Hennepin Co. commissioner voted for contracts tied to wife's law firm

Hennepin County Commissioner Peter McLaughlin has repeatedly voted for multimillion-dollar trash-disposal agreements tied to the law firm where his wife works — and never disclosed the connection.

The contracts are with Great River Energy, which owns the Elk River processing plant where Hennepin County sends garbage to be converted into electricity. The company retained McLaughlin's wife, Nancy Hylden, and her law-firm colleague Richard Forschler, as lobbyists in the fall of 2009 as Great River made a desperate pitch to keep the county's business.

Hylden said that while she initially provided some "strategic counsel" on energy issues, she's never lobbied her husband — and hasn't worked for Great River in years, although she continues to register herself as a lobbyist with the company in the interest of disclosure. Forschler, who works with her at Faegre Baker Daniels, took the lead in setting up meetings between Great River and county commissioners, including McLaughlin.

McLaughlin defended his votes on the contracts, noting that he even fought to push down Great River's rates.

As for disclosure, he said: "I don't need to reveal that — she hasn't ever tried to influence me on these things, so there's nothing that would require a declaration, or worse yet, denying my residents my participation on these matters that affect how much they pay for garbage."

A new five-year agreement with Great River is on Tuesday's agenda of the county's Public Works, Energy and Environment Committee, which McLaughlin chairs. The contract is worth $27 million, but Great River could receive less because the county pays only per ton shipped.

While McLaughlin's actions appear to be legal, the dealings shine a light on Minnesota's vague requirements on conflicts of interest and lobbying disclosures.

The law says that officials taking action on a matter that would "substantially affect the official's financial interests or those of an associated business" must submit a written statement describing the nature of the potential conflict of interest to a superior. But the regulations don't offer many specifics, and omit detailed guidance in the case of a spouse's relationship.

"Our statute is very weak," said Gary Goldsmith, executive director of the Minnesota Campaign Finance and Public Disclosure Board.

He said a bill that would have outlined clearer, more substantive conflict of interest rules went nowhere in the 2013 Legislature. He said the board was split on how much disclosure the state should require in the case of a spouse or child, but included the issues in the proposal in hopes of starting a vigorous debate.

Additionally, lobbyists doing business in Minnesota must register their clients' names, but don't have to disclose who they lobbied or what project they are working on.

The Washington, D.C.-based Center for Public Integrity last year gave Minnesota an "F" grade on its lobbying disclosure requirements.

Richard Painter, an ethics expert at the University of Minnesota School of Law, said it's common for a politician's spouse to be a lobbyist, but that on the federal level, citizens have access to more information about it.

In the matter of the Great River contract, Painter said, voters have a right to know about the commissioner's connections so they can ask questions.

For decades, Hennepin County sent a portion of its garbage to an Elk River processing plant, paying more than $80 a ton. Concerns about the expense, among other things, led the county not to renew the 20-year contract when it expired in 2009. Great River, which owned a nearby power plant, began an effort to acquire the processing facility that year, but the company needed more municipal solid waste to keep both plants running. Anoka and Sherburne counties had also ended their contracts.

Great River, which provides wholesale electricity to 28 distribution cooperatives in the Midwest, converted the waste into what's known as refuse-derived fuel at the processing plant.

Hylden and Forschler registered as lobbyists with Great River on Oct. 28, 2009. Hylden, who began a lobbying career long before marrying McLaughlin, made it clear that she wouldn't lobby her husband, according to interviews. Hylden became a partner in the law firm in 2012.

Rick Lancaster, vice president of generation at Great River, said he was particularly interested in hiring Forschler because he had done some work for the company a decade earlier; it never crossed their minds, he said, that McLaughlin's tie to the firm would give them favor.

"We needed to get into a discussion quickly with Hennepin County to take over this contract. … We had heard that [Forschler] knew people at the county and could help us arrange meetings and get in the door there," Lancaster recalled.

Great River made its pitch to the county in January 2010, noting that its Elk River operation's "long term viability [was] dependent on receiving additional municipal solid waste," records show. County officials resisted some of Great River's proposals, such as increasing tipping fees at the county incinerator to help subsidize its own operation.

The company formally closed on its purchase of the Elk River processing plant in the spring, and the following year, in April 2011, commissioners approved a $9 million agreement through 2012 to send garbage to Great River. The tipping fee in the new contract was slashed dramatically, to $54 a ton.

Those moves were in line with state policies that favor local governments burning waste rather than landfilling it, and the county incinerator in north Minneapolis doesn't have enough room for all of the county's trash.

McLaughlin, already a longtime and influential voice on the board, has had the most authority on trash issues because they go through the committee he chairs. He voted for the agreement that April at the full board meeting, and at the committee meeting that preceded it.

In April 2012, McLaughlin voted for Hennepin County's 20-year solid waste plan, which states, "The county has an interest in continuing its deliveries to Great River Energy's (GRE) Elk River Resource Processing Plant. The county will negotiate a contract to extend deliveries beyond 2012."

In January 2013, McLaughlin motioned for a vote on, and supported, a $3 million agreement with Great River through June 30.

McLaughlin also took a series of votes in the last few years awarding hundreds of thousands of dollars in recycling contracts to Network for Better Futures, a nonprofit that connects at-risk men with jobs, where Hylden has been a registered lobbyist since 2008. Hylden said she lobbies for the organization at the legislative level, however, and is not involved in the county contract.

(Hylden is also a registered lobbyist for the Star Tribune.)

McLaughlin said he doesn't keep track of his wife's clients. Hylden said her husband doesn't come home every night and say, 'I'm going to make decisions on x, y, and z, do you care about that?' "

On the contract up for a vote this week, officials say Great River hasn't used Faegre Baker Daniels to help. Earlier lobbying paved the way for Great River, according to Lancaster, and "we have the relationships that we need now with the staff, which we didn't have before."

Maya Rao • 612-673-4210