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Uneven compliance, weak penalties

Lieutenant governor hopeful Karin Housley was one of two candidates who have filed for constitutional offices who failed to file economic interest statements on time. (File photo)

Lieutenant governor hopeful Karin Housley was one of two candidates who have filed for constitutional offices who failed to file economic interest statements on time. (File photo)

After Sen. Karin Housley, R-St. Marys Point, missed the deadline for filing a required financial disclosure statement with the Campaign Finance and Public Disclosure Board, DFL Party chair Ken Martin this week was quick to cast the misstep from the lieutenant governor hopeful in the least flattering light.

“What is she hiding?” Martin said via press release. “Statements of economic interest are in place to ensure that Minnesotans know whether a candidate has a financial interest in the office they’re seeking. By not following the law and allowing voters to see potential conflicts of interest, [gubernatorial candidate] Scott Honour and his running mate are treating Minnesotans with contempt.”

Martin dolloped on some extra umbrage by highlighting Housley’s status as a shareholder in the Polymet Mining Corporation — evidence, he asserted, that “she has a direct financial interest” in the permitting and regulatory decisions involving the company.

As it happens, that last nugget was gleaned from Housley’s own Twitter account. “First time tour for a long-time shareholder,” Housley tweeted following a visit to Polymet offices during a northern Minnesota campaign swing last month.

Reached by telephone on Monday, Housley said her stake in the company is worth less than $300 and attributed the missed filing deadline with the Campaign Board to a clerical error. “It was just a campaign oversight. It was in my outbox and never went out. It’s there now,” Housley said.

Although not available online yet, Housley said her newly submitted disclosure is identical to the one she previously provided to the board as a candidate for the Senate. In that filing, Housley listed her occupation as a partner in Keller Williams Real Estate, stock in eight companies, and the ownership of four properties.

Of the 42 candidates who have filed for constitutional offices, Housley and Sharon Anderson — a perennial candidate who is running for attorney general — were the only ones who failed to file economic interest statements on time.  Among candidates running for the House, the compliance rate is considerably lower. According to the CFPDB website, 22 candidates — 12 Republicans and 10 Democrats, none of them current office holders — missed the deadline.

“There are more there than I would like or I would expect to see,” said Gary Goldsmith, the executive director of the CFPDB. “They should have gotten a letter from us by now and probably a telephone call notifying them that a late filing fee will accrue.”

At $5 per day with a cap of $100, the late filing fee is unlikely to cause much financial angst among wayward candidates. The penalty, which has not changed since it was first enacted in the early wave of post-Watergate reforms, does not provide much incentive for timely filing, Goldsmith said.

When the Legislature changed the rules for lobbyist filings by eliminating a 10-day grace period and increasing the late fee to $25 per day, Goldsmith noted, the compliance improved markedly. He said he hopes the Legislature will take a closer look at increasing the penalties for delinquent economic interest statements next session.

But to critics of the state’s disclosure rules for public officials, such changes would only nibble at the edge of a much larger problem: rules that, even when fully complied with, provide little in the way of detail.

Under existing law, candidates are required to list sources of compensation, any securities they own with a fair market value of at least $2,500, and non-homesteaded properties. However, they are not required to quantify those earnings and investments. Additionally, there is no mechanism for the campaign finance board to audit those self-reported assets.

Citing such factors in its 2012 nationwide survey of anti-corruption laws, the Center for Public Integrity gave Minnesota a grade of D-minus for legislative accountability. According to the center’s rankings, states such as Tennessee, New Jersey and Louisiana were among the top performers by that metric — and far more transparent than Minnesota.

“That may feel counter-intuitive. But we found that states with a recent history of serious scandals have often been forced by those scandals to make some fairly substantive and aggressive reforms,” said Gordon Witkin, the executive editor at the Center for Public Integrity. “Because Minnesota has a long reputation for relatively clean government, it has gotten a little bit lazy in terms of transparency and accountability.”

Rep. Ryan Winkler, DFL-Golden Valley, observed that Minnesota lawmakers have long been reluctant to beef up such rules, in large part because many chafe at the implication that there is any need for reform.

“This has been a pretty anti-public disclosure Legislature on lots of issues,” Winkler said. “I don’t think it’s because they are corrupt. I think it’s because they take it personally and they somehow think that by passing this sort of legislation they’ll make the public think the Legislature has a problem with integrity and self-dealing. I think the public believes we have a problem with integrity and self-dealing, so we should try to pass legislation to change that perception.”

Winkler noted that a push from Rep. Laurie Halverson, DFL-Eagan, to require that candidates and officials disclose basic information about their spouses’ sources of income and investments stalled at the Capitol this year. In Winkler’s view, such disclosures are more important than the existing requirements that candidates list mutual funds and stocks.

“It would be a pretty unusual set of circumstances where legislators would financially benefit because they own stock in a company and then the Legislature passes a bill that helps that company,” he ventured. “It would be far more likely that an interest with a lobby at the Capitol would find ways of getting cash to you or your family through consulting or other kinds of work.”

About Mike Mosedale

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