The Daily Double

In something akin to a political charity event horizon, political charity Alliance for a Better Minnesota has a new TV ad starring a political charity TakeAction Minnesota community organizer.

And not just any left-wing community organizer, but go-to-gal Jessica English, who has taken her tale of homeless-single mom-minimum wage worker on a multi-year magical misery tour.

Here she is in 2011.  Here she is in 2013.

She finds a home here.  Evil bankers threaten to evict her here.  It’s enough to make you wonder why the string of left-wing nonprofits who’ve employed her can’t pay enough to keep her in stable housing.

In 2014, she’s starring in a Democrat TV ad ("Impossible") attacking the Republican candidate for governor on the minimum wage issue.  At one point in the ad, the following words appear on the screen,

"Jeff Johnson Hurt 350,000 Minnesota Workers.  Source:  Star Tribune 4/10/14"

The ad appears to refer to this article, which reports on efforts to raise the minimum wage in Minnesota.  The article itself does not mention Jeff Johnson.

[Gary Gross has debunked the ad's central claims.]

As for Jessica English, we are to understand that in the entire state of Minnesota, population 5,000,000+, Democrats cannot locate a second hard-luck story to put on television.  Instead, the state Democrats recycle the same sad sack saga over and over again.

The magical misery tour is waiting to take you away.

How Democrats Keep Winning Elections, Part 3

If Melisa López Franzen did not already exist, it would be necessary for the Democrat Party to invent her.  A young, ultra-liberal corporate attorney, she entered politics as a candidate for state senate in 2012 with no voting record or public career to scrutinize.

Hand-picked for her gender, ethnicity, and photogenic qualities as the Democrat candidate for a wealthy suburban district seat held by a Republican (SD49, Edina), Franzen’s 2012 campaign provides a case study in modern, Big-Data-driven Democrat politics.

Once in office, Franzen managed the trick of voting for record state government spending, but against the tax increases to pay for it.  She ranks among the most liberal Minnesota state senators, holding a lifetime rating of 11 (out of 100) from the Taxpayers League.  All of this, despite running as a pro-business moderate.

Her campaign launched in February 2012, and she hit the ground running.  In her first filing with the state Campaign Finance Board (July 23^rd), she listed a total of 95 individual donors, 35 (almost 40 percent) of those located out of state.

Of Franzen’s early campaign donors, five were from New York City, four from Los Angeles and three from San Francisco.  Other liberal enclaves—such as Boston, Malibu, Philadelphia, Seattle, and West Hollywood—were also heard from.  Her initial fundraising represents an extraordinary level of national interest in a first-time, no-name candidate in a flyover state.

As the campaign rolled along, the out-of-state money kept flowing.  Franzen ended the year with 63 out-of-state donors contributing a significant share of the $100,313 raised for her campaign.

Franzen took contributions from 18 political action committees, including 14 separate unions.

Her opponent, then state Rep. Keith Downey (and now chair of the state Republican Party) was no slouch in the fundraising department.  He raised $116,805 for his 2012 campaign, his third run for public office.  Of Downey’s itemized donors from his combined 2012 House and Senate campaigns, only 9 listed out-of-state addresses.  Of these nine, most were either former business partners or part-time Minnesota residents.  No money came from California, Massachusetts, New York, Pennsylvania, or Washington state or Washington, DC.

Downey’s success in fundraising as an individual candidate is indicative of the individualistic, entrepreneurial spirit within the conservative and Republican movements.  Donors on the right eagerly give to those men (and women) “in the arena,” the candidates who are personally taking the fight to the other side.

Conservatives and Republicans are less willing to give money to party units or independent groups, worried that the funds be wasted on “overhead” or “consultants.”  Democrats and liberals have fewer such qualms.

Those preferences show in the “independent money” that flowed into the Downey v. Franzen 2012 state senate race.  According to figures compiled by the Minneapolis Star Tribune, spending on the race totaled a staggering $870,000.  As the Star Tribune reports, the Republican Downey slightly outspent the Democrat Franzen. 

Independent expenditures were a different matter.  Money spent to help Franzen totaled $408,962, nearly twice the $238,836 spent to help Downey.  Most of the outside money was spent on an effort to discourage Republican voting in the district.

Case in point was this series of advertisements put out by the shadowy group Public Safety Matters.  The ads, funded in large part by union money, were aimed at Republican voters and slandered Downey as anti-police and pro-crime.

Franzen was one of the 13 candidates participating in 2012’s PhotoGate, where the state Democrat party had to pay a $100,000 fine for cheating during that year’s election.

Franzen’s positioning as a pro-business moderate with no track record made her the dream Democrat suburban candidate, on paper.  And on paper was where the candidate herself could usually be found.

Franzen appeared on the campaign trail only during off hours from her corporate gig.  Door-to-door campaigning on her behalf was outsourced to the SEIU labor union.  In 2012, SEIU reports spending $3,489.65 in staff expense for “voter contact” on her behalf.

For her part, Franzen boasted in the Eden Prairie News that she personally “knocked on over 5,000 doors.”  For such a densely populated district, a 5,000 doors total is laughably small.  But the laughter quickly stops when you realize that—thanks to Democrat data-driven micro-targeting—those 5,000 doors were the ones most critical to her campaign.

Otherwise, she was mostly kept out of sight and under wraps in 2012.  She was frequently absent at district public forums, sending surrogates in some cases.

Franzen’s out-of-state financed, union-staffed, law-breaking campaign nevertheless triumphed on election day, with her winning almost 53 percent of the vote.  Franzen’s was the ultimate in pre-fabricated campaigns: the donors were pre-arranged, the staff already hired, the outside groups primed to intervene, the political strategy set, all that was needed was a candidate, any candidate.

Look kids, it’s the new politics!

In Part 1, I introduce the data-driven strategy Democrats are using to win elections.

In Part 2, I document the Democrats’ success in finding previously disengaged voters.

In Part 4, I will show how the Franzen campaign plugged into the larger Democrat Big Data machine.

How Democrats Keep Winning Elections, Part 2

Where did all the Republican voters go?  Actually, they all voted in 2012.  However, to compete with Democrats, Republicans need to find new voters among the disengaged.

In terms of voter turnout, Republicans start with a built-in advantage.  Republicans are more likely to vote than those in the general population.

In this example from a 2008 Gallup poll, in moving from all adults to registered voters, John McCain picked up two points on Barack Obama.  In moving from registered voters to likely voters, McCain picked up six more points on Obama.
 

As we move from the general population (all adults over 18) to those engaged enough to be registered to vote, support for Republicans increase.  Support for the GOP increases further when we narrow the screen to “likely” voters.  The more engaged a voter is, the more like that voter is to support Republicans.

[Update:  The political pollster Rasmussen takes this process one step further, screening for "certain" voters.  When we move from "likely" voters to "certain" to vote voters, Republican prospects improve again.]
 

Democrats see this same data and sense opportunity.  The less-engaged voter is more likely to vote Democrat, so a gold mine can be found with this usually neglected category.

Now forgotten in the annals of politics, Mitt Romney actually led in the final Gallup poll   of the 2012 election—49 to 48 percent—among likely voters.  Obama won because his campaign went out and found a couple of million unlikely voters to defy expectations and turn out for the Democrats.

In 2012, Mitt Romney received 60,933,500 votes, nationwide.  That was almost a million more than the 59,948,323 votes that John McCain received in 2008, more than the 59,028,444 that John Kerry received in 2004, and 10 million more than the 50,999,897 popular-vote winner Al Gore received in 2000. 

The legend of the four million missing Romney voters turns out to be a myth.  Republican voters turned out in 2012, in bigger numbers than they had in 2008.

Romney’s vote total in 2012 was enough to win any U.S. Presidential race in history, except for the two won by Obama.  The Democrat’s Big Data-driven turnout machine identified and got to the polls about 10 million voters that had not previously participated in national elections and were not on the radar of national Republicans.  In doing so, Democrats raised overall voter participation rates to levels not seen since the 1960’s.

In Minnesota, it was much of the same story.  In 2012, despite making little effort to compete in the state, Mitt Romney got 1,320,225 votes:  about 45,000 more votes than the 1,275,409 McCain got in 2008.  Romney’s 2012 total was only 26,000 less than George Bush’s 2004 Minnesota result, when the state was thought to be competitive. 

Romney’s 2012 total was 211,000 more than the Minnesota votes Bush got in 2000.  Republican voters turned out in Minnesota in 2012.

In contrast, Obama’s 2008 and 2012 campaigns found more than 100,000 votes than any recent Democrat presidential candidate had found before.  Voter turnout in 2012 in Minnesota was close to 76 percent, behind only the states of Wisconsin and Mississippi.  Even in a high turnout state like Minnesota, Democrats were able to identify new voters among the previously unengaged.  Those additional 100,000 voters made the difference in close Congressional and state legislative races.

Put another way, in 2012 in Minnesota—despite little local effort by the GOP presidential candidate, despite a weak U.S. Senate candidate, despite a state party in deep debt—state Republicans turned out just about every Republican vote that ever existed.  But Democrats turned out more than 100,000 voters that had not participated before 2008.

To win in the future, Republicans need to find a couple hundred thousand votes among the 20 percent of the electorate that does not participate.

[Update:  liberal columnist Lori Sturdevant and liberal political scientist Larry Jacobs are openly worrying about Democrat turnout in 2014.]

In Part 1, I introduce the data-driven strategy Democrats are using to win elections.

 

In Part 3, I’ll examine a case study in Minnesota's new politics.

How Democrats Keep Winning Elections, Part 1

The formula for winning elections is completely straightforward:  get more of your voters to show up and vote for your candidates.

After losing close elections at the national level in 2000 and 2004, and at the state level in 2002 and 2006, Democrats got together and figured out how to start winning again.  The approach they developed was, again, simplicity itself:  discourage Republicans from voting and get Democrats who rarely vote to show up and vote.

It turns out that Republicans have a built-in advantage:  our voters tend to be more engaged in the process and more likely to vote than Democrats.  Step one for Democrats is to discourage Republicans from voting.

Every time you see an ad on TV attacking Jeff Johnson or Mike McFadden, understand that the ad is not trying to get you (the Republican or Independent voter) to vote Democrat, the ad is trying to get you to not vote at all.  By convincing right-leaning and centrist voters that Republicans are evil, vile people, they hope to discourage turnout and frequently succeed.

In step 2, on the other side of the ledger, Democrats have invented a new model to get their voters to vote.  They have mastered Big Data, the use of huge computer databases to identify and locate potential voters from the less-engaged general population. 

Please read this short, but illuminating piece on Catalist, which explains why Republicans lost the 2012 election, and may not win again, unless we develop something like it.

Catalist is not just a better version of our voter lists (which it is), it’s how the Democrats use it.  When we identify a new Republican voter, we will send a mail piece, or leave a phone message just before Election Day.  When the Dems find a new voter, they will—via Catalist—dispatch a real, live person or two (known to the voter) to ask the voter face-to-face to vote Democrat, with a pitch customized to that voter’s demographics, interests, and preferences.  Guess which approach is more effective.

Notice I have said nothing about issues or messaging.  The Democrats’ message and delivery system is simple:  Republicans are evil and will take stuff away from you (TV ads) and Democrats like you and will give you free stuff (in person, at your front door).

Republicans have been using the same playbook for decades.  Every cycle, our candidates pivot to the center, trying to win the votes of independents and assuming our base will show up on their own initiative.  Very little of the money and effort on the Republican side goes into activity which will win elections:  getting out our voters.

Instead, much activity is spent on winning the argument:  convincing people that we have better candidates and ideas.  We confuse governing (what we’ll do, once elected) with campaigning (how to get our voters to the polls).

In the Republican model, to win we must run the table: field great and appealing candidates, articulate a clear governing vision, identify the top issues that resonate with voters, and craft the perfect messaging to reach the voter.  It's a Field of Dreams approach: build a great campaign, and voters will come and find you.

Democrats, instead, focus all of their campaign activity on the act of voting.  Their formula does not depend on having good candidates and winning issues:  Democrats sell a brand, not a candidate or a philosophy.  They don't wait for voters to come, they go out and find them.

GOP election efforts are candidate-centered: the entire system must be reassembled every election.  Dem's, on the other hand, operate a permanent infrastructure.  In 2010, the race for governor was over, even before the Democrats got around to picking a candidate.

Mitt Romney won independents by a big margin in 2012—he won the argument—but lost the election.  It turns out that winning over independents (winning the argument) takes a lot of time, effort, and money.  The Dems figured out that it’s much cheaper and easier to get someone who agrees with them in the first place, but wasn’t planning on voting, to come out and vote.  After 2004, Dems gave up on independents and learned to win by growing their base, one voter at a time, from among the crowd of left-leaning Americans who didn’t used to vote in elections.

In Part 2, I will go into more detail about the scope of the Democrat's vote-finding machine.

In Part 3, I provide a case study in the new politics.

Slipping Through the Cracks

Events happen with such haste in Mark Dayton’s Banana Republic that every now and then one slips through the cracks of my otherwise comprehensive reporting.

In late 2013, Mark Dayton’s MNsure health insurance exchange awarded a series of “outreach grants” to local community groups in the state.  One such group receiving a $50,000 grant in December 2013 was the Minneapolis-based Confederation of Somali Community in Minnesota. 

Around the time the group was receiving the grant (based on an earlier application), board member Mohamud Noor was named as the group’s new leader.  As you know, Noor serves on the Minneapolis School Board and has twice run (unsuccessfully) for the Democrat nomination to serve in the state legislature.

In the future, I'll try to keep up.

Doing Well by Doing Good, Part 5

Now that the state has raided and shut down the controversial nonprofit Community Action of Minneapolis, it may be useful to take a look at some of the similar nonprofits operating around the state.

The Minneapolis agency is part of a network of a couple of dozen that serve throughout the state, operating programs funded by taxpayers aimed at helping low income households.

One of the most eye-catching facts in the Community Action Minneapolis scandal was the compensation of its CEO.  Bill Davis was reported to have received $273,060 in total compensation in the last year for which data is publicly available.

I took a look at the CEO compensation for all local agency heads, as shown below,

Community Action Agency	Location	CEO Comp. $
Community Action MPLS	Minneapolis	$273,060
Ramsey & Washington	St. Paul	172,872
Local Government Salary Cap		162,245
Scott, Carver & Dakota	Shakopee	139,628
Three Rivers	Zumbrota	131,552
Arrowhead	Virginia	118,877
Anoka County	Blaine	118,741
Mahube-Otwa	Detroit Lakes	116,974
Suburban Hennepin	St. Louis Park	113,662
Lakes & Prairies	Moorhead	109,215
West Central	Elbow Lake	109,163
Minnesota Valley	Mankato	97,699
Tri-County	Little Falls	97,368
Lakes & Pines	Mora	95,259
Tri-Valley	Crookston	95,018
Heartland	Willmar	93,821
Southwestern	Worthington	92,498
Northwest	Badger	92,131
Semcac	Rushford	90,510
Wright County	Maple Lake	90,055
Tri-County	Waite Park	85,436
Western	Marshall	84,091
Bi-County	Bemidji	83,834
KOOTASCA	Grand Rapids	80,475
Prairie Five	Montevideo	69,434
Duluth	Duluth	60,220
Inter-County	Oklee	56,392

[Compensation listed is as reported in the agency’s last available IRS Form 990 income tax return (either 2012 or 2013, depending upon the fiscal year used).  For CEO’s not serving a full year, the previous year’s figure was used.]

For comparison purposes, I’ve included the salary cap used by local governments for 2014, $162,245.  Local governments can, and do, seek waivers to pay above that amount.

It turns out that Davis’ compensation is quite an outlier for this type of organization, representing something close to three times the median CEO compensation.

The other agency that sticks out in this analysis is the one across the river, the Community Action Partnership of Ramsey & Washington Counties, based in St. Paul.  Its CEO, Clarence Hightower, received total compensation of $172,872 in the year ending September 30, 2013.  Hightower’s compensation comes in close to twice the median compensation of local agency CEO’s.

You may recall that Hightower’s name came up recently in connection with the Community Standards Initiative controversy.  The CSI controversy was the first count in the recently filed ethics complaint against state Sen. Jeff Hayden.  Count 2 in the Hayden complaint centered on Hayden’s board membership in Community Action of Minneapolis.

According to the St. Paul Community Action agency’s 2013 income tax return, the east-metro agency spent over $676,000 on travel, conferences and meetings.

In 2012, the St. Paul agency spent even more on travel and conferences, totaling $756,272.  In 2011, the amount for the agency for those items was $722,028.

To compare, the Minneapolis agency spent a little over $233,000 on these items in 2012.  True, the east-metro agency represents a larger organization—roughly twice the size of the Minneapolis group—but its spending on travel and conferences was three times the amount of the agency on the other side of the river.

Perhaps further investigation would prove useful.  In a later post, I look at the political donations of the community action network.

They Fly By Night

[Updated:  this post has been updated.  See below.]

The Minneapolis Star Tribune has compiled the most recent campaign finance figures into a handy spreadsheet.  The big names—Education Minnesota, Alliance for a Better Minnesota, etc.—you will have heard of if you follow state politics.

One group that cracked the top 20 will be new to most of you:  DLCC for Minnesota.  Formed only in June of this year, DLCC for Minnesota is the local chapter of the Democratic Legislative Campaign Committee.  As the name would imply, the DLCC is a political committee dedicated to electing Democrats to state legislatures around the country.  As you would expect, DLCC is headquartered on K Street in Washington, DC.

Two Minnesotans serve on the DLCC's board:  Speaker of the House Paul Thissen and Senate Majority Leader Tom Bakk.  The DLCC’s man in Minnesota is David Griggs, a longtime Democrat operative who has worked for Bakk, among others.

According to records on file at the state’s Campaign Finance Board, DLCC has pumped $161,700 into its Minnesota operation since its June start.  Of that amount raised, the DLCC has disclosed that most of it ($99,000) was provided by the public employee union AFSCME.

Where did the money go?  A total of $160,950 went to pay invoices submitted by Project Lakes and Plains.  As the Star Tribune describes,

For years, Democrats have participated in a polling and research consortium, called Project Lakes and Plains, that allows them to share information.

The result is they read from the same playbook and that playbook says in the midterm election that Minnesota voters care deeply about education issues. 

In other words, Project Lakes and Plains is the entity that allows candidates, political party units, and outside groups to work together, without running afoul of election laws against coordination.  Here is a partial list of the money paid to Project Lakes and Plains in recent years,

Project Lakes and Plains Revenue
Client	2014		2013		2012		2011		2010
Alliance for a Better Minn.	164,279		22,500		255,000				124,000
MN DFL Party	10,000				81,000		59,500		163,000
House DFL Caucus	160,950				212,570
Senate DFL Caucus					121,930
DLCC for Minnesota	160,950
WIN Minnesota Federal PAC	14,900		9,000
Al Franken for Senate			9,000
Total (2010-2014)	$ 1,568,579

What is unusual about the DLCC situation is that the Democrats appear to have created an entity purely for the purposes of paying some of Project Lakes and Plains’ bills, invoices that had previously been paid by other party units.

Curiously, on the same day the DLCC created the Minnesota Fund, it created a separate Victory Fund PAC.  The Victory fund has taken in over $164,000 from just 10 individual donors.  Nine of the 10 donors are out of state and include the well-known Tim Gill and James Hormel.  The Victory Fund is still holding $147,000 in cash on hand.  Its only expenditures have been to send small amounts of money out of state, to Michigan and North Dakota.  So far, not a single dollar of the fund has been spent in Minnesota.

The largest donor—giving slightly more than half of the Victory Fund total—is computer scientist and businessman John Koza, who heads up the National Popular Vote effort.

It’s amazing the places you’ll go when you follow the money.

[Update:  It turns that the June 2014 creation of the two MN DLCC entities is no mystery.  It fulfills the terms of a settlement between the Campaign Finance Board and DLCC arising from a complaint filed two years ago by the state Republican Party.]

Doing Well By Doing Good, Part 4

Minneapolis Congressman Keith Ellison is making headlines for quitting the board of the embattled nonprofit Community Action of Minneapolis.

In quitting the board of the group accused of misspending taxpayer funds, Ellison is quoted as follows,

Ellison, a DFLer, said he had not attended any board meetings and appointed an alternate to serve on his behalf.  He said he did not vote on any financial matters.

In a statement, Ellison said the audit’s findings are “serious and require corrective action.”

It’s too bad that Ellison could not turn up to any Community Action board meetings.  If he had, he might have learned something about the nonprofit’s operations and its alleged mismanagement of tax dollars.

Back in January 2012, Ellison issued this press release asking for more Federal spending on the low-income energy assistance program, known as LIHEAP,

“LIHEAP is about more than just heating assistance for low-income families and seniors, though that alone would be reason to fight for it,” Ellison said. “This is about the fundamental American promise to care for those who need heat during the cold winter months. We don’t want our grandparents having to choose between fuel and food.”

As you will have guessed by now, the agency operating the LIHEAP program in Ellison’s district is Community Action.  It turns out that every dollar spent on luxury vacations and car loans to nonprofit executives could be used instead to help heat the homes of our seniors.

Doing Well By Doing Good, Part 3

Alleged financial mismanagement at a local nonprofit, Community Action of Minneapolis, has received a great deal of media attention since the release of a scathing state government audit of the group.  The state’s Department of Human Services is now considering cutting off funds to the agency as a result of its investigation.

The story has taken on a political angle, since the group’s board included two politicians—Congressman Keith Ellison and state Sen. Jeff Hayden—who have resigned from the group in recent days.

What is a Community Action Agency?
The Community Action Agency is a creature of LBJ’s War on Poverty, created 50 years ago to assist in delivering Great Society programs to the nation’s poor.  Community Action of Minneapolis is part of a network of agencies that covers the entire state.  The service offerings differ from agency to agency, but often include low income household energy assistance (utility bill subsidies), low-income home weatherization (insulation) and operation of the local Head Start program.

The Minneapolis agency was formed by the City in 1994 to administer certain Federal block grant programs.  It does not operate the local Head Start program.

Many readers of the Minneapolis Star Tribune’s coverage of this story may have been surprised to discover so many Democrat elected officials serving on the agency’s board.

It is actually required by law.  Not that they all must be Democrats, but that one-third of the board for each agency must consist of public officials, with the remainder split between community members and private sector leaders.  For this purpose, unions count as the private sector.

As it happens, Republican public officials are thin on the ground in Minneapolis, if Community Action were inclined to appoint one.  In areas dominated politically by Republicans, you will find public official board members at local agencies who are Republicans.

I have no idea what the original rationale was for having one-third of each agency’s board consist of public officials.  However, in today’s context, it provides a built-in lobbying team ready to advocate for continued (or expanded) taxpayer funding of the agency’s activities.

What is the Issue?
In Fiscal Year 2012, Community Action received 99.92 percent of its total revenue from government sources, according to the group’s IRS Form 990 income tax return.  Most of its funds come from Federal energy-related programs overseen by the state’s Department of Commerce.

An earlier audit (2012) performed by the Legislative Auditor found that the state’s,

Department of Commerce did not adequately monitor a local service provider [Community Action of Minneapolis] that inappropriately provided $1.35 million to households who did not meet the eligibility requirements for the crisis emergency benefits they received from the Low-Income Home Energy Assistance Program.

In the audit (2014) performed by the state’s Department of Human Services (DHS), the first finding involves inadequate oversight by Community Action’s board over the activities of senior management.  One recommendation made by DHS was to have Community Action fill the many vacant slots on the board.  The resignations of Ellison and Hayden, in that regard, are not helping the cause.

In the audit itself, the DHS audit cites specific transactions related to programs overseen by Commerce.

Further, many of the questionable items cited by DHS apply to the agency’s overall management.  The bulk of the dollars questioned by DHS involve dodgy allocations of overhead costs to a DHS grant that should have been allocated to Commerce-related grants, or never incurred in the first place (travel, bonuses, etc.).

With all of its revenue coming from taxpayer sources, Community Action must meet strict guidelines on cost allocation and administrative spending.

If DHS has lost faith in the ability of Community Action to execute its grants, then one wonders how Commerce cannot reach the same conclusion.  Should the discussion be expanded to include cutting off all government funding of this local agency?

And if government funding is withdrawn from Community Action, who would step in to continue to supply the services that its clients depend on?

To extend the discussion even further, if an agency has been around for 20 years (or 50) and has not yet accomplished its mission, then perhaps it’s time to rethink the delivery of these services or consider whether this particular mix of services will ever accomplish the stated goals.

In Part 1, I looked into some of the politics behind the latest controversy.  In Part 2, I looked into the connections with the 2009 Federal stimulus money.

Doing Well By Doing Good, Part 2

As the fallout continues over alleged misspending at the Democrat-connected nonprofit Community Action of Minneapolis, we should take a step back and look at how we got here.  [See Part 1 for more.]

Community Action is usually described as an anti-poverty agency.  In fact, its two biggest programs involve weatherizing (insulating) the homes of low-income households and signing up low-income households for energy assistance (utility bill subsidies).

During the early days of the Obama administration, these programs received huge additional funds from the 2009 Federal stimulus.

According to the nonprofit’s IRS Form 990 income tax returns, from Fiscal Year 2009 to 2010, the nonprofit’s revenue nearly doubled, from $9 million to $17.3 million.  Of that 17.3 million, a total of $13.2 million came in the form of government grants.  The 2010 revenue of $17.3 million fell to $15.8 million in 2011 and fell further to $11.1 million in Fiscal Year 2012 as the stimulus money was phased out.

Reporting in the Minneapolis Star Tribune indicates that problems at the nonprofit date back years, perhaps even decades.  If the propensity for alleged misspending was there before 2009, the opportunity certainly grew during the Federal stimulus years.

In the 2010 Fiscal Year, the group paid CEO Bill Davis (a former treasurer of the state Democrat party), $236,445 in total compensation.  That amount rose to $245,088 in 2011 and to $273,060 in Fiscal Year 2012.  As of 2012, the nonprofit is carrying $264,000 in deferred compensation on its balance sheet.

In 2010, the group spent more than $285,000 on travel, conferences and meetings.  That amount rose to $294,000 in 2011 and fell to $233,000 in 2012.

The Federal stimulus funds came and went, but the overhead costs that built up during these years remained.

According to its Federal tax returns filed during these years, the nonprofit lists a number of elected Democrats among its board members—Congressman Keith Ellison, state Sen. Jeff Hayden, and Minneapolis city council members Barb Johnson and Bob Lilligren—and not their designated alternates.

One of the less publicized aspects of the 2009 Obama stimulus was how it steered billions of dollars—not toward urgent infrastructure projects—but toward Democrat-favored constituencies and causes.  As day follows night, that sudden influx of money created opportunities for misspending of taxpayer funds.

In Part 3, I explore the origins of the nationwide Community Action movement.

Doing Well by Doing Good

One of my all-time favorite Simpson’s quotes comes from the early days of the Bill Clinton presidency.  Lisa and Bart were using Grandpa Simpson as a front for a money-making scheme.  Grandpa was happily cashing the checks.

Bart Simpson: "Didn't you wonder why you were getting checks for doing absolutely nothing?"

Grandpa Simpson: "I figured because the Democrats were in power again."

Just so.  After a generation out of power, Democrats re-occupied the Minnesota Governor’s Mansion in January 2011.  Long-suffering constituencies—starved of resources from anti-government, penny-pitching, results-oriented Republicans—went wild.  The Minneapolis Star Tribune reports,

Leaders of a Minneapolis nonprofit that serves low-income residents used taxpayer money to pay for a celebrity cruise and trips to Palm Beach and the Bahamas, according to a recently completed state audit.

Along with the trips, the audit by the state Department of Human Services found that the nonprofit’s leaders spent public money on bonuses, golf, spa treatments, furniture, alcohol and even a personal car loan.

The Star Tribune headline reads,

 

Audit scolds Community Action of Minneapolis for misspending hundreds of thousands of dollars.

The result needs to be much more than a scolding.  The Star Tribune notes that the Community Action board includes three members appointed by local Democrat politicians, including Congressman Keith Ellison, state Sen. Jeff Hayden, and a series of Minneapolis city council members.  Community Action proposed to spend 68 percent of its budget on administration and overhead next year, according to the Star Tribune.

It’s not the first time this month that Sen. Hayden—a Deputy Majority Leader—has been linked to a dodgy nonprofit operation.  Bill Davis, the head of Community action is a former treasurer of the state Democrat party.  According to the group's 2012 Form 990 income tax return, Davis received $273,060 in pay.

Oddly enough, the state agency investigating Community Action is the Department of Human Services.  Serving as DHS' Chief Compliance Officer is Gregory Gray.  According to his LinkedIn profile, Gray has held that post since March 2011.  Prior to that, Gray served as an executive with Community Action, and was previously elected as a Democrat member of the State House of Representatives.

[For his part, Democrat Gov. Mark Dayton says that he was very alarmed by the audit's findings.  But the same governor who cannot name a single program that should be cut from state government is somehow surprised when groups abuse his generosity with taxpayer money.  Although the state claims that it has been investigating the group for months, Dayton says he first found out by reading the Sunday paper.  The man in charge, but always the last to know.]

The mentality seems to be that, after decades of selflessly serving the public, the time has come for nonprofit executives to start helping themselves.  State government agencies, and the nonprofit entities they fund, need to be audited much more frequently than is currently the case, to root out waste and abuse.

But to paraphrase a lesson from my MBA education, you cannot ‘audit quality into’ a program.  Audits find problems after the fact.  What needs to change is the ‘me first’ attitude among nonprofit management and the politicians who vote them taxpayer money, no questions asked.

In Part 2, I dig deeper into the history of Community Action Minneapolis.  In Part 3, I get into the history of the nationwide Community Action movement.