With little fanfare, Julie Blaha was sworn in as Minnesota’s state auditor with the responsibility of overseeing and protecting the integrity of local government finance. This involves some $20 billion per year.
Although the office was weakened in 2015 by actions of the Legislature and the governor, Blaha will have considerable clout if she utilizes it. That may not be as simple as it sounds. The changes permit counties and certain local units of government to contract out their audits to private firms thereby making the state auditor more dependent upon legislative funding. This will considerably reduce her independence, which is central to a professional audit function. It will also place her office in legislative partisan play.
The real loser here, however, is we, the people, because traditionally we looked to the state auditor to be the ultimate protector of our monies. The office’s expertise lies in its ability to match government’s taxing and spending against law. That is why the mandate was created. The original goal was to have the state auditor serve as the people’s whistleblower when it comes to local government. In order to effectively perform that role it is imperative that the state auditor be independent and free of any partisan constraint.
Blaha could restore strength to the office
Julie Blaha may well be the individual who restores strength to that office. Her background with the teachers union and AFL-CIO indicate strong leadership skills and, I sense, a willingness to stand up to power.
Her first test will come shortly with her audit of the City of Minneapolis and the recent District Court decision that found that the City Council did not have the power to buy and operate the Commons Park, which was part of the massive Vikings Stadium deal.
This whole project from the beginning has been cloaked in false promises and an alarming amount of secrecy and ineptitude.
Consider the fact that at the outset, former Gov. Mark Dayton declared that not “a single dollar of general fund tax revenues” would be used for the stadium. This is where all the trouble began.
End result: $20 million each year for 30 years
The end result, however, is that the state is paying $20 million per year for 30 years to retire stadium bonds. In addition to this $600 million, the Metropolitan Council and Department of Transportation have been pouring in millions of additional monies.
Eric Roper of the Star Tribune pinned down the costs to Minneapolis: “After accounting for interest and inflation, the city is paying an estimated $631 million over 20 years to finance and operate U.S. Bank stadium.”
On top of these direct costs that exceed $1 billion, the public has paid hundreds of millions more via the seat tax, naming rights and a number of other income schemes created by the owners of the Vikings. The hardest monies to find are those from Vikings owner Zygi Wilf. It is abundantly clear that he and his cadre of attorneys completely outmaneuvered the governor’s team at every turn. For the record, it should be noted that Wilf was found guilty of “civil racketeering” and fined some $84 million in a separate New Jersey lawsuit. The judge there further added, “I do not believe I have seen one single financial statement that is true and accurate.” This raises further questions about our vetting process or the lack of one.
It is also interesting to note that both Dayton and former Minneapolis Mayor R.T. Rybak were “surprised” and “shocked” when the full extent of their stadium packages were disclosed. But, this comes way too late. The taxpayer is on the hook for well over $1 billion.
That is why this lawsuit and the judicial findings are of prime importance.
From the inception of the stadium project, Paul Ostrow, a former DFL City Council president, and a host of others, including John Hayden, a plaintiff in this lawsuit, have been pressuring the City Council to at least hold public hearings. But their pleas and the letters from Ostrow and this writer that were publicly delivered to the City Council and mayor were ignored. There were no hearings and not even a referral to the city’s internal auditor for review.
Court warnings ignored
But, perhaps, even worse, is the fact that the mayor and City Council totally ignored the warnings from the court in 2013 and now seem intent to do so again. As the courts have noted, the City Charter gives exclusive rights to the Park Board for the operation and ownership of the city’s parks. But instead of obeying the law, our elected officials came up with a scheme to circumvent the law. They would sell the Commons Park to the Park Board for $1 (the City Council paid $20 million for the land and did so without a public appraisal). Then the city would lease it back so the taxpayer instead of the Vikings could foot the bill for the millions of dollars involved in maintenance costs.
Ostrow and Hayden suffered considerable abuse and ridicule as plaintiffs in this winning suit. But their persistence and steadfast commitment to the public’s interest may be the key to understanding what happened and perhaps may result in more costs being shifted to the billionaire owners.
With this as a background, State Auditor Julie Blaha has the opportunity to carry out the mission and publicly declare that the public has the right to know how, when, where, why, and how much of their money is being spent.
Just how did a project that was supposed to cost the taxpayer nothing evolve into what Forbes Magazine termed the “third” worse stadium deal in history.
A professional and thorough audit will elevate the office of the state auditor, and it will be seen once again as the protector of the people. I truly hope that Julie Blaha will prove to be the leader that is needed.
Arne Carlson is a former governor of Minnesota (1991-1999) and state auditor (1979-1991).
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