed to file 1998 election year reports

 

Reid Hekman, treasurer, Young Republicans - The Young Republicans was started by high school students and registered with the Board in January 1997. The only Report of Receipts and Expenditures filed by the committee covered calendar year 1997 and disclosed an ending cash balance of $469.30. Staff has made several attempts to contact Mr. Hekman regarding the filing of the 1998 reports. Certified letters sent to the PO Box listed with the Board were returned to our office. In December, a certified letter went to an address in Detroit Lakes and was picked up by Mr. Hekman, however, the Board received no response from him. Staff has been unable to obtain a valid telephone number for Mr. Hekman or his parents. Staff was also unable to contact the committee chair and believes that he may be residing in Europe. Upon further review of the file, staff found that there were no itemized expenditures or contributions reported by the Young Republicans.

 

The committee has accrued a late filing fee of $1,000 and assuming the year end report is not filed, the total will be $1,100.

Mr. Heffelfinger's MOTION: To direct staff to administratively terminate the committee and discontinue attempts to secure the delinquent reports.

 

Vote on MOTION: Unanimously passed.

 

Contribution refund reconciliation for calendar year 1997

 

Staff performed a reconciliation audit between total contribution refunds made by the Department of Revenue and total amount of contributions reported by principle campaign committees and political party units. There was one principle campaign committee with a discrepancy greater than $500. That committee has since satisfactorily amended its report to show all contributions received in 1997.

 

Informational Items

 

Payment of Late Filing Fees

Pat Muggenburg, candidate: $100

 

Sunday Alabi, treasurer, Minn ACORN Political Action Committee: $50

Roy Bucholz, treasurer, Campaign Fundamentals: $100

Hermina Cardenas, treasurer, Neighbors for (Carlos) Mariani Committee: $300

Jerry Fallos, treasurer, USWA Local PAC 4108: $150

Kelly Guncheon, treasurer, MN Funeral Directors Association: $150

Michelle Lindquist, treasurer, Friends of Todd Lindquist: $100

John Meeks, treasurer, Change Minnesota: $50

Cynthia Page, treasurer, 5th Congressional District RPM: $50

Diane Poole, treasurer, 19th Senate District RPM: $450

Carlton Rust, treasurer, Reform Party of Minnesota: $50

Kevin Walli, treasurer, Fryberger, Buchanan, Smith & Frederick PAC: $400

 

Vernon Wetternach, treasurer, Karen Clark Election Committee: $466

 

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

 

ADVISORY OPINION REQUEST

 

Request for the following advisory opinion is public data.

 

Advisory Opinion #306 - Status of a nonprofit corporation as political committee; application of Minnesota Statutes Chapter 10A to nonprofit corporation's activities

 

The Board reviewed a draft response to an advisory opinion request from David Olsen, legal counsel for Ventura For Minnesota, Inc. (VMI) a nonprofit corporation which owns certain "intellectual property rights" which were transferred from the Jesse Ventura for Governor Committee (committee), who asks if: 1) the activities of VMI make it a political committee under Minn. Stat. ch 10A.01, sub. 15 and require VMI to register as such; 2) the committee may transfer the rights from the committee to the VMI without consideration; 3) licensing and royalty fees paid to VMI constitute contributions under Minnesota Statutes Chapter 10A; and 4) money spent by VMI for its stated purposes constitute corporate political contributions and if so, do the contributions fall within the nonprofit corporation exception to the general prohibition of Minn. Stat. 211B.15 on corporate contributions.

 

Chair Rodriguez welcomed David Olsen, counsel and Vice President, Ventura For Minnesota, Inc. and Doug Friedline, campaign manager for Jesse Ventura for Governor Committee.

 

Mr. Olsen explained the organization of the VMI nonprofit corporation and told Board members that they hoped to donate the net income realized from the receipts of fees and royalties to charity and spend some of the income on constituent services. When asked what type of expenses the corporation board would consider as constituent services, Mr. Olsen replied he did not know. Mr. Olsen noted that they would have no way of knowing what type of expenses they would be paying for until the requests were received. He also noted that there may be a future need for further advisory opinions as to what would constitute a constituent service.

 

Mr. Friedline explained to the Board how the Jesse Ventura for Governor Committee was using products approved by VMI in raising campaign funds.

 

Mr. Olsen and Mr. Friedline answered Board members questions. Board members discussed the question, when do constituent services merge with political activities.

Mr. Fluegel's MOTION: To: 1) direct staff to rewrite Advisory Opinion #306 to reflect Board discussion; 2) state that the activities of Ventura For Minnesota, Inc. (VMI), as described, do not make it a political committee however, its future activities may require it to establish and register a political fund; 3) draft responses to VMI's other questions based on the conclusion that VMI is not a political committee; and 4) lay this matter over to the March 19th Board meeting.

 

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

 

Mr. Olsen and Mr. Friedline left the meeting.

 

Request for the following advisory opinions are nonpublic data.

 

Advisory Opinion #307 - Definition of Constituent Services

 

The Board reviewed a draft response to an advisory opinion request from a legislator who asks if an incumbent legislator may use principal campaign committee funds to pay for bus transportation to the Capitol in St. Paul so that constituents can attend an educational day organized by the legislator, and if so, may such costs be reported as noncampaign disbursements.

 

Ms. Wilson's MOTION: To approve Advisory Opinion #307 as drafted.

 

Concerns were raised as to whether this service would be defined as a constituent service. Chair Rodriguez welcomed a staff member of the requester. The staff member read letters received from the constituents thanking the legislator for the opportunity to gain new insight into the legislative process through this trip. She also noted that all constituents paid for their own lunches.

 

Ms. Wilson withdrew her MOTION.

Mr. Fluegel's MOTION: To lay the matter over to the March 19th meeting when the requester will be available to answer questions from the Board.

 

Vote on MOTION: Unanimously passed.

  

Advisory Opinion #308 - Definition of Lobbyist

The Board reviewed a draft response to an advisory opinion request from an individual who asks if an uncompensated member of the board of directors of an association becomes a lobbyist under Minn. Stat. 10A.01, subd. 11, by spending more than five hours in a month communicating with public officials concerning the association's activities and concerns, and if the result is different if the association is a lobbyist principal by virtue of having a paid lobbyist registered with the Board.

 

Mr. Fluegel's MOTION: To approve advisory opinion #308 as drafted.

 

Vote on MOTION: Unanimously passed.

 

SUMMARY: ADVISORY OPINION #308 signed by Chair Carolyn Rodriguez, February 26, 1999: A member of the board of directors of an association who does not have authority to spend money on behalf of the association and who, without compensation, spends time communicating with public officials to urge them to take particular positions on legislation is not a lobbyist within the meaning of Minn. Stat. 10A.01, subd. 11.

 

Advisory Opinion #309 - Lobbyist contributions to retirement party and gift

 

The Board reviewed a draft response to an advisory opinion request from a retired public official who has been appointed as an official of a metropolitan governmental agency who asks if there are any restrictions on contributions to fund a retirement party or a gift for an individual who has ceased being an elected public official but who remains an "official" under Minn. Stat. 10A.071.

 

Board members discussed limitations and restrictions imposed by campaign finance laws and the fact that the although the proposed retirement party and gift relate to an official position no longer held, the requester is still within the group of persons classified as "officials" under the statute.

Mr. Heffelfinger's MOTION: To direct staff to rewrite the draft opinion based on discussion; circulate the amended text to the chair and other Board members for a five working day review; and direct the chair to approve nonsubstantive changes, if any, and sign the opinion.

 

Vote on MOTION: Unanimously passed.

 

SUMMARY: ADVISORY OPINION #309 signed by Chair Carolyn Rodriguez, March 19, 1999: Donations for a retirement party or gift for a retiring elected public official are not contributions to the official's principal campaign committee. A donation made or requested by a lobbyist or lobbyist principal for a gift to a retiring official, who has taken another position by which the individual is still an official under Minn. Stat. 10A.071, is prohibited. A donation made or requested by a lobbyist or lobbyist principal for a retirement party is a prohibited gift to any official attending the party unless such official contemporaneously pays to the donor consideration equal in value to the proportional cost of the gift.

 

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).

 

LEGISLATIVE RECOMMENDATIONS COMMITTEE REPORT

 

Ms. Olson summarized proposed legislation affecting Minn. Stat. ch. 10A.

 

REPORT FROM EXECUTIVE SESSION

The Board issued findings showing there is probable cause to believe that the Willy Negaard for Senate Committee violated Minn. Stat. 10A.27, subd. 9(b), when it made a contribution to the Gutknecht for U. S. Congress Committee. Minnesota Statutes, chapter 10A provides no penalty for this violation. 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).

 

The Board issued findings showing there is probable cause to believe that the (Tom) Van Engen Volunteer Committee violated Minn. Stat. 10A.27, subd. 9(b), when it made a contribution to the Craig Duehring for Congress Committee. Minnesota Statutes, chapter 10A provides no penalty for this violation. 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).

 

At it's meeting of January 8th Board members discussed the acceptance of a contribution from a lobbyist during regular session by the (Michael) Freeman for Governor Committee. The Pre-general Report of Receipts and Expenditures covering January 1 through October 19, 1998, filed by the committee disclosed acceptance of a $150 contribution during the regular session of the Legislature from a lobbyist registered with the Board. The committee provided documentation showing that the contribution has been returned to the contributor.

 

Mr. Goldsmith explained a problem in the Campaign Finance '98 software where individuals were not flagged as lobbyists. This problem with the software has been corrected. Because the violation occurred due to a problem with the Campaign Finance '98 software, the Board voted to accept the return of the contribution to the lobbyist, to close the matter, and make the Board's action a part of the public records of the Board.

ADJOURNMENT

 

Meeting adjourned.

 

Respectfully submitted,

  

Wil Fluegel, Secretary

(Minutes by staff)

 

contact the Campaign Finance Board for copies of the Legal Counsel's report at 651-296-5148 or 1-800-657-3889.

 

For Findings, click here.