How a wrinkle in Minnesota law could have let Lori Swanson avoid disclosing finances for her old AG campaign — until 2019

Lori Swanson has released a campaign finance report [PDF] from her recently ended attorney general reelection effort — after first benefiting from an exemption that could have delayed disclosing information about that campaign until 2019.

That exemption represents a provision in state law that applies to Swanson due to the unique circumstances of her shift from running for attorney general to running for governor. Because of that switch, Swanson could have waited until January 31, 2019 to report contributions and expenditures made to her AG campaign committee during April and May, despite the fact that some of that money can be transferred to her new governor campaign committee under another provision of state campaign finance law.

According to the draft disclosure report released by the Swanson campaign this week after a request by MinnPost, Swanson’s attorney general campaign committee raised $126,289 through the first five months of this year — including $54,407 during April and May — and had $239,280 in the bank. Of that balance, $40,000 can be transferred to her newly formed governor campaign committee. The Swanson for Attorney General committee can also donate money to other candidates and political committees before being shuttered.

Not required to report under the law

Based on the opinion of the state Campaign Finance Board, Swanson wasn’t legally required to disclose the report. That’s due to a section of state law apparently designed to save candidates who don’t end up filing for office the hassle of having to produce multiple reports over the course of a campaign year.

In early June, Swanson had already filed to run for her fourth term in the attorney general’s office when she attended the state DFL convention seeking the party’s endorsement. She won the first ballot over challenger Matt Pelikan but fell short of the 60 percent margin needed. Swanson then withdrew from the endorsement process, and — two days later — also withdrew her official filing for attorney general and replaced it with a filing for governor.

The first campaign finance report for the governor’s campaign is due July 30. But under advice from the campaign finance board, the Swanson campaign wasn’t planning to disclose the April and May contributions to her AG campaign committee until an annual report was due next year.

“The Committee was advised by the Campaign Finance Board that a second quarter report was not required because the Committee was terminating and that the Committee didn’t need to file a report until year end,” wrote Swanson campaign spokeswoman Ruth Stanoch. She said the campaign is surprised that the board staff said the exemption was meant for marginal campaigns “because it was the CFB who gave us this advice.”

Jeff Sigurdson, the executive director of the campaign finance board, said Swanson’s campaign was exempt because she ultimately did not file for attorney general. That is, her initial filing was withdrawn and she will not appear on the August 14 primary ballot for that office.

That said, Sigurdson said the circumstances of the Swanson campaign are not what the exemption was intended to remedy. “It is very unusual and as far as I know unprecedented,” Sigurdson said. “So it was not a situation the statute was trying to anticipate.”

Sigurdson said the section of law was meant to exempt campaigns that never really got going; the thinking was that it isn’t worth having them file a series of reports throughout a campaign they never really entered.

“There are always a ton of committees registered with us that may or may not become active,” Sigurdson said. “There are committees for governor that are set up, for example, by current members of the Legislature and the committees just sit there as a vehicle to be activated should they decide to run for governor.”

Provision could be fixed

The board could ask the Legislature to fix the loophole during next session, Sigurdson said. “It could certainly be something I include on the list to bring to the board for consideration and see if they want to include that in their package for the next legislative session,” Sigurdson said. “The board could take a look at that issue, absolutely.

“Obviously, it’s not going to be retroactive so it shouldn’t be partisan or political because it will be looking to future situations, not what’s already occured.”

Under state campaign finance law, Swanson can transfer up to $40,000 from her attorney general campaign committee to that of her governor campaign. Such early money has value as seed funding. But it also has the potential of costing the new committee money later. That is because any money from a terminated campaign counts against the limit a candidate can accept from political party committees. If Swanson wins the DFL primary, for example, she would not be able to accept any money from DFL committees.

Whether Swanson transfers funds from one committee to the other and how much won’t be known until the first report as a candidate for governor, which is due July 30.

The Swanson for Attorney General Committee’s most-recent report filed with the board is dated April 13 and showed that it had raised nearly $77,000 during the first three months of 2018. Including money raised prior to this year, the committee showed a cash-on-hand total of $210,249.  

The draft report released by the campaign Thursday is here. [PDF]