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.

Fire Sale in Detroit City

The American Interest's Walter Russell Mead is calling attention to the bankruptcy sale now underway for the City of Detroit.  The City is looking at selling some of its museum's priceless art collection.  (Priceless?  We'll find out soon.)

How did it come to this?  Mead explains,

"This is another grim reminder of just how destructive Detroit’s corrupt machine politics have been.  At one time, Detroit was the manufacturing capital of America and one of the country’s great cities; today it’s trying to stave off a kind of modern-day bonfire of the vanities."

Those same liberal/progressive policies that led inevitably, inexorably to Detroit's bankruptcy are the policies we are adopting in one-party-rule Minnesota.  Remember, Michigan was years ahead of us in forcing the unionization of home child care providers.

We Need a Reform Conservatism

Ross Douthat, the New York Times’ only conservative columnist, posted a helpful piece today on “What Is Reform Conservatism?  An agenda for an almost-movement.”

I met Ross a few weeks ago when he was in town to give a talk on his latest book, before a packed house.  I think he is someone we should be listening to.

Ross concedes in his post today that the idea of reform conservatism “has not exactly caught fire within the G.O.P.”  When you are fighting against the daily catastrophes brought on by one-party rule—as we are in Minnesota—or the too-many-scandals-too-count in Washington, it’s tough to look longer term at ideas worth implementing when (not if) we are back in power.

I’m optimistic that—in Minnesota—we may be back in 2014, so now is the time for building a consensus around a positive agenda for change in state government.

Last month I made a few suggestions to get started on a reform agenda for Minnesota.  Today, Ross offers a six point agenda that is useful as a starting point for discussions.  I wish he would have included a point on education reform (as I did) but that is more a quibble than a criticism.

More useful for the idea of establishing a conservative reform agenda are the two premises Ross’ articulates as underlying his thinking on the subject.

First, Ross discusses the need for “making family life more affordable, upward mobility more likely, and employment easier to find.”

Second, Ross names that the biggest hurdle to making that happen,

The existing welfare-state institutions we’ve inherited from the New Deal and the Great Society, however, often make these tasks harder rather than easier:  Their exploding costs crowd out every other form of spending

I’ve made exactly that same point before.  You would think that we would share common ground with those on the other side of the fence who genuinely want to help the needy.  The No. 1 reason why there is not more money to help the neediest?  Because of the huge share of our budget devoted to programs that we know don’t work.

Ross’ conclusion,

So we don’t face a choice between streamlining the welfare state and making it more supportive of work and family; we should be doing both at once.

Just as important are the items that Ross lists that should not be part of a conservative reform agenda:  no cap and trade, no more tax increases, etc.

I agree with the idea that we need something of a conservative reform movement.  Let’s get started.

The Dems' Sales Tax Shakedown

In the previous edition of The Column, I mentioned the 400-page tax bill passed by the Minnesota state legislature in the waning seconds of their 2013 session.  As everyone understood, we are still unpacking all the unpleasant surprises within the bill that nobody read.  The latest victim is the state's warehousing industry.

The Minneapolis Star Tribune reports today that "Warehousing firms cry foul over new Minnesota taxes,"

"Most Minnesota businesses dodged a sweeping expansion of the sales tax, but not logistics firms.  The final version of the tax bill, approved moments before the end of the legislative session last week, included an expansion of the sales tax on a handful of unlucky industries. One of them is warehousing and storage."

It seems that Minnesota had not previously taxed warehouse services, nor has any other state.  The reaction of the state’s warehouse industry is to consider decamping to less hostile locales, such as Des Moines and Kansas City.

Reaching the Low Information Voter, Part 2

In the first part of this series, I explore Minnesota’s current political landscape and suggest some messages crafted to reach democracy’s newest key demographic: low information voters.  In this part, I dig deeper into what low information voters actually know, and how to approach them.