Hayden target of state GOP Senate ethics inquiry

Minnesota GOP state senators are filing an ethics complaint against a Democratic legislator involved in an embattled Minneapolis nonprofit.

Republicans on Wednesday called for a Senate probe of whether Sen. Jeff Hayden and his wife financially benefited from their ties to Community Action of Minneapolis.

"Bottom line is [Hayden] should have known better," said Senate Minority Leader David Hann, R-Eden Prairie. "He should have known better [than] to accept perks from a taxpayer funded organization."

Hayden, DFL-Minneapolis, released a statement saying he already responded to the concerns outlined in the complaint.

"I look forward to resolving this matter before the Subcommittee on Ethical Conduct as soon as possible," Hayden said. "A thorough review of the facts will demonstrate clearly that my conduct was lawful and ethical and in no way violated the rules or norms of the Senate."

Community Action of Minneapolis has faced withering criticism the last few days after a state audit concluded that its longtime chief executive, Bill Davis, misspent $800,000 in taxpayer dollars on travel, celebrity cruises, a personal car loan and trips for board members.

On Wednesday, the Minnesota Community Action Partnership, the statewide association of Community Action agencies, called for the resignation of Davis and the entire board.

In the ethics complaint, six GOP senators said Hayden was part of an effort to misuse state and federal dollars cited by the Department Human Services audit. They also say Hayden used his position as deputy majority leader to influence the Minneapolis school board to award a $375,000 contract to Community Standards Initiative, which proposed an outreach program to address the district's vast academic achievement gap.

The two allegations, the GOP says, "betrays the public trust and brings the Senate into dishonor or disrepute."

Once the complaint is filed, the ethics committee will have 30 days to respond. If it decides to investigate the complaint, it can do so immediately or wait until a later time, Hann said. The committee in question has two Democrats and two Republicans.

Davis said in an earlier interview he can refute the audit's most damaging findings. He said that he submitted more than 100 pages of evidence to counter the audit's conclusions but that state leaders did not include them in the final report.

Davis has declined to make public the 100 pages the organization sent to auditors.

The audit also found that board members did little to ensure that tax dollars were being wisely used.

Hayden served on the Community Action of Minneapolis board, but designated his wife, Terri, as his alternate from 2011-2013, the time frame covered in the audit.

Board members say they saw Hayden and his wife in attendance at board retreats at Alexandria's Arrowwood Resort. Hayden said he paid for his own expenses while on the trip.

Hann said having his wife serve on the board does not excuse Hayden of his responsibilities as a public board member.

"Why did he allow others to accept those things? As a board member, why would you allow the wrong expenditure of money to continue?" Hann asked.

Hayden resigned from the board Tuesday, and joined others in calling for Davis to resign from a post that he has held for 24 years.

Leaders for Minnesota Community Action Partnership, the statewide association of Community Action agencies, said Wednesday that the organization's mission cannot be "achieved with this chaos."

"We believe that one result of the DHS audit is such widespread belief that your collective judgment has betrayed public trust, and worse, that no good purpose can be served by continuing to serve in your positions," MinnCAP Chairman Robert Benes and Executive Director Arnie Anderson said in a letter to the board and Davis. "We have no doubt that the correct thing is for you to resign, and to resign immediately, to clear the way for new leadership," the letter said.

Davis, who did not return repeated messages Wednesday, appears to be girding for a fight.

At an emergency board meeting Tuesday night, his job status never came up, board members said.

Council Member Blong Yang, who is now on the board, said his alternate, Natalie Johnson Lee, told him the board is "digging in and prepared to fight this."

The complaint also called into question Hayden's involvement with Community Standards Initiative, a group led by Clarence Hightower and Al Flowers.

In March 2013, Hayden authored a bill appropriating $350,000 to CSI to reduce the achievement gap in Minneapolis. The organization failed to meet its goals as of early September and district officials were planning to stop payments on the contract.

According to a Star Tribune source, Hayden and Sen. Bobby Jo Champion threatened to withhold state aid if Minneapolis school officials did not approve the contract.

Hayden and Champion denied the allegation and said they were "disappointed … and are deeply concerned over what we fear is a signal that MPS is unwilling to pursue good faith partnerships with community-based organizations in support of their underperforming schools."

The Senate ethics complaint also alleges Hayden failed to disclose a conflict of interest with CSI. Hayden's father, Peter, is a member of CSI's public safety subcommittee. It is not clear whether that is a paid position.

"Hayden misused his influence as a state senator … to unduly influence the Minneapolis school board to approve a [contract] to an organization that financially benefited his friends and family members, and possibly himself," the complaint said.

Alejandra Matos • 612-673-4028 Twitter: @amatos12