Give him this, Republican candidate for governor Jeff Johnson stayed on message until the very end. “The fight is not going to end tonight,” he told supporters at the Loews Hotel in Minnesota after conceding the race to Gov. Mark Dayton. 

The fight goes on, he said, “So that every kid has access to great education… so that health decisions are made by patients and doctors… The fight needs to make the people in government understand that their job is not control and regulating … but to actually serve the taxpayers who pay their salaries.”

But Johnson made it clear the fight was not going to be a personal one — and that he may be done with political office. “I love my job on the [Hennepin] county board and I see myself back in the private sector at some point down the road,” he told reporters.

Johnson gave his concession speech about 10:30 last night when he was ten points behind Dayton, a gap that eventually narrowed some.  While congratulating Dayton on a well-fought campaign, he noted what he considered insurmountable advantages possessed by the incumbent. 

“We got outspent eight to one by outside money. I think we held our own with the internal money,” Johnson said.  “And Mark Dayton’s been in Minnesota politics for almost 40 years so overcoming that name recognition was really difficult.”    

Johnson predicted correctly that the race would tighten as voters were counted in greater Minnesota.  As of Wednesday morning, the margin of Dayton’s victory was six points.  But Johnson discounted speculation that he would run for governor again. 

“Oh, no,” he said. “We’re going to Disney World in a few weeks.  That’s the only thing on my mind right now.” 

Newly re-elected Gov. Mark Dayton didn’t so much extend an olive branch as wave it in the general direction of the Republican leadership that takes control of the Minnesota House in January.

At a news conference Wednesday, Dayton was refreshed, relaxed, and pointed about how he intends to work with the Republicans who will have an 11-seat house majority.  

“I’m going to be as conciliatory as I can be and I’m just pointing to the past,” he said, referring to the government shutdown in 2011, the last time Republicans had control of the legislature.  “I think it’s a real question mark of whether they are willing to assume the mantle of leadership.”

On tax increases and MNsure — the two centerpiece issues of the Republican campaign against him — Dayton indicated there was room for discussion, with strings attached. 

“It’s not going to happen,” he said when asked about the Republican campaign theme of repealing MNsure.  “I hope the Republicans … who’ve just been throwing rocks at it the past year will decide to step in and offer constructive ways to improve it.”

As for tax cuts — specifically the high-income tax increase that Republican candidate for governor Jeff Johnson wanted to roll back — Dayton had a counter-offer. 

“If you want to cut taxes or not raises taxes then you’ve got to deal with other side of the financial ledger. Where are you going to cut?” he said. “I think that will be the acid test.” 

Lt. Governor-elect Tina Smith offered a more nuanced approach to leading in a divided government. “We need to figure out how to govern with the legislature that is there and we will put all our energy into doing that,” she said, as Dayton offered her the podium just two minutes into the news conference.

Dayton made it clear that Smith, his former chief of staff, would be a prominent figure in the administration. At the news conference, Smith handled reporters’ questions directly and offered second opinions without the customary deference toward her boss.

But it was Dayton in control, at least for an hour. “I’m not going to give up everything I believe in,” he said in response to multiple questions about a remade Republican House. “I issue a friendly challenge to the Republican majority in the House and the leadership there to be more accommodating than they were a couple of years ago.”

“I told my staff it’s going to be Dayton unbound.”

The future of the Republican Party of Minnesota, based on the results of last week’s elections, is either a) sound and poised for future gain, b) in flux, or c) still in doubt.

The correct answer — if there is one — depends on who you believe has the smartest analysis of the election: the current chair of the party; a former chair of the party; or the chairman of the Tom Emmer’s successful bid for congress.

Let’s start with the current chair: Keith Downey, who views Tuesday’s results as evidence that Republicans have regained their political footing. “The turnaround is basically over and the comeback can begin,” he said. “Arguably, it’s already started with the House.”

The Republicans’ gain of 11 seats in the Minnesota House has put them in the majority, a victory that Downey ascribes to solid political strategy — and a DFL Party that overplayed its hand. “The Democratic message was so Minneapolis-centric, it was deemed for what it was,” he said. “I think there was a significant check on Democrat power and a restoration of balance here in Minnesota and nationally.”

Downey interprets the DFL victories at the top of the ticket to the power of incumbency.  “Well-funded incumbents prevailed,” he said.  “And Al Franken outspent Mike McFadden five to one, an enormous amount to protect his seat.  When the dust is settled, I think we’ll see that Mark Dayton outspent Jeff Johnson three to one.”

Downey had a tougher time explaining a recurring Republican weakness, though: losses of legislative seats in the suburbs.  All the party’s gains but one came from greater Minnesota. “I think in these individual suburban districts, we will look at the individual races and see why it went the way it did,” he said.

But David FitzSimmons, Emmer’s campaign director and a former legislator, offers a different take. He believes the suburban losses have more to do with bigger forces. “It’s a tale of two results,” he said. “They [Republicans] did well connecting with greater Minnesota voters, but you could make the argument it wasn’t so hot with suburban voters.”

It’s part of larger demographic shift that Minnesota Republicans will have to confront, FitzSimmons said. “We’re catching up to the rest of the country in that Republicans dominate outside of the main urban areas,” he said.  “But the urban areas are the ones that are growing so that’s the challenge on the Republican side.”

Rep. Keith Downey

In order to do that, though — to tap into that growth, to spread the conservative message, to become a governing force — Republicans must develop the financial infrastructure to match the Democrats’, said former GOP party chair Pat Shortridge. In particular, Republicans must create something akin to Alliance for a Better Minnesota, the progressive “outside group” that funnels millions to DFL candidates. “We have now gone three elections cycles with no counter to Alliance for a Better Minnesota, and this is just unforgivable,” Shortridge said.

The right model, he suggests, is the Minnesota Jobs Coalition, which attacked Dayton earlier in the year but switched its focus to helping electing the House Republicans. “Outside [conservative] groups have got to follow along the lines of the Jobs Coalition – they have to be more political,” he said. 

Such a group may not be a traditional business coalition, Shortridge added, because “Folks in the business community are worried about access. [Alliance for a Better Minnesota] is not worried about access. They are worried about winning.” 

In separate interviews, Shortridge, FitzSimmons, and Downey all offered somewhat similar prescriptions to the success of Minnesota GOP in future elections:

Shortridge: “We want to govern conservatively so we need a better governing vision.”

FitzSimmons: “The challenge is to make sure their message connects with metro area voters.”

Downey: “The biggest key is to show we represent the interests of Minnesotans.”

For the third consecutive election cycle, Minnesota Republicans are lamenting the absence of a political action group to rival the well-financed, DFL-aligned outside group Alliance for a Better Minnesota.  

They may be try to plug that gap with the Minnesota Jobs Coalition, an organization that helped put Republicans in the majority in the Minnesota House — and that is now trying to put itself forward as the natural GOP counterweight to ABM. But the question still remains whether any GOP-aligned outside group can create and maintain coalitions with the efficiency and effectiveness of its progressive counterpart.    

“I think the Minnesota Jobs Coalition is well positioned to be the lead the group on the right,” said founder Ben Golnik. “I believe more strongly than ever now, we need a year round group to hold the Democrats accountable.” 

Golnik and his team of video trackers, who’d been following Gov. Mark Dayton during the 2014 legislative session, switched to individual legislators this summer. They hit DFL legislative candidates hard and fast, unfettered by a concern of working with legislators in the upcoming session.

Trackers followed DFL legislators Shannon Savick and Andrew Falk, catching Savick incorrectly denying she had voted for a new Senate office building and Falk appearing to run away from a question on his vote for MNsure.  

Savick and Falk lost their races, as did DFL state representative John Ward, against whom the Minnesota Jobs Coaltion ran radio ads.  

Groups like the Leadership Fund and Pro-Jobs Majority, affiliated with the Minnesota Chamber of Commerce, also weighed in on targeted legislative races, but stayed out of the governor’s race.  

“The business groups—the problem is that they are going to they have to lobby the same legislators they are running ads against,” Golnik said.  No one affiliated with the Jobs Coalition is a registered lobbyist. 

“Our business groups in Minnesota tend to be more flexible in their ideology,” said State senator Dave Thompson of Lakeville, a one-time Republican candidate for governor.  “They aren’t as likely to launch a full-throated attack as ABM did against [Republican candidate for governor] Jeff Johnson.” 

MinnPost photo by Brian HallidayBen Golnik

And did it ever. Of the $4.8 million that ABM had amassed as of the end of the October, more than two million dollars was spent to define Johnson as a Tea Party Republican who would roll back progress and reform.   

And of the $4.8 million, $3 million came from the WIN Political Action Fund, which got the bulk of its contributions from the political arms of unions like Education Minnesota, AFSCME, IBEW, MAPE, and the Nurses Association. 

Thompson, who has authored anti-union legislation, believes that conservatives can’t replicate the ABM model. “Here the DFL has a cash machine – the unions and union dues,” he said. 

But the assumption that ABM held and will continue to hold a huge funding advantage is “a self-fulfilling prophecy,” said Pat Shortridge, former chair of the Minnesota Republican party.  “We were sending Mike [McFadden, GOP U.S. Senate candidate] and Jeff out there without any cover. We can’t wait for some national group to come along to bail us out.”

Golnik couldn’t agree more.  He said the Jobs Coalition is preparing a detailed post-mortem that will go to like-minded groups and individuals.  “We made a lot of progress,” he said. “We now have to track this to show to donors and others We have the best return on investment on the center right.” 

Well funded, data driven, and largely anonymous "donor alliance" groups are as much responsible for the DFL sweep of statewide offices — and for Republican victories in the Minnesota House of Representatives — as any individual candidate or independent expenditure organization.

That's the takeaway from a memo dated October 21 from a national liberal group, the Committee on States, which reveals how potent these groups have become in state elections, largely through unlimited contributions and well-coordinated affiliate organizations.

"This cycle, twenty functional state-based donor alliances… will have invested over $45 million into proven, research-driven state-based progressive political infrastructure," the memo states.

Groups like the Committee on States, a partner of Democracy Alliance — a national network of wealthy liberal donors — do not actually make contributions directly to parties or candidates. Instead, they connect likeminded givers to approved organizations, like the Alliance for a Better Minnesota, an independent expenditure group that spends its money on television and online advertising supporting Democratic candidates.

According to the Committee on States, such donor groups gave $7 million dollars to Minnesota outfits like ABM. Of the 20 targeted states, Minnesota was second in these kinds of contributions only to Wisconsin, which received $9 million. “If the national donors listed above had not coalesced around the COS strategy, then the infrastructure across these important states would be … nonexistent,” the memo reported.

Minnesota Republicans have yet to create a coordinating structure comparable to that of Democrats, but they came close in terms of dollars this election cycle. A top party official estimates that outside groups working to elect Republican state House members spent together about $5 million.  

About $2 million of that came from the MN Action Network. Like ABM, it’s a non-profit education and advocacy group — designated a 501(c)(4) — that legally receives contributions from donors whose names are not required to be disclosed.

While Alliance for a Better Minnesota is the undisputed leader in this category, the MN Action Network, founded by former U.S. Senator Norm Coleman, is hardly a bit player. During the most recent cycle, it provided polling, opposition research and issue advocacy advertising on mail, radio, TV, and online — measures that proved critical in electing the incoming Republican House majority.    

Under the current law, non-profit 501(c)(4) like MN Action Network cannot communicate with candidates, but the information finds its way to like-minded groups. For example, political vendors that do the work for 501(c)(4) can choose to disclose voter data with other non-candidate clients. Such groups will report their final campaign numbers for 2014 on February 2. A MinnPost analysis estimated that the 20 largest of these organizations operating in Minnesota spent $18 million on behalf of statewide and legislative candidates.

But its clear that the growing power behind the throne in Minnesota (and other states) are donor groups like the Committee on States. And the source of that funding will not appear on a campaign finance report.

Former Republican candidate for governor Scott Honour has returned to his private investment business — but that doesn’t mean he’s abandoned public policy.

On the contrary, he’s working on several initiatives that suggest he’s holding open the possibility of another run for public office.

First on Honour’s list is education. Specifically, he is encouraging education reform groups to consider a lawsuit against the state of Minnesota.  It would be similar to a case in California, Vergara v.  California, that argued successfully that laws on teacher tenure and seniority violated the equal education clause in the California constitution. 

“The Minnesota constitution has very similar language and that kind of suit could actually be brought in this state effectively.  And it should be,” Honour said in a recent interview. “It’s completely unacceptable that we have this achievement gap that we have — that we have the lowest minority graduation rates in the country.”

Education is a subject he and his former running mate Sen. Karin Housley discuss frequently. “We’re talking about how to drive legislation that was on the agenda that we were looking to pass had we become governor and lieutenant governor,” he said. 

He and Housley are sussing out the possibility of bipartisan support for teacher accrediation changes and changes on solar and wind energy mandates.

Honour also has ongoing discussions with GOP party chair Keith Downey and new executive director of the GOP House caucus Ben Golnik, with whom he’s discussing a “right to try” law that gives terminally ill patients access to experimental drugs that are not FDA-approved.

“We need more edge-of-the seat topics,” Honour said.  “Compassionate, common sense …  we Republicans speak way too much about what’s wrong and why we don’t like it.  We jump into the conversation in the middle of it assuming that everybody knows what the heck we’re talking about.”

Honour does not deny that there’s an overtly political goal in this agenda. With issues like education reform, “We’ll have laid the groundwork wherein, in the 2016 election, not only will we keep the majority and pick up some seats but we could win the senate and now, you do some more good things, you lay the ground work to win the governorship in 2018.”

He still views Gov. Mark Dayton as an adversary.  “The fact that he’s letting our most vulnerable children stay trapped in failing schools, I think is completely inappropriate,” he said. “I’m going to continue to call him out on it.” 

So, does that mean he intends to try and replace Dayton?  “I’m not focused on 2018,” he said while acknowledging that the infrastructure of his 2014 campaign — donor lists, voter i.d.’s, etc. — remains intact.

And, as the 2015 legislative session gets underway, “You’ll probably hear some things from me,” he said.

Suggestions by major GOP donors — as reported earlier this week by the New York Times— that Republicans should coalesce early behind a frontrunner presidential candidate for 2016 are getting a tepid response among state activists.

“It’s certainly not too early to start paying close attention to the 2016 presidential race,” said Keith Downey, chair of the Minnesota Republican Party.  “But I don’t think the public will look very favorably on the perception that a candidate was handpicked early by insiders or donors.” 

To the contrary, Downey said, the activists with whom he’s spoken are excited about the prospect of a long list of potential candidates.  “We have a lot of growing talent,” he said. 

Former Florida governor Jeb Bush, former presidential candidate Mitt Romney, and New Jersey Gov. Christie top the current field of potential candidates — at least in terms of their ability to fundraise. 

Walter Hudson, an activist in Minnesota’s sixth congressional district, doesn’t give them frontrunner status, though. “In this last election, we saw the low voter turnout on a bipartisan level and I think if we saw the same old same old candidates, we would continue with low in interest in the outcome,” he said.  “In the circle that I travel in, there is a lot of support for Rand Paul.”   

Yes, the Minnesota Republican party still has its factions. And that’s fine with Downey who, when it comes to presidential candidates, contends the more the merrier.  “It’s not only Christie and Bush, it’s Rand and Rubio in the Senate and the field of governors,” he said, mentioning Susan Martinez of New Mexico, Nikki Haley of South Carolina, and Scott Walker of Wisconsin.      

According to Chris Tiedeman, national committeeman for the state Republican Party, the list of viable candidates “will narrow. It always does. But you are going to see a [nomination] campaign.  You’ve got to bring new ideas and you’ve got to show people you are going to be able to win.”

That doesn’t mean that a lively, even combative contest for the Republican nomination will lead to undermining the eventual nominee, Downey said.  He said the national party decision to hold its nominating convention in late June or early July in Cleveland will give the nominee ample time to regroup to take on the Democratic nominee.

And that would be Hillary Clinton? Not a slam dunk, say Downey and Tiedeman.  They believe that Clinton will also face serious competitors. “It’s not going to be a coronation there either,” Tiedeman said.

The Minnesota Department of Commerce is tangled up in politics — again. 

This is not exactly new territory for the state agency. With a mission of regulating commerce, the department crosses paths with the banking industry, insurance firms, energy companies and telecommunications providers. 

That means the department often has a target on its back, says former Commerce Commissioner Jim Bernstein, who ran the department under former Gov. Jesse Ventura. “Our oversight is of a number of industries that people interact with everyday,” he said.  “If I made a decision that favored consumers or rate payers, I’d hear from the industry. If I leaned the other way, I’d hear from consumers.”  

The latest controversy involves Community Action of Minneapolis, which was raided after investigators discovered the agency was misusing millions of dollars in federal funds aimed at helping low-income people pay their heating bills.  The state Department of Commerce is the pass-through point for the federal money.  

In the Minnesota Public Radio report that set off the latest round of scrutiny, Commerce Department staff members said the department had been aware of the misuse of funds for years, but that Commissioner Mike Rothman would not act on the warnings because of political sensitivity, a claim Rothman does not deny. 

“I understand the politics, because the leadership of the Community Action agency and well-known and powerful,” Bernstein said.  

Bernstein had his own brush with powerful interests. In 2002, toward the end of his tenure as commissioner, Bernstein had fined American Bankers Insurance $3.5 million for illegally selling credit-protection insurance.  

But the company, based in Florida, settled for a much smaller fine a year later after the Pawlenty administration came into office. A legislative auditor’s report confirmed that American Bankers Insurance had made campaign contributions to both the Republican and DFL parties, although stopped short of saying that the contributions led to the smaller fine. 

Bernstein said he’s “loathe” to criticize Rothman but added, “The agency [Community Action] was out of control.  The board of directors was utterly incompetent. It appears based on media reports that the leadership was corrupt.  Should the department have caught this?  You can make a case that says, ‘yes.’” 

Bernstein said during his tenure between March of 1999 and December, 2002, the Low Income Heating and Assistance Program was housed at the Department of Commerce.  “I had full responsibility and full authority to make sure the moneys were being spent responsibly,” he said.  “The question is how much authority the department now has with oversight.” 

The authority would still seem to be substantial, given the reported comments from department staff and the fact that the LIHEAP national website cites the monitoring reports in Minnesota as an example of how states can determine whether the federal money is being used properly. 

Republicans have seized upon the implication of political favoritism. Incoming speaker of the House Kurt Daudt says Rothman should step down if he “chose to put politics before protecting Minnesotans.” 

This isn’t the first time Rothman or his department has been the focus of Republicans' attention. Earlier this year, Republican candidate for governor Jeff Johnson charged that politics played a part in in the Commerce Department’s approval of low health insurance rates offered on MNSure by Preferred One health insurance company.  Preferred One exited the exchange, saying the low rates were not sustainable. 

Bernstein shrugs at calls for resignation. “It always happens with this position,” he said.  

But Rothman should not expect that the scrutiny of the Department of Commerce to diminish, Bernstein said.  “Everybody uses the phone, goes to the bank, uses electricity,” he said.  “And, as a result, you are going to deal with the legislature all the time.  They pay close attention to what the Commerce Department is doing.  It is a political position.” 

There’s no question that the 2016 presidential race will be expensive. Some estimates suggest that a candidate for president in 2016 will have to raise about $500 million to win the White House. A Republican primary candidate will have to raise about $80 million to win the nomination. 

Therein lies the strength of Jeb Bush in Minnesota. 

The former governor of Florida is by no means a favorite among party activists who, like many conservative Republicans nationwide, dislike Bush’s take on immigration and education. As to how Bush regards Minnesota, it’s not a critical state for him in terms of delegates to the national convention or electoral votes.

But Minnesota’s Republican donors are a different story.

“The things that the base finds distasteful about Jeb Bush – Common Core, immigration – the donors do not,” said one GOP insider who, like everyone interviewed for this story, wants to be unnamed to preserve neutrality at this point in time. “As a donor, you are looking for electability and not as concerned with the issues that the base may find really important.” 

TCF Bank president Bill Cooper, broadcasting magnate Stanley Hubbard, and other executives —both current and retired — from Minnesota’s Fortune 500 firms are possible financial supporters of a Bush candidacy, said another activist. “They would like his chances to win in November,” she said.

Furthermore, while Jeb Bush is a stranger to most Minnesota voters, his father George H. W. Bush has close and personal ties to old money Republicans named McMillan, Whitney, and Pillsbury. While no longer the power elite among state Republicans, they are individuals who would make the $2,700 personal contribution to a candidate named Bush and might help out as regional fundraising chairs. 

Before committing, Minnesota’s Republican donors likely wait to see which of field of at least dozen candidates gets traction. In the case of Jeb Bush, they may have to wait awhile.  Bush supporters here say he’s not intending to compete in Iowa or even New Hampshire.  Instead, he’ll wait for the South Carolina primary, with its more diverse Republican voting pool that would be more receptive to his ideas.

Observers point out that the Republicans best hopes for the presidency all have a problem with the base. “[Florida Sen. Marco] Rubio has immigration, [New Jersey Gov. Chris] Christie has the chumminess with Obama after Hurricane Sandy,” one said.   

And the Bush name is a double-edged sword. “I think his problem may be ‘no more Bushes,’” according to one activist.  “And that’s too bad because he’s the best of three by far.”

But even Bush’s strongest detractors in Minnesota acknowledge the clout he carries. “His problem is the activist base,” said one.  “But that can be blunted because his strength is the donors.”    

The new year starts with evidence that outside Republican campaign groups intend to play early and often in response to concerns that they run a poor second to their DFL counterparts. 

One such outside group, the Minnesota Action Network, which is headed by former U.S. Sen. Norm Coleman, has already launched a mail campaign targeting DFL state senators and representatives.

“Call Senator Melisa Franzen,” reads a flyer that landed Saturday in the mailboxes of district 49 voters in Edina and Bloomington.  “Tell her to start 2015 off on the right path and oppose wasteful spending.”

Franzen is one of nine DFL state senators that many Republicans believe are vulnerable in 2016. In addition, the Minnesota Action Network is directing mail at three DFL House members who they also believe could be vulnerable in 2016.  The messages — on taxes and education — vary slightly, but the intent is the same: to get out early on the next election cycle to help Republicans retain control of the Minnesota House  — and re-take it in the Senate.

After Mark Dayton’s reelection as Governor, Republicans were quick to point out the need for a rich, coordinated and committed group to take on the DFL’s most prominent and effective “outside” group: Alliance for a Better Minnesota, a non-profit education and advocacy group that legally receives contributions in unlimited amounts from donors whose names are not required to be disclosed.

In a New Year’s Eve email to supporters that assessed his campaign, GOP candidate for governor Jeff Johnson acknowledged Democrats superior operation by extending a sideways compliment to ABM. “It appears that third-party spending against me was between 4 and 6 times greater than third-party spending against Dayton,” Johnson wrote.  “People love to complain about negative advertising, but if done correctly, it is very effective.”

Johnson also urged the formation of a third party group “dedicated solely to winning the governor’s office.” 

But 2016 will be all about control of the legislature. Republicans, who gained House seats in rural districts in 2014, have yet to recover from the ground they lost in the suburbs in recent election cycles, hence the focus on Franzen. 

A first-time candidate, Franzen defeated then state representative Keith Downey in 2012, a year when the ill-fated marriage amendment ballot measure galvanized not only liberals but social moderates, the kind of people who count for a lot of votes in Edina and Bloomington. 

The political arm of the Senate Republican caucus, under the leadership of David Hann, has already begun the groundwork of finding the right candidates.

In the meantime, the Minnesota Action Network is trying to soften the ground for those candidates, telling voters that as the legislature prepares for its 2015 session, “it’s time for them to start spending responsibly.”

As the legislative session progresses, it’s likely the Minnesota Action Network will continue similar voter outreach efforts, essentially starting the 2016 campaign before the book is closed on 2014, with an eye on a campaign even further out: the 2018 governor’s race.

University of Minnesota law professor Richard Painter believes that Republicans should be afraid — very afraid — of the campaign finance system. And, as a Republican himself, he intends to do something about it.

Painter, who was the chief ethics lawyer for President George W. Bush, is on leave from the U of M as a fellow at the Safra Center for Ethics at Harvard. He’s writing a book on campaign finance and how Republicans have left themselves vulnerable to agendas of foreign businesses and government. 

“I spell out that this is a serious issue, how money from China, from the Middle East is so easy to get into our corporations,” he said.  “The social conservatives – whether I agree or disagree with them – will be in the minority of influence compared to the influence of energy companies, gambling, pharmaceuticals, and now, with legalized marijuana, drugs.” 

Painter has disagreed with social conservatives. He is one of a handful of Republicans in Minnesota who joined the effort to defeat the marriage amendment in 2012. He has gone against the Republican grain on other issues, as well. His proposals to establish ethical guidelines for securities lawyers became a key provision of the Sarbanes-Oxley Act, which redefined how public corporations must comply with the law.

But on campaign finance reform, he is squarely on the side of conservatives. The problem, as he sees it, is that the heavier the hand of government regulation, the more that hand can extract political contributions to mitigate the damage.

“The traditional business community should be worried” about the cause and effect of the current finance system, he said. Painter said he hopes the book will be published “before the 2016 election cycle heats up.”

Painter believes that the state attorney general offices are a subset of the problem. “A bunch of AG’s is looking to the energy drink business. Defense attorneys go to an AG fundraiser and the investigation is dropped next month,” he said, summarizing an article on the practice reported in the New York Times.

Another article reported on plaintiffs attorneys that encourage attorneys general to investigate businesses and then retain the private attorneys on contingency. “That’s a great way to drive industry out the state,” Painter said.  “There ought to be a rule that prosecutors never talk about potential cases at a partisan political event.”

Richard Painter

Painter submitted a proposal to the American Bar Association to formally adopt such a restriction.  “You could also have state legislatures pass a law,” he said, noting that a Missouri legislator has asked him about such language.

Ben Wogsland, a spokesman for Minnesota attorney general Lori Swanson says that she has never attended a meeting of the Democratic Attorneys General Association.  “We were told she’s the only attorney general in the country that doesn’t attend meetings of either the Democratic Attorneys General Association (DAGA) or the Republican Attorneys General Association (RAGA),” said Wogsland.

Painter, meanwhile, has more on his agenda than professional guidelines and academic discussion.  He says that he will have an active role in a group that will debut later his month to push for campaign finance reform.

The group, tentatively called “Take Back our Republic,” will offer solutions “from a Republican, conservative perspective,” he said.  Painter will be joined in the effort by Trevor Potter, the Republican lawyer who was campaign counsel to John McCain’s and George H.W. Bush — but who may be best known as the lawyer who, in 2012, helped Stephen Colbert set up his own SuperPac.

This year is an election year, though not for the general public. Both the DFL and Republican state parties will elect their leadership. Like Ken Martin, his DFL counterpart, GOP chair Keith Downey says he’s going for another two-year term as chair.

With a newly elected DFL slate of constitutional officers, Martin’s re-election to a third term is expected to be an easy win at a state central committee meeting on February 7. Downey also looks likely to win re-election, with no challengers on the horizon.

But Downey, say some party insiders, was debating whether he wanted to continue as chair and was strongly encouraged to do so. He’s credited with fortifying the party’s financial position and helping Republicans gain control of the Minnesota House. 

Still, in a statement, Downey acknowledged, “There’s a lot of work ahead of us.” That work would be maintaining those seats in the House and gaining seats in the Senate in 2016 plus laying the groundwork for statewide races where wins have eluded Republicans for the last two election cycles. 

The state Republican party will hold its election of party chair and other officers April 11 at its spring central committee meeting.

Richard Painter

A University of Minnesota law professor and a political consultant who's worked on five Republican presidential campaigns – both alumni of the George W. Bush administration – launched a campaign finance reform group Wednesday tilted toward the conservative point of view. 

Richard Painter and Mark McKinnon lead the board of Take Back Our Republic, a fledgling group that does not so much decry the evil of big money as the evil of foreign money in campaigns. 

The group is encouraging political campaigns and third party groups to be vigilant in following the law that prohibits foreign contributions to American campaigns. “We must be careful lest our political system be seen by foreign interests as a carnival in which all can participate and get the results they seek, even if those results weaken American interests, our national unity, and our national security,” the group states on its website.

A crackdown on accepting foreign money is the stick in the equation, but Take Back also offers a carrot. To encourage small donors, it suggests making contributions to federal campaigns up to $500 exempt from disclosure. Currently, any contribution over $200 must be disclosed. 

The group also supports a tax credit for small political donors, giving contributors a credit for donations up to $200 and a deduction for donations up to $600. Minnesota allows a tax refund  — up to $100  — for contributions to state campaigns.

Take Back describes itself as an education and advocacy group and promises to make all its donations transparent. The group has a six-member paid staff headed by former Republican political operative John Pudner. In his biography on the group’s website, Pudner says he joined Take Back Our Republic to lead "a team of ex-political wonks to help change the very industry in which they once thrived.”

Appearances at plant openings and business expansions are a routine obligation of being governor. Few are memorable.

But when I read the news this weekend that Fairmont Foods in Fairmont would be closing its operations in March, I remembered every detail of my visit there with Gov. Arne Carlson more than two decades ago. After all, Fairmont Foods is where I met Paul McCartney. 

Yes, that Paul McCartney.

In 1993, Fairmont Foods was chosen to produce a line of frozen vegetarian foods created by Paul’s wife, Linda, who would die of breast cancer in 1998. Arne was asked to preside over the ribbon cutting ceremony, which would also include both Paul and Linda. 

I was the governor’s communications director at the time, and neither I nor his wife Susan would usually accompany the governor on this kind of state business. But Susan and I are baby boomers of the first order, and a one-on-one with a Beatle was not business as usual. The governor made room for us.

When we arrived at the Fairmont offices, Arne and Susan were taken aside for a private meeting with Paul and Linda. I hovered in the background, grateful for the brief glimpse I had of Paul: so tall, so English, still cute.

Just before the ribbon cutting was to begin, Paul went into a private room for some grooming. The door was left ajar and, yes, I admit it, I peeked in as an assistant touched up his makeup and hair.

MinnPost photo by Brian Halliday

The autographed "Sgt. Pepper" album

I didn’t expect to get any closer to Paul, but I just happened to be at the door of the room where he was getting his touch up when he exited. I stammered and smiled. He smiled back. And then I produced my secret weapon.

Just before I had left that morning, my husband, who fancies himself the state’s foremost authority on the Beatles (or at least their biggest fan), handed me the iconic cover of the Beatles’ album, “Sgt. Pepper’s Lonely Hearts Club Band.” Take it, he said, and ask him to sign it.

So there, standing the offices of Fairmont Foods, I made a request I’m sure Paul has heard thousands of times before.

I don’t remember much more about the visit. I know Linda McCartney’s line of frozen foods stopped production a few years later.  And my heart goes out to the people who will lose their jobs when Fairmont Foods closes in March. But I certainly have a lasting and beloved memory of the place, one sits on my mantle: an album cover that reads, “To Brian and Cyndy. Love, Paul McCartney.”

With the release of dueling tax proposals Tuesday, Gov. Dayton and legislative Republicans added another issue to the partisan divide that they'll have to bridge before the end of the legislative session.

Dayton wants childcare tax credits for young families; Senate Republicans want tax breaks for seniors. DFLers want a tax increase to pay for transportation needs; Republicans want to pay for improvements through existing tax dollars. House Republicans want to allow consumers to bypass MNsure; DFLers would make it an agency reporting directly to the governor and legislature. 

And then there’s education, an issue that is often shaped by partisan perspectives.

But at a Twin Cities North Chamber of Commerce legislative forum I moderated last week, there was one bit of common ground: House DFL minority leader Paul Thissen and the House Republican majority whip Dan Fabian agreed on the first education reform bill of the session, a measure that would end the practice of “last in, first out” (often referred to as LIFO) when it comes to laying off public schools teachers. Neither is in favor. 

The bill, authored by DFL state senator Terri Bonoff, modifies the teacher seniority system to include teacher evaluations in determining layoffs.  

And even though house Republicans offered a similar bill, majority whip Fabian, of Roseau, is not a fan of the measure. “Teachers who are more senior are often the better teachers,” he said.

DFL minority leader Paul Thissen, of Minneapolis, likewise said of the legislation: “This is not the silver bullet.”

It may not be unexpected that Fabian, a former teacher, and Thissen, a Democrat, don’t want to tinker with union rules for teachers. But their agreement on the issue went further. Both contend that addressing the state’s education gap needs vision, not micromanaging.

“If it works in Minneapolis, it doesn’t mean it’s going to work in Roseau,” Fabian said. “I don’t like legislation that’s one size fits all.”

“This [bill] is the state telling local school districts how to do it,” said Thissen. 

“No more mandates,” Fabian agreed. “I would like to allow more freedom at the local level.”

As the discussion moved to other topics, the political differences emerged. But on an issue as critical as education, the south Minneapolis Democrat and the northwestern Minnesota Republican, the yin and yang of the political dynamic this session, showed surprising agreement — at least when it comes to their distaste for the legislature’s first attempt at education reform. 

Republicans in the Legislature and state business leaders aren’t even taking Gov. Mark Dayton’s transportation proposal out for a test spin before declaring it unacceptable. 

But state business leaders do have a tax increase proposal of their own. 

Dayton’s plan calls for a 6.5 percent per gallon tax on gas at the wholesale level, an increase in license tab fees and registration fees, and a half cent sales tax increase in the seven-county metro area. 

The response from Senate minority leader David Hann: “The Legislature should take the time to adequately define our transportation needs, and then come up with solutions that actually address it, without raising taxes.”

Legislative Republicans and the Minnesota Chamber of Commerce support plans to use general fund revenues and wring efficiencies out of the current system, a proposal that critics say would fall far short of the $6 billion the state will need over the next ten years.

But the state Chamber of Commerce isn’t entirely opposed to raising taxes to fund transportation. It’s asking the Legislature to consider a “value capture user fee,” essentially a property tax increase on properties that would be enhanced by transportation improvements.  

“Think of it as a special assessment,” said Bill Blazar, the Minnesota Chamber’s acting president. “You would have to show that public improvement has raised the value of the property so it’s a benefit test, not speculation.”

Blazar said there’s a number of legislators, both DFL-ers and Republicans, that “at a minimum see the need to look at the alternatives.”

In 2008, the last time gas tax was raised, the Minnesota Chamber was one of the major players in what eventually turned out to be a 8.5-cent gas tax increase. The Chamber even supported the override of Gov. Tim Pawlenty’s veto. 

That was then. “In the last seven years, I think the way we use the transportation system has changed fundamentally,” Blazar said. “Just the number of people who work at home.  Secondly, the technological changes — the most prominent is the electric vehicle — and then, third, the fact that you had such a big tax increase in 2013.”   

Move Minnesota, a coalition of labor and interest groups, supports the governor’s plan.  “A great first step,” is how spokesman Darin Broton describes it. 

Broton predicts movement on either raising the sales tax on fuel or a simple percent per gallon tax increase. Unlike Blazar, he sees similarities between 2008 and 2015.  “This [opposition to gas tax increase] is how the chamber positioned itself in 2008. They didn’t come in until the last minute to support the override,” he said. “What else is sort of similar, a number of regional chambers have been pushing for new revenue.”

Blazar contends the new revenue is there in the value capture user fee. “We’re optimistic that value capture or something like will be part of the final legislation.”

Over the next several weeks, Minnesota Senate Republicans will roll out their response to the budget initiatives Gov. Mark Dayton unveiled this week: a series of policy proposals on education, transportation, health care and the Metropolitan Council.

“Governor Dayton has always challenged [Republicans] to come up with our own ideas and not just criticize his — and he’s right,” said the GOP caucus policy director Bill Walsh.

Walsh said Senate Minority Leader David Hann has directed his staff to develop three pieces of legislation on education reform as an extension of Hann’s response to Dayton’s initiatives. “We’ve been using this ‘throw more money at it’ approach to education for decades and it hasn’t worked,” Hann said of Dayton’s plan to spend almost half of the state’s $1 billion budget surplus on education.  “Where is the education reform package.  Where are the new ideas?”

The GOP caucus in the state Senate is also working on what Walsh calls “a pretty substantive transportation package,” akin to the Republican House proposal.  “Our goal is to make a dent in transportation without raising taxes,” Walsh said.  He added, “It may be more significant than the House.”

Other than the transportation proposal, Walsh said the legislation would not have a budget component.  Budget proposals are usually left to the governor and the majority caucuses. But Walsh says the legislation will be germane and timely. “You’ll see it in the next few weeks.  Now is the time before committee deadlines,” he said.  “If you don’t get your policies out there, you’re irrelevant.”

A check of the final campaign finance reports from 2014 shows that the DFL was the clear winner. At least when it came to money.

The state DFL Party reports spending nearly $8 million last year, compared to the Republican Party of Minnesota, which spent $3.7 million. Equally notable is the parties’ debt: $30,000 for the DFL and $500,000 for the GOP. (These are debts recorded on state filings.  Federal filings show the DFL with a debt of just over $500,000 and the state GOP with debt of just over $1 million.)

The DFL-aligned Alliance for a Better Minnesota maintained its status as model for outside spending groups. The ABM's Action Fund spent $5.3 million, $500,000 of that on behalf of Dayton. 

Spending against Republicans was the hallmark of ABM this election cycle. It reported spending $2.4 million against GOP gubernatorial candidate Jeff Johnson. The ABM Action fund also directed almost $1 million in television and online advertising against Republican candidates for the Minnesota House, notably Jim Knoblach, Tim Miller, Ryan Rutzick, Kirk Stensrud, Stacey Stout, Barb Sutter, Andrea Todd-Harlin and Jennifer Wilson.   

Yet for all the battles the DFL won, it ended up losing the war.  All but Knoblach and Miller were defeated, but Republicans took control of the state House.

Republicans were assisted by the Freedom Club, which spent $1.4 million, mainly on behalf of GOP legislative candidates. Freedom Club gave $200,000 to the state party and $4,000 to Jeff Johnson’s campaign. The Minnesota Action Network spent $856,000 and the Minnesota Jobs Coalition spent $770,000. Both groups targeted their spending on legislative candidates.

Given the amount of outside spending this election cycle, the campaign for governor register almost as an afterthought. In total, the Dayton campaign spent just over $3 million to get the governor re-elected, while Johnson spent $2.4 million, roughly eight dollars to Dayton’s ten.

The Freedom Club of Minnesota often scores bold-faced names for its annual spring dinner, but none with more currency than this year’s guest, Wisconsin Gov. Scott Walker, a possible candidate for the Republican nomination for president.

The conservative group, whose political action arm spent $1.4 million on Republicans during the 2104 election cycle, will host Walker at a private dinner event.  

“It was quite an honor that he chose us,” said Alex Kharam, the Freedom Club’s executive director. “We certainly had a lot of folks that wanted him. He is probably running for president.”

Kharam said the event is for members only and is not a fundraiser, either for Walker or the club. There is no charge for the event.

Broadcaster John Stossel spoke at the club’s 2014 dinner and financier Steve Forbes the year before that. Other Freedom Club speakers have included New Jersey Gov. Chris Christie and Sarah Palin.

Commenting on whether is was difficult to get an A-lister like Walker, Kharam noted, “If you want to run for president as a Republican, certainly the Freedom Club is the place to go to in Minnesota.”

As in the past, Freedom Club events are not open to the public, a policy that has, in the past, cause some criticism. Former U.S. Senate candidate Mike McFadden was criticized by his DFL opposition for skipping public debates but appearing at a private Freedom Club forum last year with other GOP candidates for the Senate.

What do politicians do in office when they no longer have to answer to voters?

If you’re a Minnesota governor, you have a tendency to pursue legislative and policy priorities that are far-reaching — but also personal, even unpopular.

Gov. Mark Dayton is the latest member of this club, making good on his post-election statement that he would be “unbound” in his second term in office.  

For one, Dayton has proposed an $11 billion dollar transportation package, funded in part by a potentially unpopular gas tax increase. He wants $10 million to replace the state’s two airplanes, a request he defines as personal as well as philosophical. And — most notably — he authorized sizable salary increases for his commissioners. 

Dayton’s actions may frustrate others in government — even fellow DFLer Senate Majority Leader Tom Bakk said Wednesday that he has “reservations” about the size of the salary bumps — but he is hardly the first governor to pursue passion projects once unburdened from having to seek voter approval. 

JonathunderArne Carlson

Take my old boss, Arne Carlson. Carlson’s second term, which began in 1995, was marked by the same sort of budget discipline as his first term, but he definitely had a few pet projects. He was passionate about school choice, an education reform that never really resonated with Minnesota voters. But in 1997, the Legislature passed a version of that reform that gave tax deductions and credits to qualified parents to spend on their education priorities. And in 1996, Carlson was able to get the Legislature to appropriate funding to combat fetal alcohol system, a priority of his wife, Susan.

Carlson also believed in funding for the arts, and in 1997 persuaded fellow Republicans in the Legislature to support a substantial boost in funding. And he personally lobbied and won bonding for the Xcel Energy Center in St. Paul.

REUTERS/Eric Miller

Former Gov. Jesse Ventura

Jesse Ventura, who served only one term as governor, had an agenda that was both farsighted and idiosyncratic. He reformed education funding, shifting the entire cost of basic education to the state. He believed in light rail and oversaw the groundbreaking of the Hiawatha light rail Blue Line. But he also persuaded the Legislature to cut car license tab fees because he was irked that tabs were more expensive for expensive cars, like the Porsche he was driving. 

Yet Ventura also used part of the revenue surplus Carlson had left behind to rebate $2 billion to taxpayers in what he called  “Jesse checks.” When Ventura left office in 2002, the state was facing a $4.5 billion deficit.

The only governor over the last two decades who didn’t seek another term but nevertheless played it safe is Dayton’s predecessor, Tim Pawlenty. He inherited the Ventura-era budget deficit and refused to raise taxes or cut spending enough to close it.

REUTERS/Brian Snyder

Former Gov. Tim Pawlenty

He avoided taking a clear position on a new stadium for the Minnesota Twins, though one of his last acts as governor in 2010 was signing legislation authorizing a $400 million dollar public subsidy of the project. 

Pawlenty did not indulge in a grand vision for state government. And few pundits, even conservatives, describe him as anything more than a caretaker governor. But Pawlenty had another reason for not indulging in personal whims as governor. He was going to run again, but for president. As we know, his candidacy never gained traction – in part because his years in the governor’s office were marked by a conspicuous lack of bold ideas.