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Legislature failed to close campaign disclosure loophole

Paul Demko//June 7, 2013//

Legislature failed to close campaign disclosure loophole

Paul Demko//June 7, 2013//

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Gary Goldsmith, executive director of the Campaign Finance and Public Disclosure Board, expressed disappointment that board recommendations to bolster disclosure requirements were not adopted. (Staff photo: Peter Bartz-Gallagher)

Opposition from state’s leading anti-abortion group helped scuttle proposal

In the days leading up to a contentious Republican primary contest last year between Connie Doepke and Dave Osmek for a Senate seat in the western suburbs, Americans for Prosperity Minnesota circulated a mailing.

“Obamacare is bad medicine,” it read, suggesting that the federal health care law would raise taxes by $500 million and allow government bureaucrats to interfere with medical decisions. “Yet, Representative Connie Doepke refused to help fight it.”

The piece went on to direct recipients to call Doepke’s office and express their displeasure over her purported failure to fight the Affordable Care Act. Nowhere in the piece did it explicitly call on individuals to vote for or against Doepke or Osmek, but Doepke’s campaign certainly viewed it as an effort to alter the outcome of the election.

“There’s no doubt in my mind that was a piece to sway the election,” said Jonathan Aanestad, who served as a key strategist on Doepke’s campaign. “We clearly understood that to be a negative toward Connie Doepke.”

Doepke went on to lose the election by just 107 votes.

There is no record of the mailing by Americans for Prosperity Minnesota in campaign finance reports from last year. Because the piece did not explicitly tell voters which candidate to support in the contest, it was not subject to the state’s disclosure rules. That means that there’s no way to find out how much was spent on the mailing or the identities of the donors behind it.

Aanestad personally doesn’t believe it would have made any difference in the contest if the names of the donors had been known. “I’m not for outing donors,” he said.

But such campaign communications — typically distributed by tax-exempt 501(c)4 nonprofit groups — have become an increasingly significant part of the political terrain in recent years. The lack of reporting requirements for such organizations was reaffirmed in an advisory opinion by the Minnesota Campaign Finance and Public Disclosure Board last August.

“A lot of money, and likely a lot of big money, is going into campaigns without voters knowing exactly who is supplying the money for the candidate,” said George Beck, a retired administrative law judge who serves on the campaign finance board. “I think that’s undemocratic. I think we have a right to know exactly who’s supporting the campaign.”

Board sought broader disclosure

The campaign finance board had recommended making changes to close that loophole during the 2013 legislative session. Specifically, the board suggested providing an explicit definition of what constitutes “express advocacy” and is therefore subject to disclosure requirements. Both the House and Senate omnibus campaign finance bills contained such language. They provided that express advocacy would include any communication that “is susceptible of no interpretation by a reasonable person other than as advocating the election or defeat of one or more clearly identified candidates.” Any communications within 30 days of a primary election or 60 days of a general election that met this standard would be subject to disclosure rules.

But the proposal ran into opposition from the Coalition of Minnesota Businesses, which is affiliated with the Minnesota Chamber of Commerce, and from Minnesota Citizens Concerned for Life (MCCL), the influential anti-abortion group.

Scott Fischbach, executive director of MCCL, said that one of the group’s concerns was that the proposal would potentially prevent the group from handing out informational pamphlets at county fairs. “What they were proposing just went way, way, way too far, and it had a whole host of unintended consequences,” Fischbach said. “The campaign finance board just really overreached and caught too many of us that really didn’t belong in there.”

But Rep. Ryan Winkler, DFL-Golden Valley, the lead author of the campaign finance bill, says that those concerns are “poppycock.” He points out that language was added to the bill explicitly exempting literature distributed at county fairs from the disclosure requirements. Winkler further states that he offered to add another exemption for communications with an organization’s members in an attempt to placate MCCL, but without success.

“They don’t like to have their members’ big donations [that are] used for elections — in other words, secret political contributors — known,” Winkler said. “That’s their position. They have an ideological opposition to disclosing their secret donations.”

The provision to increase disclosure requirements was amended out of the House bill during a hearing before the State Government Finance and Veterans Affairs Committee. The amendment passed on a 9-8 vote, with all Republicans and two pro-life Democrats voting in favor of removing the provisions.

Deal tied to elections bill

The disclosure language survived in the Senate version of the bill, but garnered no Republican votes on the floor. It then died in conference committee. The reason: Republicans threatened to pull support for the elections bill if the express advocacy provision remained in the campaign finance bill. Gov. Mark Dayton had stated that he wouldn’t sign any bill dealing with elections if it didn’t have bipartisan support.

“The Republicans said that they would not support any elections bill unless we agreed to take out the electioneering communications language and keep it out,” said Winkler. “In other words, they would take down both the elections bill and the campaign finance bill unless they prevailed. Our leadership agreed to that for the greater good of the elections bill and other provisions in the campaign finance bill.”

The deal eventually brokered also included a Senate provision exempting social events that all legislators are invited to attend from the state’s gift ban. Winkler wasn’t particularly happy about either decision. “It was a compromise that I’m not at all satisfied with,” he said.
Sen. Ann Rest, DFL-New Hope, the lead author of the Senate bill, also apparently wasn’t too pleased with the outcome. After the conference committee concluded, Rest had her name removed as the bill’s chief author. Instead, Sen. Katie Sieben, DFL-Newport, became the chief author. (Rest and Sieben did not return calls from Capitol Report seeking comment for this story.)

Gary Goldsmith, executive director of the Campaign Finance and Public Disclosure Board, expressed disappointment that the board’s recommendations with regard to bolstering disclosure requirements were not adopted. On Monday the board will hold its first meeting since the close of the legislative session, and he expects that to be a topic of discussion.

“They were some of the most important provisions of the bill from the board’s standpoint,” Goldsmith said. “These were important, and we’ll begin the conversation about how we go forward.”

Winker hopes to revisit both disclosure requirements and the gift-ban exemption next year. He also would like to take up legislation that would increase economic disclosure requirements for legislators.

“I’m not sure that we really significantly improved Minnesota’s campaign finance system with this bill this year,” Winkler said. “But we did improve the elections system, we did make some changes, and I think the ground is laid for more changes in the years ahead.”

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