State fines Minneapolis DFL for inaccurate disclosures during last municipal races

The Minneapolis DFL filed inaccurate public disclosure forms and failed to keep adequate financial records in 2017 — the last time a municipal election was held — according to a state investigation.

The Minnesota Campaign Finance and Public Disclosure Board found in January that the local party left about half its income and half its expenses off public forms that are designed "to help ensure that the public knows where money collected for political purposes has come from and how that money has been spent."

The board fined the Minneapolis DFL $6,000, which the party can pay in installments through mid-2022. It also required the group to file an updated report for 2017. One version of that was submitted late Wednesday, but Megan Engelhardt, the board's assistant executive director, said they are working with the party to make final adjustments.

With the 2021 races for mayor and City Council already underway, local party leaders say they have put measures in place to ensure that filings for this year are accurate. They've switched to a new program for collecting donations, created a deputy treasurer position and formed a new committee to approve large purchases.

"We've been full participants in the investigation," said Devin Hogan, the current chair of the Minneapolis DFL. "We've followed everything they've asked us to do."

The inaccurate filings corresponded with a tumultuous time for the local party, which had four treasurers over about an 18 month-span in 2017 and early 2018.

The Minneapolis DFL drew the attention of the campaign finance board when it failed to meet deadlines for filing reports for 2018.

While they were working through that issue, the local party discovered that nearly half its income and half its expenses hadn't been included on the forms covering 2017.

Missing from the reports were items that showed which candidates for city races had paid for space at endorsement events and which companies the party had paid for catering, printing, security and other services.

"Although the party unit was able to obtain some records after the fact from its bank, it still cannot explain the source of $21,869.30 in receipts or the purpose of $27,107.74 in expenditures," the campaign finance board wrote in a report released in January. "In short, the record here shows that the party unit's treasurers failed to collect and maintain all required records for the party unit in 2017."

After the board released its report, a former party leader provided additional documents, but some gaps remain, Engelhardt said.

"The bank records are just going to show us the amount and the vendor, but they're not going to say what they're for, and if you take a look at the reports they need to have a purpose," Engelhardt said.

Both the board's findings and party representatives attributed the inaccurate filings to the turnover in the treasurer's position.

"This wasn't a [case where] one person made an error," Engelhardt said. "This was a systematic issue."

Hogan said he is confident the party's reports for 2021 will be accurate. "We've been keeping records the entire time," he said.

Because the party participates not only in municipal elections but also in state-level races, the Minneapolis DFL has the option to file its reports to the state rather than to the Hennepin County campaign finance board where municipal candidates submit their reports. That means the local party doesn't have to file its next public report until early in 2022, after the elections for mayor and City Council have concluded.

The Minneapolis DFL is preparing to begin its endorsement process, which wraps in late spring. Candidates who win the local party's election are able to pool resources, allowing them to send mailers and fliers together and, in theory, reach a wider audience for a lower cost.

The November election is drawing national attention and money, with one group contributing $500,000 to a committee aiming to replace the Minneapolis Police Department. Hogan said donations to the local DFL Party are, so far, similar to prior years, with the average contribution running around $20 and originating in Minneapolis.

Liz Navratil • 612-673-4994