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Chapter Five


Financial-Disclosure Considerations


Candidates for Minneapolis city office soon discover that, while the filing fee is minimal, there are arduous requirements for submitting information about campaign finances to election officials. First, all candidates are required to submit a “Statement of Economic Interest” to the city no later than fourteen days after filing for office. This statement requires, among other things, that one disclose “securities held in associated businesses” which is interpreted to mean any investment in a stock or other security which has a market value of $2,500 or more. Another requirement, which affects landlords especially, is to “report all non-homesteaded property held individually or in partnership within the state of Minnesota”, giving addresses, type of ownership, and acreage of the property. I had assured Butler and Swartwood that the paperwork would be no problem. Maybe those assurances were given too lightly.

Election law in Minnesota also requires that candidates for public office in Hennepin County must form what is called a “principal campaign committee” within fourteen days of either raising or spending more than $100 for their campaigns. This committee must have a chair and a treasurer, and it must have a separate bank account to handle all funds received or spent for campaign purposes. Once the committee is established, it must file a report known as the “Campaign Finance Report of Receipts and Expenditures” three times during the campaign period.

could the three candidates share a campaign committee?

My idea was that Jim Swartwood, John Butler, and I could share the same campaign committee which might be called “New Dignity Party Committee”. That way, I could handle all the paperwork for the three campaigns, relieving Swartwood’s and Butler’s concerns in that regard.

I called the elections bureau at Hennepin County to ask if a multi-candidate committee was allowed under the law. The official did not know; I should consult an attorney. (But then, of course, I could not afford any lawn signs or literature.) She did steer me to numbered sections in the law that governed election requirements. My own reading of the text failed to detect any legal provision preventing the arrangement that I desired. So I went ahead with the paperwork to establish a committee known as New Dignity Party Committee to handle funds for all three campaigns.

There was a practical reason for wanting a single committee. It was that the law also requires political literature, including signs, to have a printed “disclaimer” at the bottom that identified the sponsoring organization. For instance, my literature might say: “Prepared and paid for by New Dignity Party Committee, P.O. Box 3944, Minneapolis, MN 55403.” To economize, Jim, John, and I would be sharing literature. I did not want to have to list three separate sponsors in the disclaimer because this would take up too much space. Space was precious, especially in lawn signs.

A Minnesota state agency known as the Campaign Finance and Public Disclosure Board has a staff person versed in election law who answers questions from the public. When I called this individual, I received three valuable pieces of information: First, three candidates sharing the same principal campaign committee was not allowed. Second, if we three candidates were sharing literature, it would be possible for one of the candidates to run the expense of this literature through his own committee even though the other two might benefit from free advertising. Such arrangements are prohibited in statewide races but not in local elections such as those in Minneapolis. Third, we need not worry about the proper form of the disclaimers. Recent case law has rendered those requirements unconstitutional. The disclaimer need not take up valuable space.

I had already filed the papers to organize “New Dignity Party Committee” as the principal campaign committee for the three separate campaigns. The Hennepin County elections bureau returned the paperwork saying this arrangement was not allowed. I then refiled the papers for my campaign alone.

New Dignity Party Committee was officially the principal campaign committee for my mayoral campaign only. John Butler and Jim Swartwood each made financial contributions to this campaign under the $100 limit, so that they need not organize principal campaign committees of their own. As far as the law was concerned, their campaigns had received or spent less than $100. They were thus spared of the paperwork burden. When I explained this to the election official, she raised no objections.

the three reports

For me (but not for John or Jim), there was still a requirement to file periodic reports on funds flowing through the principal campaign committee. The first report, called “pre-primary”, covered the period from the beginning of the year through September 1, 2009. There was no primary in the Minneapolis city elections this year, of course, but the City Council decided to keep the reporting requirement anyhow.

The report was due on September 8, 2009 - one week after the filing period ended. There were penalties of up to $100 or $500 - I was not sure of the distinction - for campaign treasurers who failed to submit their reports on a timely fashion after being notified by election officials. In some cases, the delinquent treasurers might also be judged guilty of a misdemeanor. If the campaign treasurers failed to file any report, penalties of up to $1,000 might be levied for each report that was not submitted.

Besides the “pre-primary” report, there were reports for subsequent periods. Another, called a “pre-general” report covered the period between September 2, 2009 and October 20, 2009. This report was due on October 27th - again, one week after the reporting period ended. Financial penalties again applied to late filers. A third report, called “2009 annual report”, covered expenditures from October 21, 2009 through December 31, 2009. This report was due on February 1, 2010.

Wary of penalties for late filing, I filed this last report on November 12, 2009, hoping to be done with it all. To my dismay, I received a packet in the mail informing me that my report had not been accepted because I had not waited until the end of the filing period. Conceivably, there could be new donations to the campaign or new expenditures by the end of the year. I now live in fear of missing the report deadline and being subject to the penalties should election requirements slip my mind in 2010.

Besides being subject to tight reporting deadlines, the three reports are each nine pages long and rather complicated. Schedules for “income from cash (monetary) contributions and in-kind donations”, for “operating expenditures and contributions made to other committees”, and for “goods and services given to others”, “notes and loans payable”, and “notes and loans receivable” feed into summary sheets at the beginning of the report. First they go to a “receipt and expenditures worksheet for this reporting period only” and then to a general summary page that continues to a second page which the treasurer signs under penalty of law.

For my pre-primary report, I sent only the summary page but was soon informed by election officials that I needed to submit all nine pages. Blessedly, all the forms are available for reprinting from a Hennepin County website, if you know where to look. I needed to redo them several times.

Frankly, all this campaign-finance reporting struck me as unnecessary from a standpoint of legitimate public interest. Mainly, people want to know who are the principal contributors to candidates who are elected so that they will know whether decisions involving those people were influenced by campaign contributions. They are less interested in knowing how the money was spent in a campaign.

To force all candidates to go through the full-scale reporting process even if small amounts of money are involved seemed to me to be a way of harassing and intimidating the little candidates. The big boys and girls have the resources to hire lawyers and accountants to take care of the paperwork, but not us small fry. When I ran for Congress in 2008, the reporting threshold for funds raised was $5,000, not $100. That seemed more reasonable.

A perverse consequence of mandatory financial reporting for campaigns is that it allows political reporters to focus exclusively on money as an indicator of whether a person running for office is or is not a serious candidate. The information is easy to obtain, and the comparisons are clear. For example, a Star Tribune reporter dismissed my 2008 campaign for Congress in a single sentence: “Independence Party candidate William McGaughey, a landlord who is a frequent candidate, hadn’t raised enough to file federal campaign finance reports.”

There are other aspects of running for public office than raising and spending funds, but one would never know it from the type of reporting that is increasingly done by the commercial news media.


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