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Minnesota government earns D+ grade from integrity investigation

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Minnesota political candidates have gained freedom in how they raise money for elections and state government has been deeply divided over how to spend its money.

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Those two factors and ethics laws that lack teeth are what is behind a low grade for the state by a group measuring transparency and accountability in all 50 states.

Minnesota earned only a D+ grade from the State Integrity Investigation compiled by the Center for Public Integrity, Global Integrity and Public Radio International. While the grade is low, no state earned an A and Minnesota's 69 score ranks the state 25th in the nation.

"The real battle today is over an avalanche of money into politics and the disclosure requirements in Minnesota are just no longer sufficient," said Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota.

Somewhat ironically, part of the reason for Minnesota's low grade is because it does not have a history of the serious government corruption that has prompted reforms in other states.

Corruption cases are relatively low-grade compared with scandals elsewhere. In the early-1990s there was the "Phonegate" scandal by Democratic lawmakers who used state-funded toll-free phone access codes for personal use. And there were some recent campaign finance violations by the Republican Party of Minnesota.

While not classified as a scandal, last year's state government shutdown raised questions about the openness of the of the state's budget process

Closed for business

On the last day of June 2011, under Minnesota's marble Capitol Rotunda, people holding signs and making speeches protested a looming government shutdown. But, most of the Capitol press corps were not listening. They were located one floor up, sitting in a quieter wing outside of the Governor's office, talking on cell phones and working on laptops. They were waiting to hear whether the Republican leadership and the Democratic governor were going to compromise on a budget deal.

The two sides could not come to agreement and Gov. Mark Dayton refused to call a special session. On July 1, 19,000 state employees were laid off, affecting licensing and regulatory services, highway construction and state parks and campgrounds.

Government observers say decision-making in the state is usually done in public and citizens have ample opportunity to have their voices heard. But the government shutdown and budget deal provided a troubling example of how legislation gets passed with little public input at the end of a legislative session.

Weeks of closed-door negotiations between Republican legislative leaders and the Democratic-Farmer-Labor Party led by Dayton finally produced a compromise on July 19. A special legislative session was called and the budget bills were signed into law.

By the time the government was open for business again, Minnesota's citizens were only just beginning to discover the details contained in those budget agreements. Minnesota Public Radio's Madeleine Baran reported, "Advocates for the disabled were surprised to find new policies for group homes included in the state budget bill passed last week -- policies they said were never publicly discussed or debated by lawmakers, state officials, or the governor."

Campaign finance changes require more oversight

Also last summer, the Republican Party of Minnesota agreed to pay a $170,000 fine for a series of federal campaign finance violations between 2006 and 2008. According to the agreement, the Party failed to properly report debts on its federal campaign finance reports and inappropriately transferred money between state and federal spending accounts. The GOP is $2 million in debt and observers say more such violations could be revealed in the wake of the party chair's resignation in December over mismanagement of the party's finances. In terms of political scandals, it may not be a whopper, but critics say it reflects a general lack of oversight of campaign finances.

And Mike Dean, executive director of Common Cause Minnesota, warns that with the U.S Supreme Court ruling in Citizens United v FEC , much more money is now able to flow into elections from previously banned contributors and needs to be closely monitored.

In 2010, Minnesota legislators passed a disclosure law in response to the Supreme Court ruling. The disclosures demonstrated, for the first time in state history, that corporations donated money to try to influence state elections through political action committees.

According to Dean, the disclosure legislation is not sufficient. "There are loopholes in the law for indirect contributions for independent expenditures with no spending limits or reporting requirements."

Underfunding the watchdog

Minnesota ranked 40 th out of 50 states and received an "F" grade from the Center for Public Integrity in its 2009 ranking of financial disclosure rules for state legislators. The state received low marks for the lack of spousal and client information by state lawmakers and constitutional officers. What may be even more worrisome is that state law does not require auditing of the economic disclosure statements. So, when it comes to financial disclosure, Minnesotans have to trust that politicians are being honest about their financial interests.

Minnesota's Campaign Finance and Public Disclosure Board has the authority to audit economic disclosure forms as well as campaign finance and expenditure reports if it chooses, but rarely does so. The board is underfunded by the legislature and does not have the resources to regularly conduct audits, according to the board's executive director, Gary Goldsmith. In some states, auditors are funded through fees paid by campaigns, but Minnesota's oversight mechanism is funded through the state's general fund and is subject to the economy as well as the political interests of legislators.

Common Cause Director Dean said the board checks for errors but stated that illegal contributions occur: "Corporate donations to political parties and candidates are banned, but there have been violations of those contributions with no consequences. "

The Campaign Finance and Public Disclosure Board also is responsible for oversight of lobbyists' registrations. But a key problem in Minnesota, according to people who regularly examine the information, is that lobbyists' disclosure requirements result in incomplete information and it is often too little, too late. Lobbyists must register with the state, but are not required to report whom they are lobbying or what bills they are lobbying for or against. They simply have to give a general description of the subject or subjects on which they expect to lobby.

Also, since 1994, statute 10A.071, otherwise known as the "Gift Ban", has prohibited state workers, including legislators and judges, from accepting gifts, including food or beverages, except in limited circumstances. There are no penalties, however, in the statute for violating this law.

If legislators or lobbyists are violating the law, it is the responsibility of state prosecutors to charge them, and so far, that has not happened. Generally, political observers say the ban has been effective in reducing the appearance of influencing politicians, but said U of M's Jacobs, "It is kind of like an honor system among a group of people who are not necessarily those who voters trust the most."

Time for judicial reform?

According to Jacobs, Minnesota has one of the most widely respected judiciaries in the nation. Historically, Minnesota judges could not raise campaign funds directly, seek political party endorsement, or publicly express views on topics that might come before them in court. However, since the 2002 U.S. Supreme Court decision in Republican Party of Minnesota v. White that allowed candidates for judicial office to announce their views on legal and political issues, the election process for judges has become more political and attracted more cash.

Jacobs warned that "Minnesota and a number of other states are facing the approaching Death Star of a politicized judiciary. It is only a matter of time until we have judges running for office and getting campaign contributions for their rulings. So instead of sitting in front of a judge with confidence that you will be treated impartially and fairly, whether you're in a union or business or some other area, we're going to be facing judges who run for office on a campaign platform with campaign contributions from big interests in our society. It's really a frightening future."

Other problematic areas in state law include an exemption for judges to disclose assets and reveal potential financial conflicts of interest. Additionally, the governor appoints most judges, but there is no process in place to evaluate the performance of judges who are up for retention or re-election.

Ahndi Fridell reported and wrote this story for the Center for Public Integrity.

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