Political Charity Takes It to the Bank

The 2014 race for Minnesota governor is now well underway.  Spending by candidates in the 2010 race for governor set a record, topping $20 million.

More remarkable than that staggering figure was the spending on Minnesota political charity groups trying to influence state government action after the 2010 election. 

Combing through filings at the IRS for the year 2011—the most recent year available—I traced a total of $21 million donated to Minnesota-related groups to influence state public policy.

Think about it:  the process for selecting our state’s top leader requires every dollar to be accounted for and disclosed for all but the smallest individual donations.

The process for implementing subsequent state policy attracts even more money, but with virtually no tracking and disclosure to the public.

I examined IRS Form 990 filings for 14 non-profit donors:  11 are based out-of-state and 3 are based in Minnesota.  These 14 donors gave more than $21 million to 44 Minnesota-related non-profit charities and social welfare organizations working to influence state policy in a variety of subject areas.

My review was by no means exhaustive:  I did not include any donations from private individuals or for-profit corporations.  There are certainly more than 14 foundations giving money to influence Minnesota public policy.  These 14 happen to be the ones I chose to review.

We just finished a 2013 legislative session in which progressive political charities achieved unprecedented success in implementing their far-left agenda.  Since the session ended last month, we have been busy unpacking all that was passed by the one-party-rule Democrats.

Those not paying attention now marvel at the depth and breadth of the “progress” made during the session.  Bill after bill was passed and signed into law by the governor.  Little, if any, of this agenda appears to reflect the middle-of-the-road, centrist consensus politics that Minnesota voters were said to crave.  In a bid to end “gridlock” in this “purple” 50/50 state, we ended up—not with common-sense compromise in which the best ideas of both sides were hashed out—but with policy program better reflective of a deep-blue, 100% liberal state.

Electing one-party-rule certainly contributed to the 2013 result, but the tsunami of out-of-state cash for the non-profit groups that supply the lobbying, the legislative proposals, and the staff support played a decisive role.

Give Me Liberty or...oh, nevermind

This past weekend, I made my annual pilgrimage to the ancestral homeland in the Commonwealth of Virginia.

As is my practice, I combined the trip with a visit to a local historic site.  This year it was Patrick Henry’s Red Hill, his farm in south central Virginia.  Red Hill is located in rural Charlotte County.

The county was named for Queen Charlotte, wife of King George III, and in the present day is one of three Virginia counties without a single traffic light.

If he is remembered at all today, Patrick Henry is known for his “Give me liberty, or give me death!” speech in March 1775, rallying support for the Revolutionary War that would begin the following month.  But there is much more to the life of this statesman than a single speech.

New Digs for Minnesota’s Ruling Class

In Minnesota last month, we had to pass the multi-billion-dollar tax increase bill to find out what was in it.

The latest revelation is a brand new state-of-the-art office building for the state Senate. 

For the last few years, we kept hearing how critical it was to spend state money to preserve Cass Gilbert’s famous 1905 State Capitol Building.  In the last few hours of the 2013 legislative session, Republicans cooperated and provided the supermajority needed to include $109 million for Capitol repair in a bonding bill.

Later that day, while no one was looking and minutes before midnight, the majority Democrats passed an authorization for a $90 million brand-new building to house Senators currently in the Capitol.  Once again the ruling class takes care of itself first.

Life in the Imperial City

Over the weekend, the Wall Street Journal ran a piece on life in Washington, DC, (“What Sequester? Washington Booms as a New Gilded Age Takes Root”).[1]  The article includes pictures of some breathtaking palatial estates, including one owned by IT investor Frank Islam.  His 40,000 square-foot mansion includes gardens “modeled, in part, after those of Henry VIII's Hampton Court palace” and featuring “a self-cleaning, 2,000-square-foot koi pond.”

Not surprisingly, Mr. Islam’s former company, QSS Group, specializes in providing IT consulting to the Federal government.  Mr. Islam donated $189,750 to candidates last year, one guess as to the party who received the bulk of his money.  As the Journal puts it,

[Mr. Islam’s] sprawling compound is a product of Washington's Gilded Age—a time of lush business profits initially fueled by government outsourcing and war.

Mark Dayton, Libertarian Reformer? I Don't Think So

We have seventeen months to go before the 2014 elections, which means that the contest is well under way.

Minnesota Governor Mark Dayton, a progressive Democrat, is running for re-election as a…libertarian reformer.  At least that’s what the infinitely credulous reporters at the Minneapolis Star Tribune claim.

Page B-3 of Sunday’s paper includes a “hot dish politics” column that discusses Dayton’s re-election plans.  The governor just signed into law the largest budget in the state’s history and the largest tax increase in the state’s industry, and approved the removal of such reforms as the sunset commission, teacher testing, and student testing.

The Lure of Hollywood

Drawn like moths to the flame, many politicians can’t resist the Klieg lights of Hollywood.  As we continue to unpack what was passed during the 2013 Minnesota legislative session, the latest surprise discovery is $10 million in state subsidies for film production.  Like professional sports stadia, movie production is one of those glamour industries that we love to throw money at, while suppressing actual wealth-creating industries like copper mining and sand mining.

At least the state’s bureaucrats are not under the delusion that $10 million is enough to lure major motion pictures with A-list actors.  The Minneapolis Star Tribune quotes state film board executive director Lucinda Winter,

While it’s not enough to draw such blockbusters as an Iron Man or Hunger Games sequel, she said. “it puts us back in the game to land small to midsize movies like Magic Mike or Silver Linings Playbook.”

However $10 million will be plenty to attract Hollywood slicksters who see us Midwestern rubes as easy marks.  And it turns out, they’re right.

Unmentioned in the Star Tribune story is the experience of our neighbor to the south, Iowa.  In 2009, Iowa was forced to shut down its film subsidy program because of scandal and fraud that resulted in criminal charges.  In 2010, the Los Angeles Times reported,

But former Gov. Chet Culver suspended the film program in 2009 after an internal audit found irregularities, including filmmakers using tax credit funds to purchase a Land Rover and other luxury vehicles for themselves.

The criminal charges followed a special audit the state conducted in October of 22 films that were awarded tax credits before the program was suspended.  The audit found that $26 million of nearly $32 million in tax credits were awarded improperly, either because the productions did not qualify for the credits or producers did not submit required documentation.

That same LA Times article details similar scandals in Louisiana and Wisconsin.  Even without the outright fraud, studies have shown that state subsidies for film production are not a good investment of taxpayer money.  We seem determined not to learn from the mistakes of others.