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.

First Hoium and his team took care of the basics, hiring a software consultant, a telemarketing specialist, and a bevy of paid phone bankers. (Most everyone in politics prefers paid phoners to volunteers by now; as one strategist notes, they show up on time and "stick with the script better.") Then they moved on to the issues.

Hoium didn't, he acknowledged, know much about Bloomington politics--he lives 100 miles away, in tiny Foley--but he knew the issues that push voters' buttons. Municipal finance, which the candidates had persisted in discussing, wasn't one of them. Low-income housing might hit closer to the spot. Bill Peterson's campaign produced a four-page pamphlet blasting "ultra-liberals" like state Rep. Myron Orfield: "First they force us to send them our taxes, and now they want us to take some of their inner-city problems." There was also a support-the-endorsement rally featuring Rudy Boschwitz, who had given $50 to Coral Houle's campaign, but was now urging voters to help "build the local Republican base that is essential to victories all over Minnesota."

But what Hoium really needed were some good "niche" issues, the kind that get tempers boiling and loyal voters turning out. He got the list of everyone who gave money to Minnesota Citizens Concerned for Life, and everyone who took out a doe permit from the state. To the hunters, a letter went out noting that Houle had voted to "ban gun shows at the Bloomington Armory.... What will come next? Gun registration? Confiscation? A city ban on gun ownership?" (Actually, the decision had come in response to neighborhood complaints about traffic, but a vote is a vote.) For the pro-lifers, there was a flier inviting them to "cast your vote for life"; there were no city issues involved, but the flier noted that "without life, every other issue is meaningless."

The Houle campaign was flabbergasted. So were some of the Republican candidates. Doug Kempf, who was running for the City Council on the GOP slate, says he never wanted guns and fetuses brought up. "I feel like my campaign got totally jerked out of my hands. I ended up taking positions in public that I wasn't consulted about. I didn't know what the plan was going to be; I was told nothing about it despite persistent questioning." (Hoium says he offered Kempf to have his name taken off one of the mailings, but Kempf declined.)

On Election Day, the Republican endorsees got trounced again. Of the four, only incumbent City Council member Peggy Ramthun was elected. The party effort, Hoium estimates, cost about $25,000; reports on whether any more than the first $12,000 came from the state GOP won't be due until February. The information filed so far does show that Bob Cummins sent the state party another $20,000 on October 27, 10 days before the election. That brought his total to $45,000, more than anyone else gave the party this year (the second-largest contributor gave a mere $15,000) and about seven times what he contributed in 1993 and '94.

Chances are no one except Cummins will ever know whether his "extraordinary generosity" this year had anything to do with the battle in his hometown. But what is clear is that his donations fit a larger picture. When the new campaign finance laws were passed two years ago, lots of people around the Capitol were mumbling about how political money is like water: Dam it up in one place, and it will find another place to flow.  

That place, it seems, is with the major parties and their legislative front offices, the House and Senate IR and DFL caucuses--six organizations in all, none of them encumbered by contribution or spending limits, all of them raising money hand over fist. In all, the state Republican Party reported some $1.3 million in income for the first 10 months of 1995--a nice figure for an off-year, but only half the total for 1994, when legislative and Congressional elections were going on and national Republican committees sent in checks for as much as $100,000 at a time. Also in '94, the state House IR caucus reported raising $1.1 million, more than double its total for the previous election year; givers included party maven Wheelock Whitney ($25,000); Minneapolis investment banker James Jundt ($20,000), and retired Honeywell exec James Binger ($20,000).

Democrats, though in the majority, had less luck with the very rich; still, the party tallied $1.5 million in contributions in 1994, up from $1 million in 1992. The DFL House caucus made about half as much as its Republican counterpart for a still-respectable total of $580,000; two years before its take was only $320,000. Big givers included the Minnesota Education Association, which wrote a check for $65,000; the trial lawyers' political action committee ($25,400); and the Realtors PAC ($28,500).

All this money, of course, has to go somewhere. For the last couple of decades, the most you saw from a political party in a typical election was the sample ballot. Parties and caucuses might also run a few polls, recruit candidates, pay field workers, and do some general get-out-the-vote phone banking and advertising; most of the specific mudslinging was left to the individual campaigns. What's more, legislative races weren't that hot to begin with; most lawmakers came from what the pros call "broomstick" districts, where voters would elect anyone or anything that had the party seal of approval.

Now, all that is up in the air. Already, big-time spending by the Republican party and the caucuses is given credit for giving the GOP 13 new House seats in 1994. Republicans consider next year their chance of a lifetime to capture a majority, perhaps in both houses. DFLers, for their part, will fight tooth-and-nail for their already tenuous hold on power.

And it turns out that, when you look closely at the laws, there's really no limit on what parties can do--as long as it benefits three or more candidates. Any fewer, and the activity will be counted against their individual spending limits, which defeats the purpose. Three, as it happens, is the number of legislative seats in each Senate district, the parties' "basic political organizing unit:" One candidate for Senate, two for the House. Voila.

So, says David Hoium, forget about getting money out of politics: Bloomington was just the beginning. "You'll see a great deal of this in '96. And on both sides--heck, the Democrats wrote the law. This is going to be standard procedure."

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