Report of the Minnesota Campaign
Finance and Public Disclosure Board

Covering the Biennium for
Fiscal Years 2010 and 2011
JULY 1, 2009 - JUNE 30, 2011

Issued: February, 2012
CAMPAIGN FINANCE and PUBLIC DISCLOSURE BOARD
Suite 190, Centennial Building
658 Cedar Street
St. Paul MN 55155-1603

Telephone: (651)296-5148 or (800)657-3889
Fax: (651)296-1722 or (800)357-4114
Email: cf.board@state.mn.us
Website: http://www.cfboard.state.mn.us

This document is available in alternative formats to individuals with disabilities by calling (651)296-5148, (800)657-3889,
or through the Minnesota Relay Service at (800)627-3529.

TABLE OF CONTENTSEXECUTIVE SUMMARY .......................................................................................................................... 1
INTRODUCTION TO THE BOARD .......................................................................................................... 4
Board Member Qualifications ....................................................................................................... 5
Board Members - July 1, 2009 through June 30, 2011 ................................................................ 6
Summary of Board Activities ........................................................................................................ 9
PROGRAM REVIEWS .............................................................................................................................. 12
CAMPAIGN FINANCE PROGRAM .......................................................................................................... 12
Program Overview ....................................................................................................................... 12
Legislative Action Impacting the Campaign Finance Program .................................................... 13
Advisory Opinions Issued Related to the Campaign Finance Program ....................................... 16
Campaign Finance Disclosure Reports Filed............................................................................... 18
Electronic Filing of ........................................................................................................................ 18
Campaign Finance Reports ......................................................................................................... 18
Public Subsidy Payments............................................................................................................. 19
Payments Made for the 2010 State General Election .................................................................. 19
Political Party Payments .............................................................................................................. 20
Campaign Finance Enforcement Actions..................................................................................... 21
LOBBYIST PROGRAM ............................................................................................................................. 22
Program Overview ....................................................................................................................... 22
Legislative Action ......................................................................................................................... 22
Advisory Opinions Issued Related to the Lobbying Program ...................................................... 22
Lobbyist Disbursement Reports ................................................................................................... 23
Principal Expenditures ................................................................................................................. 24
Lobbyist Program Enforcement Actions ....................................................................................... 24
ECONOMIC INTEREST PROGRAM ........................................................................................................ 24
Program Overview ....................................................................................................................... 24
Legislative Action ......................................................................................................................... 24
Advisory Opinions Issued............................................................................................................. 24
OTHER BOARD PROGRAMS .................................................................................................................. 25
STAFF DUTIES ......................................................................................................................................... 26
Staff Salaries ................................................................................................................................ 28
BOARD FINANCIAL INFORMATION ....................................................................................................... 28
Board Operating Budget .............................................................................................................. 29
Penalties Paid for Late Filing of Disclosure Reports and other Violations of Chapter 10A ......... 30

ii

EXECUTIVE SUMMARY
The Campaign Finance and Public Disclosure Board is charged with the administration of the Campaign
Finance and Public Disclosure Act, Chapter 10A of Minnesota Statutes. During fiscal years 2010 and2011 the Board was challenged to administer the campaign finance provisions of Chapter 10A in light of
the United States Supreme Court Ruling in Citizens United v. Federal Election Commission. Thisdecision overturned Minnesota’s prohibitions on the use of corporate funds to finance independent
expenditures for or against candidates. The effect of this decision on the Board’s clients and activities
was dramatic.

Board staff spent much of the 2010 legislative session providing analysis, assisting in thedrafting of proposed statutory language, and supporting efforts by the legislature to amend provisions of
Minnesota statutes to comply with the Citizens United ruling. At the same time, the Board worked on aplan to integrate corporate independent expenditures into Chapter 10A in the event that a legislative
solution was not achieved. Through hard work by all parties involved major legislation to modify Chapter
10A was passed with strong bipartisan support on the last day of the 2010 legislative session.

However, for the Board, the passage of the legislation was only the beginning of the work needed to
implement the Citizens United ruling. Forms and processes for registration and reporting for the newly
authorized independent expenditure committees and funds had to be created in time for the 2010 election
reporting periods later that same year. During 2010 newly created independent expenditure committees
and funds made independent expenditures of $9,134,914. The new sources of funding for independent
expenditures as well as an apparent shift in the types of committees that made independent expendituresare seen in the following graph.

1

As the 2010 election year unfolded the Board was the subject of a federal lawsuit that challenged both the
new statutes regulating independent expenditures, and some long established provisions of Chapter 10A.
Staff supported the Attorney General’s Office defense of Minnesota statutes with many hours of analysis
and research during the litigation. As of the date of this report, the Board is awaiting a decision on thelitigation by the full Court of Appeals for the Eighth Circuit.

Even without the Citizens United decision, the 2010 election year was set to be challenging as all
legislative and constitutional offices were on the ballot. Public subsidy payments totaling $4,011,037
were made to 364 eligible candidates at the 2010 election. Additionally, 2010 was the first election atwhich political committees and funds were required to file five reports of financial activity, compared tothree reports in prior election years. With the additional reports came more report processing and client
support demands on Board staff.

While the Board faced challenges in administering the campaign finance provisions of Chapter 10A in achanging landscape of court decisions and new statutory provisions, the lobbyist program remained
relatively stable. About 1,450 lobbyists were registered with the Board at any one time throughout thetwo year period. The lobbyists represented about 1,300 principals. The principals reported total
expenditures of $59,199,895 in calendar year 2010, and $62,904,757 in calendar year 2009.

The economic interest disclosure program for public officials was also stable in number at about 2,200
individuals required to file Economic Interest Statements with the Board. However, the election ofGovernor Dayton in 2010 did create a wave of new appointments to public official positions with therequisite processing of statements filed with the Board. Unfortunately, the Board has not yet beensuccessful in fully integrating into its systems the 800 soil and water management and conservation
officials that were added as the result of 2008 legislation. Obtaining economic interest disclosure fromthese officials continues to be a difficult program to administer.

During the biennium the Board held twenty one scheduled meetings, one emergency meeting, and one
special meeting at which public testimony was taken. During the meetings the Board issued nineadvisory opinions; reviewed and approved sixty-one Findings of Probable Cause that resolved
investigations based both on complaints filed with the Board and on inquiries initiated by the Board fromthe staff review of disclosure reports; and offered forty-two Conciliation Agreements to resolve
contribution and spending limit violations of Chapter 10A.

Despite the increased work load the Board was able to operate within its budget. Primarily due to notfilling staff vacancies, the Board returned over $65,000 to the state general fund at the end of the 2010 –2011 biennium. The decision to keep a position vacant for part of the biennium was difficult because it2

decreased the services provided by the Board to both the general public and the regulated community.
However, because of the considerable uncertainty over the Board’s budget, filling the positions only toface one or more layoffs in the 2012 – 2013 biennium would have been even more damaging to Board
operations due to unemployment compensation expenses.

The Board’s budget is sufficient to maintain only 7.6 full-time equivalent staff positions. Based on its
current and historical workloads, the Board needs nine staff members to maintain the levels ofprofessionalism and service expected by its clients and the public.

The Board looks forward to working

with the legislature and the Governor’s office in defining the type of disclosure and enforcement thepeople of Minnesota need and expect, as well as the budget that will be needed to accomplish the task.

3

INTRODUCTION TO THE BOARD
Authority

The Campaign Finance and Public Disclosure Board wasestablished by the state legislature in 1974 through enactment of
Chapter 10A of the Minnesota Statutes. Throughout its history the
Board has enforced the provisions of Chapter 10A, promulgated andenforced Minnesota Rules 4501 through 4525, and issued advisory
opinions to guide clients in meeting the chapter’s requirements.

Mission Statement

To promote public confidence in state government decision-making
through development, administration, and enforcement of disclosure
and public financing programs which will ensure public access toand understanding of information filed with the Board.

FunctionsCore functions of the Board include administration and managementof the:•registration and public disclosure by state legislative,
constitutional office, and judicial office candidates, political party
units, political committees, and political funds;•

state public subsidy program that provides public funding toqualified state candidates and the state committees of politicalparties;•registration and public disclosure by lobbyists and principals
attempting to influence state legislative action, administrative
action, and the official action of metropolitan governmental units;•

disclosure of economic interest, conflicts of interest, andrepresentation of a client for a fee under certain circumstances
for designated state and metropolitan governmental unit
officials.

4Goals and Objectives•

Create better compliance with the Campaign Finance andPublic Disclosure Act by moving to an educational model inwhich providing easy to access information and training
reduces the number of violations.

•

Provide fair and consistent enforcement of the Act.

•

Help citizens become better informed about public issues
related to the Act.

Board and Staff•

The Board consists of six members, none of who may be an
active lobbyist, a state elected official, or an active candidate forstate office. The Board is not non-partisan; rather it is multipartisan, with no more than three of the members of the Board
supporting the same political party. Additional information
about Board composition and members is found below.

•

The Board is able to maintain only 7.6 full time equivalent
positions. Based on its current and historical workloads, theBoard needs nine staff members to maintain the levels ofprofessionalism and service expected by its clients and the
public.

Additional information about Board staff is foundbeginning on page 26.

Board Member Qualifications
The Board consists of six citizen members who are responsible for the administration of the Campaign
Finance and Public Disclosure Act. Members of the Board are appointed by the Governor to staggeredfour-year terms. Their appointments must be confirmed by a three-fifths vote of the members of eachhouse of the legislature. Two members must be former members of the legislature who support different
political parties; two members must be persons who have not been public officials, held any political party
office other than precinct delegate, or been elected to public office for which party designation is requiredby statute in the three years preceding the date of their appointment; and the other two members must
support different political parties. The Board holds regular monthly meetings, which are open to the public
and executive session meetings which are closed to the public.

5

Board Members - July 1, 2009 through June 30, 2011
Terri Ashmore - Left Board March, 2011
Terri Ashmore was appointed in January 2003, by Governor
Tim Pawlenty and reappointed in January 2007 for a term
ending in January 2011. Pending appointment of a newmember she served through the March 1, 2011 Board
Meeting. She served as a member of the Republican Party of
Minnesota and has not been a public official, held any politicalparty office other than precinct delegate, or been elected to
public office for which party designation is required by statute in
the three years preceding the date of her appointment. Ms.
Ashmore is the Managing Director of the Basilica of St. Mary.
She serves on the Board of the Lundstrum Center of the
Performing Arts which provides arts education and experiences
for children and youth in North Minneapolis and volunteers for
the Jeremiah Program, a housing and education program forsingle mothers.
Felicia Boyd - Left Board July, 2010
Felicia Boyd was appointed in April 2004, by Governor Tim
Pawlenty and reappointed in January 2008. Ms. Boyd
resigned from the Board July 29, 2010. She served as amember of the Republican Party of Minnesota with norestrictions on previous activities. Felicia J. Boyd is a partnerwith Barnes & Thornburg LLP in the firm’s Minneapolis office,where she is a member of the firm’s Intellectual Property
Department. Ms. Boyd focuses her practice on complex
intellectual property litigation and has led plaintiff and defense
litigation on a large variety of claims related to patents,
copyrights, trademarks, and trade dress. She is a graduate of
the University of Minnesota Law School and St. Olaf College.
Bob Milbert - Left Board March, 2011
Board Chair Calendar Year 2010
Bob Milbert was appointed in January 2003, by Governor Tim
Pawlenty and reappointed in January 2007 for a term ending inJanuary 2011. Pending appointment of a new member heserved through the March 1, 2011 Board Meeting. He is aformer member of the legislature from the Democratic Farmer
Labor party where he served as a member of the Minnesota
House of Representatives for 16 years. He is a graduate ofDartmouth College. Mr. Milbert is the CEO of MilbertCompany, a Culligan Water dealership. He is a Board
member of the Minnesota Amateur Sports Commission, aformer member of the USA Hockey Foundation, andvolunteers for the United Way.

6

Hilda Bettermann - Board Chair Calendar Year 2009
Hilda Bettermann was appointed in April 2004, by Governor
Tim Pawlenty and reappointed in January 2008 for a term
ending in January 2012. She is a former member of thelegislature from the Republican Party where she served in the
Minnesota House of Representatives for eight years. Ms.
Bettermann is currently a Board member of the Brandon
History Center and the Douglas County Hospital Board. She
is also a former member of the Central Lakes Area SanitaryDistrict Advisory Council, Rural Health Advisory Council, theWorkers Compensation Council and the MNSCU Trustee
Advisory Council.

John Scanlon - Board Chair Calendar Year 2011
John Scanlon was appointed in October 2008, by Governor
Tim Pawlenty to fill an unexpired term and reappointed in
January 2010 for a term ending in January 2014. He fills a
Board position requiring a member who has not been a public
official, held any political party office other than precinctdelegate, or been elected to public office for which party
designation is required by statute in the three years preceding
the member's appointment to the Board. Mr. Scanlon is anassistant general counsel with 3M Company. He currently
provides general legal counsel to several 3M divisions andU.S.-based subsidiaries in a variety of substantive areas oflaw including contract, antitrust, product liability, productrepresentation, and distribution. Previously he was an attorneywith Dorsey and Whitney in Minneapolis and a law clerk to
U.S. District Court Judge Paul A. Magnuson. He is a graduateof the University of Notre Dame and Notre Dame Law School.

Andy Luger
Andy Luger was appointed in March 2011, by Governor Mark
Dayton for a term ending in January 2015. He fills a Board
position requiring a member who supports a political party butotherwise has no restrictions on previous political activities.
Mr. Luger is a partner at the Minneapolis law firm of Greene
Espel, PLLP where he practices business litigation and whitecollar criminal defense. Previously, he was an AssistantUnited States Attorney in Minnesota and New York focusing
on white collar criminal matters. He graduated from theGeorgetown University Law Center magna cum laude and is asumma cum laude graduate of Amherst College.

7Deanna Wiener
Deanna Wiener was appointed in March 2011 by GovernorMark Dayton for a term ending in January of 2015. She fills
the position of a former DFL legislator and served as a state
senator from 1993-2003. Ms. Wiener has been a Realtor since1977 and is currently a Broker and Co-owner of Cardinal
Realty Co. She is also a partner in land development
businesses. Currently she serves as a director to the National
Association of Realtors and is a board member of the St. Paul
Association of Realtors and serves on the board of the Friendsof Mississippi. She is a graduate of St. Mary's Jr. College, now
St. Catherine's, with an associate degree in nursing.

Greg McCullough
Greg McCullough was appointed in May 2009 by Governor
Tim Pawlenty for a term ending in January 2013. He fills a
Board position requiring a member who has not been a public
official, held any political party office other than precinctdelegate, or been elected to public office for which party
designation is required by statute in the three years preceding
the member's appointment to the Board. Mr. McCullough is acommunications leader at GE. In previous roles, he led
marketing operations for Fortune-class companies in theinformation technology, chemical, and commercial real estateindustries. He earned BA and MS degrees from Northwestern
University and an MBA from the University of Minnesota.

David Swenson
David Swenson was appointed in December 2010, by
Governor Tim Pawlenty, to complete a term ending in January
2012. He fills a Board position requiring a member who
supports a political party but otherwise has no restrictions on
previous political activities. He grew up in New Hope, MN,
attended Boston College, then earned his law degree from the
University of Minnesota Law School and his Masters in Public
Affairs from the University's Humphrey Institute. After school,
Mr. Swenson clerked for the Minnesota State Court ofAppeals, followed by the U.S. Court of Appeals for the Federal
Circuit in Washington, D.C., then practiced law in Washington
for ten years. He returned to Minnesota in 2007, and is apartner at the law firm of Robins, Kaplan, Miller & Ciresi LLP,
practicing in the area of patent litigation and appeals. Mr.
Swenson also serves on the Community Board of the Blaisdell
YMCA.

8

Summary of Board Activities
Meetings

The Campaign Finance and Public Disclosure Board held 21 scheduled
meetings, one emergency meeting, and one special meeting at which public
testimony was accepted, during the biennium. Minutes of Board meetings are
published on the Board’s web site.

Advisory Opinion
Procedure

The Board is authorized to issue advisory opinions on the requirements of theCampaign Finance and Public Disclosure Act (Minn. Stat. chapter 10A) and theHennepin County Disclosure Law (Minn. Stat. §§ 383B.041 - 383B.058).
Individuals or associations may ask for advisory opinions based on real or
hypothetical situations to guide their compliance with these laws.

A request for an advisory opinion and the opinion itself are nonpublic data. The
Board provides Consent to Release Information forms to individuals requesting
opinions as part of the procedures under this law. If the requester does notconsent to the publication of the requester’s identity, the Board generally
publishes a public version of the opinion, which does not identify the requester.

A written advisory opinion issued by the Board is binding on the Board in any
subsequent Board proceeding concerning the person making or covered by therequest and is a defense in a judicial proceeding that involves the subject
matter of the opinion and is brought against the person making or covered by
the request unless: 1) the Board has amended or revoked the opinion before
the initiation of the Board or judicial proceeding, has notified the person making
or covered by the request of its action, and has allowed at least 30 days for the
person to do anything that might be necessary to comply with the amended or
revoked opinion; 2) the request has omitted or misstated material facts; or 3)
the person making or covered by the request has not acted in good faith inreliance on the opinion.

A total of nine advisory opinions were issued in fiscal years 2010 and 2011, andtwo advisory opinions were revoked. A summary of each advisory opinion
issued during the biennium is provided in the review of programs administeredby the Board.

9

Education andTraining OutreachTo accomplish the goal of educating clients and the interested public on thecompliance and reporting requirements of Chapter 10A Board staff conducted
the following training during the biennium:•

13 compliance training sessions for candidates, treasurers and chairs ofprincipal campaign committees, political party units, and politicalcommittees and funds•

13 computer lab training classes for clients who use the Campaign
Finance Reporter software•

1 seminar prior to the legislative session for lobbyists.

Recognizing the cost and inconvenience for clients to attend training in St. Paulthe Board provided, for the first time, web based training to clients. The Board
conducted two live training sessions over the internet for users of Campaign
Finance Reporter and internally produced eight videos on specific topics
related to using Campaign Finance Reporter. The videos are available on the
Board’s web site. Based on favorable client feedback both of these training
tools will be used more extensively in the future.

Additionally Board staff participated in numerous panels, presented at many
continuing legal education courses, and spoke to interested groups of the
public on the requirements of Chapter 10A.

Use of Technology

The Board has long recognized the value of receiving disclosure reports inelectronic format. Electronic reports may be moved directly into Board
databases where the records are analyzed for compliance issues and thenported to the Board’s website for faster disclosure to the public. Electronic
filing eliminates the cost and errors associated with data entry of paper reports.

To facilitate electronic filing the Board developed web based applications forfiling lobbyist disbursement reports, lobbyist principal reports, and the annual
certification by public officials of the Economic Interest Statement. Use of theseweb based applications is optional, clients may still file a paper report, but all
three applications have participation rates of well over 90%, which indicates thatclients also prefer electronic filing.

Additionally, beginning in 1998, the Board has offered a free PC based
reporting application known as Campaign Finance Reporter for use bycandidates, political parties, and political committees and funds. In 2010 the10

legislature acknowledged the advantages of electronic filing in promoting
disclosure to the public and passed a Board recommendation that electronic
filing be mandatory for campaign finance reports beginning with the 2012
election cycle. Since the passage of this requirement Board staff has beendeveloping a XML schema that will be the standard for the electronic filing of
campaign finance reports using any vendor’s software. The use of XML is also
being incorporated into Campaign Finance Reporter so that the Board only
needs to support one electronic file format.

The Board increasingly turns to the internet to provide the point of access forclients and the general public to Board applications and information.
During fiscal year 2010 the Board’s website received 103,650 separate visits; infiscal year 2011 the site received 93,548 separate visits.

The Board website offers•

Board meeting notices and minutes;•

Board Enforcement Actions - Findings and Conciliation Agreements;•

Advisory Opinions;•

Lists of lobbyists and associations, candidate committees, politicalcommittees, political funds, party units, and public officials;•

Copies of all campaign finance and lobbyist reports;•

Electronic filing for lobbyists and lobbyist principals;•

Electronic filing of the Annual Statement of Economic Interest for public
officials;•

All Board publications and forms;•

Searchable databases of campaign finance contributions;•Searchable database of independent expenditures;•Campaign Finance Summaries;•

Lobbyist Disbursement Summaries;•

Annual Report of Lobbyist Principal Expenditures;•

Training videos on the use of Campaign Finance Reporter

11

PROGRAM REVIEWSThe Board administers three major and several minor programs as authorized by Minnesota Statutes
Chapter 10A. The major programs are campaign finance, lobbying, and economic interest disclosure. The
review of each major program includes a general description of the program, a review of legislation passed
during the biennium that affects the program, a review of any Board advisory opinion issued during the time
period for the program area, and an overview of administrative activity that occurred during the biennium.

CAMPAIGN FINANCE PROGRAM
Program Overview

The Board administers the provisions of Chapter 10A of the Minnesota
Statutes that govern campaign finance laws for principal campaign
committees, political committees, political funds, political party units, andindependent expenditure committees and funds.

During a non-election year these committees and funds file one year-end
report disclosing receipts and expenditures to the Board. During the 2010
election year candidates and political party units filed three reports; all othercommittees and funds filed five. The 2010 election was the first year thatpolitical committees and funds were required to file more reports thancandidates or party units. The number of filed reports will increase to six
reports a year in 2012 for political committees and funds, but will remain at
three a year for candidates and party units. Information on the number ofreports filed is found on page 18.

Each filed report is reviewed by Board staff for compliance with thedisclosure law requirements, including accurate accounting and reporting,and adherence to applicable contribution and expenditure limits. Violations ofcontribution and expenditure limits are resolved through either a Conciliation
Agreement or in some cases a Board Finding of Probable Cause. Information
on Board investigations and enforcement actions is found on page 21.

As a part of the campaign finance program the Board administers andregulates the distribution of payments for the state’s public subsidy program,which provides public funding to qualified state candidates and the statecommittees of political parties. Payments are made following the state
primary election to candidates and monthly to the state committees ofpolitical parties. Information on the payments is found on page 19.

12Legislative Action

Legislation passed in 2010 amended Minnesota Statutes Chapter
10A in the following ways:•

If a volunteer using the volunteer’s own personal automobile
chooses not to be reimbursed for the expense the use of theautomobile is NOT recognized as an in-kind contribution.
Unreimbursed volunteer automobile use is no longer areportable transaction. This treatment of automobile use also
applies to use of the candidate’s automobile by the candidate.

•

Established two new registered entities, the independent
expenditure political committee, and the independent
expenditure political fund. These entities may accept
contributions and transfers from corporations and otherassociations not registered with the Board. These entities
may make independent expenditures on behalf of candidates
or expenditures on ballot questions, but may NOT makecontributions to candidates, political parties, or regularpolitical committees or funds.

•

Established standards for the disclosure of underlying
contributions made to independent expenditure committees
and funds from unregistered associations.

•

An association that makes qualifying independent expenditures
without registering an independent expenditure politicalcommittee or fund is subject to a civil penalty of up to fourtimes the amount of the independent expenditure, not toexceed $25,000, except when the violation was intentional.

•

Announcing a formal public endorsement of a candidate forpublic office is not an independent expenditure, unless the act
is simultaneously accompanied by an expenditure that would
otherwise qualify as an independent expenditure.

•

Established a new non-campaign disbursement; costs paid toa third party for processing contributions made by a credit
card, debit card, or electronic check.

13

•All registered political committees and funds, political party
units, and candidate committees must provide e-mailaddresses for officers and the website address for thecommittee if one exists.

•

Campaign Finance reports must be filed electronically in astandards-based open format specified by the Board
beginning in 2012. For good cause, the Board must grant
exemptions to this requirement.

•

All campaign finance reports are nonpublic data until 8:00
a.m. on the day following the day the report was due.

•

The campaign finance reports of the state central committees
and legislative caucuses of the Republican and Democratic
Farmer Labor parties may not be released to the public until
the report from the equivalent unit of the opposing party is on
file with the Board.

•

During an election year political committees and funds must file
Reports of Receipts and Expenditures 56, 28, and 15 days
prior to the state primary election, 42 and 10 days prior to thestate general election, and a year-end report.

•

Political party units and candidate committees must file
Reports of Receipts and Expenditures 15 days prior to thestate primary election, 10 days prior to the state generalelection, and a year-end report.

•

Each Report of Receipts and Expenditures includes activity
form January 1 to the close of the reporting period.

•

The late filing fee for a year-end report was increased from $5
to $25 per day, with the maximum total late fee raised from$100 to $1,000.

14•The late fee for pre-primary and pre-general election reports
begins the day after the report was due without notice. The
maximum total late fee rose from $500 to $1,000.

•

In an election year the contribution limit to Secretary of Stateand State Auditor candidates increased from $500 to $1,000.
In a nonelection year the limit increased from $100 to $200.

•

A contribution limit of $2,000 in an election year for the officesought and $500 in a year in which the candidate is not on theballot was set for all judicial candidates.

•

A candidate who is eligible for a public subsidy payment may
not receive the payment until the candidate has filed the preprimary Report of Receipts and Expenditures. A candidate
who does not file the pre-primary report prior to the deadline forsubmitting the pre-general report is no longer eligible to receive
a public subsidy payment.

•

A candidate must sign the public subsidy agreement no later
than 3 weeks prior to the date of the primary election in a state
general election year, and no later than the day after the closeof filing for office in the case of a special election.

•

The Affidavit of Contributions must be signed and filed by thecandidate no later than the deadline for filing the pre-primary
report in a state general election year, and within 5 days of theclose of the filing period for a special election.

•

Eligible contributions received during the calendar year prior to
the year on which the candidate is on the ballot may be
counted towards the amount of qualifying contributions needed
to receive a public subsidy payment.

15

Advisory Opinions Issued
Related to the Campaign
Finance Program•

Advisory Opinion 408 answered questions on whether theuse of a motor vehicle as an advertising device for a principal
campaign committee would result in an in-kind contribution
from the vehicle owner to the committee even when thevehicle is not being used specifically for campaign activities.

•

Advisory Opinion 410 provided that an independent
expenditure is an expenditure that is made “without theexpress or implied consent, authorization, or cooperation of,and not in concert with or at the request or suggestion of, any
candidate or any candidate's principal campaign committee
or agent.” Communications with others that do not involveany candidate, candidate’s principal campaign committee, or
agent, will not defeat the independence of an expenditure.

•

Advisory Opinion 411 stated that the use of the noncampaign
disbursement category for expenses of serving in office is notavailable to pay for home health care of a close relative while apublic official is traveling. The Board declined to establish a
new noncampaign disbursement category to permit this
proposed use of principal campaign committee funds.

•

Advisory Opinion 412 considered whether a candidate’scontribution to, or support of, an independent expenditurepolitical committee or fund affects the independence ofexpenditures by that political committee or fund benefitting
other candidates. The opinion provided that in specificsituations a candidate as an individual may contribute to orotherwise support an independent expenditure committee,
but that a candidate who has signed the public subsidy
agreement may not use their committee funds to contributeto an independent expenditure committee or fund.

•Advisory Opinion 415 considered whether a candidate’s
committee could make a contribution to a fund established to
pay for the costs of that candidate’s election ballot recount.
The opinion provided that such a contribution could be madeand that the Board would use the opinion to create a new16

noncampaign disbursement category for candidates.
•

On June 30, 2011, the Board revoked Advisory Opinions 257
and 343. These two opinions provided that a corporationthat donates to ballot question committees and funds are notrequired to disclose information on the underlying source(s)of the corporation’s funding. The Board determined that theconclusions of these two opinions were not consistent with
provisions of Minnesota Statues requiring disclosure fromunregistered associations.

17Campaign Finance
Disclosure Reports Filed

Number of Reports of Receipts and Expenditures filed by candidates,
political party units, political committees, and political funds during thebiennium.

2010 Election Year
Candidate Committee(3 reports)
Political Party Unit
(3 reports)
Political Committee orFund (5 reports)
2010 Totals

Paper
Reports
Filed
1,004

Electronic
Reports
Filed
963

Total
1,967

729

267

996

1,547

422

1,969

3,280

1,652

4,932

453

292

745

253

82

335

327

72

399

1,033

446

1,479

2009 Nonelection Year
Candidate Committee(1 report)
Political Party Unit
(1 reports)
Political Committee orFund (1 report)
2009 Totals

Electronic Filing ofCampaign Finance Reports

Principal campaign committees, political committees, political funds,
and political party units have been using the Campaign Finance
Reporter software since 1998. The Board provides the software to
registered committees without charge. The maintenance, upgrade,training, and helpdesk support of the software is provided by Board
staff.
The software provides compliance checks and warning as records areentered, generates electronic reports for filing that reduce the data
entry demands on Board staff, and provides contact management
tools for the committees that use the software.

Number of Committees FilingElectronically

Reportingyear

Principal campaign
committees

2010
2009
2008
2007
2006
2005

376
292
278
201
228
174

18

Political committees,
political funds, andpolitical party units
174
154
135
114
126
75

Public Subsidy Payments

The Board administers the distribution of payments for the state’s public
subsidy program, which provides public funding to qualified statecandidates and the state committees of political parties.

To be eligible to participate in the public subsidy program, a candidate

Payments Made for the2010 State General
Electionmust sign and file a public subsidy agreement with the Board in which
the candidate agrees to abide by statutory campaign expenditure limits
and to limit contributions by the candidate to the candidate’s principal
campaign committee. A candidate must also raise a specified amountin individual contributions and file an affidavit stating that thisrequirement has been met. Overall 416 of the 473 candidates who filed
for a legislative seat or constitutional office in 2010 (or 88%) voluntarily
signed public subsidy agreements.

The Campaign Finance and Public Disclosure Board distributed$3,998,646 in public subsidy payments to 361 candidates in 2010 (fiscal
year 2011).

The 361 candidates who received a public subsidy

payment represent 85% of the 422 major or minor party candidates who
were on the general election ballot.

Public subsidy payments made by office and party in 2010 were as
follows:

OfficeDFL$0

RPM$515,953

IPMN$348,279

Attorney General$180,409$0$0Secretary ofStateState Auditor$67,214$58,967$0$67,214$58,967$0State Senate$813,551$618,818$6,488

State House$750,620$496,934$15,226$1,879,010$1,749,641$369,994

Governor

Total

19

Political Contribution
Refund Program

By statute candidates who sign the public subsidy agreement andpolitical parties are allowed to give political contribution refund receipts
to individual contributors. As part of the response to a state budget
shortfall Governor Pawlenty used his authority of unallottment toeliminate funding for the political contribution refund program during
fiscal years 2010 and 2011.

Political Party Payments

The state committees of political parties receive 10% of the tax checkoffs to the party account of the State Elections Campaign Fund.
Based on monthly certification from the Department of Revenue for the2010 – 2011 biennium payments to political parties were as follows:
Party

FY 2010

FY 2011

Democratic Farmer Labor$45,582$40,391

Green Party of Minnesota$3,567$2,893

Independence Party of Minnesota$6,423$8,648

Republican Party of Minnesota$27,189$21,923

Total payments to State Party Committees:$82,762$73,855

20

Campaign Finance
Enforcement Actions

The Board conducts investigations of possible violations of theprovisions of Chapter 10A. An investigation is started in response to acomplaint filed with the Board, or may be initiated by staff based on
information disclosed on documents filed with the Board.

Investigations of possible violations of the contribution limits for a
candidate, or the expenditure limit for a candidate who signs the public
subsidy agreement, are typically resolved with the Board offering aConciliation Agreement. The Conciliation Agreement will set the terms
under which excess contributions are returned, and provide for a civil
penalty to the committee for exceeding the contribution or expenditure
limit.

Investigations of other possible violations of Chapter 10A are resolved
through the issuing of a Board Finding of Probable Cause. The Board
issues Findings if there is probable cause to believe that a violation ofChapter 10A occurred, and will issue a Finding stating that there is noprobable cause to believe a violation occurred if warranted.

During fiscal year 2010 the Board issued thirty one Conciliation
Agreements to resolve violations of Chapter 10A. In fiscal year 2011 an
additional eleven Conciliation Agreements were offered. All of theConciliation Agreements were accepted.

In fiscal year 2010 the Board issued twenty five Findings to conclude
investigations. Of that total seven were in response to a complaint filedwith the Board. In fiscal year 2011 the Board issued thirty six Findings,
with ten of that total in response to complaints filed with the Board.

To insure compliance with disclosure deadlines Chapter 10A provides
for late fees applied at the rate of $25 dollars a day for year-end
Reports of Receipts and Expenditures, and $50 a day for pre-primaryelection and pre-general-election Reports of Receipts andExpenditures. Disclosure reports that are filed after a $1,000 late fee
has accumulated may also be subject to an additional $1,000 civil
penalty.

21

Civil penalties and late fees collected by the Board are deposited in thestate general fund. A breakdown of late fees and civil penalties
collected as enforcement of the campaign finance program is provided
on page 30.

LOBBYIST PROGRAM
The Board administers the provisions of Chapter 10A of the Minnesota

Program Overview

Statutes that govern registration and public disclosure by lobbyists andtheir principals attempting to influence state legislative action,
administrative action, and the official action of metropolitan
governmental units.
Lobbyists are required to report disbursements for lobbying purposes to
the Campaign Finance and Public Disclosure Board two times eachthyear (January 15 and June 15). On the June 15 report the lobbyist
must provide a general description of the subject(s) lobbied on during
the previous 12 months.
Individuals or associations that hire lobbyists or spend $50,000 or more
to influence legislative action, administrative action, or the official actionof certain metropolitan governmental units, are “principals” and are
required to file an annual report disclosing total expenditures on thesethefforts. The report is due March 15 , and covers the prior calendar
year.

Legislative Action

Advisory Opinions Issued
Related to the Lobbying
ProgramThere were no statutory changes to the provisions of Chapter10A that
regulate lobbyists and principals during the 2010 – 2011 Biennium.

•

Advisory Opinion 407 provided that an offer by the Minnesota
Twins (a principal) to allow Hennepin County local officials theright to purchase a ticket to the Minnesota Twins opening gamefrom a pool of tickets reserved for people directly andsubstantially involved in bringing the ballpark project tosuccessful completion was a prohibited gift.

22•Advisory Opinion 409 looked at situations in which
communication with public officials for compensation would
bring an individual within the definition of a lobbyist. The
opinion also provided that once a person is a lobbyist all
support for the lobbyist’s communication is reported as lobbyist
disbursements. Underlying support activities for a project are
not lobbyist disbursements unless they support a lobbyist’s
communications.

•

Advisory Opinion 413 reviewed how corporate structure may
affect the registration of lobbyists with the Board. The opinion
states that lobbyists must register on behalf of each association
whose interests they promote, regardless of the mechanism
used to retain or direct the efforts of the lobbyists.

•

Advisory Opinion 414 reviewed a very specific set of facts
regarding an award given to a public official by a principal andfound that a presentation item that is in the form of a decorativeaxe is a plaque with a resale value of five dollars or less and,thus, is exempt from the gift prohibition.

Lobbyist Disbursement
Reports

The Board has developed a web based reporting system for lobbyists.
Use of the system is voluntary, but as shown below it is used by mostlobbyists as the reporting method of choice. Lobbyist disbursement
reports are available for review on the Board web site.
Reporting year

Reports filed

2010

3,950

98%

2009

4,028

93%

2008

4,022

92%

2007

3,798

90%

2006

3,445

88%

23

Electronically filed

Chapter 10A requires principals to file an annual reportdisclosing expenditures made in Minnesota to influencelegislative, administrative, or official actions by a metropolitan
governmental unit. The disclosure is a single number which may
be rounded to the nearest $20,000. Total principal expenditures
for calendar years 2009 and 2010 are shown below.

Principal Expenditures

Lobbyist Program
Enforcement Actions

2010$59,172,799

2009$62,909,757

The Board completed one investigation and issued one Finding
regarding the requirement to register as a lobbyist during the biennium.
In addition during the biennium eight lobbyists were penalized formaking contributions to candidates during a legislative session.
Information on late fees and civil penalties paid by lobbyist andprincipals for missing a report filing deadline is found on page 30.

ECONOMIC INTEREST PROGRAM
The Board administers the provisions of Chapter 10A of the Minnesota

Program Overview

Statutes that govern disclosure of economic interests by public officials
and local officials in metropolitan governmental units. There areapproximately 2,200 public officials who file with the Board. Local officials
use forms developed by the Board, but file with the local government unit.
Original statements of economic interest must be filed at the time of
appointment, or for candidates, when the candidate files for office. All
incumbent candidates and appointed officials must file annually by Aprilth

15 of each year a supplemental statement if there are changes to bereported from the previously filed statement. The Board has developed a
web based system for submitting supplemental economic interest
statements.

Legislative Action

There were no statutory changes to the provisions of Chapter 10A that
regulate economic interest statements during the 2010 – 2011 Biennium.

Advisory Opinions
IssuedNo advisory opinions related to economic interest statements were issued
during the biennium.

24

OTHER BOARD PROGRAMS
Potential Conflict ofInterest

A public or local official who in the discharge of the official’s duties
would be required to take an action or make a decision that would
substantially affect the official’s financial interest or those of an
associated business must under certain circumstances file a Potential
Conflict of Interest Notice, or a written statement describing thepotential conflict. If there is insufficient time to comply with the written
requirements oral notice must be given to the official’s immediate
supervisor of the possible conflict. If the official is not permitted or isotherwise unable to abstain from action in connection with the matter,the public official must file the Notice with the Board and a local official
must file with the governing body of the official’s political subdivision.
The statement must be filed within one week of the action taken.

Public Employees
Retirement Association(PERA) Trustee
Candidates

Candidates for election as PERA Trustees are required to file certain
campaign finance disclosure reports with the Campaign Finance andPublic Disclosure Board under Minn. Stat. § 353.03, subd. 1.
Under this statute, the Board prescribes and furnishes to trustee
candidates the reporting form and instructions for completing the form.

Enterprise Minnesota, Inc

The agency name was changed from Minnesota Technology, Inc (MTI)
to Enterprise Minnesota in 2008. Minn. Stats. §§116O.03 and 116O.04
require certain disclosure by the board of directors and the president ofEnterprise Minnesota upon appointment and annually thereafter during
their terms in office. Under these statutes, the Board prescribes andfurnishes to the directors and president the reporting form andinstructions for completing the form.

State Board of Investment(SBI)

Minn. Stat. §11A.075 requires certain disclosure by SBI members upon
appointment and SBI employees upon hire and by both annually until
termination of appointment or employment. Under this statute, the Board
prescribes and furnishes to the members and employees the reporting
form and instructions for completing the form.

Representation
Disclosure

A public official who represents a client for a fee before any individualboard, commission, or agency that has rule making authority in a hearing

25

conducted under Minnesota Statutes, Chapter 14, and in the cases ofrate setting, power plant and powerline siting, and granting of certificatesof need under Minn. Stat. §216B.243, must file a Representation
Disclosure Statement within 14 days after the appearance has takenplace, disclosing the official’s part in the action.

Local Pension Plans

Members of a governing board of a covered pension plan and the chief
administrative officer of the plan are required to file certain Statementsof Economic Interest with the governing board under Minn. Stat.
§356A.06, subd. 4.

The Office of the State Auditor prescribes the statement andinstructions for completing the statement. The chief administrative
officer of each covered pension plan must submit to the Campaign
Finance and Public Disclosure Board a certified list of all pension board
members who filed statements with the pension board no later thanJanuary 15th. Approximately 755 pension plans are required to file with
the Board under this law. The Board does not have jurisdiction over
enforcement of this certification requirement.

STAFF DUTIES
Executive Director

Facilitate achievement of the Board’s goals and objectives. Set agenda
and prepare materials for Board and committee meetings. Direct allagency and staff operations. Draft advisory opinions for Board
consideration. Serve as the Board’s representative to the Legislativeand Executive Branch. Educate and assist clients in compliance with
reporting requirements, limits, and prohibitions. Administer the
preparation of the biennial budget.

Serve as advisor to the Executive Director and assist in management ofAssistant Executive
Directorthe operations for the agency. Conduct complex investigations andprepare drafts for Board consideration. Reconcile and report on the
Board’s financial systems. Supervise the agency’s compliance programs
and information resources. Administer the state public subsidy payment
program.

26

Office Manager
Office Services Supervisor

The duties of this position were distributed to other Board staff and the
Smart Team offered by the Department of Administration for small
agencies.

Policy and Planning Analyst
Management Analyst 2

Develop documentation of Board operations and policies. Serves as aninternal management consultant providing support and analysis of
agency operations, policy, procedures, and management structures andmakes recommendations for improvement based on those studies.

Compliance Officer
Investigator

Investigate complaints and draft Conciliation Agreements and Findingsfor Board consideration. Serve as investigative liaison to the Board,
Executive Director, and Attorney General's office. Monitor cases for
Revenue Recapture and Minnesota Department of Revenue Collections
Division. Prepare and submit reports to the Department of Financeregarding civil penalties. Prepare and conduct training classes forclients on campaign finance reporting requirements.

Programs Administrator
Office and Administrative
Specialist Principal

Provide for distribution, collection, data entry, and filing of disclosure
required by Minn. Stat. chapter 10A. Collect, store, and retrieve data
for the preparation and analysis of summaries of documents filed with
the Board. Provide database advice and guidance to Board staff andclients.

Information Technology
Specialist III

Develop, maintain, and manage complex database applications to
support administration of all Board programs and activities.
Provide technical service, assistance and training to Board staff.
Develop, administer, and provide technical support for the Board’s
website. Provide client training and support in the use of the Campaign
Finance Reporter Software.

Information Technology
Specialist III

Insure that the technology resources of the Board support applicablebusiness rules and statutory obligations. Provide application design
development and administration in response to management requests.
Provide high-level programming. Design and support multiple complex
relational databases.

27

Programs Assistant
Office and Administrative
Specialist Intermediate

Provide assistance with data entry and initial desk review for all filed
reports. Assist with mailing, copying, and filing of all documents filedwith the Board in all agency programs. Maintain agency receipts fordeposit with the State Treasurer. Provide general administrative andprogram support.

Staff Salaries
Fiscal Years 2010 and 2011

Position

Staff

FY 2010

FY 2011

Executive Director

Gary Goldsmith$90,619$94,226

Assistant Executive Director

Jeffrey Sigurdson$88,439$86,439

Office Manager

LuAnn Swanson$6,898NA

Policy and Planning Analyst

Rebecca Shedd$39,399$28,738

Investigator

Joyce Larson$51,386$51,385

Information Technology Specialist III

Jon Peterson$54,051$54,374

Information Technology Specialist II - III

Jon Glass$41,572$44,352

Office and Administrative Specialist Principal

Marcia Waller$38,356$39,134

Office and Administrative Specialist Intermediate

Yalana Johnstone$4,938NA

Office and Administrative Specialist Intermediate

Elizabeth White$11,365$30,521$425,086$429,172

FY 2010

FY 2011

Original Appropriation$748,000$748,000

Fiscal Year 2010 Unallotment($28,000)

Total Salaries

BOARD FINANCIAL INFORMATION
Biennial Budget Fiscal Years 2010 and 2011
Income Summary

Fiscal Year 2011 Unallotment($9,000)

Photocopy Revenue

$117

$90

Service Processes Fees Recovered
Miscellaneous Income$495

Carry Forward from fiscal year 2010 (A)$58,882

Total

28$720,117$798,467

Expenditure Summary
Operating budget expenditures($661,235)

Operating budget balance forward to fiscal year 2011 (B)($58,882)($732,910)$65,557

Returned to State General Fund at End of Biennium
Board Operating Budget

The Campaign Finance and Public Disclosure Board is funded by a direct appropriation from the Minnesota
Legislature. Over 80% of the Board’s budget is used to pay the fixed costs of salary and benefits, rent, andpostage for required mailings.
Salary and Benefits

FY 2010

FY 2011

Full time staff (salary and fringe)

561,144563,512233

206

Per diem

2,475

2,860

Vacation payment/retirement

13,0860

Unemployment Benefit

3,900

2,414

580,838

568,992

Office rent

40,262

41,931

Postage

10,16910,915

Telephone

4,838

5,048

350

0

Photocopy machine leases

6,087

3,151

Travel

3,403

3,833

Printing

33

1675

Board meeting expenses

2,312

2,364

Staff / Board development

2,969

7,836

Subscriptions, Memberships

685

612

Supplies/Equipment

5,403

52,925Purchased services

1,581

27,745

Legal costs

1,016

572

0

1341

937

3,969

Operating Expense Sub Total

80,398

163,917

Board Operating Budget Total$661,235$732,910

Workers compensation

Salary and Benefits Sub Total

Operating Expenses

Miscellaneous Rents

Repairs and Maintenance
E-Government

29

Penalties Paid for Late Filing of Disclosure Reports and other Violations of Chapter 10A
The following is a listing of fees and fines paid during the biennium. Some fees and fines may have beenassessed prior to fiscal year 2010, and some fees and fines assessed during the biennium were not paid byJune 30, 2011.

Late Filing Fees
Principal Campaign Committees
48 Hour Notice
Political Committees and Funds
Political Party Units
Economic Interest Statements
Lobbyist Disbursement Report
Lobbyist Principal Annual Report
Total Late Fees

Civil Penalties
Contribution from Unregistered association
Unregistered association
Political Committees and Funds
Political Party Units
Candidate
Contribution limits violations
Candidates accepted in excess of limit
Special source (20%) aggregate limit
PCF Contribution exceeded limits
Excess lobbyist contributions
Excess Party Unit Contribution
Candidate Exceeded Spending Limit
Prohibited contributions during session
Political Committee and Funds
Terminating Candidates
Lobbyist
Failure to file disclosure report
Candidate Committees
Political Committees and Funds
Political Party Units
Lobbyist Principal
Failure to file amended report
Economic Interest Statement
Certified False Information
Total Civil Penalties

Total Late Fees and Civil Penalties
Deposited in State General Fund

FY 2010
Dollars Paid
3,534
350
500
200
705
653
950
6,893

Number of
Violations
28
3
5
1
14
13
33
97

FY2011
Dollars Paid
17,1395,665
14,305
6,150
820
450
2,095
46,624

Number of
Violations
124
33
110
36
19
7
60
389

FY 2010
Dollars Paid

Number of
Violations

FY2011
Dollars Paid

Number of
Violations

3,025
2,850
1,380

6
3
2

3,508
400

6
1

2,050

2

670
1,598
170

4
8
2

664

1

14,1303,716
16,353
100
850

15
13
6
1
2

2,000
500
550

2
1
2

1,250
930
800

2
5
3

5,970
1,000

20

400

1

3,057
400
300
2,300
1,281

15
1
1
5
5

300

1

3,000

1

56,124

19,37863,01766,00230