Minnesota has a reputation for good government. So why are the state’s conflict of interest laws so weak?

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DFL Rep. Joe Atkins has a lot of jobs. He’s a seven-term DFL state lawmaker, partner at a law firm and executive director of the Inver Grove Heights BEST Foundation, where he raises money to provides scholarships to local graduating high school students.

When taking on so many roles — as part-time legislators often do in Minnesota — things can get complicated.

Complicated, like when Atkins started receiving health and public pension benefits from Independent School District 199, which was supportive of the nonprofit foundation he ran, but is still technically separate. Or like when the Minnesota Jobs Coalition, a Republican-aligned campaign group, raised questions about Atkins’ time as former chair of the House Commerce Committee, where they claimed he raised money for the BEST Foundation from “lobbyists and corporations he was tasked with regulating.” Or when a Star Tribune report found that all three of Atkins children received scholarships from the BEST Foundation, even if he didn’t personally pick out the recipients himself.

And yet — though Atkins has since stopped receiving any benefits from the school for his work at BEST — he actually didn’t violate state conflict-of-interest policies in any of those instances: He listed all the organizations, including the school district, as sources of compensation on a one-page statement of economic interest required under Minnesota law.

That, to some, is exactly the problem: that in cases like Atkins’, the state’s requirements are far too lax when it comes to reporting possible conflicts of interest, an argument underscored by the Center for Public Integrity’s decision to give Minnesota a grade of D- for transparency in government last year. 

As lawmakers prepare for the start of 2016 Legislature next month, here’s a look at how Minnesota’s state government keeps tabs on possible conflicts, and why a lot of people say the process could be a lot better. 

What constitutes a conflict of interest?
At its most basic level, a conflict of interest is when a lawmaker has the potential to receive personal or financial benefit based on his or her public position, and it’s a fairly common dilemma in state legislatures across the nation. Not all lawmakers have only one place of employment. In fact, the job of a legislator is a low-paying, part-time gig in many states (like Minnesota) and usually requires some supplemental income. 

Rep. Joe Atkins
State Rep. Joe Atkins

Lawmakers’ personal and professional backgrounds offer welcome and needed perspective on issues, of course. But they also allow for the possibility of conflict, as legislators are asked to vote on policies that have the potential to intersect with their private lives. State legislatures are filled with teachers, lawyers, and farmers, for example. Does that mean a teacher shouldn’t serve on an education committee, or a farmer on the agriculture committee?

Most states don’t take it that far, but they do require some basic reporting to make sure votes and actions aren’t taken in real time that could financially benefit a lawmaker. 

So how does it work in Minnesota?
All legislators must submit an economic interest form once a year, which is posted for the public on the Minnesota Campaign Finance and Public Disclosure Board’s website. On that form, legislators must include any source of compensation, including where they work, any businesses they are associated with, or any contract work worth more than $2,500 in the last 12 months. They must also include any property held within the state, stocks and any investments with pari-mutuel horse racing in the U.S. and Canada (yes, horse racing).

If a conflict emerges during session, legislators are required to prepare a written statement describing a potential conflict of interest to the presiding member of the House and Senate chamber (respectively, the speaker of the House and the Senate president). But legislators don’t have to recuse themselves from a committee or floor if they don’t want to, and the presiding officers have no power to stop them from taking a vote. Legislators are only legally required to notify a superior.

What if a lawmaker doesn’t disclose all of his or her possible conflicts? Does anyone have the power to enforce the reporting requirements?
Not exactly. Conflict of interest reporting is done through the Minnesota Campaign Finance and Public Disclosure Board, which was given the authority to audit legislators’ conflict of interest statements in a 2014 law change.  

But the auditing doesn’t happen very often, said Gary Goldsmith, director of the board. “I don’t think people think about what would be involved in an audit of a statement of disclosure of financial interests,” he said. “In the form, that’s not where the violation is likely to be. A true audit would really need to look at whether something that is not on the statement should be on the statement.” 

Finding something a legislator is not reporting is tricky. To uncover secret real estate holdings could require pulling documents from counties across the state, and stocks and securities are difficult to access without the holder’s participation. “I’m not sure you can even do a very good audit of disclosure of financial interests,” Goldsmith said.

How do other states deal with this?
Conflict of interest policies vary greatly from state to state, but experts say Minnesota lags behind most places when it comes to transparency. Many states have long mandated that spouses reveal similar financial information, for instance, so lawmakers don’t take votes or push through legislation that could benefit their husbands or wives. In Utah, state law requires conflict of interests to be posted on the state Senate site and on each House member’s page. 

How often do conflict of interest issues come up in Minnesota?
There are plenty of examples in Minnesota throughout the years. Most recently, the issue cropped up in 2012, after it was revealed that former House Human Services Reform Committee Chairman Rep. Steve Gottwalt helped steer a bill through the chamber to drop thousands of people from the state-run MinnesotaCare program and move them into the private insurance market. Months after the bill passed, Gottwalt signed on as an independent contractor for an insurance brokerage firm that had lobbied for the change. Gottwalt never brought up his new role during relevant committee hearings and he did not disclose that he sold insurance on his statement of economic interest, listing only his own consulting firm. 

But some speculate that one of the reasons Minnesota’s conflict of interest requirements haven’t changed much over the years is the fact that there haven’t been many major scandals.

Is anyone proposing to change Minnesota’s laws?
Sen. John Marty, DFL-Roseville, has pushed for years to tighten Minnesota’s laws regarding conflicts of interest. “I think most of my colleagues from both parties are honest people,” said Marty. “I’m accusing all of us of being 100 percent human. Even if we are trying our best to be honest about things, Psychology 101 can tell you about reciprocity. Someone does something for you you feel like you owe them.” 

State Sen. John Marty
State Sen. John Marty

“I’m not interested in waiting for a big scandal and then we say we’ve got to fix things up,” he added. 

Marty has introduced a bill that would lower the threshold to $50 for a legislator to report independent contract work if that client is also a lobbyist or group doing regular advocay work on an issue at the Capitol. Many legislators are lawyers, and they might have a client who has a stake in an issue at the Capitol. Marty thinks that should be reported. 

In 2013, the Minnesota Campaign Finance Board drafted a bill to give legislators an idea what a comprehensive conflict of interest proposal might look like. Among other things, the proposal defined what a conflict of interest is and specifically prohibited it, which Minnesota’s law doesn’t currently do. (The board also drafted language to eliminate a requirement to disclose interests in pari-mutual horse racing, since that’s not much of an issue these days). But the proposal was controversial even among board members, so they didn’t recommend its passage to legislators.

What’s so controversial about it?
Transparency advocates acknowledge there’s a balance that must be struck when debating conflict of interest reporting. Citizen legislators deserve some level of privacy in their finances, they say, and aggressive reporting requirements could scare off some qualified candidates from running for or staying in office.

Rep. Laurie Halverson, DFL-Eagan, pushed in 2014 to add legislators’ spouses to conflict of interest reporting, but the idea was shut down because of privacy concerns. Members of the Campaign Finance Board deadlocked over whether that should be a requirement. Halverson said she reports her husband’s financial conflicts in her own economic interest statement, even though it’s not required.

“There are a lot of people who tend to over-report what their financial conflicts are,” she said. That being said, we don’t have the legislation that requires that level of reporting and a large part of that is because we are perceived to have a pretty clean system. I think in terms of the public trust, it’s important to have to the legislation that backs this up. We should do more than expect people to do the right thing. We should have some teeth behind those expectations.”

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Comments (4)

  1. Submitted by Ray Schoch on 02/08/2016 - 01:02 pm.

    Molars

    Rep. Laurie Halverson, DFL-Eagan, said “…I think in terms of the public trust, it’s important to have to the legislation that backs this up. We should do more than expect people to do the right thing. We should have some teeth behind those expectations.” I couldn’t agree more, and with Senator Marty, as well. Waiting for something outrageous to take place (and show up in the media) is a stupid way to run any organization, especially one that assumes and requires the public trust in order to operate at least semi-effectively. The current system begs to be exploited, and if we had tighter restrictions, I think we’d find that there are some currently in state government who might not be able to fit within those restrictions if they had to. They’d have to change their behavior so that it was more honest and transparent. In a legislator, I think that’s a good thing, and if it keeps some otherwise-qualified candidates out of the electoral pool, well, so be it. Someone else of similar qualifications will be able to step forward.

    I should add that it’s not exclusively a legislative or legislature-specific problem. The laxity around conflicts of interest in the very minor-league position of planning commissioner in Minneapolis is, in my view as a former planning commissioner in another state, appalling. There’s nothing in the rules about spouses, family members, or businesses doing business with the city from which a commissioner might benefit INdirectly, or about non-monetary compensation. A commissioner is required to recuse him/herself only if there’s a direct financial benefit to that commissioner from the planning commission’s action. That leaves a hole the size of a whole barn, not just the door, through which all sorts of shady ethics can proceed.

  2. Submitted by Jon Kingstad on 02/08/2016 - 07:02 pm.

    Legislative conflicts of interest

    It seems to me that the problem for legislators is really less of a conflicts of interest issue or problem than it is an under-the-table influence for votes problem. They’re similar but I think of conflicts of interest as arising in the area of contracting the property transfers, over which legislators usually don’t have that much say-so. Executive branch personnel do and so do local government appointed and elected officials.

    Minnesota Statutes sec. 10A.01, subd. 35 defines 29 categories of “public official” of which a “legislator” is only one. That subdivision does not include “local officials”, defined under subd. 22 as:

    “. . . a person who holds elective office in a political subdivision or who is appointed to or employed in a public position in a political subdivision in which the person has authority to make, to recommend, or to vote on as a member of the governing body, major decisions regarding the expenditure or investment of public money.”

    The law which is labeled “conflicts of interest” does not even apply to “local officials” unless they are “elected to or appointed by a metropolitan governmental unit.”

    https://www.revisor.mn.gov/statutes/?id=10A.07

    Under section 10A.01, subd. 24 “metropolitan government unit” only applies to cities with a population of over 50,000 which excludes most of the cities in the seven county area and all of the cities throughout the state. Not that it matters much because all section 10A.07 does is require the person with the “potential conflict of interest” , specified as “an action or . . . a decision that would substantially affect the official’s financial interests or those of an associated business” is report the potential conflict of interest to a superior and abstain from the action.

    The statements of economic interest really don’t say much at all about how a public official or local official might be engaged in some sort of self-dealing. This law is extremely weak and is essentially self-regulation. There’s no “cop” really to investigate or enforce the law if a public official or local official is engaged in conflicts of interest or corrupt self dealing. Plus, on the local level, such corruption is a gross misdemeanor, which means that if there are any “cops”, it will have to be the local police or sheriff or city attorney. County attorneys and the AG have no jurisdiction here. If there is any office in this state which investigates public corruption, I’ve never heard about it.

  3. Submitted by Joe Musich on 02/08/2016 - 07:31 pm.

    Thicken the firewalls …

    between potential conflicts of interest, please. The permeability is truly scaldalous but it seems to be everywhere and practiced by everyone. Especially by people who already have is said “a leg up !” And maybe there in lies the rub to alter conflict of interest potential requires those who benefit to be on board. Conflict of interest is what is destroying our very political system. Incompetency seems to be pushed up as is the Peter Principle but the push up comes from friendly forces at the rear. With the erosion of civil service requirements we are only bound to see more of this second hand corruption. Who did Synder put in charge for the “tasks” in Michigan the competent or the friends donating to his point of view ?

  4. Submitted by Bill Willy on 02/09/2016 - 12:13 am.

    Grand scale conflict of interest

    If you’d like a look at, and a little detail on, a form of corruption and “conflict of interest” that goes light years beyond anything Joe Adkins may or may not have been involved in, read these two articles written by Hannah Sayle in City Pages.

    The kind of thing she sheds light on is the kind of thing that HAS to be stopped. (Just ask some of the bottled water buyers in Wisconsin and Flint.) It’s the kind of thing that should be investigated by the Legislative Auditor, the Attorney General, the EPA and, if you ask me, the Justice Department or FBI. At the very least, the MPCA should be all over these people like flies (before their legislative buddies gut the MPCA’s budget completely).

    “Big Ag is conquering Minnesota like a noxious, unkillable weed”

    http://www.citypages.com/news/big-ag-is-conquering-minnesota-like-a-noxious-unkillable-weed-7446687

    “Dayton caves to Big Ag, Republicans on protecting us from water pollution”

    http://www.citypages.com/news/dayton-caves-to-big-ag-republicans-on-protecting-us-from-water-pollution-8003477

    I don’t know who these people (or the people in the legislature that are carrying their water) think they are, but apparently they’re pretty sure they’re above the law and that they can do whatever they want with and to the state’s ecosystem to keep on sucking up the big bucks without being bothered by “onerous government regulation.”

    But then I suppose a person’s pretty sure they don’t have to worry about being above or in fear of the law when they and their “friends on the inside” are writing and passing and repealing the law.

    Really. . . Take a look at those articles. Hannah Sayle lays it out pretty well.

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