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State GOP remains weighed down by debt

Mike Mullen//February 4, 2015//

State GOP remains weighed down by debt

Mike Mullen//February 4, 2015//

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DFL chairman Ken Martin observed that his party’s losses in the House prove that money “is not the only predictor of whether you’re going to be successful.” (File photo)
DFL chairman Ken Martin observed that his party’s losses in the House prove that money “is not the only predictor of whether you’re going to be successful.” (File photo)

Minnesota’s Republicans turned the House “red” in 2014, and will look to do the same for the Senate next year. Now, if only they could get that color off their campaign finance reports.

Year-end reports filed with the campaign finance board found the Republican Party of Minnesota (RPM) still weighed down by debts accumulated years before, and considerably worse off financially than the DFL Party. RPM entered 2015 with all of $680 in cash-on-hand in its state bank account, and had nearly $460,000 of debt in its name.

By comparison, the DFL Party’s main bank account had $126,000 in cash and around $30,000 of liabilities at the end of last year.

Much of the Republican debt was accumulated during 2014, an election year with two statewide contests and 134 state House elections. But some of it is left over from as far back as 2010, when the party’s finances first ran deeply into hock. For example, the GOP paid the law firm Trimble & Associates, which handled legal matters related to the 2010 gubernatorial recount, more than $100,000 during 2014, and still has to clear another $23,000 of that debt off its books.

Despite the lingering obligations and the seeming financial straits, state chairman Keith Downey was generally upbeat about the party’s fiscal picture. The GOP dedicated the majority of 2013, a non-election year, to balancing its budget, Downey explained, which allowed it to spend more freely — and take on more debt — during the 2014 campaign season.

“We were stable enough that we could direct financial resources, and largely all of our efforts in 2014, toward the elections.”

As much as half of a contribution received in 2013 would have gone toward debt repayments, said Downey, who estimated that paying down obligations might have only been 5 to 10 percent of last year’s operating budget. He attributes the “dramatic improvement” to a two-pronged approach.

On one section of the ledger, the party temporarily scaled back expenses on staffing and consulting; on another, Republicans cut long-term deals with some creditors, while paying off the most burdensome interest-bearing debts.

“It’s not perfect,” Downey said, “but we did everything we possibly could in the election year.”

The DFL’s current cash advantage was mirrored in its overwhelming spending edge during last year. The party’s central account doled out almost $2.9 million for independent expenditures, approaching three times the $1.1 million the GOP spent.

The DFL’s strength also translated to a huge lead in caucus spending. The House DFL caucus account spent $928,000 on independent expenditures, while its GOP opposite number had a total outlay of $470,000 on legislative contests. But money wasn’t everything. The DFL caucus spent more than $75,000 in defense of five different incumbents, each of whom went on to lose their seats.

Downey attributes some of those successes to near-parity seen among outside spending groups, where a number of business and social organizations combined to compete with DFL-aligned giant Alliance for a Better Minnesota (ABM).

DFL Party chairman Ken Martin observed that DFL losses in the House, despite the party’s outspending the Republicans, proved that money “is not the only predictor of whether you’re going to be successful.” Even still, Martin said he had started his 2016 fundraising efforts just weeks after the November elections.

“The next election started the day after the last one,” Martin said. “The sad reality is that, these days, campaigns never end.”

Downey, for his part, said the RPM would plan to take an approach like it did in 2013, reducing some of its operating activity to prepare for another election cycle the following year.

That year, 2016, will see all 201 legislators up for re-election, though only one notable statewide vote, for the presidency. The situation comes up only once every 12 years, Martin observed, and could mean Minnesota’s in-state donor bases get to have it out without much outside interference. Minnesota has backed the Democratic presidential candidate for 10 straight elections, a record streak in the modern era, and that run could discourage either party from big spending next year.

“That federal money is tough to come by, particularly if you don’t have national committees investing in the state,” Martin said. “It’s probably not likely that [Minnesota] is going to be a big battleground in that election.”

On the individual side, Gov. Mark Dayton’s campaign finance report showed a total of just over $3 million spent on his re-election. The amount gave Dayton significant financial superiority over the Republican candidate, Jeff Johnson, who spent about $2.3 million in his attempt to oust the DFL incumbent.

Dayton, who has said he will not seek re-election, carried about $35,000 in cash-on-hand into 2015. The governor’s campaign also disclosed nearly $3.9 million in debts, though the report’s use of the word “obligations” seems misleading; Dayton owes that money to himself, having loaned the campaign the money during his first campaign in 2010.

Rep. Ryan Winkler, DFL-Golden Valley, seized on the day’s news to make the case for increased transparency in political spending. Because state law only requires disclosure from outside groups that are expressly advocating — that is, instructing voters to “vote for” or “vote against” a specific candidate — in a given race, Winkler said, much of the real campaign activity goes unreported.

Winkler has introduced a bill to add a “reasonable person” provision to the law, which would expand the definition of electioneering to capture expenses that “could not be susceptible to any other interpretation.”

Last year, Americans for Prosperity, the nonprofit political organization founded by libertarian uber-donors Charles and David Koch, spent hundreds of thousands of dollars targeting Dayton’s record. Because the group did not explicitly tell television viewers and radio listeners to vote against the DFL governor, the ads fell outside current disclosure laws.

According to leaked accounts from a recent political retreat, the Koch brothers told elite donors and conservative candidates that they plan to spend nearly $900 million on the 2016 elections.

The issue surfaced momentarily in a House Government Operations and Elections Committee hearing on Tuesday, when Rep. Laurie Halverson, DFL-Eagan, encouraged the committee chairman to give the DFL-backed bill consideration. In response, Rep. Tim Sanders, R-Blaine, said he plans to hold discussion around the issue, though he said he was not sure if Winkler’s bill, of which Halverson is a co-author, would be the legislation put before the committee.

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