here for PDF format
of Meeting with David Schultz
Civic Caucus, 8301
Creekside Circle, Bloomington, MN 55437
Thursday, June 14,
professor, Graduate School of Management,
Johnson, chair; Chuck Clay, Paul Gilje, Jim Hetland, Jim Olson (by phone),
and John Rollwagen
Context of the meeting--As
part of its process of learning about election-related issues, the Civic
Caucus today is concentrating on how political campaigns are financed in
Welcome and introduction--Verne
and Paul introduced David Schultz, professor, Graduate School of
Management, Hamline University. Schultz is author of "Price of Admission
2006: Political Money Trends in Minnesota", his biennial analysis of
official state campaign finance data.
Schultz has met
previously with the Civic Caucus and as a core participant receives all
information distributed by the Civic Caucus. At Hamline University,
Schultz teaches doctoral and masters-level students in public, non-profit,
and business administration. He also holds appointments at the Hamline in
the Department of Criminal Justice and Forensic Science and at the
University of Minnesota law school where he teaches election law, state
constitutional law, and state and local law. His is also a senior fellow
for the Institute of Law and Politics at the University of Minnesota Law
Comments and discussion--In
Schultz' remarks and in discussion with the Civic Caucus the following
points were raised:
1. Money is driving the impasse in Minnesota
politics--A central conclusion in Schultz' analysis is that the
DFL and Republican officeholders are finding it almost impossible to
compromise on legislation, because each side is so heavily financed by
entrenched interest groups. It's sort of a political "cold war", he said,
with officeholders feeling beholden to the interest groups that elected
and, more importantly, funded them, and, therefore, are unable to modify
positions, The small individual donor is a minority player in the
state's political and policy process, he said. In 2006, more than 70
percent of all campaign-related contributions came from PACs (political
action committees), lobbyists, and big individual contributions (more than
include lobbyist-principal expenditures on the Legislature, in 2006 the
money spent by special interests to affect the legislative process totaled
nearly $83.8 million, or about $419,914 per legislator.
2. Source of data outlined--Since
1999, Schultz said, he has been receiving all the data collected by the
Minnesota Campaign Finance and Public Disclosure Board, including sources
and amounts of contributions and detailed expenditures.
3. "Hard" and "soft" money contributions
contributions are given directly to candidates running for public office
and are the most regulated, subject to disclosure and contribution
limits. "Soft" money is subject to less demanding disclosure
requirements, is subject to no contribution limits, and is given to PACs,
parties or legislative caucuses. In 2006 in Minnesota, $38.5 million, or
78 percent of total contributions, was "soft" money, and $10.6 million, or
22 percent, "hard" money. Contribution limits enacted in 1994 have been
rendered virtually meaningless by expansion of soft money. Soft money is
given by all types of contributors, big and small.
4. Importance of "independent" expenditures--Independent
expenditures represent money spent by political action committees,
political parties, and legislative caucuses to influence specific races or
ballot propositions. Until 1999 Minnesota political parities and
legislative caucuses were prohibited from making independent expenditures
on behalf of candidates, but in that year the ban on such expenditures was
struck down as unconstitutional.
Independent expenditures in 2006 in Minnesota
totaled $14.3 million, of which $8.4 million was spent by the political
parties and legislative caucuses, and $5.9 million by political action
committees. Of the $8.4 million about two thirds was spent by DFL-affiliates,
and one-third, Republican. According to Schultz, party and caucus
independent expenditures have grown rapidly and are one of the most
important forces driving up the cost of political campaigns in close
races. These expenditures are also a prime source of the negative attack
ads one increasingly finds on television.
5. Ability to mask special interest money--Special
interest groups such as political action committees, lobbyists, and big
donors can write checks to a local party unit that then will turn around
and write checks in the same amount to the state party or caucus.
type of masking, Schultz said, occurs among lobbyists who represent many
clients. Such lobbyists make contributions to state legislative
candidates from income received from those clients. However, it's not
possible to determine which clients are behind those contributions.
6. Total spending to achieve political
influence--Schultz said that
in 2006, more than $132 million was spent for political purposes or to
achieve political influence. Of that amount, $21.6 million (16.3 percent)
were expenditures by candidates; $58.8 million (44.1 percent),
expenditures by political action committees, political parties, and
legislative caucuses, and $51.9 million (39.2 percent), lobbyist-principal
7. Goals for limits on influence have been
dramatically exceeded--In 1994
the Legislature adopted the "Marty reforms", named after Senate author
John Marty. These reforms had an objective of establishing a limit on
contributions from political action committees, lobbyists and big donors
at 20 percent of all contributions to candidates. That percentage, in
fact, today is about 70 percent, when you include soft money, which
illustrates that the law sponsored by Sen. Marty no longer works.
Schultz firmly believes that economic power translates into political
8. Schultz proposals--Schultz
would expand from $50 to $75 the allowable contributions individuals now
can make to political campaigns and be entitled to a full-refund on their
income taxes. Political parties and legislative caucuses would forfeit
participation in the refund program if their independent expenditures
exceeded $2,000 per legislative candidate.
Schultz has outlined other possible changes:
limit on contributions to political parties and legislative caucuses.
of 20 percent on the total contributions any political party, party unit,
or legislative caucus may take form lobbyists, political action committees
or big donors.
regulate attack ads, any ad distributed within 60 days of a general
election or 30 days of a primary--even financed by independent
expenditures--would be subject to hard money contribution limits under
--Immediate, real time disclosure of all campaign contributions or
expenditures, including independent expenditures, in excess of $1,000.
Unfortunately, Schultz said, the very reason why changes need to be
adopted is why they will not be, because Minnesota's
political process is captured by money.
9. Impact of money on 2006 races in Minnesota--Schultz'
data revealed that the DFL received 57 percent of money donated to
legislative candidates, won 55 percent of votes cast, and 64 percent of
legislative seats. Tim Pawlenty received 54 percent of all donations to
gubernatorial candidates, compared to 22 percent for Mike Hatch. Schultz
believes the money advantage was decisive in the outcome of the elections
(DFL sweep of the Legislature, and the Pawlenty victory.) More
importantly, 76% of Pawlenty’s money came form PACS, lobbyists, and big
givers, and a majority o the money given to legislative candidates was the
same. Minnesota’s elections and policy process is that embedded in a
context of special interest money that makes it difficult for the public
interest to be secured.
legislative leaders misinterpreted their election victory, he said.
Because they captured 64 percent of legislative seats, they thought they
could push through a more aggressive legislative agenda. However, they
didn't fully realize that the DFL candidates received only 55 percent of
10. Difficulty in receiving media coverage--Schultz
said that despite his releasing a news release of his report and visiting
reporters at the Capitol in early May on the financing of 2006 elections
in Minnesota, he received no attention in the electronic or print media.
might be done to improve media coverage, Schultz said many people expect
that one of the two metro dailies in the Twin Cities will go out of
existence in a few years. He believes that the message needs to be taken
to the new media--Internet-based.
11. Other reasons affecting 2006 elections--In
response to a question Schultz said that negative public attitude toward
President Bush was a contributing factor to DFL legislative victories in
Minnesota. Also, he said, DFL candidates were attracting more swing
voters and moderates. Early on in her campaign, he said, Amy Klobuchar
found an issue that appealed very much to women (supporting a second or
third day in the hospital following giving birth). Klobuchar immediately
built an insurmountable lead over Mark Kennedy.
12. "Strategic" investments by special
interests--If you are a
special interest group, you look at Minnesota elections very
strategically--just as an individual looks at personal investment
options. You make some gifts to individual candidates, but you make
significant gifts to the parties (because of their platforms) and to the
legislative caucuses (because of their setting the agenda for taking up
13. Relative importance of the money issue--Asked
where he would rank campaign finance relative to other election-related
issues that the Civic Caucus is working on, Schultz said it is in the top
one or two. He quoted Archibald Cox who said that the rules about
contributions are the rules about the rules of the game. The second
issue, Schultz said, is legislative redistricting. Asked why the public
is not strong in its outcry against the present system of campaign
finance, Schultz said other issues out there, such as the Iraq war, are
deemed more important.
redistricting issue needs to be addressed he said. He supports some kind
of commission replacing the role of the Legislature. Unfortunately, Ron
Abrams, an advocate for change, is not in the Legislature any more.
14. Future of the precinct caucus--Asked
about Barry Casselman's comments last week on doing away with the precinct
caucus, Schultz replied that looking at the precinct caucus, the political
convention, and the primary election, one of the three has to go. The
system is antiquated, but everyone gets teary-eyed when you talk about
15. Support for instant runoff voting (IRV)--Schultz
said he supports IRV because it gives a broader range of choices to
voters. He thinks IRV will help elect some Republicans in St. Paul,
which he believes desperately needs a two-party system.
16. Changing selection of judges--Schultz
would replace elections of judges entirely with appointment and a
confirmation process, but with no appointments for life. He thinks the
Quie proposals that incorporate a retention election represent a
compromise to satisfy those folks who want to retain some kind of election
17. Role of the Civic Caucus--Asked
about the future of the Civic Caucus, Schultz said he thinks the Civic
Caucus does a good job of gathering and distributing information but "an
incredibly lousy job" of translating the information to advocacy.
behalf of the Civic Caucus, Verne thanked Schultz for meeting with us this
The Civic Caucus
is a non-partisan,
tax-exempt educational organization. Core participants
include persons of varying political persuasions, reflecting
years of leadership in politics and business.
A working group meets face-to-face to
provide leadership. They are Verne C. Johnson, chair; Lee
Canning, Charles Clay, Bill Frenzel,
Paul Gilje, Jim Hetland,
John Mooty, Jim Olson, Wayne Popham and John Rollwagen.
Click Here to
see a biographical statement of each.