GOP: "DISCLOSURE AND TRANSPARENCY ARE THE CORNERSTONE OF OUR STATE CAMPAIGN FINANCE LAWS. THIS IS A CIRCUMVENTION."
Entenza's web of lies is starting to fall apart.
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'527' donations are difficult to trace
Faulting both major political parties for an elaborate "shell game," national campaign experts say it may be difficult if not impossible to trace the path of $300,000 that DFL House Minority Leader Matt Entenza contributed to a national "527" organization, which in turn spent generously on campaigns and voter registration in Minnesota.
Minnesota Republican Party officials are trying to build a case that the Entenza donation to the 21st Century Democrats was improperly reported and illegal, and that the money was spent directly on behalf of DFL House candidates in Minnesota through a 21st Century political action committee that paid for field workers.
Entenza and 21st Century officials contend that his contribution was perfectly legal and that not a penny of it flowed to 21st Century field staff on the House campaigns. Rather, they claim, Entenza's money was donated to the Young Voter Project, a separate 21st Century program aimed at turning out students on college campuses and other young voters in several presidential battleground states, including Minnesota.
The distinction might strike some citizens as trivial and tedious, but advocates for campaign finance reforms say both Democrats and Republicans are playing games with 527s and eroding already shaky public confidence in the election system.
"It's part of a great shell game in both parties," said Aron Pilhofer, database editor for the Center for Public Integrity, a Washington D.C.-based group that tracks campaign money. "They (DFLers and 21st Century officials) could very well be telling the God's honest truth. But the system makes it difficult to tell who's raising money from whom, where it's going and where it's coming from. ... It gets very complicated very, very quickly."
The research director of another Washington campaign watchdog group, Sheila Krumholz of the Center for Responsive Politics, said the recently revamped federal campaign laws that bred so many 527 groups this year "left a lot of room for groups to fudge what they're doing and whether they're benefitting candidates directly or indirectly. It's difficult to get a complete picture and understand the flow in and out."
Political crossfire
Beyond all the technicalities lies a larger political issue. Republicans, stung by the startling DFL House comeback engineered by Entenza and DFLers, can contend that the victory has less to do with issues and policy if those victories are somehow tainted. An extra $300,000, not made public until after the election, would represent a sizeable off-the-books advantage, on the order of about $20,000 extra in each of the 15 or so swing districts, Republicans argue. The spending limit per House seat for candidates who receive public subsidies is about $27,000.
On this larger public relations front, DFL House leaders weren't helped by the revelation last week that the DFL House caucus recently agreed to pay $45,000 to the Federal Election Commission for infractions before the 2002 election, in which they were badly routed. Entenza was the not the caucus leader until 2003 and DFLers contend the two issues are completely separate.
Entenza says that the Republican attack can be easily dismissed as "sour grapes" and a diversion from a spate of business setbacks, legal difficulties and ethical charges against Republican Party Chairman Ron Eibensteiner. Those problems include a tax lien and recent questions about possible conflicts of interest due to Eibensteiner's investments in gambling-related businesses.
"Republicans have a long, long history of being financed by large donors, including Eibensteiner himself and his predecessor Bill Cooper, who have given hundreds of thousands of dollars to the Republican Party," Entenza said. "They are feeling hurt because they lost this election and rather than moving on to do the people's business, they are bringing up these baseless charges."
Eibensteiner said the party likely will file complaints against Entenza and 21st Century Democrats within the next week or so, either with the Federal Election Commission, the Minnesota Campaign Finance and Public Disclosure Board or a new state panel that reviews campaign complaints before recommending whether to press charges in county district courts. It's possible that charges could be filed in all three venues, Eibensteiner said.
A crucial point the Republicans will try to make is that Entenza was attempting to hide his contributions, made in three $100,000 installments in July, August and October. Entenza, who also contributed $75,000 to the House DFL caucus, would not have been helped by pre-election publicity over contributing a total of $375,000 to his caucus, Republicans say. "He could have given directly to the DFL caucus, but he chose not to because he didn't want people to know about it," Eibensteiner said. "Disclosure and transparency are the cornerstone of our state campaign finance laws. This is a circumvention."
Disclosure
Republicans say it defies credulity that Entenza, whose top priority was to win back seats and reduce the Republican margin in the House, would give $300,000 of his own money to an untargeted national or even statewide effort to turn out young voters. And there appears to be a similarity between the amount Entenza gave and the amount spent by 21st Century in Minnesota. According to the IRS disclosure, through Sept. 30, a month before the election, 21st Century paid $234,000 to field organizers and legislative candidates in Minnesota, Republicans say, far more than in any other state.
Entenza says the Republican speculation is hogwash. His contributions have been on the public record, in an Internal Revenue Service disclosure form and on campaign watchdog groups' Web sites since early October, he contends. Entenza emphasized that he is an attorney, and is knowledgeable about election law. And as a former prosecutor of white-collar crime, he says he has been careful about following the letter of the law in campaign finance. Nothing on the IRS disclosure form indicates that Entenza's money was earmarked for the Young Voter Project, or that the field staff working on House campaigns was paid from a pot of money to which Entenza did not contribute.
Entenza and 21st Century Democrats' executive director in Washington D.C., Kelly Young, said that such distinctions are not required on the IRS form. But neither could offer any documentation that would show Entenza's contributions were spent only on the Young Voter Project.
"We don't know how to give documentation for it," said Young. "Like any other contribution, it goes into a large pot and is spent in so many ways."
Spirit of the law
The campaign experts agree that there appears to be nothing illegal about the way the 21st Century Democrats filed their contribution and expenditures, or the fact that the finances were not earmarked by program. But it still might not be within the spirit of the law, they suggest.
"Often, 527s have several different pockets, and even out of one pocket they will spend on several different things, some partisan and nonpartisan," said Larry Noble, executive director of the Center for Responsive Politics. Even if the groups could prove and document that Entenza dollars went strictly for the Young Voter Project, Noble said, the larger point is that "money is fungible" and not having to spend it for one purpose frees up money for another. Public Integrity's Pilhofer said that post-election controversies like Entenza's are popping up in several states, including Pennsylvania, Mississippi and Washington.
Young says the Young Voter Project concentrated on college campuses. And DFL House members did pick up seats in and around Mankato, St. Cloud, Rochester, Bemidji and the suburbs, all of which have state college or community college campuses. But that connection is purely coincidental, Young said.
However the controversy is resolved, it marks Entenza's emergence as a bigger player in state politics and a major DFL patron. Although his income as a legislator and attorney is modest, Entenza's wife, Lois Quam, is the CEO of a major division of UnitedHealth Group, and recently was named by Fortune as one of the nation's 50 most powerful business executives.
Her salary has not been disclosed, but Securities and Exchange Commission records show she sold $14.2 million worth of United Health stock in the 15-month period that ended in December 2003. Source: Star Tribune, November 29, 2004
##
'527' donations are difficult to trace
Faulting both major political parties for an elaborate "shell game," national campaign experts say it may be difficult if not impossible to trace the path of $300,000 that DFL House Minority Leader Matt Entenza contributed to a national "527" organization, which in turn spent generously on campaigns and voter registration in Minnesota.
Minnesota Republican Party officials are trying to build a case that the Entenza donation to the 21st Century Democrats was improperly reported and illegal, and that the money was spent directly on behalf of DFL House candidates in Minnesota through a 21st Century political action committee that paid for field workers.
Entenza and 21st Century officials contend that his contribution was perfectly legal and that not a penny of it flowed to 21st Century field staff on the House campaigns. Rather, they claim, Entenza's money was donated to the Young Voter Project, a separate 21st Century program aimed at turning out students on college campuses and other young voters in several presidential battleground states, including Minnesota.
The distinction might strike some citizens as trivial and tedious, but advocates for campaign finance reforms say both Democrats and Republicans are playing games with 527s and eroding already shaky public confidence in the election system.
"It's part of a great shell game in both parties," said Aron Pilhofer, database editor for the Center for Public Integrity, a Washington D.C.-based group that tracks campaign money. "They (DFLers and 21st Century officials) could very well be telling the God's honest truth. But the system makes it difficult to tell who's raising money from whom, where it's going and where it's coming from. ... It gets very complicated very, very quickly."
The research director of another Washington campaign watchdog group, Sheila Krumholz of the Center for Responsive Politics, said the recently revamped federal campaign laws that bred so many 527 groups this year "left a lot of room for groups to fudge what they're doing and whether they're benefitting candidates directly or indirectly. It's difficult to get a complete picture and understand the flow in and out."
Political crossfire
Beyond all the technicalities lies a larger political issue. Republicans, stung by the startling DFL House comeback engineered by Entenza and DFLers, can contend that the victory has less to do with issues and policy if those victories are somehow tainted. An extra $300,000, not made public until after the election, would represent a sizeable off-the-books advantage, on the order of about $20,000 extra in each of the 15 or so swing districts, Republicans argue. The spending limit per House seat for candidates who receive public subsidies is about $27,000.
On this larger public relations front, DFL House leaders weren't helped by the revelation last week that the DFL House caucus recently agreed to pay $45,000 to the Federal Election Commission for infractions before the 2002 election, in which they were badly routed. Entenza was the not the caucus leader until 2003 and DFLers contend the two issues are completely separate.
Entenza says that the Republican attack can be easily dismissed as "sour grapes" and a diversion from a spate of business setbacks, legal difficulties and ethical charges against Republican Party Chairman Ron Eibensteiner. Those problems include a tax lien and recent questions about possible conflicts of interest due to Eibensteiner's investments in gambling-related businesses.
"Republicans have a long, long history of being financed by large donors, including Eibensteiner himself and his predecessor Bill Cooper, who have given hundreds of thousands of dollars to the Republican Party," Entenza said. "They are feeling hurt because they lost this election and rather than moving on to do the people's business, they are bringing up these baseless charges."
Eibensteiner said the party likely will file complaints against Entenza and 21st Century Democrats within the next week or so, either with the Federal Election Commission, the Minnesota Campaign Finance and Public Disclosure Board or a new state panel that reviews campaign complaints before recommending whether to press charges in county district courts. It's possible that charges could be filed in all three venues, Eibensteiner said.
A crucial point the Republicans will try to make is that Entenza was attempting to hide his contributions, made in three $100,000 installments in July, August and October. Entenza, who also contributed $75,000 to the House DFL caucus, would not have been helped by pre-election publicity over contributing a total of $375,000 to his caucus, Republicans say. "He could have given directly to the DFL caucus, but he chose not to because he didn't want people to know about it," Eibensteiner said. "Disclosure and transparency are the cornerstone of our state campaign finance laws. This is a circumvention."
Disclosure
Republicans say it defies credulity that Entenza, whose top priority was to win back seats and reduce the Republican margin in the House, would give $300,000 of his own money to an untargeted national or even statewide effort to turn out young voters. And there appears to be a similarity between the amount Entenza gave and the amount spent by 21st Century in Minnesota. According to the IRS disclosure, through Sept. 30, a month before the election, 21st Century paid $234,000 to field organizers and legislative candidates in Minnesota, Republicans say, far more than in any other state.
Entenza says the Republican speculation is hogwash. His contributions have been on the public record, in an Internal Revenue Service disclosure form and on campaign watchdog groups' Web sites since early October, he contends. Entenza emphasized that he is an attorney, and is knowledgeable about election law. And as a former prosecutor of white-collar crime, he says he has been careful about following the letter of the law in campaign finance. Nothing on the IRS disclosure form indicates that Entenza's money was earmarked for the Young Voter Project, or that the field staff working on House campaigns was paid from a pot of money to which Entenza did not contribute.
Entenza and 21st Century Democrats' executive director in Washington D.C., Kelly Young, said that such distinctions are not required on the IRS form. But neither could offer any documentation that would show Entenza's contributions were spent only on the Young Voter Project.
"We don't know how to give documentation for it," said Young. "Like any other contribution, it goes into a large pot and is spent in so many ways."
Spirit of the law
The campaign experts agree that there appears to be nothing illegal about the way the 21st Century Democrats filed their contribution and expenditures, or the fact that the finances were not earmarked by program. But it still might not be within the spirit of the law, they suggest.
"Often, 527s have several different pockets, and even out of one pocket they will spend on several different things, some partisan and nonpartisan," said Larry Noble, executive director of the Center for Responsive Politics. Even if the groups could prove and document that Entenza dollars went strictly for the Young Voter Project, Noble said, the larger point is that "money is fungible" and not having to spend it for one purpose frees up money for another. Public Integrity's Pilhofer said that post-election controversies like Entenza's are popping up in several states, including Pennsylvania, Mississippi and Washington.
Young says the Young Voter Project concentrated on college campuses. And DFL House members did pick up seats in and around Mankato, St. Cloud, Rochester, Bemidji and the suburbs, all of which have state college or community college campuses. But that connection is purely coincidental, Young said.
However the controversy is resolved, it marks Entenza's emergence as a bigger player in state politics and a major DFL patron. Although his income as a legislator and attorney is modest, Entenza's wife, Lois Quam, is the CEO of a major division of UnitedHealth Group, and recently was named by Fortune as one of the nation's 50 most powerful business executives.
Her salary has not been disclosed, but Securities and Exchange Commission records show she sold $14.2 million worth of United Health stock in the 15-month period that ended in December 2003. Source: Star Tribune, November 29, 2004
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