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Lawmakers look to close campaign finance loophole affecting Minneapolis elections

The bill attempts to resolve a campaign finance disclosure gap illustrated most recently by an effort in 2017 by the group Minneapolis Works on behalf of several incumbent Minneapolis city council members. 

State Rep. Mike Freiberg
Rep. Mike Freiberg is the prime sponsor of a bill that would require more PACs involved in local elections in Hennepin County to disclose contributions and expenditures throughout election years, including before primary and general elections.
MinnPost file photo by Briana Bierschbach

The chairman of the Minnesota House State Government Committee wants to close a loophole in state campaign finance disclosure laws that makes it difficult to track the role of statewide political committees in Minneapolis elections.

Rep. Mike Freiberg, a DFLer from Golden Valley, is the prime sponsor of a bill, HF 1994, that would require more political action committees involved in local elections in Hennepin County to disclose contributions and expenditures throughout election years, including before primary and general elections.

Current law only covers committees registered in Hennepin County — but, importantly, not statewide committees — that file reports with the state Campaign Finance Board. That has allowed some committees to go through an entire campaign cycle without reporting how they raise or spend money.

The law change was requested by Hennepin County, and the bill would cover statewide political committee expenditures for ballot questions and races for Minneapolis and the Minneapolis Board of Education. Because it uses ranked choice voting, Minneapolis doesn’t conduct a primary, but the reports would still be due prior to when primaries have been held in the past.

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The change attempts to resolve a disclosure gap illustrated most recently by an effort in 2017 to defend several incumbent Minneapolis city council members. The business friendly Minneapolis Works! was formed by leaders from the city chamber of commerce and downtown council, and by developers, all of whom feared that a group of council challengers would be harder to work with than the incumbents.

At least one of of the group’s solicitations asked like-minded donors to give either to Minneapolis Works or to the existing MN Jobs Coalition. And while Minneapolis Works was required to file reports prior to the primary and prior to the general election, the Jobs Coalition was not. The reason? It files its reports with the state Campaign Finance Board. And because the finance board is oriented toward state elections, which happen in even-numbered years, the finance board currently does not require political committees to file at all in odd-numbered years, when city elections take place.

That created a situation where a lot of money was raised and spent to influence the 2017 campaign that was not publicly reported until 2018 — nearly three months after the election. Freiberg’s — and its’ companion bill in the Senate, SF 2241 — would close that loophole.

Dan Rogan, civil division manager for the Hennepin County Attorney’s Office, told the committee Tuesday that some 24 different political committees that were active in local races covered by the bill would have to file with the state rather than the county.  Under the bill, such groups would have to begin using CFB software and file electronically. Hennepin County currently permits filing on paper and via PDFs that make reports difficult to analyze.

That filing change would cover all political committees, political funds and independent expenditure campaigns that take part in elections for Hennepin County government, Bloomington, Brooklyn Park, Minneapolis and the Minneapolis school board. But because only Minneapolis city and school board elections are held in odd-numbered years, the new reporting by statewide political committees only impacts those elections.

“Hennepin County approached me about the bill and they did point out this issue,” Freiberg said. “The bill would make it so they do have to meet more-regular reporting requirements during the odd-years as well. It seemed like a good government type disclosure, to bring about greater transparency to local elections.”

Hennepin County’s public policy manager, Kirk Pederson, said committees like the Jobs Coalition followed the law in 2017 but there was a gap in reporting law that HF 1994 would close.

If passed, the bill would mean that all political committees spending in Minneapolis city and school board races would have to disclose contributors and expenditures on April 14; June 14; 15 days before the primary election; 42 days before the general election; and 10 days before the general election.

The Jobs Coalition’s Minneapolis spending in 2017 would not have been fully disclosed before the election even had HF 1994 been in effect, however. That’s because the group waited until after the last reporting deadline, 10 days before the November general election, to send $140,000 directly to the Minneapolis Works committee. Because the transactions happened after the final deadline, the money showed up for the first time on Minneapolis Works’ year-end report, filed in January 2018.

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The Jobs Coalition’s own year-end report was filed eight days late, something that has become a pattern for the business-oriented committee. It did show that — contrary to claims that Minneapolis Works was being funded by out-of-state conservative donors — it was instead funded by local business interests. The $140,000 from the Jobs Coalition to Minneapolis Works came from, among others, the Pohlad brothers, Ryan Companies, Sherman Associates, Swervo Management, the downtown building owners and managers and the Minnesota Multi-Housing Association.