Campaign finance board: Frey can use money from council campaign in run for mayor

Minneapolis City Council Member Jacob Frey ended 2015 with $101,000 in campaign funds, about 10 times as much as Mayor Betsy Hodges. Then he was confronted with the question: Can he use that money to run for mayor?

On Tuesday the state's Campaign Finance and Public Disclosure Board published a draft advisory opinion that says Frey can change his council campaign committee into a mayoral campaign committee, and use the money he raised as a council member in his bid to unseat Hodges in November.

The ruling, if it's adopted by the board Tuesday, would put Frey in a commanding financial position in what's shaping up as a tough mayoral race, with Hodges challenged by Frey, civil rights activist Nekima Levy-Pounds, DFL state Rep. Raymond Dehn and filmmaker Aswar Rahman.

"The draft opinion provides that the relevant statutes do not require Mr. Frey to register a new committee for the office of mayor, and that he may amend the office of the current committee," Jeff Sigurdson, director of the Minnesota Campaign Finance and Public Disclosure Board, said in a letter to board members. "As a result, Mr. Frey will be able to use the money currently in his principal campaign committee for his mayoral campaign."

Before the ruling, it was unclear if Frey could use his council campaign money to run for mayor. State campaign finance law appears to prohibit Frey from moving the money he raised as a council candidate over to a new campaign committee for mayor.

Ginny Gelms, the Hennepin County election manager, said she believed "that you can transfer unused funds from one committee to another, but those are subject, just like any other contribution, to contribution limits, which in this case would be $1,000."

Council members who have run for mayor in Minneapolis in the past such as Gary Schiff, Don Samuels and Hodges have formed new committees for their mayoral campaigns. They have also kept their contributions from one committee to the other under the legal limit, which was $500 before it was raised to $1,000 in 2014.

But Frey is seeking to do something new and different. He wants to repurpose his council committee as a mayoral committee, and he asked the Campaign Finance Board for an opinion on whether he can do so.

Sigurdson said that in his 16 years on the Campaign Finance and Disclosure Board, nobody has tried to do this, and he can't find evidence of it in earlier years.

But the draft advisory opinion issued Tuesday concluded that state law defines a campaign committee as "the single political committee designated by a candidate for election for any city office" and that Frey may designate his existing committee as a committee for the office of mayor.

"We wanted to do this right and by the book, so I'm pleased there is clarity," Frey said in a statement Tuesday.

Hodges declined to comment.

The advisory opinion also noted that another section of Minnesota law governing state offices specifically allows for candidates to transfer money from one committee to another as long as the new office sought has a higher contribution limit than the office under which the candidate raised money for the first committee.

That law prevents someone who was a gubernatorial candidate from using their campaign funds to run for the state legislator, but it allows for the opposite.

"There is a mechanism at the state level that expressly authorizes that, if a state senator wanted to run for governor, attorney general or auditor," said David Zoll, an attorney for Minneapolis law firm Lockridge Grindal Nauen.

The opinion issued Tuesday noted that Frey is running for mayor, a higher office with higher contribution limits than the council office under which he has been raising money.

If the board adopts the advisory opinion, anyone who wants to contest Frey's use of the money would likely have to mount a legal challenge, Sigurdson said.

New totals for candidate fundraising should be available in a little over a week. Hennepin County candidates must file annual campaign finance reports for 2016 by Jan. 31.

Adam Belz • 612-673-4405 Twitter: @adambelz