Capitol View: April 23, 2012 Archive

Landlord files eviction notice against state Republican Party

Posted at 10:51 AM on April 23, 2012 by Tom Scheck (5 Comments)
Filed under: Political parties, State Government

The Minnesota Republican Party has been served eviction papers for its St. Paul office.

Boston-based Hub Properties filed an eviction notice in Ramsey County District Court last week because the party is $96,000 behind in rent.

"Landlord seeks to have Tenant evicted," the court notice said. "Because Tenant is still in possession of the Leased Premises and has failed to pay rent. Landlord further seeks to terminate any right of possession Tenant may claim."

The move comes just months after the party disclosed that it was nearly $2 million in debt.

Politics in Minnesota first reported the news about the eviction notice.

Republican Party Chair Pat Shortridge told MPR News that he's disappointed the landlord filed the eviction notice because the party is trying to work out a deal with its creditors. He said he doesn't think the Republican Party will actually be booted from its offices.

"Our landlord took the step of filing some court papers," Shortridge said. "They're certainly within their rights. I don't agree with their decision because I think we've making some progress on figuring this out. We're not going anywhere. We're not going to get evicted. We're not going to have any long-term issues. I think we're going to get this solved."

Shortridge says the news will be a minor problem for fundraising, but he said the party has been slowly erasing its debt.

Shortridge was elected party chair in December after Tony Sutton stepped down after receiving heavy criticism that he wasn't fully disclosing the party's finances (MPR examined the party's spending decisions under Sutton in this story). The party is working with the Federal Election Commission and the Minnesota Campaign Finance Board to ensure that any violations are handled properly.

Shortridge also sent this letter to Republican Party activists last week detailing some of their plans to straighten out the party's finances:

In light of recent press stories, I wanted to give you an update on where we are in the process of straightening out the Party's finances. Here's what we've done:

* First and foremost, we've amended our Federal Election Commission (2011) and Minnesota Campaign Finance and Public Disclosure Board reports for 2011 and 2010.

* The Financial Control and Oversight Committee, chaired very, very ably by Jeff Johnson, has looked into many of the questionable transactions from the past and will present a series of recommendations to significantly improve our processes, internal financial controls and oversight.

* We've continued to cut expenses, while continuing the process of restoring trust with our major donors and rebuilding our small dollar donor programs. Fundraising is improving and we're getting things done on a shoestring. You should be VERY proud of the party staff and our many key volunteers for going above and beyond the call to get things done.

* We have negotiated with our creditors so we engage in an orderly process for paying down our debt. In 95% of the cases, that process has gone smoothly. In a couple of cases, it has not gone as well as we'd hoped despite the best efforts of Mike Vekich, Bron Scherer, and me. One in particular that I wanted to tell you about is our negotiation with our landlord.

We have a long and very expensive lease which still has twenty-one (21) months to run. As you know, we have more space than we need and our monthly lease cost is in excess of current, comparable market lease rates. When I was elected on December 31, 2011, the rent had not been paid since August 2011 and as part of our continuing financial issues and our effort to re-negotiate the lease, no lease payments have been made in 2012 to date.

Rather than continue discussions with us, the landlord chose to exercise its rights and filed a notice of eviction in Ramsey County court. We're not going to be evicted, and at the same time, are continuing to negotiate on the back payments as well as on a lease that better fits both our space needs and our budget.

While this is a situation none of us wants, it's part of the rebuilding process. No one ever said it would be simple or easy or without bumps along the way. But I wanted you to hear about it from me rather than from any other source.

* The bottom line: We're in better shape than we were three months ago, but not as good as we'll be three months from now. It's a daily process that requires hard work and common purpose.

Please let me know if you have additional thoughts or questions. I'll see you in St Cloud, if not before.

Pat Shortridge, Chairman
Republican Party of Minnesota

UPDATE: Here's the first four pages of the eviction notice:

Eviction Notice

Common Cause IRS complaint challenges ALEC's tax-exempt status

Posted at 2:45 PM on April 23, 2012 by Catharine Richert
Filed under: State Government

Common Cause has filed a whistleblower complaint with the Internal Revenue Service challenging the American Legislative Exchange Council's tax-exempt status.

"ALEC is a corporate lobby front group masquerading as a public charity," said Common Cause president Bob Edgar.

ALEC is an organization based on conservative principles that brings together state legislators and corporate representatives to draft model legislation on subjects ranging from tort law to climate change. Lawmakers pay a nominal fee to join while companies pay thousands. While membership is open to lawmakers from all parties, most members are conservative.

Common Cause, a liberal group, contends that ALEC's primary purpose is lobbying. Non-profits organized similarly to ALEC under the tax code are allowed to lobby so long as it does not constitute most of the group's activity.

ALEC lawyer Alan Dye says the organization doesn't lobby and the complaint has no merit.

Common Cause argues that documents acquired through state-level data requests and an anonymous source conflict with Dye's account.

Those documents include legislation-specific talking points drafted by ALEC and circulated among state lawmakers, scorecards to track the progress of specific legislation, and model press releases.

"When you do those sorts of things, that's the definition of lobbying," said Eric Havian, who is representing Common Cause in its complaint. His firm, Phillips & Cohen LLP, routinely represents whistleblowers.

Dye says the complaint is a partisan attack.

The complaints "ignore a lot of the law that's applicable here, distort some of the other law that they do talk about, and are seemingly to me non-objective," Dye said. "They're screeds. They're not really legal documents."

Dye says ALEC abides by legal lobbying limits, but that the organization otherwise free to communicate in ways that are not covered by those definitions, principally disseminating non-partisan research and analysis.

"Everything ALEC does is intended to take into account all points of view, and to result in a complete analysis, and is all based upon non-partisan research and analysis,"Dye said.

Havian said that ALEC's corporate members are violating the tax code, too. If a someone representing a business has lunch with a legislator, it's a lobbying expense and therefore not tax deductible, Havian explained. That exact same meeting can happen at one of ALEC's conference, but the company can write off the expense of travel, dues, and membership because ALEC bills itself as an educational organization.

Havian said it could take the IRS years to investigate the Common Cause complaint.

ALEC has traditionally kept its membership and work close, but it's been getting wide media attention in recent weeks after more than a dozen companies including Coke, Wendy's, McDonalds, and Kraft Foods, decided to discontinue their ALEC membership. Those companies have been singled out by ColorOfChange, an organization that has linked ALEC's support for a bill that would expand the use of deadly force with the death of Florida teenager Trayvon Martin.

ALEC announced last week that it would end the task force key in proliferating that legislation as well as bills that would require photo identification at the polls.

Minnesota-based Xcel Energy has confirmed that it has an ALEC membership, but that it only focuses on energy-related issues.

UnitedHealth Group is reportedly a member as well.

Other major Minnesota corporations, including 3M, Cargill and Target, say they are not.