Top lege races tab: $13.6 million

During the fall campaign season, the Republican Party of Minnesota sent out mailings in Senate District 4 accusing Kent Eken of voting to raise the “granny tax.”

The legislation referenced in the piece was the 2009 omnibus health and human services bill. The Senate version of the bill included a 17-percent hike in the fee charged nursing home residents.
But at the time Eken was serving in the House. The nursing home fee increase wasn’t included in the House version and didn’t survive a conference committee on the bill. In other words, Eken never voted to increase fees on nursing home residents as claimed in the mailings.

On October 26, Minnesota DFL Party Chair Ken Martin filed a complaint with the Office of Administrative Hearings alleging that the state GOP violated state campaign rules by disseminating false information. The following day the Republican Party took a rather extraordinary step: It sent out another mailing to the 15,000 residents who’d received the earlier lit pieces, retracting its claim.

“We goofed,” the mailing stated. “Kent Eken did not vote to raise the fee seniors pay for nursing home care. Instead, Eken voted to raise the cost we pay for hospital care and health insurance.”

Despite this mea culpa, the Office of Administrative Hearings eventually ruled in the DFL’s favor and fined the state GOP $600. Eken went on to defeat GOP challenger Phil Hansen by 4 percentage points.
The dust-up over the “granny tax” was just one instance in which campaigns across the state were buffeted by independent expenditures that the candidates had no ability to control. The Eken-Hansen contest, in a sprawling western district that tilts slightly in favor of Republicans, was among the most expensive in the state. It attracted more than $550,000 in expenditures by the state parties, Senate caucuses and independent political organizations. That was more than six times as much as the candidates themselves spent on their campaigns.

Both Eken and Hansen decry the avalanche of independent expenditures. “It makes a candidate feel like a pawn when you don’t have any control over what they’re saying about you or about your opponent,” Eken said. “We don’t even have control over whether it’s a clean race.”

Hansen, a newcomer to politics, points out that he spent more than six months working diligently to communicate with voters in the district only to see his message drowned out in the final weeks of the campaign. “You feel so insignificant at the end,” said Hansen, a former defensive end in the National Football League. “You feel like you’re not even in control of your own race.”

That experience was shared by candidates in swing districts across the state in 2012. Nearly $13.6 million was spent by the campaigns, caucuses, parties and independent political organizations on 36 tightly contested races that Capitol Report tracked. The average cost of one of those swing races was $330,000 in the House, $435,000 in the Senate. And less than 20 percent of that money was spent by the candidates themselves. Put another way, party and PAC independent expenditures came to just over $11 million in those contests — a sum more than four times greater than the $2.7 million candidates spent.

Those figures don’t account for every penny that was spent on those legislative races in 2012. Some smaller groups that do limited independent expenditures aren’t included in the mix. (For instance, Voices of Conservative Women spent nearly $3,000 on mailings and phone calls to support eight female GOP candidates.) In addition, nonprofit groups that don’t explicitly endorse candidates aren’t required to report their spending with the Campaign Finance and Public Disclosure Board. The Coalition of Minnesota Businesses, which is affiliated with the Minnesota Chamber of Commerce, was just one of the entities that put out mailings through their issue-advocacy arms that don’t show up in campaign finance reports.

Overall, DFL-aligned groups had a significant cash advantage. Their combined fiscal output topped $7 million – just over 10 percent more than their GOP counterparts. In part, that reflects the continued financial struggles of the state Republican Party, which has been mired in crippling debt for more than a year. “They weren’t a financial player, and that’s tough when you’ve got one less bullet in your gun than the other side,” said Gregg Peppin, a veteran GOP political strategist.

The most expensive race in the Senate was the showdown between two-term state Rep. Keith Downey and Target Corp. attorney Melisa Franzen in Edina. Spending topped $850,000, with 27 percent of that money disbursed by the candidates themselves. Franzen won the race by nearly 6 percentage points.
On the House side, the race in district 39B — between first-term GOP Rep. Kathy Lohmer and DFL challenger Tom DeGree — drew the most money. That contest attracted just over $460,000, with spending by the campaigns accounting for just 18 percent of the total. Lohmer ultimately prevailed by 6 points.

Some races saw large infusions of cash from a single independent political group. In Senate District 36, where GOP Sen. Ben Kruse was ousted by DFL challenger John Hoffman, the Freedom Club State PAC spent just over $150,000 unsuccessfully trying to protect the incumbent. In fact, the Freedom Club backed the losing candidate in all seven Senate races where the group’s spending hit six figures.

Fallout from Citizens United

The overall spending dynamic is nothing new: Independent expenditures have outpaced campaign spending for years. But what’s changed, according to political operative on both sides of the aisle, is the size of that chasm. “The only thing that was different was the amount,” said Mike Kennedy, who oversaw the DFL Senate caucus campaign. “Probably the ratio was higher than it’s ever been before.”
In part, the increase in independent expenditures is due to the United States Supreme Court’s Citizens United ruling in 2010, which struck down prohibitions on political spending by corporations and unions as unconstitutional restrictions on free speech. While unions were already permitted to engage in political spending in Minnesota, the decision cleared a path for businesses to spend freely on elections.

That ruling also ties the Legislature’s hands in seeking solutions to the disparity between campaign spending and independent expenditures. “Because of Citizens United, there’s not a lot we can do legislatively,” Eken said. “There’s not much you can do to limit them when the Supreme Court has made that interpretation.”

But the Legislature is certain to discuss changes to campaign finance laws that seek to address the lack of financial muscle for candidates. In December the Campaign Finance and Public Disclosure Board recommended that the Legislature boost contribution and spending limits for House and Senate races. The board recommended increasing limits on individual contributions — at a minimum — from $500 to $1,500 per election cycle for House races and from $500 to $2,500 for Senate races. It also advised the Legislature to increase candidate spending caps from just over $40,000 to at least $60,000 for House races and from $109,000 to at least $120,000 for Senate contests. Gov. Mark Dayton has also voiced support for increasing individual contribution limits, which have remained stagnant since 1994.
“I’ve been here 14 years, and there have been the same limits for those 14 years,” Kennedy said. “It’s ludicrous to think that inflation hasn’t happened in 14 years.”

Peppin suggests a more significant departure from the status quo: throwing out all limits on political spending and requiring full, immediate disclosure. “The people are smart enough to make a determination if they think somebody is being bought and paid for by a donor,” Peppin said.

Turning off voters

Rep. Tom Anzelc, DFL-Balsam Township, witnessed firsthand the deluge of independent expenditures. He was pitted against GOP incumbent Rep. Carolyn McElfatrick, of Deer River, in House District 5B.
All together, independent expenditures on the contests totaled more than $350,000. That’s more than five times as much as was spent by the two campaigns. Anzelc says the mailings were so voluminous that people he’d never met before would accost him in the grocery store to decry the onslaught. “By the time we got to mid-October, they were so tired of participatory democracy they wanted to vote and get it over with,” Anzelc said. “They stopped paying attention to what we were really saying.”

Mailings and radio spots, primarily paid for by business-affiliated groups, tarred Anzelc as a supporter of allowing individuals who receive cash assistance from the state to use that money to purchase cigarettes and alcohol. The charge stemmed from an amendment that Anzelc voted against that would have stiffened restrictions on how cash assistance can be used. “Over the years, I’ve always seen a propensity for the other side to come after the poor,” Anzelc said. “They always end up coming after the poor. And they did with me.”

Anzelc said he followed the advice of his campaign manager and ignored the attack pieces. That strategy was vindicated on Election Day: The DFLer triumphed by 7 percentage points.