Playing Hardball With Soft Money

Robert Cummins has some money sitting around. He's president of a $2 million-plus Eagan-based company called Fargo Electronics and lives in a $400,000 house in West Bloomington, the posher half of the state's largest suburb.

Cummins, like most of the people who vote in Bloomington, is a Republican. In a year when the only election for miles around was for mayor and City Council, he gave $300 to each of four GOP-endorsed candidates, and his wife wrote checks for the same amount. They might have wanted to give more, but new campaign finance rules, approved with much fanfare in the 1993 legislative session, would have prohibited the campaigns from accepting.

But the legislators left a place for those big, fat checks to go. Political parties, unlike individual campaigns, can still collect donations in any amount; in the first 10 months of this year, Cummins gave more than $45,000 to the state GOP. The party, in turn, spent around $25,000 to support the campaigns of Bloomington candidates in the last four weeks before the election. The same campaigns raised a mere $20,000 between them during the entire year.

Of course, Cummins's largesse and the party's spending in Bloomington couldn't have had anything to do with each other; that would be "earmarking" of contributions, which is illegal. A complaint filed with the Hennepin County attorney by some Bloomington Republicans and the Independence Party alleges just that. But while supporters say the circumstantial evidence is plain, there is no smoking gun, no memo, no overheard conversation. The complaint also claims that the party's rough-and-tumble tactics in the Bloomington campaign violated election law. County staffers are investigating, but won't comment.

But regardless of what happens on the legal front, the saga of Bloomington '95 is worth keeping in mind--as a preview, if nothing else, of 1996. Pundits may worry over the disrepute of the two-party system and talk wishfully of diminishing big money's influence. But wealthy donors and political professionals have long since found another game plan.

The Bloomington story started almost a year ago, when three-time mayor Neil Peterson accepted an appointment to the Metropolitan Council. As his successor he designated Coral Houle, the council's most experienced member and a fellow Republican. But when party delegates gathered in May to endorse a mayoral candidate, Houle didn't find much favor: She was pro-choice, people grumbled, she'd occasionally voted with the City Council's lone Democrat, and she hadn't appointed enough loyalists to city office. The endorsement went to Bill Peterson (no relation to Neil), a lawyer and former state legislator.

A week later, on May 24, Bob Cummins made his first two contributions to the state party in 1995--$1,000 and $9,000, delivered in two separate checks. (All of Cummins's political donations come in amounts less than $10,000; it's hard to say why, except perhaps to avoid the additional paperwork that comes with transaction of more than $10,000.)

By all accounts, Peterson and the slate of City Council candidates allied with him--all Republicans, all but one challenging other Republicans--ran a low-key campaign before the September primary. After all, they had the GOP endorsement in the state's most Republican city, as well as Newt Gingrich's coattails: They even wrote up a "Contract with Bloomington," promising things like "making city fiscal reports more taxpayer-friendly to read and understand."

In the primary, they got flattened. And things didn't look too good down the road. Houle had wide name recognition, support from the likes of Gov. Arne Carlson, and the endorsement of the Independence Party. She also had $22,000 in the bank, including $7,000 of her own money; Peterson's campaign had $4,300 to its name.

Enter the state party. A couple of weeks after the election, state GOP chairman Chris Georgacas was quoted in the Bloomington Sun-Current as saying that his organization would throw a little weight around in Bloomington. They'd help Peterson and his allies "say why they are better than the incumbents," and provide "serious financial support."

On September 27, the Bloomington IR Volunteer Committee (a local party unit, not to be confused with the individual campaign funds) started writing checks. It paid out $5,325 in one day; just three weeks earlier, it had had $773 in the bank. That same day, Bob Cummins gave $15,000 to the state party, in two checks for $7,500 each. And two days later, the Bloomington committee recorded a $12,000 contribution from the state party. "It's obvious that someone called and said, 'Hey, we got the money, go ahead and spend it,'" says Amy Grady, who managed Coral Houle's campaign.

Not so, says Georgacas. "[The allegation] is completely without substance. The individual in question has been extraordinarily generous to the party, but there has been no earmarking whatsoever." Besides, he adds, the party frequently gets involved in municipal elections. "Two years ago, we put a lot of money into some highly competitive races in Minneapolis and St. Paul. This time around, we did it in Bloomington. There's nothing unusual about it." According to reports filed with the Hennepin County attorney's office, the party gave no money to any local unit except Bloomington this year.

Regardless of its source, the local party's new wealth bought some heavy artillery. David Hoium, whose claim to fame to date had been his work with Leon Oistad on Jon Grunseth's ill-fated gubernatorial campaign in 1990, was hired to spearhead the last-ditch effort. (When asked whether he was brought in by the state party or the city committee, Hoium shrugs audibly: "What's the difference?") Oistad, incidentally, had recently been slapped with a $35,000 IRS lien, had moved to Bloomington, and was working on one of the GOP-endorsed City Council campaigns. Hoium insists that his and Oistad's roles were separate--he got paid to put together a "party operation," Oistad was volunteering for a candidate--but that distinction seems to have been lost on most of the people involved. They saw the two as a team who swept in, took control, and turned the campaign into a slick, professional operation that pulled no punches.

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