A Web of Influence

I borrow the title of this entry from an item posted at the Minneapolis Star Tribune website.  As a public service, the Star Tribune has created a graphical tool to chart the interrelationships between the big-dollar organizations inside Minnesota’s insular political world.

The graphic shows which group has given to which other group, with the size of the circle indicating the size of the dollars involved.  Each circle is colored either red (for Republican) or blue (for Democrat).

What the Star Tribune won’t say is that the number and size of the blue circles overwhelms the fewer and smaller red circles.  For the visually-minded the graph reveals just how lopsided are the state’s money politics.

Another useful graphic would be one that mapped the personal relationships between high ranking members of Gov. Mark Dayton’s administration and the state’s top political donors.  If they did, it would look something like this:

Gov. Mark Dayton à was married to Alida Rockefeller Messinger à who is (by herself) the state’s 5^th largest campaign donor (2007-2012 data).

Chief of Staff Jaime Tincher à is married to Adam Duininck à who sits on the Met Council and runs the state’s 3^rd largest campaign donor (WIN Minnesota).

Deputy Chief of Staff Bob Hume à is married to Carrie Lucking à who works at the state’s largest campaign donor (the Education Minnesota teachers union).

Deputy Chief of Staff Jennifer O’Rourke à is married to Ken Martin à the Chair of Minnesota’s Democrat Party.

For those keeping score at home, Carrie Lucking has just moved from Alliance for a Better Minnesota to Education Minnesota. 

Democrats Are Winning the Money Race

One of the most persistent myths about modern politics holds that Republicans are the party of “the rich.”  The myth refuses to die, despite all available evidence indicating that the opposite is true.

Reporter Rachel Stassen-Berger, who covers campaign finance for the Minneapolis Star Tribune, posted a story with the headline “More than $715k poured into political groups recently.”

She documents the money that has entered Minnesota’s election since the most recent campaign finance filing deadline last week.  Ms. Stassen-Berger lists a total of $716,000.  Of that amount, $691,000 (96.5 percent) is going to Democrat-related candidates and causes.

But don’t get your hopes up, the remaining $25,000 came from a wealthy out-of-state supporter of same-sex marriage to back a vulnerable Republican who voted for the measure last year.

Comparing the left-to-right dollar total leaves us somewhere in the neighborhood of 100 to 0.

Project Lakes and Plains

As we are in another campaign finance reporting season, all eyes are on who donates to whom in the world of candidates, political parties and political action committees.

Oddly enough, relatively little attention is paid to who is receiving the vast sums sloshing about this election season.  Frequently, these industry vendors provide key links between candidates, parties, and the independent expenditure groups that support the other two.

On the Democrat side of the ledger, one group doing well is Project Lakes and Plains.  Headed by Denise Cardinal—founder of Alliance for a Better Minnesota and, more recently, her own political consulting firm, Cardinal Insight—Project Lakes and Plains has brought in more than $1.3 million in the past few years:

Client	2014	2013	2012	2011	2010
Alliance for a Better Minn.	74,250	22,500	255,000		124,000
MN DFL Party	5,000		81,000	59,500	163,000
House DFL Caucus	79,850		212,570
Senate DFL Caucus			121,930
DLCC for Minnesota	104,850
WIN Minnesota Federal PAC	14,900	9,000
Al Franken for Senate		9,000
Total	$ 1,336,350

Records on file at the state’s Campaign Finance Board and the Federal Election Commission indicate that Project Lakes and Plains provides a range of polling and consulting services to statewide Democrat Party efforts.

The Minneapolis Star Tribune has described Project Lakes and Plains as a “taxable nonprofit,” whatever that means.  Minnesota Public Radio has described Project Lakes and Plains as “Cardinal’s firm.”

According to records on file at the Minnesota Secretary of State’s office, Project Lakes and Plains is organized as a nonprofit corporation, begun in early 2010.  Cardinal is currently listed as the group’s president.

In fact, Cardinal’s efforts were important enough to the fortunes of the state Democrat Party, that they wrote Project Lakes and Plains into the Party’s 2012 Strategic Blueprint (page 29).

The Ties That Bind.  As this election season grinds on, we will continue to highlight the relationships between the players and the people behind the scenes.

Fighting for the Soul of the Middle Class

Last month a political group calling itself Middle Class Majority was formed, just in time for the 2014 election in Minnesota.

The group’s chair is Geri Katz, a self-described “wife, mother, and union thug” who works as a political organizer at the Minnesota Nurses Association labor union.

I guess I should be encouraged that the political left still thinks that there are votes to be had by invoking the middle class, a fast-shrinking demographic long ignored by the liberal-progressive elites.

Barely a month in existence, the Middle Class PAC has hit the ground running.  According to records on file at the state Campaign Finance Board, Middle Class Majority has raised a total of $95,000 from its four founding partners:  the nurses union, the Education Minnesota teachers union, the public employee union MAPE and Planned Parenthood.

To keep everything in the family, Middle Class is using No Coast Workshop, the direct mail consultancy of Minnesota House of Representatives staffer, Andy Pomroy.  Pomroy works as a research consultant to the House Democrat caucus and has been employed by the state House of Representatives and House Democrats in various capacities, off-and-on, since 2004.

According to his LinkinIn^TM profile, Pomroy’s No Coast work dates back to 2011.

Middle Class has already weighed in on behalf of 5 candidates, spending a total of $35,000 in support of incumbent house Democrats representing the most vulnerable suburban swing seats this year.

This effort appears to dovetail with the official House Democrat caucus campaign “to Retain a ‘Middle-Class Majority’ in the Minnesota House, put together by Pomroy's employer.  Although dropping the definite article and hyphen, the “independent” effort on behalf of the Democrats has adopted the same campaign language.

Using the “Middle Class” name allows the group to avoid the stigma of a union or abortion group’s name on its direct mail pieces aimed at swing voters.

Who knows, perhaps political independents and low-information voters will buy into this faux-grass-roots effort to identify Democrats with the struggles of the middle class.  Unfortunately, middle-class Minnesotans will find little relief if the Democrats retain their one-party rule over state government.

Reaching Across Time

We are in one of those intervals on the state campaign finance calendar when big dollar donations have to be immediately reported.  Yesterday saw the biggest individual donation received so far this period:  the independent Democrat group WIN Minnesota reports receiving $50,000 from Stillwater attorney Jeff Anderson.

If his name doesn’t ring a bell, it should.  Anderson—and his law firm Jeff Anderson and Associates—is big in the business of representing plaintiffs in the clergy sex abuse    scandals.  His firm’s motto:  “Reaching Across Time for Justice.”

The $50,000 to WIN Minnesota is just part of his recent generosity to the state Democrat party.   According to records on file at the state’s Campaign Finance Board (CFB), Anderson’s newly discovered fondness for the state Democrat party has resulted in $175,000 in donations in the past three years:

	Donation Amount
Recipient	2014	2013	2012	2011	2010
Minnesota DFL Party	45,000	-	-	-	-
House DFL Caucus	25,000	5,000	25,000	-	-
Senate DFL Caucus	-	-	25,000	-	-
WIN Minnesota	50,000	-	-	-	-
Total (2012-2014)	$ 175,000

One 2013 legislative development has significantly assisted Anderson’s efforts to reach across more time on behalf of his clients.

On May 28, 2013, Democrat Minnesota Governor Mark Dayton, signed a bill that repealed the time limit on filing lawsuits in such matters.  The law had been passed by the Democrat majority-led Minnesota House and Senate.

In the hearing before the state House Civil Law Committee, Anderson client Jim Keenan testified in favor of the bill.  Keenan had also testified in favor of the state Senate version of the bill before that body’s Judiciary committee.

The House author of the bill (HF681) was state Representative Steve Simon (D-Hopkins).  According to records on file at the CFB, Anderson donated $2,000 to Simon’s Secretary of State campaign in 2013.  In 2013, a Julie Anderson, sharing the same address as Jeff Anderson, also gave $2,000 to Simon’s campaign for Secretary of State.  (In 2014, Julie Anderson donated $1,000 to the re-election campaign of Gov. Mark Dayton.)  Anderson’s law partner, Mike Finnegan, gave Simon an additional $2,000 in 2013.

It always pays to Follow the Money.

Where Everyone Is Above Average, Part 3

To put my recent posts [1, 2] regarding executive compensation at Minnesota Public Radio in context, it’s useful to compare their pay to other organizations’ pay.

The Minneapolis Star Tribune has just published its newest edition of the Top 100 list for CEO executive compensation at Minnesota’s top companies.  The latest data cover the year 2013.

If MPR were a for-profit company, the Fiscal Year 2013 pay for its current CEO (Jim McTaggart) of $557,014 would rank 68th on the highest-paid private company CEO list.  Not bad for a quasi-governmental agency. 

The FY2013 pay for MPR’s retired CEO (Bill Kling) of $1,086,351 would place him 49^th on the latest private company CEO list.  That puts compensation for MPR CEO’s in the league of companies like Digital River, Christopher & Banks, and Fastenal.  In 2013, Fastenal produced revenue of more than $3.3 billion, with profits of $448 million.  In 2013, Fastenal paid their current CEO a mere $794,761, about $300,000 less than MPR paid its retired CEO.

In fact, Kling’s FY2013 pay exceeds the CEO pay of the sole media company on the Star Tribune Top 100 list (ValueVision).

As it happens, MPR’s parent non-profit, American Public Media Group, ranks only 38^th on the Star Tribune’s list of Minnesota’s largest non-profits (based on 2012 data), with revenue of $110,800,000 (2012 figure).  That revenue figure for public radio works out to less than ¼ of Fastenal’s profit.

With MPR executive pay ranking up there with private company compensation, it should come as no surprise that it also ranks highly against non-profit-sector pay.

McTaggart’s 2012 pay of $494,500 ranked him higher on the list than many non-profit CEO’s running much larger charitable organizations.  In 2012, only 6 non-profit CEO’s in Minnesota ran smaller organizations and got paid more than MPR’s McTaggart.

As the retired MPR CEO, Bill Kling’s total FY2012 compensation of $780,025 would have ranked him as the 16^th highest paid non-profit CEO.  His FY2013 compensation of $1,086,351 would have moved him up to 11^th in the state.  Either figure would have made Kling the top-paid leader of any arts organization that year.

Of the higher paid non-profit CEO’s, all head either health care or educational institutions.

In 2012, current CEO McTaggart earned more than the heads of Carlton College and St. Olaf College and the heads of medical outfits including Fairview Health and Olmsted Medical Center. 

All of which makes a certain amount of sense.  For-profit companies have an obligation to return profits to shareholders.  MPR does not compete for customers, nor does it have shareholders.  Any excess then accrues to senior management in the form of compensation.

Minnesota Public Radio’s website lists no fewer than ten senior executives (c-suite officers and the different ranks of vice president).  These 10 senior executives join the legions of managers, directors, managing directors, and assorted other officers who populate the staff.  As I noted in Part 2, 10 MPR employees make more than $300,000 and 15 more than $200,000 per year.

Remember, the tote bag is yours at just the $8/month donation level.

Where Everyone Is Above Average, Part 2

In my recent post detailing the lucrative post-employment package of now-retired MPR founder Bill Kling, I hope I didn’t leave behind the impression that the management team he left behind was toiling in penury.  Because they are not.

In Fiscal Year 2013, Kling’s successor as MPR’s CEO, Jon McTaggart, received $557,014 in total compensation from the non-profit corporation.[1]

Including McTaggart and Kling, a total of 10 MPR employees made more than $300,000 in FY 2013.   A total of 15 made over $200,000.  Keep in mind that Minnesota’s Governor earns only $120,303.

Rest assured that MPR’s on-air talent is sharing in this largesse.  Kai Ryssdal, the host of MPR’s nationally-syndicated program Marketplace, took in $446,732 in FY 2013.  At that level of compensation, he was MPR’s 2^nd highest paid current employee.

But don’t worry, if you donate just $5 per month, you get a free "I Listen" coffee mug.

In Part 3, I see how MPR's pay compares to that offered by other organizations.

Note:  All MPR financial data, including tax returns, can be found here.

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[1] See MPR’s Fiscal 2013 IRS Form 990 Income Tax Return, Schedule J, Part II.

The Bad, Bad “Bad Boss Tax” Idea

Jonathan Blake tweeted about the latest bad idea to come from Minnesota’s political charity machine:  "The Bad Boss Tax".

In this instance a “bad” boss is one that hires lots of low-wage workers: workers who also receive government benefits like food stamps or subsidies for healthcare, housing, or energy costs.  Hiring workers who also receive government benefits in some form is said to be taking advantage of the taxpayer.

Wal-Mart appears to be the specific target of this campaign.  But what about the chicken/egg argument?  By hiring those on public benefit, isn't Wal-Mart supplementing their household income and subsidizing the taxpayer?

According to the supporters of the Bad Boss Tax, the employer is supposed to pay such a high wage that the employee would not qualify for any government benefit.  If not, the employer will have to pay hefty fines for hiring the dependent.

That’s a tall order, given that most Americans now receive some form of government benefit.

TakeAction Minnesota is pushing the idea, which, apparently will be introduced as a bill in the state legislature next year.  As Blake pointed out, TakeAction doesn’t seem to have thought this idea through.

Beyond the obvious—employers will avoid hiring those on public benefit—the hardest hit employers by such a law are those businesses and charities that specialize in hiring the disabled, the homeless, and those giving the poor and unskilled a leg up.  Do we really want to discourage hiring those at the bottom of the ladder with fines and penalties?

Where Everyone Is Above Average, Part 1

[Editor's Note 1: this piece has been updated from its original version to include a response from MPR.  See below.  It has also been updated from the original version to improve readability.]

[Editor's Note 2:  FOX 9 News covered this story on their magazine show The Reporters.  Watch this piece beginning at the 9:33 mark.]

A $1 million-a-year pension?  Not even many one percenters can dream about retiring on an income of $1 million per year.

Rarer still is the former non-profit executive who can pull down a million a year in his golden years.

The former head of Minnesota Public Radio (MPR), Bill Kling, it appears, was doing just that.  Bill Kling practically invented public radio, founding MPR back in the 1960’s, and either founded or was there at the start for all of public broadcasting’s key institutions.

Kling, now 72, retired from MPR at the end of June 2011.  However, his income from that taxpayer-funded organization actually went up for two years after leaving the helm.

According to tax documents filed by MPR and its parent non-profit company American Public Media Group (AMPG), Kling received compensation of $1,086,351 in the twelve months ending June 30, 2013 (the most recent data available).

In the 2013 fiscal year, Kling received direct compensation[1] of $370,049.  Kling’s consulting company GreenIsland Group, received[2] an additional $716,302 from MPR.  As described in the footnotes to MPR’s IRS Form 990 tax return,

Beginning on July 1, 2011, Mr. Kling began to perform services for AMPG, MPR’s not-for-profit parent support organization, in accordance with the terms of the employment agreement that called for a post-employment consulting period, which ends December 31, 2013.

Here is a summary of Kling’s MPR compensation the last three years.

Year Ending	Direct	Other	GreenIsland
30-Jun	Comp	Comp	Consulting	Total
2013	370,049		716,302	1,086,351
2012	521,041	20,142	238,842	780,025
2011	644,872	38,913		683,785
Total				$ 2,550,161

As you can see above, Fiscal Year 2011 was Kling’s last year on the MPR payroll.  His first two years in retirement have seen his compensation rise considerably above his previous level.

In addition, Kling received another interesting perk.  Buried in AMPG’s tax documents is this nugget,[3]

Travel for companions upon the retirement of William Kling, the founder of AMPG and MPR, and their president until June 30, 2011, the organization reimbursed Mr. Kling for airfare for him and his spouse for travel related to a retirement vacation.  (See update below.)

I’m not the first to raise questions about the size of Kling's compensation, or notice the link between his compensation and taxpayer subsidies for MPR’s programming, or document the Byzantine interplay between MPR/Kling’s various not-for-profit and for-profit ventures.

On the outrage scale, Kling’s GreenIsland gig can’t hold a candle to the $2.6 million Kling pocketed from the 1998 sale of the for-profit MPR subsidiary River Town Trading catalog company. 

Still, one wonders about the scale of Kling’s post-retirement benefits given the scale of the taxpayer contributions to his former organization.

For its part, MPR's 2013 annual report suggests that support from government agencies represents only 8 percent of the entity’s $85 million in annual revenue.

That cuts both ways: MPR could restructure its business model to find a way to live on the other 92 percent of its revenue sources, then they could pay their executives (past and present) whatever they wished, consistent with the non-profit nature of their operation.

Otherwise, MPR has some obligation—in accepting taxpayer money—to be careful with the taxpayer dollar.  And it turns out to be a lot of dollars from state taxpayers.

MPR accepts more than $1 million a year from Minnesota’s Legacy Fund, the dedicated state sales tax passed by referendum in 2008.  Since the creation of the Legacy Fund, MPR has received the following amounts from Minnesota taxpayers,

Fiscal	Legacy
Year	Funds
2015	1,485,000
2014	1,485,000
2013	1,134,535
2012	1,318,000
2011	1,325,000
2010	1,325,000
Total	$8,072,535

Of course, none of those dollars were earmarked for Kling’s golden retirement.  But the generous taxpayer funding of the organization, overall, should raise questions on the appropriate level of executive compensation.  After all, Minnesota’s Governor earns only $120,303.

Doing Well by Doing Good

Consider the example of Apple co-founder Steve Jobs.  Over his career, Jobs is said to have accumulated a fortune of more than $8 billion.  But every transaction between Apple and the consumer was strictly voluntary.  When I was last in the market for a mobile phone, I bought Jobs’ iPhone, but I could have purchased a Samsung or a Nokia or (more importantly) none at all.

When it comes to my support of MPR, as a taxpayer, I have two choices:  pay up or go to jail.  There seems to me something qualitatively different about a private fortune based on voluntary transactions and a private fortune seeded with taxpayer dollars extracted under the implied threat of force.

In the history of our republic there have been many great public institutions founded by soldiers, doctors, scientists, educators, and others.  But I can think of few other examples where a great public institution was built alongside a large personal fortune.

As they say in the news business, a phone call to MPR for comment was not immediately returned.

Updated:  MPR called back and clarified a number of points.  First, Mr. Kling's post-employment contract ended as scheduled on December 31, 2013.  He is no longer being paid by the organization.  He was paid additional money not reflected in the table above.

Those amounts will be disclosed by MPR in their next annual tax return.  Finally, MPR was reimbursed for the vacation travel costs noted above by individual members of the Board of Trustees as a gift to Mr. Kling.

In Part 2, I examine the pay of other MPR executives.  In Part 3, I compare MPR executive pay to that offered by other organizations.

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[1] See MPR’s 2013 IRS Form 990 Income Tax Return, Schedule J, Part II, Line 8.

[2] See MPR’s 2013 IRS Form 990, Schedule L, Part IV, Line 3.

[3] See APMG’s 2013 IRS Form 990 Income Tax Return, Schedule J, Part III, Page 3.

The Great Swimming Pool Debate of 2014

As conservatives and Republicans we often talk about the need to make the case for limited government.  It turns out, making the case for limited government can be tougher than you would think.

Case in point, my participation in last month's Sartell Says debate on municipal swimming pools.  Sartell is a suburb of St. Cloud, Minnesota, and the "Sartell Says" series is an Oxford Union-style chamber debate, where the audience votes before and after the event.

Last month I was on the "con" side of this question,

     Outdoor public pools are a valuable and necessary function of a city?

You can hear the results yourself, as Minnesota Public Radio has archived a podcast of the event, which the station broadcast last Friday as part of the MPR News Presents program.  [Yes, despite their best efforts, every once in a while, my voice sneaks onto their station.]

The "pro" side argued that taxpayer-funded outdoor swimming pools would cure every societal ailment from childhood obesity to income inequality.  When offered "free swimming pool," the Sartell audience was in no mood to hear about escalating operating costs and slippery slopes.

DEED’s Job Numbers Don’t Add Up

Each month the Minnesota Department of Employment and Economic Development (DEED) issues a press release announcing the number of jobs created in the previous month by the state’s economy.

And each month local media hail the latest figure as further proof (as if it were needed) of the genius of the current Democrat-run state government.

For June, DEED reported that the state gained 8,500 jobs for the month (3,900 created by the government, by the way).  DEED also reported that the state gained 10,700 jobs in the first six months of 2014.

Doing the arithmetic, that total means Minnesota gained 8,500 jobs in June, but a mere 2,200 jobs in the five months of January through May, combined.

Each month DEED also reports on the jobs created in the previous 12 months, for a rolling look at the number of jobs created for a year-long period.  For the 12 months ending June 2014, DEED reports Minnesota created almost 53,800 jobs.  That figure would mean that we’d created 43,100 jobs in the six month of July through December 2013, but a mere 10,700 jobs in the most recent six months.  Rather than suggesting an economic boom, those numbers indicate a real weakness in our state’s economy.

But consider this anomaly:

Reporting		Jobs Gained
Month	Month	YTD	Last 12 Mo.
June	8,500	10,700	53,779
May	10,300	---	45,617
April	(4,200)	---	41,934
March	2,600	---	41,582
February	(100)	---	44,714
January	600	---	52,160
Total	17,700

Adding together the number of jobs created each month in 2014, as reported by DEED, produces a total of 17,700 jobs for the year so far.  So that means that sometime during the last few months, 7,000 jobs have vanished from the official state rolls.

Here’s a prediction:  that 8,500 number for June will be quietly revised downward.  That’s been the pattern of late:  May’s job gain number was revised down from 10,300 to 7,200.  April’s loss of 4,200 jobs was revised down to an even bigger loss of 5,300.  The originally reported March gain of 2,600 jobs was revised down to 1,900 the following month.  DEED marked down the February loss of 100 jobs it originally reported by a further 1,100.

DEED actually revised the January gain of 600 upward by 200 the following month.  For those keeping score at home, we’ve had four consecutive months of downward revisions, with the average monthly downgrade being 1,500 jobs.  That’s where 6,000 of the 7,000 missing jobs have vanished, but 1,000 are still not accounted for.

If we were flipping coins, the odds of four consecutive downward revisions would be 1 chance in 16, or 6.25 percent.  If it were a race horse, I wouldn’t bet it to show.

At the length truth will out.

For the Common Good

In this All-Star month for Minnesota, St. Paul also will be hosting a big-time celebrity, as presumed-Presidential candidate Hillary Rodham Clinton visits Garrison Keillor’s Common Good Books to sign copies of her light-selling tome Hard Choices.

Keillor hopes to sell 1,000 copies of the Clinton book in conjunction with her July 20^th appearance at his St. Paul bookstore.

It may surprise fans of Keillor to learn that the public radio star’s book store is owned by Prairie Books LLC, his for-profit company.  Yes, the man whose A Prairie Home Companion radio program is heavily dependent on state and federal tax dollars for distribution on public radio networks soils himself with the grubby pursuit of coin. 

Prairie Books is just part of the for-profit Keillor empire, which includes Prairie Film Productions LLC, Prairie Films LP, and Prairie Home Production LLC.  Despite his commitment to the common good, Keillor is big into intellectual property rights.  For his radio show alone, Keillor claims ownership of some 32 words, phrases, and titles.

Keillor has parlayed taxpayer-supported public radio into a private fortune, as his various for-profit enterprises have made him a wealthy man.  And he has used his wealth to support Democrat Party candidates and causes.  For example, Keillor donated $1,000 in cash and $3,000 in catering to Democrat Mark Dayton’s re-election campaign earlier this year.

As an individual, Keillor can and does donate to Democrat candidates.  However, for-profit corporations cannot donate directly to political candidates.  In hosting Hillary Clinton at his bookstore, Keillor has found a neat end-around this restriction.  Surely, his bookstore is not the first for-profit one to help sell books written by an active politician.  But the nature of the July 20th transaction cannot be ignored.

His Common Good bookstore will make money—not for the common good—but for its owner and candidate Clinton.

A Pretty Good Deal!