Minnesota Lawyer
Brad Rixmann has“gained an enormous amount of clout in a short amount of time,” said one veteran Capitol political operative. (Staff photo: Peter Bartz-Gallagher)
Brad Rixmann likes to say he was dragged into politics “kicking and screaming.”
Just five years ago, Rixmann, the founder and chief executive officer of Pawn America and spinoffs like Payday America, had been at the Capitol only a few times as a child for tours and visits. But in the latter half of the 2000s, bills started popping up at the Legislature that aimed to close what consumer advocates say are major loopholes in payday lending laws. That wouldn’t have been good for Rixmann’s business. He headed to the Capitol.
“I did not want to be involved,” Rixmann said this week. “I did not want to have to testify. We had no consumer complaints at the state level. If we ever have an issue, we take care of it, so it seemed to me like things were just being made up.” Rixmann started testifying out of necessity: “I felt like I could continue to be dragged down or I could get involved and talk with people about who we are and what we do.”
Now Rixmann is a regular in Republican political circles. Rixmann has personally given more than $167,000 to political causes of all stripes, but the lion’s share has gone to Republicans in the last three years. While that figure pales in comparison with GOP uber-donors like reclusive businessman Bob Cummins — who has given millions, mainly to the House Republican caucus, over the last decade — Rixmann is a more recent fixture at the Capitol and has been openly involved in everything from door-knocking and distributing lawn signs across the state to hosting fundraisers and working on campaigns. Last fall he was the finance co-chairman for Republican gubernatorial nominee Tom Emmer’s campaign.
“He’s gained an enormous amount of clout in a short amount of time,” said one veteran Capitol political operative who preferred to remain anonymous. “He’s a Republican, no doubt, but even when Democrats were in control he managed to block [payday lending] bills. Now that Republicans are in control, you’re only going to see more of Brad Rixmann.”
Involved out of necessity
Rixmann is an Iron Ranger by birth. He was born in Hibbing but was adopted and moved to the western suburbs, where grew up. Rixmann went to Lutheran elementary and high schools before attending Concordia University.
His father took him to his first pawn store when he was 24, a story Rixmann loves to tell. “I walked in and I loved it, because I could actually afford to buy stuff,” he said. At the time, Rixmann was an apartment rental agent, and his father worked in real estate. But the job was only “marginally exciting,” and Rixmann wanted to get into the pawn industry. Rixmann and his father got a blessing from their local pastor and about a year later, in 1991, he opened his first Pawn America store, in Robbinsdale. Since then, the business has grown to 23 locations in four states, employs more than 400 people full-time and pulled in about $57 million in revenue in 2010, Rixmann said.
“For many, many years no one really thought about pawnbrokers,” he said. “Their stores were on the other side of the tracks where people wouldn’t think to shop. But the way to be successful is to go where people want to shop.”
The success of the business also drew attention in St. Paul. Bills started popping up in the Legislature around 2007 that aimed to close a loophole that advocates say allows some lenders to rack up fees at much higher rates.
Ron Elwood, an attorney at the Legal Service Advocacy Project, has fought the issue for years. With the help of legislators like former DFL Sen. Kevin Dahle and current DFL Rep. Jim Davnie, he has pushed bills that would require payday lenders to work under the Minnesota Consumer Small Loan Act. Several of Minnesota’s biggest payday lenders — including Pawn America — have chosen in recent years to operate instead under the state’s industrial loan and thrift statute, which allows them to make bigger loans and charge higher fees.
“It’s not just the idea of, ‘Is payday lending good, bad or indifferent?’ His outfit has exploited an unintentional legal loophole to charge significantly higher fees for loans than others can,” Elwood said. “He is big enough to become qualified as an industrial loan and thrift banking organization, but he does none of that business, and he uses that law to charge more.”
Rixmann the donor
Rixmann has been able to fight off changes to the law, however, and some say that’s because of his burgeoning political presence.
His pocketbook has been a major factor. While Rixmann’s political donations date back as far as 2002 — when he donated to payday lending supporter and DFLer Mee Moua’s campaign for Senate — they were minor and infrequent until 2007, when payday lending bills slipped into the legislative queue. Each year since then, Rixmann’s donations have increased in volume and breadth.
According to the Minnesota Campaign Finance and Public Disclosure Board, Rixmann has donated nearly $167,000 to political causes. The House Republican caucus (Rixmann calls it the most “business-friendly” legislative caucus) has been one of his biggest beneficiaries, receiving about $45,000 from Rixmann over the last several years. Republicans have gotten the lion’s share of his donations — his largest single contribution was to the Republican Party of Minnesota for nearly $60,000 last year — but Rixmann has taken the time to tend to the other side of the aisle, too.
He donated to both DFL and GOP candidates for governor and threw money at individual DFL candidates like Reps. Leon Lillie, Tom Tillberry and Joe Atkins. On both sides of the aisle, Rixmann has made micro-level contributions to specific Senate and Congressional District party groups and chamber PACs in cities like Burnsville and St. Paul. The Senate DFL, which until last fall held the majority for nearly 40 years, has received $20,000 from Rixmann, while Senate GOPers have received $13,000. The House DFL caucus has received the least, with about $5,000 total in donations.
When asked if he is a Republican or Democrat, Rixmann says only that he “supports those who support business.” He plans to stay involved looking ahead to the 2012 elections, saying that “Democrats haven’t called me and asked me to be involved yet.”
CEO turned campaigner
Rixmann’s political activities have slowly stretched beyond campaign contributions. He has been a board member of the Minnesota Chamber of Commerce’s political action committee; he is chairman of the Minnesota Pawn Brokers Association; he worked on Emmer’s campaign; and he considers donors and businessmen like Cummins close friends. Last fall he co-hosted a high-profile fundraiser for Emmer alongside then-Gov. Tim Pawlenty and former Republican Sen. Norm Coleman. He has already hosted a pheasant hunting fundraiser for House Republicans this year.
During the 2010 gubernatorial battle, Rixmann sent a letter to other members of the chamber PAC board as they deliberated over whether to endorse Emmer or Independence Party candidate and business owner Tom Horner. In the letter, Rixmann said Mark Dayton would win the governorship if the business community didn’t rally behind Emmer. The PAC ultimately endorsed Emmer.
“Quite often as business owners, it’s easy for us to write checks,” Rixmann said, “and what I like to do is get into the trenches and talk to people and say this is who we are and why we are involved. Sometimes people sit at home and they vote and things don’t go their way, and they are upset for two years or four years or six years. In order to really make a difference, you have to get involved.”
He has brought his business and employees and family into the political world. Many of his employees are also frequent political donors, and one lobbyist said he also helps organize massive door knocks through Chuck Armstrong, his community affairs director at Rixmann Cos. Rixmann is also a lawn sign enthusiast. He has his own trailer used solely for the purpose of dropping lawn signs for candidates he supports. Last fall, some of his Pawn America shops even sported Emmer for Governor signs in their windows.
GOP operative Gregg Peppin said Rixmann’s profile has only recently risen in Republican circles. Peppin worked in the House until 2008; at that time, Rixmann was not yet considered one of the “go-to guys” for the caucus. That’s changing, Peppin said.
Despite his GOP bona fides, Rixmann has also been able to fend off DFL-backed bills in a DFL-controlled Legislature. Many sources point to his lead lobbyist, Paul Cassidy, as the reason. Cassidy and Rixmann are strange bedfellows; Cassidy worked in the administration of former DFL Gov. Rudy Perpich and has been a DFL lobbyist and bundler for years.
But Rixmann’s father had been a client of Cassidy’s, and he went right to him when he needed a presence at the Capitol. As Cassidy tells it, the two are old friends. “I think Brad has adapted very well,” Cassidy said. “I don’t think a lot of people asked to be dragged into the legislative process, especially a business person. Out of necessity, Brad had to start engaging at the Legislature.”
