Minnesota lawyers, real estate agents, motorcycle advocates and auto dealers flew under the radar in the final weeks of the campaign for governor in financing a harsh advertising blitz against DFL candidate Mike Hatch.
Days after the last state deadline for reporting such contributions, the Minnesotans contributed nearly $200,000 to an effort that would remain largely out of view until after the election, recently filed Internal Revenue Service records reveal. Another $40,000 contributed by Minnesotans to the anti-Hatch effort was made public before Election Day.
The Minnesota money is on top of $500,000 that Houston homebuilder Bob Perry gave to the ad campaign against Hatch. The Texan's contribution also wasn't reported before the election.
The disclosures are expected to revive calls in the Legislature next year for greater transparency and timeliness in reporting large campaign donations during the homestretch of election campaigns.
Perry and the Minnesotans gave their money to A Stronger America, a group based in Alexandria, Va., which made it available for ads that aired in the final days of the Minnesota governor's race.
A Stronger America is among a proliferation of tax-exempt groups that have raised money in recent years for political activities such as issue advocacy. Those groups' activities are harder to track than more traditional fundraising by political parties or candidates.
Nationwide, Perry was the biggest contributor in 2006 to such groups. He gave $5.2 million through Oct. 23, mostly to conservative business groups and the Republican Governors Association, according to records released by the IRS and analyzed by the Center for Responsive Politics, a nonpartisan, nonprofit Washington research group that tracks money in politics, and its effect on elections and public policy.
The $5.2 million figure doesn't include the $500,000 Perry gave to A Stronger America on Oct. 26.
Perry is perhaps best known in political finance circles for his $4.5 million in contributions in 2004 to the tax-exempt organization Swift Vets and POWs for Truth, which challenged the war record of Democratic presidential candidate John Kerry.
Joe Weber, a spokesman for the anti-Hatch effort in Minnesota, said he didn't know how Perry learned of A Stronger America.
Under IRS rules, contributions by tax-exempt groups must be reported to the federal government within 30 days after a general election; A Stronger America made such reports on Dec. 6.
Under Minnesota rules, only contributions that groups received though Oct. 23 of this year had to be reported to the state before the Nov. 7 election. Money received after that date isn't reported to the state until January.
Among the Minnesotans who gave to A Stronger America after the Oct. 23 state reporting deadline were Ronald J. Schutz, of Medina, who contributed $5,000, and Dominick Driano, of Fairmont, who donated $10,000. The Committee of Automotive Retailers gave $35,000 after the October deadline, and a related group, the Local Action PAC, gave $75,000. The Minnesota Association of Realtors gave $25,000 and the Motorcycle PAC of Minnesota gave $5,000.
The Automotive Retailers group also contributed another $20,000 before the October deadline, which was made public before the election. Other contributions made public before the election came from Robert Ulrich, the CEO of Target, and Stanley Hubbard, the CEO of Hubbard Broadcasting, who each gave $10,000.
Legislative action likely
The 2007 Legislature almost certainly will give serious consideration to proposals to require prompt, pre-election disclosure of large late-campaign spending and contributions by such tax-exempt groups, legislative leaders in both parties and in the House and Senate said Wednesday.
Sentiment for shedding light on the practice probably will be strong and bipartisan because each party has complained bitterly about being victimized by shadowy last-minute infusions of cash into campaigns.
After the 2004 election, it was Republicans who were outraged by the discovery that DFL House Minority Leader Matt Entenza and his wife, health-care company executive Lois Quam, had contributed some $600,000 to various campaigns, much of it through a group that worked for House DFL candidates, and much of it after the disclosure window had closed.
Those contributions and others resulted in a record $300,000 fine for disclosure violations against the 21st Century Democrats, a national group. Entenza was not found to have violated the law.
A late surge in spending also has generally been considered an important factor in big gains made by DFLers in House elections in 2004.
"Everybody's been gored by it [late spending and post-election disclosure] at this point and nobody likes these surprises," said David Schultz, an ethics and campaign finance expert at Hamline University.
"We can't prevent [the donations and spending], but we certainly can improve on the disclosure. ... So let's do it," said Sen. Ann Rest, DFL-New Hope, who will lead a committee that is responsible for election laws. Rest said there is bipartisan support for more immediate disclosure by such organizations.
In the House, Rep. Tom Emmer, R-Delano, author of a bill in 2005 and 2006 that would have tightened late-campaign disclosure requirements, said the DFL Senate majority and the House Republican majority share blame for failing to enact more immediate reporting.
"People on both sides are suspicious now and we've got a much better chance of passing it this time," Emmer said.
Schultz said a 24-hour or 48-hour reporting requirement not only would provide the transparency that voters should have but also probably would inhibit last-minute spending binges by groups that want to conceal their agendas.
"[Gov. Tim] Pawlenty doesn't look good on this one," Schultz said, while noting that the governor has no apparent ties to A Stronger America.
Pawlenty hasn't said anything publicly about the Perry contribution or the Stronger America group but he signaled through a staff member Wednesday that he agrees with the calls to close the disclosure loophole.
"Governor Pawlenty believes that additional disclosure of contributions made late in a campaign makes sense and would support such a measure," spokesman Brian McClung said.
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