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Teen Challenge, St. Benedict's told to return $4.3 million of Petters money

Imprisoned entrepreneur Tom Petters bought himself a lot of goodwill by donating chunks of his ill-gotten gains to good causes like Teen Challenge. But since the money was, well, you know, stolen, the charity is being told to give it back. David Phelps of the Strib writes: “Minnesota Teen Challenge, a nonprofit addiction counseling and assistance program, has been asked to return more than $2.3 million it received in contributions and donations from the personal and corporate estates of former Wayzata businessman Tom Petters. In lawsuits filed in federal district court and U.S. Bankruptcy Court, receiver and trustee Doug Kelley asserts the donations were actually proceeds from the Petters-run Ponzi scheme and should be returned to reimburse investors and creditors who lost money when the $3.65 billion fraud collapsed in 2008. The lawsuit was filed late last week just as the Minnesota House approved a bill prohibiting such clawback actions involving charities and religious organizations. That bill now goes to Gov. Mark Dayton for his consideration. He has until midnight Tuesday to act on the legislation. Separately, Kelley filed an additional clawback lawsuit on Monday seeking $2 million from the College of St. Benedict that it received in a series of donations from a Petters-run foundation from 2003 through 2006.”

If you see fireworks over St. Paul today, it’ll because the Legislature has pushed through one of its primary initiatives. No, silly, not something with actual jobs attached … but Voter ID. The AP says: “A House-Senate conference committee signed off Monday night on an agreement putting the question before voters. It heads back to the two chambers where passage is virtually certain.  Gov. Mark Dayton has no authority to block the measure from appearing on the ballot. If voters adopt the amendment, the new photo ID requirement would be effective for elections in fall of 2013 onward.”

Speaking of fireworks … Minnesota may yet achieve parity with Wisconsin on stuff that you blow up, legally. Says Jim Ragsdale in the Strib: “In Minnesota, what are called ‘novelties’ -- sparklers, snakes and small fizzy fountains -- were legalized in 2002. The bigger consumer fireworks, such as bottle rockets, firecrackers and multi-tube skyrockets that blossom at 150 feet, remain illegal, but stubbornly popular. In the Twin Cities area, Wisconsin's thriving border fireworks marketplace is often the source. Those who deal with the aftermath of fireworks displays gone awry are solidly opposed. Police and fire chiefs associations, burn centers at Regions Hospital and Hennepin County Medical Center, Children's Hospitals and Clinics, the Academy of Ophthalmology, the American College of Emergency Physicians and the League of Minnesota Cities are among the dozens of groups lined up against the proposals. … The new bills would allow the sale and use of the full range of consumer fireworks, said Dan Peart of Ohio-based Phantom Fireworks, who testified on the Senate bill. Access to the giant rockets in municipal displays still would be limited to licensed experts. Peart described the most popular consumer fireworks on the market today — a 500-gram repeater that can send several rockets skyward. ‘It's the largest consumer firework allowable by law,’ Peart said. By lighting one fuse, he said, shells arc more than 100 feet and burst with a concussion that can be felt on the ground. ‘It's really quite impressive’, he said.” I swear to God, you can buy MIRV’d ballistic missiles at roadside stands in Wyoming. Talk about Standing Your Ground.

As the day went on Monday, Gov. Dayton didn’t get any happier about the weekend deal between the House and charitable gambling organizations. MPR’s Tim Nelson writes: “Dayton also objected to not being involved in the negotiations. His administration initially made an offer to evenly split $125 million in electronic pull-tab proceeds with charitable gambling operations. Last month, Dayton offered to up the charities' take by $10 million more, with the rest still dedicated to stadium debt. The governor said he was surprised Sunday to find the charities had reached a separate deal with stadium backers in the Legislature. ‘We've worked very well, and in a bi-partisan way on this project, and put thousands of hours into it,’ he said. ‘To have it worked out with other groups and not even including me and my administration is very disappointing’. … other stadium supporters were cautious about the plan after Dayton's remarks. ‘Tipboards are illegal,’ said state Sen. Julie Rosen. She left little doubt about her feelings on the proposal. She said House negotiators didn't talk to her about the idea, even though she is carrying the stadium bill in the Senate. Rosen said she did introduce a measure today to legalize a video version of lottery scratch-off games — but she said the stadium deal didn't need any more tinkering, let alone a controversial backup-up financing plan. ‘Nobody has called me. Nobody has told me about this backup plan,’ Rosen said. ‘I feel very similar to the governor — it's, what's the agreement?' "

Doug Belden of the PiPress continues to follow the bouncing stadium ball. Prior to last night’s House vote pushing the shaky deal forward, he was writing: “Senate Majority Leader Dave Senjem, R-Rochester, said Monday afternoon he had not studied the House plan in detail. ‘We'll obviously shake it out,’ he said. ‘We'll see where it goes.’ Senjem said he's still clinging to hope the Legislature can adjourn Thursday — which would make passage of a stadium bill unlikely — but ‘it's obviously going to be a rush to make that at this point.’ Wilson said if the tipboard component of the deal was dropped it would be a blow, but the deal could still survive. ‘It's an important part of the deal, but whether it's a deal-breaker or not, that's to be determined,’ he said. But without the tipboards, the state would need some other way to generate additional revenue, administration officials said.”

The U.S. immigrations and Customs Enforcement arrested 56 people in Minnesota this past week, part of a nationwide sweep. Jon Collins of MPR says: “In raids across the country last week, U.S. Immigration and Customs Enforcement arrested more than 3,100 immigrants, many of whom had previously been convicted of serious crimes. The operation included 56 arrests in Minnesota. Most of those arrested had been convicted of crimes ranging from manslaughter to drug trafficking, Shawn Neudauer, ICE public affairs officer, said. Others had immigration violations. More than 1,000 of those arrested had multiple convictions. About 200 of the arrestees could face further charges from federal prosecutors for crimes like illegal re-entry after deportation.”

At The Huffington Post, a Medill School of Journalism student, Elizabeth Schulze, looks at modern conservative messaging and uses retiring GOP Sen. Geoff Michel as an archetype of a certain sort of Republican.  She writes, “But is recruiting the right candidate all that it takes to win an election? Geoff Michel says no ...  and the media is the reason why. ‘I'm not happy with the media these days,’ he says. ‘They are searching for a good story, and for them, a good story is conflict or a flood or a fire or somebody being extreme rather than the nuts and bolts and even some of the more boring stuff about the legislative process.’ A flood, a fire or somebody being extreme ... like Minnesota's own Michele Bachmann. ‘Michele Bachmann was in the news most of the last year,’ Michel says. ‘There's nothing moderate or balanced about Michele Bachmann. She knows it and she plays to it. She knows how to get media coverage. I don't think she could get elected in Edina.’ … Though less convinced that Republicans will maintain the majority, Geoff Michel says he agrees that Minnesotans are unwilling to commit to one party for too long. ‘I think it's going to be really close,’ he says. ‘I think there's a natural kind of pendulum that kind of swings back and forth. In 2010, it swung pretty strongly to the Republican side. I kind of feel it starting to swing back the other way.' "

Big-time HMO profits may bring as much as $8 million back into the state’s account, says Christopher Snowbeck in the PiPress. “A cap on HMO profits instituted in Minnesota last year will generate about $8 million for state government, a number that could grow. That's the early conclusion from filings being submitted to regulators this week by the state's nonprofit health plans. In a filing Monday ... Minneapolis-based UCare said it expects to return $7,977,270 million to the state, a sum that represents the amount of excess earnings that UCare received last year through its contracts with Minnesota. UCare is one of four large HMOs that manage care for patients in the state's Medicaid and MinnesotaCare health insurance programs. Health plan profits from these public programs have been under heightened scrutiny for more than a year at the state Legislature. Representatives for Bloomington-based HealthPartners and Minnetonka-based Medica did not say Monday if their companies exceeded the cap, which Gov. Mark Dayton said last year would limit earnings at 1 percent of revenue.”

Despite a certain veto, GOP legislators pushed through the controversial teacher seniority bill, Megan Boldt of the PiPress writes: “A joint House-Senate committee passed a compromise plan that would end the practice of laying off teachers based on seniority rather than performance. Rep. Carlos Mariani, DFL-St. Paul, cast the lone vote against it. The only other Democratic member of the committee, Sen. Terri Bonoff of Minnetonka, joined Republicans to support it. The move was no surprise. Republican legislators who want to end seniority-based teacher layoffs promised last week to push forward with their proposal, even though Gov. Mark Dayton has indicated he’ll veto it.

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Comments (7)

Why should charities be exempt from clawback?

If a crook steals money and gives it to a charity, why should they get to keep it? That makes absolutely no sense.

And your point is?

Of course it makes no sense.

If legislation were about what makes sense or what is needed in Minnesota, they'd be here and gone in weeks, not months. This is about vested interests and political muscle. If Dayton has any sense left he'll veto the bill.

Teen Challenge not a "good cause"

MN Teen Challenge is part of the "troubled teen" industry, and they require children to participate in Christian religious practices in order to receive services. Coerced religious obedience is not treatment. Their nonprofit status should be revoked.

The GAO has documented widespread abuse, maltreatment, neglect and death in residential programs for teens, see www.astartforteens.org, including wilderness challenge programs, boot camps, "therapeutic boarding schools" and residential drug treatment facilities.In my experience this is a multi-billion dollar ripoff industry that preys on emotionally vulnerable parents.

View GAO reports at www.astartforteens.org/documented-abuse.

I do not see why charities should be exempt from the clawback. Bad luck, but these are ill-gotten gains.

Fireworks from Wisconsin

The fireworks bill is another GOP solution in search of a problem. Giant hoards of Minnesotans driving to Wisconsin to buy bottle rockets, really? So if they pass the fireworks bill, we don't need the Stillwater Bridge?

Teen Challenge funds their

Teen Challenge funds their program with MN GRH funds (group residential housing money), after advising clients on their right to Christian-based treatment. “The placing authority must authorize chemical dependency treatment services that are appropriate to the client’s…religious preference…(Section 9530.6620). It seems like good Christians would return ill-gotten gains and not try to be shielded by legislative action.

If you want to see how Teen

If you want to see how Teen Challenge gets clients and state funding for their programs, look at their application. Just google "Teen Challenge GRH" GRH (Minnesota Group Residential Housing) is one of the funding streams that pay for room and board for disabled adults. It's rather instructive, and I'm sure that Teen Challenge is not the only program that has all the kinks worked out of how to get public funding for a religious based program.

Placements at Teen Challenge

Sorry for the detour. Yes, Craig, the provisions in the application are straight out of the list of warning signs for programs to avoid, including TC having power to keep a youth beyond 13 months, heavily restricted communication, unreasonable limiting of parental access, and no access to advocates to whom abuse can be reported.