State of Minnesota
Campaign Finance and Public Disclosure Board
In the matter of the Complaint Against thePeople for (Gregory) Davids CommitteeStatement of the Allegations and Responses
On June 23, 2006, Frank H. Wright filed a complaint against the People for (Gregory) Davids
Committee (the “Committee”), alleging that the Committee violated Minnesota Statutes, Chapter
10A. The complaint letter was also signed by Margaret J. Hanson and Harlin Taylor (together,referred to hereinafter as “Complainants”).
Complainants allege that the Committee “has abused the category of constituent services
noncampaign disbursements - in particular travel and postages expenses”. Complainants
allege that: “These expenses have not been justified with the required meaningful informationand therefore should be disallowed.”
More specifically, Complainants question whether $3,180 of mileage reimbursed toRepresentative Davids and $3,704.76 claimed for postage, all classified as noncampaign
disbursements for constituent services, should be disallowed because the report does notinclude sufficient information to justify the classification.
Complainants also asks the Board to investigate two questions:“First, has Representative Davids, personally, benefited from improper reimbursement ofexpenses by the Davids committee?
Second, has Representative Davids engaged in a pattern of misusing the constituent
services noncampaign disbursement exception to unlawfully evade the limits that apply
to campaign expenditures?”
Complaints “fervently believe that if there ever were a case for carefully and completely auditing
the papers, records, and accounts of a legislative campaign committee and the legislator forwhom it was established, that case is now before the Board.” Complainants provide argument
and opinion urging a complete audit. The merits of these arguments are addressed in the
Discussion section of this document. Other than information from the Committee’s 2005 reportand information regarding travel reimbursement from the House of Representatives,
Complainants offered little evidence to support any of their positions.
Upon receipt of the complaint, Board staff notified Representative Greg Davids and Matthew
Quanrud, the Committee’s Treasurer, of the allegations and afforded them an opportunity torespond.
Staff thoroughly examined the Committee’s 2005 Report of Receipts and Expenditures. In
addition, staff requested specific documents and information including copies of all receipts for
expenses that were not clearly justified as noncampaign disbursements on the Report. Staff
also requested a description of the constituent services performed in connection with various
expenditures.

Representative Gregory Davids responded to the staff requests. There has been no response
from or communication with Matthew Quanrud. Representative Davids provided a written
response and exhibits consisting of receipts, samples of printed pieces, and explanations ofvarious expenditures. Following receipt of the original response, staff requested additional
information and received an additional response from Representative Davids.

Discussion
The staff essentially conducted a complete audit and investigation of any expenditures that
could be questioned either because they were not sufficiently explained on the Report or
because they could include inappropriate or incorrectly classified items.
The results of the investigation are discussed below.
Mileage reimbursements to Representative Gregory Davids
Complainants ask whether $3,180.00 for mileage reimbursed to Representative Gregory Davids
should be disallowed as noncampaign disbursements due to insufficient disclosure.
Staff requested that the Committee provide a detailed itemization of each reimbursement for
mileage paid to Representative Davids, including the date of the reimbursement, date of eachtrip, where the Representative traveled, and why the travel should be considered a cost of
constituent services. Representative Davids provided, as Exhibit 3 to his response, hand
written materials including all of the requested information. While the detailed descriptions of
the purpose of each meeting do not appear to be contemporaneously made with the trips, therecords of the trips themselves appear to be made on an on-going basis to record the events.
The 2005 legislative session ran from January 4 through May 23, 2005. During thisapproximately 21 weeks, Representative Davids made 19 trips from the Capitol to his district inaddition to those trips reimbursed by the Legislature. The trips were relatively evenly spread out
over the session, with some heavier travel in February and March. Representative Davids
indicated that these trips were so that he could collect and process constituent mail and to seeconstituents. Representative Davids’ disclosure indicates that the trip is 232 miles. At thepermitted mileage rate of 40.5 cents per mile, the charge of $93.96 per trip reported by thecommittee is correctly calculated. Representative Davids also made many trips to meetings andevents in southern Minnesota. Based on the described purposes of these trips, many of themmight more accurately be classified as costs of serving in office rather than costs of constituent
services. However, the change in classification would not make them campaign expenditures.
Complainants’ allegation that insufficient information is included in the Committee’s Report tosupport the constituent services noncampaign disbursement classification has merit.
Beyond the adequacy of disclosure, complainants also question Representative Davids’ amountof overall travel. They ask the Board to “look closely at Representative Davids entire travel
reimbursement lifestyle . . .” which they consider excessive.
The scope of the Board’s jurisdiction is limited to whether money spent through a principal
campaign committee is properly recorded and reported. The Board declines to comment about
the appropriateness of the amount of travel undertaken by Representative Davids where, as
here, the amount itself is not evidence of improper recording or reporting.

-2-

Postage reported as noncampaign disbursements for constituent services
Complainants ask whether $3,704.76 reported for postage as noncampaign disbursements forconstituent services should be disallowed for lack of sufficient disclosure.
As part of the investigation of this matter, staff requested the Committee to provide copies of allreceipts for postage reported as noncampaign disbursements and to describe what was mailed,including the number of pieces mailed and the persons to whom the mailing was sent.
Representative Davids provided, as Exhibit 9 to his response, copies of all checks to the U.S.
Post Office, receipts for postage purchased, and a general description of the mailings coveredby the postage.
At the time he submitted the post office checks, receipts, and explanations, Representative
Davids amended the Committee’s 2005 Report to re-classify two items of postage in theamounts of $199.80 and $81.40 from noncampaign disbursements to campaign expenditures.
Representative Davids identifies mass mailings of approximately 5,000 pieces. Receipts
suggest that these mailings were done with first class stamps with a cost of $1,850 for the threemailings.
Representative Davids also lists several other types of constituent mailing that he does. While
Representative Davids’ records with regard to the nearly $2,000 of constituent services
mailings in addition to the mass mailings are not complete, neither the Committee records nor
anything provided by complainants provides evidence that expenditures were incorrectly
categorized.

Issue ThreeComplainants urge as a separate issue that a full audit should be conducted of theCommittee’s 2005 and prior year reports.
Although separately listed by Complainants as an issue, a request for an audit is a part of theremedy, not a separate item of the complaint. In this case, Board staff conducted what wasessentially a complete audit of the Committee’s noncampaign disbursements for which there
was insufficient disclosure or which raised other questions. The depth of this examination is
sufficient to address both Complainant’s issues and other issues that arose during theinvestigation.

Additional issues raised in the Complaint
While Complainants’ letter specifically sets forth the above three issues, other issues areinterspersed in the text of the letter, though not specifically identified as such. In some cases
these issues are included in the Complainants’ arguments and in other cases they areincorporated into requests for relief. The Board has attempted to identify all of Complainants’issues and, in this section, addresses those that were not clearly identified in the complaint.
The candidate, not the treasurer, appears to prepare campaign finance reports and may
write all of the Committee’s checks.
Complainants note that fines paid in the previous action were paid by checks signed by the
Candidate, not the treasurer. The Board notes that in the present investigation all of the checks
to the U.S. Post Office provided in Exhibit 9 were signed by the candidate, not the treasurer.

-3-

Minnesota Statutes Chapter 10A does not include a prohibition against the candidate signingprincipal campaign committee checks provided that the expenditures are authorized by thetreasurer. Neither does Chapter 10A prohibit the candidate from filling out Reports of Receipts
and Expenditures.
There is no allegation or evidence that Representative Davids attempted to circumvent or
violate the provisions of Minnesota Statutes Chapter 10A by signing the checks and Reports.
Did Representative Davids comply with the Board’s 2004 order to repay certain hotel
costs.
In 2004, the Board disallowed as noncampaign disbursements for costs of serving in officecertain hotel costs during the legislative session that were in excess of the per diem costs paidby the Legislature. It was the Board’s position that those costs were for the personal use of thecandidate.
Representative Davids repaid all of the costs in question with the exception of $308.85.
Following a request from Board staff, Representative Davids responded that the $308.85 wasfor housing costs directly related to the performance of his legislative duties and incurred after
adjournment of the session, so that per diem from the Legislature was not available to coverthose costs.
Housing costs associated with travel to the Capitol as a part of legislative duties during periods
when legislative per diem reimbursement is not available are properly reported as costs ofserving in office.
Do the allegedly low amounts of campaign expenditure postage costs, without more,
give rise to an allegation on which the Board should take action.
Complainants argue that because the Committee appears to use what they consider too large a
percentage of its postage for constituent services rather than campaign expenditures, there
must be some violation. Apparently to support that position, Complainants attach as Exhibit 8 acopy of a congratulatory letter and state that “Representative Davids is known throughout his
district for his long standing (sic) habit of sending many congratulatory letters, sympathy cards
and other greetings.”
Although submitted as support for their complaint, Complainants properly acknowledge that theletter they submit as Exhibit 8 was apparently paid for out of Representative Davids’ legislative
budget and that its propriety “would be a question for the legislature, not the Board.”
Representative Davids, in his written response, confirmed that this and similar letters were
produced and paid for out of his legislative constituent services budget.
Complainants also state that in 2004, the Committee had only $17.82 in campaign expenditures
for postage (other than direct mailings). A review of the Committee’s 2004 year end Report
reveals, however, that there is $488.02 in postage reported as campaign expenditures.
The Board also notes that in December of 2005, the Committee purchased approximately $800
of postage charged to campaign expenditures. It is typical of committees to use some of their
non-election year spending limit to pre-purchase items such as postage. This practice may
have the effect of making election year postage costs appear to be lower than they actually are.

-4-

Did the Committee provide sufficient disclosure of underlying information for
expenditures that reimbursed Representative Davids for costs he incurred?
When a person is reimbursed for expenses paid on behalf of a committee, the underlying
information about costs being reimbursed must be reported. Minnesota Statutes, Section
10A.20, subd. 13, states in part that when reporting a reimbursement, the treasurer “must report
the purpose of each expenditure or disbursement for which the third party is being
reimbursed”. This disclosure includes the purpose, vendor, and amount of each underlying cost
being reimbursed. The Committee Reports did not provide this disclosure.
As part of the investigation of this matter, Board staff requested that the Committee provide
copies of receipts for all expenses for which Representative Davids was reimbursed.
Representative Davids provided these receipts as Exhibit 4 to his response. Provision of thesereceipts is accepted by the Board in lieu of an amended report. In the future, this disclosuremust be timely filed on periodic Reports.
Do the amounts of mileage reimbursed to Representative Davids, without more,constitute a basis for further investigation?
Complainants argue that Representative Davids’ reports show excessive mileage
reimbursements in December of each year and that the mileage amounts are “inconceivable”.
Complainants wonder whether “Representative Davids has gotten into the habit of paying
himself a Christmas bonus from his campaign committee funds.” As with some ofComplainants’ other allegations, no evidence of any improper conduct is provided; theallegations are based solely on campaign finance reports and on Complainants’ opinions ofwhat an appropriate level of travel would be.
Complainants urge that it is inconceivable that Representative Davids drove 996 miles on
December 31, 2005, the date of the last reimbursement. For 2005, staff requested andRepresentative Davids provided itemization of all reimbursed mileage. The December 31st
check was reimbursement for multiple trips during the period. Based on the information
provided, and the lack of evidence from Complainants of improper conduct, the Board
concludes that there is no basis for investigation of mileage reimbursements from prior years.
Are reimbursements for out of state travel to the National Conference of Insurance
Legislators (NCOIL) conference proper and properly documented?
Because the Committee’s 2004 Report lacked the detail required, staff requested receipts to
support each reimbursement for NCOIL expenses. Representative Davids provided therequested receipts which document charges of $760.65, as follows: $350 registration fee,
$329.42 car rental, $13.23 gasoline and $68.00 parking.
Complainants urge the Board to deny use of committee funds for this conference as a cost ofserving in office. They argue that “If the Board upholds the use of Campaign Committee funds
for out of state travel under this broad category of expenses for serving in office, it will create yet
another large opening for the essentially unregulated use of publicly subsidized funds byincumbents.” Complainants further argue that if it is necessary for legislators to travel out ofstate, then the cost of that travel should be paid out of legislative budgets.
Minnesota Statutes, Section10A.01, subd. 26 (10) specifically provides for a noncampaign
disbursement for “payment by a principal campaign committee of the candidate's expenses forserving in public office, other than for personal uses”.

-5-Representative Davids was chair of the House Commerce Committee in 2004, the year thequestioned reimbursements were made. In his response to this investigation, he indicated that
the Speaker of the House requested him to attend the NCOIL conference as head of thecommittee responsible for insurance legislation in Minnesota. While the Board understands
Complainants’ concern that this noncampaign disbursement category permits officeholders to
use principal campaign committee funds outside of campaign spending limits, it appears that theuse of funds in this instance falls within this noncampaign disbursements exception.
Has Representative Davids used his “constituent services office” for personal businesspurposes or for campaign purposes.
The Board uses quotation marks around the phrase “constituent services office” to clarify thatthe term is not one that appears in Minnesota Statutes Chapter 10A. Rather it is the term used
by Representative Davids to describe an office in Preston, MN that he maintains for meetingwith constituents.
On the basis of an insurance business card listing the “constituent services office” address andtelephone number and speculation about the use of the “constituent services office”,
Complainants question whether Representative Davids is using the office for personal businesspurposes. Board staff made extensive inquiry into this possibility as well as the possibility thatthe office was used for campaign purposes.
With respect to the specific business card provided by Complainants, Representative Davids
indicated that the telephone number was listed in error and that when the error was discovered,within two weeks of the printing of the cards, the remaining cards were destroyed.
Board staff requested copies of all other business cards used by Representative Davids in his
insurance business. He provided copies of cards and letterhead in Exhibit 17 to his response.
No other business card uses the “constituent services office” telephone number. Representative
Davids stated in his written response that he has never used the office to meet with insurance
clients. Complainants’ request that the Board examine Representative Davids purchases offurniture and equipment for his separate insurance business office goes beyond the scope of
this investigation.
In the course of the investigation it became clear that Representative Davids used theconstituent services post office box for both constituent services and personal/ businesspurposes. Representative Davids made appropriate reimbursements between himself and theCommittee and amended prior year reports to accurately reflect the shared use of the box.
Board staff asked comprehensive questions about possible campaign use of the “constituent
services office”. Representative Davids responded to detailed questions. His answers disclosed
no campaign use of the “constituent services office” with one exception. Representative Davids
reported that he made 1,000 copies of a thank-you letter on the copier in the “constituent
services office”. The toner and paper for these copies were purchased as campaign
expenditures; however use of the copier was not accounted for. Based on a 1.7 cent per-copy
rate, Representative Davids has amended his 2005 report to decrease noncampaign
disbursements by $17 and increase campaign expenditures by the same amount.

-6-

Did Representative Davids submit timely requests for reimbursement?
Complainants suggest that Representative Davids may not have submitted his reimbursement
claims in a timely manner. They urge application of Minnesota Statutes, Sec. 10A.18 which
requires that written bills be submitted within 60 days after the service is provided.
An examination of the Committee’s 2005 report indicates that Representative Davids was being
reimbursed on a monthly or more often basis. In general, there is nothing in the response
provided by Representative Davids to suggest that the majority of reimbursement requests were
not submitted on a timely basis.
Two December reimbursements merit further examination. The first is for parking at the State
Capitol, a contract-based parking agreement available to legislators. Representative Davids
was reimbursed $582.00 on December 31, 2005, for this expense. The second reimbursement
was for $707.27 paid on December 31, 2005, for a second telephone line and internet services
for constituent services activities.
With regard to the parking, no question was raised concerning the appropriateness of theexpenditure as a cost of serving in office. Representative Davids explained to Board staff that
he was billed monthly by the state for the parking and that reported the amount to theCommittee on a monthly basis, with the understanding that he would pay the bill at the end of
the year and the committee would reimburse him at that time. While Representative Davids
incurred a monthly obligation to the state on an ongoing basis, he did not have a reimbursable
expense until he paid the bill in December.
In the case of the internet service and telephone line, Representative Davids paid the bill on amonthly basis and states that he reported the amount to the Committee with the understandingthat the amount would be reimbursed in a lump sum at the end of the year. Exhibit 4 includes adetailed itemization of the telephone and internet costs and what appear to be monthly sheets
listing the monthly costs.
In both cases, it appears that the committee was accruing unpaid bills during the year, whichwere paid at the end of the year. In an election year, where timing of the expense may
determine its characterization as campaign expenditure or noncampaign disbursement, it isimportant that bills be submitted in a timely manner and, if not paid on a monthly basis, that they
be reported by the Committee as unpaid bills.

Additional Issues Raised in the Course of the Investigation.
In the course of the investigation, the staff inquiry raised issues not identified by Complainants.
Reporting of cost of meals for the candidate or others as costs of constituent services.
Minnesota Administrative Rules 4503.0100, subpart 6 states, in part, that “’constituent services’means services performed or provided by an incumbent legislator or constitutional officer for the
benefit of one or more residents of the official's district . . . ”.
Representative Davids reported certain meals as noncampaign disbursements for constituent
services. Buying a person a meal, or buying oneself a meal at a meeting, is not a service forconstituents within the meaning of the rule and statute. Upon advice by the staff that payment
for such meals is not considered a constituent service, Representative Davids reimbursed theCommittee in the amount of $135.00 for meals previously reported as constituent services.

-7-

Reporting of payment for meals at meetings related to legislative duties.
Payment for food while at a meeting directly related to legislative duties is a noncampaign
disbursement. However, this noncampaign disbursement applies only to payment of meals forthe officeholder, not for others attending the meeting.
Representative Davids reported certain meals for others than himself as noncampaign
disbursements under the above provision. Upon advice by staff that payment of meals forothers at such meetings is not within the exception, Representative Davids reimbursed theCommittee in the amount of $180 for meals previously reported as noncampaign disbursements
for costs of serving in office.
Payment for attendance at a golf tournament.
Representative Davids reported payment to Lockridge, Grindal, Nauen of $200 as anoncampaign disbursement for constituent services. When questioned about this expenditure,
he explained that it was for a golf tournament sponsored for chiropractors and that he attended
a roundtable discussion as part of his participation and that his participation provided a service
to constituents.
When advised that it did not appear to be a constituent service, Representative Davids changed
the cost to a noncampaign disbursement for food and beverages at a fundraising event. Upon
advice that the fundraising noncampaign disbursement exception applied only to fundraisers forthe candidate’s own principal campaign committee, Representative Davids elected to personallyreimburse the Committee $200 for this expenditure.
Payment for pens that were printed with Representative Davids’ name, position, andtelephone number.
Receipts from Amsterdam Printing for direct payments or payments for which Representative
Davids was reimbursed indicated the purchase of 550 ballpoint pens at a cost of $436.76.
Representative Davids provided samples of these pens, which were reported as noncampaign
disbursements for constituent services. Each pen bears printing with Representative Davids’
name, office or position, and telephone number.
Representative Davids stated that he still has the pens. He further states that they wereintended for use by constituents at town meetings and that they were to be collected at the endof each meeting, but that no such meetings took place. He further states that he knows that
nothing of value can be given to a voter under statute and that he did not intend to give the pensto voters.
Pursuant to Administrative Rule 4503.1000, Subp. 6, a constituent service must be a service
performed or provided by an incumbent officeholder. If spending by a principal campaign
committee does not fit specifically into a noncampaign disbursement category, it must bereported as a campaign expenditure.
The purchase of the described pens does not appear to meet the definition of a noncampaign
disbursement for constituent services in part because the pens are imprinted with advertisingidentifying the candidate and providing his telephone number. The pens are therefore more
properly classified as a campaign expenditure and should be reclassified as such.

-8-Can postage purchased in 2005 for campaign use be changed to a noncampaign
disbursement in August, 2006 by amendment of the 2005 report?
On August 8, 2006, Representative Davids faxed to the Board a hand written letter stating that
“After further review of my 2005 Campaign Finance committee, I find that I made an inadvertentreporting error. I misclassified three expenditures to the United States Post Office. They wereincorrectly reported as campaign expenditures but were non campaign expenditures (sic) for
constituent services.” The total affected by the items described in the letter was $615.10.
The Board notes the following other evidence with regard to characterization of this postage
expense. First, the 2005 Report itself, filed January 31, 2006, in close time proximity to theexpenditures, lists them as campaign expenditures.
Second, Representative Davids was asked in detail to explain his postage expenditures as apart of this investigation. In his response, he provided copies of every check and every receipt
for postage. During that review, he re-classified two items from noncampaign disbursement tocampaign expenditure, but made no other adjustments.
Finally, the Board is in possession of copies of the three checks that are the subject ofRepresentative Davids’ letter. Each check is hand written and signed by Representative Davids
and each of them bears, in the memo section, the phrase “100% Campaign”. The Board notesthat many other checks bear the memo “100% Const. Ser.”. Also the Postal Service receipt
supporting one of the three checks has the hand written note “Campaign” written on it.
While Representative Davids states that the postage was incorrectly classified on his report, healso provides contradictory evidence in the form of the report itself, the failure to make thechange when he responded to the initial staff inquiry, and the checks on which he indicated theuse of the postage. Therefore, it appears the expenditures were correctly classified on theReport filed in January, 2006.
Are the costs of production, distribution, publication or broadcast of idea or suggestion
solicitations within Representative Davids district properly reported as noncampaign
disbursements for constituent services?
The Board addressed this issue in the 2004 investigation and concluded that mass distributionof idea solicitations, not requested by any constituent, and identifying the candidate, often with aphotograph, were campaign expenditures.
During the 2005 legislative session, the legislature amended Minnesota Statutes, Section
10A.01, subd. 26(6), the definition of constituent services, to add the phrase “including the costof preparing and distributing a suggestion or idea solicitation to constituents . . .”. This
amendment went into effect August 1, 2005.
Representative Davids’ Report discloses that even before the law change, he used the conceptof the idea solicitation. He printed cards, ran radio spots, and ran print ads regularly in the local
newspapers. While the Board could rule that such costs incurred before August 1, 2005, arecampaign expenditures, in deference to the intent of the legislature, it declines to do so.
The complaint, besides being about a lack of disclosure, appears to be about the ability ofincumbent officeholders to use noncampaign disbursement exceptions to effectively supplement
their campaign expenditure budget. Because this is a legislative issue, it cannot be resolved by
the Board.

-9-Based on the record before it, the Board makes the following:

EVIDENTIARY FINDINGS
1.

There is evidence that at the time his 2005 Report was filed, Representative Davids
failed to provide sufficient information to support the classification of mileage
reimbursement as noncampaign disbursements for constituent services. During thecourse of the investigation, Representative Davids provided detailed information to
support the mileage classification.

2.

There is evidence that at the time his 2005 Report was filed, Representative Davids
failed to provide sufficient information to support the classification of postage expenses
as noncampaign disbursements for constituent services. During the course of theinvestigation, Representative Davids provided detailed information to support the
postage expense classification.

3.

There is evidence that Representative Davids signed and filed campaign finance
Reports for 2004 and 2005. There is also evidence that Representative Davids signed
at least some of the principal campaign committee checks during that period.

4.

There is evidence that $308.05 in hotel costs reimbursed to Representative Davids byhis principal campaign committee in 2004 were for lodging costs during the legislative
session interim and did not duplicate or supplement costs paid for by the
Representative’s per diem allowance.

5.

There is no evidence that Representative Davids has incorrectly reported campaign
expenditure postage as noncampaign disbursement postage. However, Representative
Davids on his own initiative notified the Board that two postage items were incorrectly
reported and should be treated as campaign expenditures. The amounts of these twoitems were $199.80 and $81.40. There is evidence that some constituent services
congratulatory letters are paid for out of the Representative’s legislative budget and are
not within the jurisdiction of the Board.

6.

There is evidence that at the time his 2005 report was filed, Representative Davids failed
to provide sufficient information to document and support the reporting classification of
costs for which he was reimbursed. During the course of the investigation,
Representative Davids provided detailed information to document the reimbursed
expenses and support their reporting classification.

7.

There is no evidence that Representative Davids has sought or obtained mileage
reimbursement from his committee to which he was not entitled.

8.

There is no evidence that Representative Davids collected inappropriate
reimbursements from his committee for costs of attending the 2004 National Conferenceof Insurance Legislators meeting.

9.

There is no evidence that Representative Davids has used the office he designates as
his “constituent services office” for business or campaign purposes with the exception ofusing the constituent services copy machine to copy 1,000 thank-you letters that were
for campaign purposes and for which he has made appropriate amendments to his 2005
Report of Receipts and Expenditures.
- 10 -

10.

There is evidence that Representative Davids was incurring a monthly expense forinternet and telephone for which he expected to be reimbursed by his principal campaign
committee. There is also evidence that Representative Davids was incurring a monthly
obligation to the State of Minnesota for parking at the Capitol for which he expected tobe reimbursed. There is evidence that Representative Davids provided the Committeewith a monthly statement of the internet and telephone costs and that he verbally
informed the Committee of the monthly parking fee

11.

There is evidence that Representative Davids reported as noncampaign disbursements,
certain meals for himself or for constituents, which were reported as constituent services
and certain meals for staff or others, which were reported as costs of serving in office.
There is also evidence that Representative Davids paid a golf tournament entry fee,
which was originally reported as being for constituent services. Subsequently
Representative Davids changed the classification to noncampaign disbursement for food“at a fundraiser”. During the course of this investigation Representative Davids
reimbursed his principal campaign committee in full for the cost of all of the items
described in this paragraph

12.

There is evidence that Representative Davids’ committee purchased 550 ballpoint pens,each printed with his name, public office or title and telephone number. There isevidence that the cost of producing these pens was $436.76. There is no evidence thatthe purchase of these pens served any constituent or group of constituents. There isevidence that Representative Davids intended that the pens with his name andtelephone number would be seen and used by voters at various functions in his district.

13.

The evidence that Representative Davids incorrectly classified $615.10 in postage
expense as noncampaign disbursements is insufficient to overcome the evidence thatthe original classification as campaign expenditures was correct.

14.

There is evidence that both prior to and after August 1, 2005, Representative Davids
produced and distributed idea solicitations by mail, in newspaper advertisements, and on
the radio.

15.

There is evidence that Representative Davids’ campaign expenditures reported on the2005 Report of Receipts and Expenditures were $5,072.30. During the course of thisinvestigation, he re-classified $281.20 of postage from noncampaign disbursements tocampaign expenditures and reclassified $17.00 of copying costs from noncampaign
disbursements to campaign expenditures. The adjusted campaign expenditure amountis $5,370.50.

- 11 -

Based on the above Evidentiary Findings, the Board makes the following:

FINDINGS CONCERNING PROBABLE CAUSE
1.

There is probable cause to believe that at the time Representative Davids’ 2005 Reportof Receipts and Expenditures was filed, it provided insufficient disclosure with respect toreporting mileage reimbursements paid to the candidate. The Board accepts the
documentation provided during the investigation in lieu of amended reporting with regard
to mileage reimbursements paid to Representative Davids. On that basis, there is noprobable cause to believe that this reporting violation for 2005 has not been cured.

2.

There is probable cause to believe that at the time Representative Davids’ 2005 Report
was filed, it provided insufficient disclosure with respect to reporting postage expenses
classified as noncampaign disbursements for constituent services. The Board accepts
the documentation provided during the investigation in lieu of amended reporting withregard to postage expenses. On that basis, there is no probable cause to believe that
this reporting violation for 2005 has not been cured.

3.

There is probable cause to believe that Representative Davids signed and filed theCommittee’s 2005 Report of Receipts and Expenditures and at least some of theCommittee’s checks. However, there is no probable cause to believe that either
Representative Davids or the Committee’s treasurer intentionally attempted tocircumvent the responsibilities of the treasurer.

4.

There is no probable cause to believe that Representative Davids failed to comply with
the Board’s order in its 2004 investigation which required the review and reimbursementof certain lodging reimbursements.

5.

There is no probable cause to believe that Representative Davids intentionally reported
postage as noncampaign disbursements that should have been campaign expenditures.
During the course of the investigation, $281.20 of postage was changed from
noncampaign disbursements to campaign expenditures. There is no probable cause tobelieve that any other incorrect classifications of postage exist.

6.

There is probable cause to believe that at the time Representative Davids’ 2005 Report
was filed, it provided insufficient disclosure with respect to reimbursements paid to theRepresentative. The Board accepts the documentation provided during the investigationin lieu of amended reporting with regard to reimbursements paid to Representative
Davids. On that basis, there is no probable cause to believe that these 2005 reporting
violations have not been cured.

7.

There is no probable cause to believe that Representative Davids collected mileage
reimbursements from the committee other than for reported committee purposes.

8.

There is no probable cause to believe that that Representative Davids collected
ineligible reimbursements from the Committee for costs of attending the 2004 National
Conference of Insurance Legislators meeting.

9.

There is no probable cause to believe that Representative Davids has used his“constituent services office” for his business. There is no probable cause to believe that
Representative Davids has used his “constituent services office” for campaign purposes- 12 -

except that Representative Davids acknowledges making 1,000 copies of a campaign
thank-you letter on the copy machine dedicated to constituent services. Representative
Davids has amended his 2005 Report to reflect the cost of the copier use of $17.00 as a
campaign expenditure to cure the reporting error.
10.

There is probable cause to believe that Representative Davids did not comply with
Minnesota Statutes, Section 10A.18, which requires a person to submit a written bill to
the treasurer within 60 days of incurring an expense for which the person expects
payment. This finding relates to Representative Davids’ reimbursements for parking at
the Capital. There is no probable cause to believe that this billing deficiency was
intentional or that full compliance would have changed the Committee’s 2005 report,
which covered the entire year.

11.

There is probable cause to believe that Representative Davids paid for meals forhimself, constituents and others and that he paid the entry fee in a golf tournament, allwith principal campaign committee funds and that those uses of committee funds do not
fall within any noncampaign disbursement provided in Minnesota Statutes Chapter 10A.
Representative Davids has personally reimbursed his committee in full for the items inquestion. Regulation of the use of principal campaign committee funds, generally, isgoverned by Minnesota Statutes Chapter 211B, which is not in the Board’s jurisdiction.

12.

There is probable cause to believe that the cost of $436.76 for pens printed withRepresentative Davids’ name, office or title and telephone number were for the purposeof influencing his election and were incorrectly reported on the Representative’s 2005
Report as noncampaign disbursements for constituent services.

13.

There is probable cause to believe that $615.10 in postage which Representative Davids
sought to reclassified as noncampaign disbursements, was correctly reported as
campaign expenditures on the Committee’s 2005 Report of Receipts and Expenditures.

14.

There is probable cause to believe that Representative Davids produced and distributed
idea solicitations between January 1, 2005 and July 31, 2005 and reported the costs asnoncampaign disbursements for constituent services. The Board has previously foundthat such costs are to be reported as campaign expenditures. After August 1, 2005, alaw went into effect specifically allowing idea solicitations to be paid for in the
noncampaign disbursement category for constituent services. Given this specificlegislative reversal of the Board’s holding, the Board will not require the costs of idea
solicitations to be reported as campaign expenditures on 2005 reports.

15.

There is probable cause to believe that Representative Davids exceeded his 2005
spending limit of $5,700 by spending a total of $5,807.26, which is $107.26 in excess of
the limit.

Based on the above Findings, the Board issues the following:

ORDER
1.

Representative Davids has corrected the reporting deficiencies in his 2005 Report ofReceipts and Expenditures with respect to his failure to sufficiently document
noncampaign disbursements, particularly those for constituent services, and his failure
to provide underlying detailed information for reimbursed expenditures. Representative- 13 -

Davids and the Committee’s treasurer are ordered for reporting year 2006 andsubsequent years as follows:(A) To include with each reported noncampaign disbursement for constituent services
the date of the service, a detailed description of the nature of the service and the cost of
the service.
(B) To provide sufficient description of each reported noncampaign disbursement toallow a reader of the report to make a determination of the appropriateness of thereporting category.
(C) To report with each reimbursement paid by the Committee, the date, amount, andpayee for each underlying expense being reimbursed and a description of eachunderlying expense consistent with subparagraphs (A) and (B) above.
2.

The allegations of the complaint based on insufficient reporting of noncampaign
disbursements and reimbursements are dismissed, the violations having been cured.

3.

Representative Davids and Committee’s treasurer are ordered to follow those parts ofMinnesota Statutes Chapter 10A related to the responsibilities and authority of thecommittee treasurer. Specifically, Minnesota Statutes, Section 10A.20, subd. 1, statesthat the Treasurer must file the periodic reports. Section 10A.025, Subd. 2, requires thatthe person who must file the reports is the person who must sign the reports and certify
them to be true. Section 10A.17, subd. 1, prohibits a committee from spending any
money unless the expenditure is authorized by the treasurer or deputy treasurer.

4.

The allegations of the complaint that Representative Davids failed to properly reimburse
his principal campaign committee for lodging costs in 2004 are dismissed.

5.

The allegations of the complaint that Representative Davids misused mileage
reimbursement for personal purposes are dismissed.

6.

The allegations of the complaint that Representative Davids collected improper
reimbursement from the Committee for his attendance at the 2004 NCOIL meeting are
dismissed.

7.

The allegations of the complaint that Representative Davids used the office hedesignates as his “constituent services office” for personal business purposes are
dismissed.

8.

For 2006 and subsequent years, Representative Davids must submit to the Committee’s
treasurer timely bills for expenses that are to reimbursed, consistent with therequirements of Minnesota Statutes, Section 10A.18.

9.

Representative Davids must amend his 2005 Report of Receipts and Expenditures tochange the classification of pens imprinted with his name, position and telephone
number from noncampaign disbursements to campaign expenditures.

10.

If the amendment required by paragraph 9 of this report causes the committee to exceed
its 2005 campaign expenditure limit, the Committee is directed to enter into theconciliation process with the Board.

- 14 -

Relevant Statutes and Administrative Rules
Statutes
Minnesota Statutes, Chapter 10A
10A.01 Definitions.
Subdivision 1. Application. For the purposes of this chapter, the terms defined in thissection have the meanings given them unless the context clearly indicates otherwise.
. . .
Subd. 26. Noncampaign disbursement. "Noncampaign disbursement" means apurchase or payment of money or anything of value made, or an advance of credit
incurred, or a donation in kind received, by a principal campaign committee for any of
the following purposes:. . .
(6) services for a constituent by a member of the legislature or a constitutional officer
in the executive branch, including the costs of preparing and distributing asuggestion or idea solicitation to constituents, performed from the beginning of
the term of office to adjournment sine die of the legislature in the election year forthe office held, and half the cost of services for a constituent by a member of thelegislature or a constitutional officer in the executive branch performed fromadjournment sine die to 60 days after adjournment sine die;. . .
(8) payment for food or a beverage consumed while attending a reception or
meeting directly related to legislative duties;. . .
(10) payment by a principal campaign committee of the candidate's expenses forserving in public office, other than for personal uses;
10A.025 Filing requirements.
. . .
Subd. 2. Penalty for false statements. A report or statement required to be filed
under this chapter must be signed and certified as true by the individual required to file
the report. The signature may be an electronic signature consisting of a password
assigned by the board. An individual who signs and certifies to be true a report orstatement knowing it contains false information or who knowingly omits required
information is guilty of a gross misdemeanor and subject to a civil penalty imposed by
the board of up to $3,000.
10A.17 Expenditures.

- 16 -

Subdivision 1. Authorization. A political committee, political fund, principal
campaign committee, or party unit may not expend money unless the expenditure isauthorized by the treasurer or deputy treasurer of that committee, fund, or party unit.

- 17 -

10A.18 Time for rendering bills, charges, or claims; penalty.
A person who has a bill, charge, or claim against a political committee, political fund,principal campaign committee, or party unit for an expenditure must render in writing
to the treasurer of the committee, fund, or party unit the bill, charge, or claim within 60
days after the material or service is provided. A person who violates this section is
subject to a civil penalty imposed by the board of up to $1,000.
10A.20 Campaign reports.
Subdivision 1. First filing; duration. The treasurer of a political committee, politicalfund, principal campaign committee, or party unit must begin to file the reports
required by this section in the first year it receives contributions or makes expenditures inexcess of $100 and must continue to file until the committee, fund, or party unit isterminated.
Subd. 1a. If treasurer position is vacant. If the position of treasurer of a principal
campaign committee, political committee, political fund, or party unit is vacant, thecandidate, chair of a political committee or party unit, or association officer of apolitical fund is responsible for filing reports required by this section.
. . .
Subd. 13. Third-party reimbursement. An individual or association filing a reportdisclosing an expenditure or noncampaign disbursement that must be reported anditemized under subdivision 3, paragraph (g) or (l), that is a reimbursement to a third
party must report the purpose of each expenditure or disbursement for which the third
party is being reimbursed. An expenditure or disbursement is a reimbursement to a third
party if it is for goods or services that were not directly provided by the individual or
association to whom the expenditure or disbursement is made. Third-party
reimbursements include payments to credit card companies and reimbursement of
individuals for expenses they have incurred.

Administrative Rules
4503.0010 SCOPE.
This chapter applies to the campaign finance activities of candidates and their principal
campaign committees, political party units, political committees, and political funds regulated byMinnesota Statutes, sections 10A.11 to 10A.335.
4503.0100 DEFINITIONS.
Subpart 1. Scope. The definitions in this part apply to this chapter and Minnesota Statutes,
chapter 10A. The definitions in chapter 4501 and Minnesota Statutes, chapter 10A, also apply
to this chapter.
. . .
Subp. 6. Services for a constituent; constituent services. "Services for a constituent" or"constituent services" means services performed or provided by an incumbent legislator or- 18 -

constitutional officer for the benefit of one or more residents of the official's district, but does notinclude gifts, congratulatory advertisements, charitable contributions, or similar expenditures.

- 19 -