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State regulators slap national Democratic group with heavy fine
by Laura McCallum, Minnesota Public Radio
December 21, 2004

The state Campaign Finance and Public Disclosure Board has levied the largest civil penalty in its history against a national Democratic political group. The board found probable cause that 21st Century Democrats broke Minnesota campaign finance laws. It fined the group a total of more than $300,000. The fines aren't related to a Republican complaint against DFL House Minority Leader Matt Entenza, who contributed $300,000 to 21st Century Democrats during the campaign.

St. Paul, Minn. — 21st Century Democrats has had a presence in Minnesota for several years, and worked on voter turnout and DFL House races in Minnesota this year. Since 2001, the group's Minnesota arm received 25 contributions totaling $334,000 from the national 21st Century Democrats.

The problem was that the national organization didn't register as a political committee in Minnesota, which meant that it couldn't contribute more than $100 to the Minnesota committee unless it complied with state reporting laws.

The chair of the Campaign Finance Board, Will Fluegel, says the board decided to fine the Minnesota committee nearly $293,000, the amount by which the contributions exceeded 100 dollars in the last two years. He says it's the largest fine he's aware of.

"But it's also important to note that it is the same proportional fine that we have traditionally given over the years for this type of violation, which is one times the amount of excess, it's simply that cumulatively, that amounts to a considerable fine," Fluegel said.

The board also fined the national 21st Century Democrats $25,000, or $1,000 for each of the 25 contributions. Fluegel says it doesn't appear that the organization intentionally violated the law.

In a letter to the board earlier this month, the group's lawyer blamed "inadvertent error," and "accounting and administrative lapses."

Officials with 21st Century Democrats declined an interview, but issued a statement saying they're reviewing the board's ruling.

Hamline University professor David Schultz, who has written extensively on campaign finance issues, says he's not surprised by the hefty fine.

"Minnesota takes very seriously its disclosure laws. And there's been a lot of concern that outside money could adversely affect the Minnesota political process. And so what the state campaign practices board is really doing here is acting within its authority to say we are going to hold people responsible for the amount of illegal money that they put into the state," he said.

Schultz says it appears that 21st Century Democrats either got bad legal advice or was trying to circumvent reporting laws. Republicans were quick to point to the latter possibility. They've filed complaints with the Campaign Finance Board and the Federal Election Commission questioning the legality of $300,000 in campaign contributions to the group by House Minority Leader Matt Entenza.

Republican Party spokesman Randy Wanke says the board ruling strengthens the Republican complaint.

"It opens the door to greater scrutiny into Matt Entenza's relationship with 21st Century Democrats, and exactly how DFL House candidates benefited from 21st Century Democrats' involvement in their campaigns," according to Wanke.

Entenza has said he welcomes an investigation because his contribution was entirely legal. It's not known when the board will act on the Republican complaints.

The ruling against 21st Century Democrats gives the organization 30 days to pay the fine, barring an appeal. The board could also levy additional fines, if other irregularities are found in reports covering the final two months of the year.

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