Minnesota Democrats push for more reporting on outside money in elections

Minnesota's independent campaign spending groups poured a record $42 million into the state during the 2022 midterm election — and that's not the whole picture.

Some outside groups that aren't connected directly to any candidate can avoid reporting what they spend through cleverly worded brochures and television ads that have a point of view on a candidate but don't expressly say to vote for or against them.

Democrats in control of state government and campaign finance regulators want to close that loophole.

"As much as that number may be impressive, it's not inclusive," said Jeff Sigurdson, chair of a state board that oversees campaign finance reporting in Minnesota elections. "Which then raises the question of how complete a picture the board is able to provide the public on what entities are trying to influence elections in Minnesota?"

Democrats want to require disclosure of all ads and mailings that could only be interpreted as intending to influence voters, while also barring certain political activity by foreign-influenced corporations. Together, those proposals could mark the first substantial changes to the state's campaign finance regulations since 2010 when the U.S. Supreme Court's Citizens United decision opened the door to a flood of outside money in state elections.

"There's been an explosion of spending by outside groups ... that are not accountable to the voters, or the candidates, or in many cases, voters and candidates may not even know who is funding them," said Sen. Liz Boldon, DFL-Rochester, who is sponsoring a bill to require more disclosure. "Our disclosure laws have not kept pace."

She noted that Follow the Money, a nonprofit that collects and compiles political contribution records across the country, gives Minnesota a grade of F. Under current law, outside groups only bump up against the state's disclosure law if they use words expressly advocating for or against a candidate — words such as stop, reject, support or cast your ballot or vote for or against someone.

If they don't use those trigger words, independent groups don't have to report what they're spending to the Minnesota Campaign Finance and Public Disclosure Board. The board fields complaints about groups that appear to be doing political activity but avoid key words and disclosure.

In 2021, the DFL Party submitted a complaint about the group Action 4 Liberty, which created mailers criticizing Democrats in swing districts for not voting to end Gov. Tim Walz's emergency powers during the pandemic. The mailers did not expressly tell voters to vote for or against a candidate, so the board couldn't require the group to disclose how much it spent on them.

Groups aligned with both parties have avoided disclosure by not using express advocacy language, and there's no way of knowing exactly how much spending has gone unreported, Sigurdson said.

Bills in the House and Senate would amend the definition of "expressly advocating" to include communications that "could only be interpreted by a reasonable person as containing advocacy of the election or defeat of one or more clearly identified candidates."

"Voters actually need to trust and believe that when they send us here that we are responsive to them and their needs, and when they see this flood of outside money, some of which they don't even know where it's coming from or who it is, they start to question whether their government is working for them," said Rep. Emma Greenman, DFL-Minneapolis, an election lawyer carrying the disclosure proposal in the House.

Because of the Citizens United ruling, legislators can do little to limit outside spending in campaigns. The ruling found the First Amendment prohibits the government from restricting independent expenditures for political campaigns by corporations, including nonprofit corporations and labor unions.

The influx of outside money since that ruling has dwarfed what candidates are able to raise and spend, giving independent groups an outsized role in state elections. The proposal wouldn't change anything for the state's largest independent expenditure groups, which already disclose their spending to the campaign finance board.

The DFL-aligned Alliance for a Better Minnesota, which released more than a half-dozen television ads against Republican governor candidate Scott Jensen last fall, topped the list of independent spending groups with nearly $16 million spent in the midterm election. Minnesota for Freedom was the biggest outside spender aligned with Republicans, spending $2.6 million to help GOP candidate Jim Schultz in the attorney general's race.

Minnesota law already prohibits individuals from a foreign country spending money to influence a state election, but legislators want to expand that restriction to include foreign-influenced corporations and nonprofit groups.

"The Supreme Court has gutted our ability to regulate money in elections. This is one narrow area where we have an ability to do something," said Rep. Zack Stephenson, DFL-Coon Rapids, who sponsored a proposed ban on such spending.

"The wealthy and the powerful on both sides of the aisle have way too much influence in our politics. This is not the perfect solution, but it's something we can do."

Republicans legislators have argued that the bill should be expanded to include unions and other groups with foreign influences that traditionally contribute to Democrats, not just corporations.

"I would love to get rid of all the dark money, because most of it benefits someone other my party," said Sen. Mark Koran, R-North Branch. "We would love to have confidence that whatever we did would actually do that."