In the final hours of Minnesota’s 2016 legislative session, a small proposal was slipped into the state’s supplemental budget bill, which helps fund programs and projects around the state. Little noticed at the time, the measure set aside grant money for organizations that help people living with disabilities find good-paying jobs.
The proposal was authored by DFL Sen. John Hoffman, who also happened to work for a nonprofit, Ally People Solutions, that did exactly that kind of work. What’s more, in the final hours of the session, the measure had been amended. Under the new language, only a handful of groups in the state would qualify for the money. Ally was one of them.
Later that summer, the organization was among the first to apply for the funding Hoffman had helped to create as a legislator.
Legislators from both parties have told MinnPost that Hoffman’s actions appear to be a conflict of interest, given his employment with Ally outside of the Legislature.
“Legislators are held to a high standard,” Republican Senate Majority Leader Paul Gazelka told MinnPost. “Sen. Hoffman’s actions appear to be below those standards.”
Leaders in the Legislature didn’t know about the conflict until after it was reported by MinnPost, nor did the Department of Employment and Economic Development (DEED), which re-issued the grant application with conflict of interest language after our inquiries. But even after the department learned that Hoffman had authored the proposal, Ally was allowed to resubmit an application with a “conflict of interest mitigation plan.” In February, DEED awarded Ally a grant of $175,000.
Along with being what would seem to be a textbook conflict-of-interest case, the episode also illustrates a longstanding issue at the Capitol: a systemic weakness in how the Minnesota Legislature polices its members — a process that rarely catches potential conflicts before they happen and seldom punishes lawmakers for engaging in unethical behavior.
Relying on self-reporting
In Minnesota, being a legislator is technically a part-time job, so many lawmakers have other sources of income outside their work at the Capitol. As a result, legislators are sometimes asked to vote on policies that have the possibility of intersecting with their private lives. That’s where conflict-of-interest policies come into play.
According to Minnesota law, a conflict of interest occurs when a “public official’s votes, actions, or decisions would affect the financial interests of the official, or those of an associated business, in a manner that is greater than the effect on other members of the same occupation or profession.”
Most ethics experts say that doesn’t mean a teacher, for example, couldn’t vote on the state’s education budget, since the vote would affect all teachers equally. A conflict only emerges when a lawmaker has the potential to benefit personally or financially based on his or her public position — in a way others in the same industry can’t.
To handle potential conflicts, once a year all legislators in Minnesota must submit an economic interest form that includes sources of compensation, businesses they are associated with or any contract work of more than $2,500. The form is made public on the Minnesota Campaign Finance and Public Disclosure Board’s website. If a conflict emerges during the legislative session, lawmakers are required to prepare a written statement describing the potential conflict of interest to the presiding member of the House and Senate chamber.
Hoffman did not discuss the legislation with Senate leadership during the 2016 legislative session, according to staff, and the conflict went unnoticed by officials or the broader public.
Hoffman did report his part-time employer as Ally People Solutions on the form posted by the Minnesota Campaign Finance and Public Disclosure Board. Even so, though the board has the authority to audit legislators’ statements, those reviews usually only happen if the board is tipped off. If a legislator is trying to hide something from the report or doesn’t volunteer information, identifying a conflict can be difficult.
Disincentives and inconsistencies
Even after the issue was reported by MinnPost, no one brought it before the Senate’s Ethical Conduct Subcommittee, which reviews conduct in the Senate when necessary. The body consists of four members — two Democrats and two Republicans — and is responsible for investigating complaints of improper conduct by a member or employee of the Senate. Complaints about a member or an employee must be in writing and submitted to the subcommittee during a legislative session. The subcommittee then has 30 days to either make a finding of no probable cause, defer proceedings, or to launch an investigation.
The problem with all that: In order for the subcommittee to do anything, another legislator has to bring the complaint — something many members feel uncomfortable doing. What’s more, the way the ethics system is set up now, ethics complaints often get labeled as partisan attacks from legislators of the opposing party, not as legitimate concerns.
“It’s hard for people to enforce on their colleagues,” said Sen. John Marty, DFL-Roseville, who has pushed for decades for stronger ethics policies in St. Paul. “It’s a place where you have to have relationships with people it’s hard for legislators to enforce on each other. It’s kind of like you’re going to punish your family member or your colleague at work. If you want to accuse me of doing something wrong, it’s going to be really awkward to work together.”
The numbers speak to just how awkward legislators find the practice. Over the last 30 years, there have been just 11 ethics hearings in the Minnesota House (two more cases were dismissed before they made it to a hearing). Legislators were reprimanded or forced to apologize in four of those cases.
Ethics hearings in the Senate have been more numerous, if not exactly frequent; between 1994 and 2017 there were 21 hearings. In just five of those cases were senators forced to apologize or leave a specific committee post.
‘We’re all human’
The state’s lax system of ethics enforcement isn’t a new problem, even if it is at odds with Minnesota’s reputation for good government. In 2015, Minnesota received a D- on the Center for Public Integrity’s report card on government secrecy, conflicts of interest and ethics.
But improving it also remains unlikely, given the ethical Catch 22 the state now finds itself in: Lawmakers aren’t likely to make changes to the system unless there’s a major ethics scandal, but the way the system is set up makes it highly unlikely that will ever be an ethics scandal, given the difficulty in bringing unethical behavior to light.
Other states handle it differently. Nearly all states have some kind of ethics committee or commission to solidify their credibility with the public, and many have standing ethics committees in one or both of their legislative chambers, like Minnesota. But in 10 states, the Legislature also has the power to create ad hoc committees if there’s a suspected violation of an ethics law or rule — or if a complaint is filed by another member or the public.
Marty suggests creating an ethics committee that keeps complaints anonymous, so legislators don’t have to feel that they are “undercutting” their colleagues. He also thinks the panel could be independent, possibly appointed by lawmakers or the courts, so that legislators aren’t in the position of having to reprimand other legislators. In states like Alaska, Nevada, New York and Washington, public members are part of legislative ethics commissions and committees. “It’s not ethical people versus unethical people; we’re all human, and we’ve set up a system where you’re going to have ethical problems,” Marty said.
Hoffman did not agree to be interviewed for this story. In its conflict-of-interest mitigation plan submitted to DEED, Ally said none of the state grant money will be used to pay Hoffman’s salary.
“Like many members of the Minnesota Legislature, I also have another job in addition to being able to represent my district. My work with Ally People Solutions is focused on marketing the organization as it seeks new companies and others to partner with,” he said in a statement. “My work and role with Ally has been disclosed as part of the process the organization has participated into regarding the DEED program.”