The party needs a $5,000 contribution just to meet this week’s payroll. Competition among political campaigns, internal party disillusionment and extra staffing are complicating budgeting. State Republicans, meanwhile, have off-year fundraising troubles, too.
The DFL, which always has presented itself as the political party of the little guy, should have more empathy than ever for all of those Minnesotans living check to check.
A year before a huge election, the party is in debt. Meeting its own payroll has become a week-to-week, white-knuckle ride. One of its big fundraising events of the year lost $48,000. And to complicate matters, a major union, the American Federation of State, County and Municipal Employees (AFSCME), is on the verge of leaving an important DFL campaign committee.
Brian Melendez, the unpaid chairman of the Democratic-Farmer-Labor Party, tries to put a coat of calm over the problems. Business as usual in a non-election year, he says.
Fundraising competition from the presidential and Senate races, disillusionment among some party faithful and the increasing size of the state party staff all have contributed to the red ink. The DFL, though, is not alone in its budget problems. The state’s Republican Party has financial issues of its own.
DFL memo battles rumors
A Sept. 12 memo from Melendez to the party’s executive committee wasn’t exactly a ho-hum document.
“How bad is it? Not nearly as bad as the rumor mill suggests,” Melendez wrote. “The Party’s financial situation is cause for concern but not for alarm. We have never missed a payroll, and we aren’t likely to. The Headquarters building isn’t in jeopardy. The sky isn’t falling. But we have fallen behind on payments to vendors.’ “
The sky may not be falling, but forgive DFL party officials an occasional glance to the heavens.
In the memo, Melendez wrote that the party, which operates on a budget of about $1.5 million, had raised only half of its budgeted income for the year. The situation was so dire that Melendez, who is in his second two-year term as the party leader, heard rumors that some party activists believed he should step down. He has been unable to put a face on those rumors.
“I looked in every nook and cranny of the party trying to find out if that’s what people thought,” Melendez said in an interview Monday. “I couldn’t find anyone who thought I should. At least, they weren’t saying it to my face. I went to each of the congressional district chairs and said, ‘If you think I’m driving us over a cliff, I’ll step down.’ They gave me a unanimous vote of confidence.”
Melendez seems confident all will be well in time for next year’s campaigns. The party has made substantial progress, he said, since that September memo, cutting its debt from $160,000 to $60,000.
“I was hoping we’d be out of debt by Thanksgiving,” said Melendez, a partner with the Faegre & Benson law firm in Minneapolis.
“We’re not going to make that. But we will make it by the first of the year. Starting in January, the money will come rolling in.”
Perhaps. But for now, it remains white-knuckle time. On Monday, Melendez said that the party would have to receive $5,000 in donations so that it could meet Friday’s payroll. And several businesses still are waiting to get paid for services provided as much as a year ago.
St. Paul’s RiverCentre, the Crowne Plaza Hotel in St. Paul and several printing companies all are owed money by the party, which scored such big victories a year ago.
But the sweet taste of victory didn’t linger long among DFLers. Melendez said that small donors — the $20 contributors — quickly lost enthusiasm for the gains the DFL made in both congressional and legislative seats last November.
“There’s anger toward the party,” said Melendez. “Sometimes it’s logical, sometimes it’s not. Many of the small donors are frustrated with the Congress and with the state Legislature. The frustration with the Congress is over the war in Iraq. The frustration with the Legislature is over the sense that Tim Pawlenty still is getting whatever he wants. There are people saying, ‘We won in 2006 — why haven’t you changed the world yet?’ “
Other factors are adding to the financial struggles of the party, he said.
A year ago, the party spent everything it had on the elections. That spending was worthwhile, said Melendez, pointing to the huge successes the party enjoyed last year.
But soon after the wins of November, presidential candidates started soliciting funds from Minnesotans.
“The presidential race started so early it’s sucking air out of the room,” Melendez said.
Donors who would typically give to the party are digging deep for their favorite presidential candidate and contributing less to the party. The U.S. Senate race to unseat Republican Norm Coleman also is putting money in the pockets of candidates that might otherwise have gone to the DFL.
Additionally, the Melendez-led party has kept four field workers on staff through the off-year, at a cost of $175,000. In the past, Melendez said, those field workers were only hired in election years.
The decision to keep those workers in the field was inspired by the national Democratic Party headquarters, now headed by Howard Dean.
The national party said it would pay for four field workers, if the state party would pony-up half. The extra spending “will pay off in November,” Melendez said.
Tough start to year
Right from the start of the year, Melendez knew this wouldn’t be a fundraising stroll. The party scheduled a big fundraiser for January at the St. Paul RiverCentre.
This event was going to celebrate the triumphs of Election Day 2006.
There was a band and food. All that was missing were donors. Five hundred people showed up, but many of those entered the celebration for free. And big institutional donors were no-shows.
“It seemed like a good idea at the time,” said Melendez of the party. “But I think people were both exhausted and tapped out.”
The fundraiser turned out to be a $48,000 fund loser.
“Tough way to start the year,” Melendez said.
Subsequent fundraising events have been far more successful, he said.
Fundraisers involving presidential candidates and members of the Minnesota congressional delegation are in the planning stages.
“We will be ready for the campaign,” said Melendez.
He also said the financial problems are not unique to Minnesota, or Democrats.
“Every state party is going through the same thing,” said Melendez, adding that the problems of the state’s Republican Party are even greater.
GOP struggling, too
Indeed, the state’s Republican Party has been dealing with some nasty allegations made by its former finance director, Dwight Tostenson, that the party was using money that should have gone directly into retirement accounts of party employees to cover the costs of party expenses. In a February memo to the Republican Party executive committee, Tostenson said that when he complained of several questionable financial dealings, he was harassed to the point that he left his position.
In July, Citizens for Responsibility and Ethics, a Washington-based nonprofit, filed a complaint with the Federal Election Commission accusing the state’s Republican Party of violating federal regulations. The FEC investigation is ongoing, and the party is trying to blame the whole mess on DFL Senate candidate Al Franken.
“The complaint was put forward by a longtime Al Franken crony, and we are continuing to do everything the FEC asks for regarding this matter,” wrote Republican party spokesman Mark Drake in an email.
This is what is known as a difficult spin, given the fact that the roots of the charges are in the February memo by a Republican official.
When asked about the state of the party’s finances now, Drake was vague.
“We are confident that we will exceed our fundraising goals for the year; therefore, we are on track to meet our 2007 budget and are able to meet our financial obligations,” he wrote.
Hoping for firmer ground
Of course, Melendez expresses confidence that the DFL will be on firm financial ground by year’s end, too.
But money isn’t the only DFL headache. AFSCME, with 43,000 members, either has threatened to leave — or perhaps already has left — its spot on the nine-member board of the United Democratic Fund. This is the body within the DFL that directs spending for campaign advertising.
“AFSCME has expressed some unhappiness,” said Melendez, “but I don’t think it will take its ball and go home.”
Melendez says he doesn’t know why AFSCME is miffed. The union’s leaders have not returned his calls, he said. The usually chatty union officials didn’t return MinnPost.com calls, either. Despite the problems, Melendez repeatedly insisted that January will bring unity and money to the party.
“We will be ready to play,” he said.
Doug Grow, a former columnist for the Star Tribune, writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.