Who’s in Charge: How Nationalized Corporate-Run Think Tanks

Influence Minnesota Politics

Who’s in Charge:

How Nationalized Corporate-Run Think Tanks Influence Minnesota Politics

Table of Contents

Acknowledgements ........................................................................................................................................ 3

Executive Summary ........................................................................................................................................ 4 Connecting the Dots .................................................................................................................................................... 4 The Impact: K Street, St. Paul ................................................................................................................................... 4

PART I: Connecting the Dots ......................................................................................................................... 6 American Legislative Exchange Council ............................................................................................................... 6 Center of the American Experiment ...................................................................................................................... 6 Freedom Foundation of Minnesota ........................................................................................................................ 7 State Policy Network .................................................................................................................................................. 7 Ties to Other Conservative Organizations ........................................................................................................... 8 Key Players ................................................................................................................................................................... 9 It’s the Money, Honey .............................................................................................................................................. 12

PART II: K Street, St. Paul ........................................................................................................................... 16 Impact on Policy Making ........................................................................................................................................ 16

So-Called Right to Work ....................................................................................................................................................................... 16 Voter ID ......................................................................................................................................................................................................... 20 Assaults on Public Education............................................................................................................................................................. 21

CAE Playing Outside the Rules? ............................................................................................................................ 22

Part III: Impact on Politicians .................................................................................................................. 24 Gubernatorial Candidate Scott Honour ............................................................................................................. 24 U.S. Senate Candidate Mike McFadden ............................................................................................................... 26

Conclusion ...................................................................................................................................................... 27

Acknowledgements ABM would like to thank the Center for Media and Democracy, which publishes ALECexposed.org, PRwatch.org, and SourceWatch.org, for providing research and editing assistance for Parts I and II of this report.

Executive Summary While the activity of the American Legislative Exchange Council (ALEC) has been highly documented (See: Legislating Under the Influence, Common Cause Minnesota, 2012) in Minnesota, the influence of corporate-backed, state-based think tanks and ALEC partners in the state has not yet been fully exposed. The tentacles of the corporate-backed policy-making machine stretch to both policies and politicians in Minnesota.

Connecting the Dots Part I of this report examines the complex web of conservative think tanks and policy groups that push a national corporate agenda in various states. Corporate lobbyists write model legislation that state legislators vote on through ALEC that furthers their profit-driven agenda, often at the expense of working people. Then, members of a national network of think tanks provide “research” to support these policies in states. Minnesota-based Center of the American Experiment (CAE) is an affiliate of the State Policy Network (SPN).1 SPN helps coordinate the work of state-based special interest groups that describe themselves as “think tanks.” Thomas Roe (of the Roe Foundation and South Carolina Policy Council) founded CAE in 1992. The national SPN now has 59 member think tanks promoting highly conservative, corporate-funded policy agendas in all 50 states. Another Minnesota-based member of SPN is the Freedom Foundation of Minnesota (FFM).2 FFM bills itself as a non-profit educational and research organization that advocates for individual freedom, personal responsibility, economic freedom and limited government. Annette Meeks, former Deputy Chief of Staff for House Speaker Newt Gingrich, founded FFM in 2006 and currently serves as CEO. In addition to its state think tank affiliates, many other national right-wing organizations are associate members of SPN,3 including ALEC, the Cato Institute, the Franklin Center, the Heritage Foundation, the Heartland Institute, and the National Right to Work Legal Defense Foundation. SPN has played a major role in supporting ALEC, serving as a "chairman” level sponsor of the 2013 ALEC Annual Conference.4 Since its founding, SPN has been funded by far-right organizations including the Koch-funded Donors Trust/Donors Capital Fund, the Bradley Foundation, the Roe Foundation, and Charles Koch’s Claude R. Lambe Charitable Foundation.5

The Impact: K Street, St. Paul Part II highlights the adverse impact that nationalized ALEC policies and SPN research have on Minnesota lawmaking. It also calls into question both the legality of CAE’s activities as a 501(c)(3) nonprofit and the ethics of CAE’s ties to politicians in Minnesota.

1 www.sourcewatch.org, accessed 09/05/13 2 www.spn.org, accessed 09/05/13 3 www.spn.org, accessed 09/05/13 4 www.prwatch.org, accessed 11/08/13; www.sourcewatch.org, accessed 09/05/13 5 www.bridgeproject.com, accessed 09/05/13

As a vehicle of SPN, CAE has promoted highly controversial, corporate-backed bills, attempts to block progressive reforms, and works to influence public opinion on Minnesota’s laws. In 2012, CAE released a report praising the proposed Right to Work constitutional amendment. The report was largely copied from an SPN affiliate in Ohio. CAE also released a highly controversial report supporting the Voter ID constitutional amendment, that would have made it harder for Minnesotans to vote, that was panned by academics and opponents of Voter ID alike. Both the Voter ID and Right to Work amendments in Minnesota were taken from ALEC model language, illustrating the close relationship between ALEC and SPN members like CAE. ALEC provides model language for corporate-backed laws and SPN members like CAE provide “research” to back up the ALEC legislative agenda. Not only does CAE’s research illustrate its work in furthering a nationalized corporate agenda in Minnesota, it also calls into question its 501(c)(3) tax-exempt status. Under federal law, 501(c)(3) non-profits’ lobbying activities are capped at either 20 percent of the first $500,000 of activities or a total of $1 million for very large 501(c)(3) organizations.6 CAE’s extensive work advocating in favor of the Voter ID constitutional amendment in 2012 is considered lobbying under federal law. When that is combined with their lobbying activity at the legislature, there is a real question if CAE exceeded the lobbying cap that allows donations to it to be tax-deductible write-offs. In addition to influencing public policy and opinion, ALEC and SPN also work to directly influence politicians and elected officials through their state think-tank fellows and staff. In 2002, the Star Tribune reported that at least five members of Governor-elect Pawlenty’s transition team had ties to CAE, including Annette Meeks, Chris Georgacas, and Katherine Kersten.7 More recently, Republican candidates for statewide office in 2014 have direct ties to CAE. Gubernatorial candidate Scott Honour was appointed to the Board of Directors of the controversial group in July 2012.8 Mike McFadden, candidate for United States Senate, recently appointed CAE board member Molly Corrigan Cronin as his campaign chair.9 These ties beg a simple question: will Honour and McFadden be forwarding ALEC’s agenda via CAE in these campaigns?

6 The Center for Association Leadership, May 2002 7 Star Tribune, “Pawlenty names his 13 transition advisers,” 11/ 27/02 8 Center of the American Experiment, Fall 2012 9 www.mikemcfadden.com, 08/02/13

PART I: Connecting the Dots An exclusive group of people and political figures secretly draft model legislation benefiting big corporations through a complex web of conservative think tanks that push a corporate agenda in the states. This report will attempt to unwind the ball of yarn that is the national network of conservative think tanks attempting to influence state policy in their own favor. The following section will highlight a few national and Minnesota-based conservative think tanks pushing a national corporate agenda, and examine how they are connected to other national conservative groups. Then, this section will highlight some of the key players in Minnesota and the influence they’ve had through their political contributions to conservative groups and politicians.

American Legislative Exchange Council The activities of the American Legislative Exchange Council (ALEC) have been highly documented in Minnesota.10 As the Center for Media and Democracy revealed when it launched ALECexposed.org in 2011, ALEC brings together hundreds of corporate lobbyists and thousands of state legislators from across the country to vote behind closed doors on “model bills” to change people’s rights.11 Corporate lobbyists write model legislation beneficial to their interests that ALEC legislative members can then copy and paste into a bill that they can introduce in their state legislature. More disturbing even than ALEC’s corporate-driven agenda is the fact that it has influence over Minnesota law, through a variety of state-based and national conservative organizations pushing the ALEC agenda in Minnesota.

Center of the American Experiment The Center of the American Experiment is a right-wing “think tank” founded in 1990 by former newspaper columnist Mitchell Pearlstein. CAE’s aim, according to its website, is “nothing less than shifting Minnesota’s intellectual and political center of gravity to the right.”12 In 2009, as part of the organization’s Foundations for Active Conservative Thinking (FACT) Project, CAE started Intellectual Takeout,13 a tax-exempt nonprofit website targeted at providing college students with data and research in a digestible manner to support conservative viewpoints and to challenge the alleged “liberal orthodoxy” in academia.14 In 2012, the Minnesota Free Market Institute (another right-wing “think tank”) merged with CAE. CAE claims to promote the ideals of “free enterprise, limited government, ordered liberty, and traditional American values.”15

10 Legislating Under the Influence, Common Cause Minnesota, accessed 08/28/13 11 http://www.ALECexposed.org, accessed 10/25/13 12 www.americanexperiment.org, accessed 08/28/13 13 www.intellectualtakeout.org, accessed 09/03/13 14 Star Tribune, “Think tank goes to college; Conservative group has many ties with Republican leaders,” 08/10/05 15 www.americanexperiment.org, accessed 08/28/13

CAE is a 501 (c)(3) non-profit located in Minneapolis, Minnesota.

Freedom Foundation of Minnesota The Freedom Foundation of Minnesota is another Minnesota-based right-wing “think tank.” FFM claims to actively advocate the principles of individual freedom, personal responsibility, economic freedom and limited government.16 Annette Meeks, the former Deputy Chief of Staff for House Speaker Newt Gingrich, founded FFM in 2006 and currently serves as CEO. In 2011, MPR and Slate magazine reported that FFM had hidden its ties to a supposedly independent group seeking to influence state redistricting to favor Republican candidates. Minnesotans for Fair Redistricting listed its address as that of FFM CEO Annette Meeks and her husband, Jack Meeks, who sits on the foundation’s board. Annette Meeks maintained that she had no involvement in Minnesotans for Fair Redistricting, but FFM board member Chris Georgacas headed the group while another board member, attorney Tony Trimble, worked closely with its law firm to develop redistricting plans.17 As the Center for Media and Democracy has documented, ALEC also secretly worked with Republican state legislators across the country on redistricting efforts.18 FFM is also a 501 (c)(3) non-profit located in Minneapolis, Minnesota.

State Policy Network Center of the American Experiment and Freedom Foundation of Minnesota are affiliates of the State Policy Network (SPN), 19 an affiliation of state-based special interest groups that describe themselves as “think tanks.” Thomas Roe (of the Roe Foundation and South Carolina Policy Council) founded SPN in 1992.20 In addition to its state think tank affiliates, SPN also has many associate members,21 including ALEC, the Cato Institute, the Franklin Center, the Heritage Foundation, the Heartland Institute, Americans for Prosperity Foundation, and the National Right to Work Legal Defense Foundation.22 SPN has played a major role in supporting ALEC: serving as a “chairman”23 level sponsor of the 201324 and 201225 ALEC Annual Conferences, for example. Since its founding, SPN has been funded by conservative organizations including the Koch-funded Donors Trust/Donors Capital Fund, the Kochs’ Claude R. Lambe Charitable Foundation, the Bradley Foundation, and the Roe Foundation.26

16 www.freedomfoundationofminnesota.com, accessed 09/05/13 17 Report from ProPublica; Slate, “Corporations Bankrolling Restricting Efforts,” 09/24/11; MPR, “Former MN Republican Party Chair Backs Ron Paul,” 02/03/12; MPR, “Briggs and Morgan lines up on GOP side of redistricting battle,” 06/14/11 18 www.prwatch.org, accessed 11/08/13 19 www.sourcewatch.org, accessed 09/03/13 20 www.prwatch.org, accessed 11/08/13] 21 www.spn.org, accessed 09/03/13 22 www.sourcewatch.org, accessed 11/08/13 23 www.sourcewatch.org, accessed 09/03/13 24 www.prwatch.org, accessed 11/08/13 25 www.prwatch.org, accessed 11/08/13 26 www.sourcewatch.org, accessed 11/08/13

Ties to Other Conservative Organizations ALEC, CAE, FFM and SPN have deep ties to a number of other right-wing organizations as well as being interconnected themselves. CAE’s network of influence extends to both Minnesota-based and national right-wing groups and figures—many of which are also affiliated with ALEC. To get a better look at this web, the following table outlines these organizations and key political figures, as well as their connections to CAE. CONSERVATIVE GROUP/FIGURE CONNECTION

Cato Institute (ALEC-affiliated) In 2012, CAE joined the Cato Institute27 to file a

brief in opposition to the Affordable Care Act’s individual mandate in the Supreme Court.

Koch Brothers (ALEC funders) CAE participates in the Charles G. Koch Summer Fellowship28 program, through which it can receive funding for summer interns. Over the years, CAE has published reports and advocated for policies that would directly benefit the Kochs’ political and corporate interests, including opposing renewable energy standards, calling for the deregulation of the fossil fuel industry, and supporting a tax code that favors the rich and big corporations.29

American Legislative Exchange Council (ALEC) CAE board member John Gibbs30 is a member of ALEC, representing Comcast on ALEC’s Telecommunications and Information Technology Task Force.

Freedom Foundation of Minnesota Annette Meeks,31 CAE’s former CEO, went on to found the conservative think tank Freedom Foundation of Minnesota. CAE founder Chris Georgacas is a FFM board member.32

State Policy Network (ALEC funder) CAE founder Mitchell B. Pearlstein was an SPN director from 1997-1998.

Federalist Society CAE COO Kim Crockett33 has been a member since 1984 and Director Edward Anderson34 is also a member.

27 www.policyguy.com, accessed 09/03/13 28 www.theihs.org, accessed 09/03/13 29 www.americanexperimnet.org/issues, accessed 09/06/13 30 www.sourcewatch.org, accessed 09/03/13 31 City Pages, 05/28/08 32 City Pages, 5/28/08 33 www.amexp.org, accessed 09/03/13 34 www.amexp.org, accessed 09/03/13

Intellectual Takeout CAE CFO Dwight Tostenson is also the CEO of Intellectual Takeout.35

Governor Al Quie (1979-1983) CAE founder Mitchell. B. Pearlstein was a special assistant for policy and communications to the Governor.36

Governor Tim Pawlenty (2003-2011) CAE COO Kim Crockett served under Pawlenty as an appointee to the Minnesota Compensation Council.37 In 2002, the Star Tribune reported that at least five members of the Governor-elect Pawlenty’s transition team had ties to CAE.38

Chris Georgacas In 2006, Chris Georgacas (a former MNGOP Chair and current FFM board member) co-chaired a bipartisan CAE task force on legislative reform alongside Democrat Roger Moe.39

Key Players CAE’s staff members and Board of Directors have extremely close ties to some of the biggest corporations. The following table outlines the individuals associated with CAE, their positions at the organization, and their business affiliations outside of CAE.40 NAME POSITION BUSINESS AFFILIATIONS

Kim Crockett41 Chief Operating Officer, Executive Vice President and General Counsel

TCF National Bank and TCF

Financial Group, former

Corporate Council

Mitchell B. Pearlstein Founder & President

St Paul Pioneer Press, former Editorial Writer and Columnist

City Business, Twin Cities

Business Monthly, and The

Sun-Bulletin, former Writer

Keith Kostuch Chairman and CEO Alltell Corporation, former

Senior Vice President of

35 www.intellectualtakeout.org, accessed 09/03/13 36 Pearlstein biography, UofM Humphrey Institute, accessed 09/06/13 37 Center for the American Experiment, accessed 09/06/13 38 Star Tribune, “Pawlenety names his 13 transition advisers; Panel members are mostly conservative and will help recruit appointees and map legislative strategy,” 11/27/02 39 Pioneer Press, “Study generates ideas to make good Legislature better,” 03/02/06 40 www.americanexperiment.org, accessed 08/28/13; www.americanexperiment.org, accessed 08/28/13; www.sourcewatch.org, accessed 08/28/13 41 www.linkedin.com, accessed 09/03/13

Strategic Planning

Bonston Consulting Group,

former partner

Thomas O. Kelly Vice Chairman Dorsey & Whitney, Attorney

Mark S. Larson Secretary Messerli & Kramer,

Attorney

Scott C. Rile Treasurer Bernstein Global Wealth

Management, Principal

Britt Drake Director of Public Programs Other ties unknown

Peter J. Nelson Director of Public Policy Other ties unknown

Dwight Tostenson CFO Intellectual Takeout, CEO

Shanna Woodbury Development Director Other ties unknown

Peter Zeller Director of Operations Other ties unknown

Mitchell Davis Director Davisco Foods, family

business

Edward C. Anderson Director National Arbitration Forum,

CEO

Ronald E. Eibensteiner Director Wyncrest Capital, Inc.

Carolyn Erickson Director CSM Investments, Partner

John F. Gibbs Director Comcast, Vice President of

Government Affairs

Lowell W. Hellervik Director Personnel Decisions

International, CEO

Robin Norgaard Kelleher Director Seaton, Beck & Revnew,

P.A., Attorney

Jack Lanners Director

F.T. L Corporation, CEO R.P. Royalties, Inc.,

President LannCo LLC,

Officer/Partner

Rick Leggott Director Arbor Capital Management,

Founder and CEO

Richard G. Morgan Director Bowman & Brooke,

Attorney

Kenneth W. Morris Director The Apercu Group, VP,

Author & Speaker

Thomas J. Rosen Director Rosen’s Diversified Inc.,

CEO

Ronald J. Schutz Director Robins, Kaplan, Miller &

Ciresi, Attorney

Charles E. Spevacek Director Meagher & Geer, P.L.L.P,

Attorney Bruce Taher Director Taher Inc., President & CEO

Tara J. Anderson Director Fafinski Mark & Johnson,

Attorney

Molly C. Cronin Director Momthink.org, former

Corporate Analyst

Bill Guidera Director 21st Century Fox, Senior

Vice President

Michael Hayden Director Other ties unknown

Scott M. Honour Director FirstCNG, Chairman

Sheila C. Kihne Director CoolConservativeGear.com,

business owner and author

Tom Mason Director Mason Public Affairs,

Director

Rick Penn Director Hutchinson Technology,

President & CEO

Scott F. Peterson Director Schwan Food Company,

Executive Vice President

Brent Robbins Director General Mills, Assistant

General Counsel

Kurt P. Schellhas Director Center for Diagnostic

Imaging, Radiologist

Tim J. Walsh Director Ready Credit Corporation,

President & CEO

Eduard Michel Former Director Virtual Radiologic Corp., Co-

Founder

Harrison T. Grodnick Former Director

Minneapolis Portfolio Management Group, Owner & Manager

Wachovia Securities, former Senior Portfolio Manager Firstar Bank of Minnesota, former Assistant Account Manager

John W. Hedberg Former Director Hedberg Family

Foundation, Retired Business Executive

It’s the Money, Honey

Not satisfied with influencing Minnesota politics and policy through CAE, many staff members and directors have contributed very generously to the organizations and candidates whom they believe will further their right-wing corporate agenda. The tables below detail all political contributions listed for CAE staff and board members in this report from 1998-2013 searched in the Federal Election Commission42 and Minnesota Campaign Finance and Public Disclosure Board43 databases. CAE staff and directors contributed at least $289,43044 to federal candidates and committees between 1998 and 2012. Nearly all contributions were made to conservative or Republican organizations and candidates.

Contributor Amount Years Notable Recipients

Ronald Eibensteiner

$53,300 2000 - 2001

All of these contributions were in soft money to the RNC Republican National State Elections Committee.

Robin Norgaard Kelleher

At least $38,710

2001 -2012

Erik Paulsen, Michele Bachmann, Norm Coleman, John Kline, Freedom Club Federal PAC, Marco Rubio, ABC PAC, Conrad Burns, Richard Berg, National Republican Congressional Committee

John Gibbs $30,500 2003 - 2012

Comcast Corporation PAC, Freedom First PAC, Tim Pawlenty, Erik Paulsen, Norm Coleman, Jon Bruning, Mark Kennedy, Brandt Hershman

Charles Spevacek

$26,350 2000 - 2012

Norm Coleman, Rod Grams, John Kline, Republican Party of Minnesota, Erik Paulsen, Michele Bachmann, Dick Day, National Republican Congressional Committee, Amy Klobuchar, George W. Bush

Lowell Hellervik

$25,800 1999 - 2010

Erik Paulsen, Mark Kennedy, Patrice Bataglia, John Kline, Norm Coleman, Republican Party of Minnesota, John McCains, Alan Fine, Ed Matthews, Michael Barret, Obi Sium

42 www.fec.gov, accessed 09/03/13 43 www.cfboard.state.mn.us, accessed 09/03/13 44 www.fec.gov, accessed 09/03/13

Contributor Amount Years Notable Recipients

Edward Anderson

$24,420 2000 - 2007

Norm Coleman, the Republican Party of Minnesota, National Republican Congressional Committee, Thomas Foley, Jim Ramstad, George W. Bush, John Thune, John Kline.

Richard Morgan

$23,300 2002 - 2011

Michele Bachmann, Norm Coleman, Chip Cravaack, Freedom Club Federal PAC, Erik Paulsen, John McCain, Tim Pawlenty

Mitchell Davis $22,500 2000 - 2012

Norm Coleman, Mark Kennedy, John Kline, Rod Grams, Randy Demmer.

Ronald Schutz At least $19,300

1998 - 2012

John Kline, Mark Kennedy, Norm Coleman, Freedom Club Federal PAC, Republican Party of Minnesota, George Bush, Robins Kaplan PAC, John McCain, Tim Pawlenty, Freedom First PAC

Ronald Eibensteiner

$18,550 1998 - 2011

Norm Coleman, Richard Berg, Kristi Noem, Mark Green, John Kline, John Ashcroft, Elizabeth Dole, Thomas Cotton, Mark Kennedy.

Keith Kostuch $17,200 1999 - 2011

Michele Bachmann, Sharron Angle, the Republican Party of Minnesota, Jeff Flake, Paul Ryan, Club for Growth PAC, Pat Toomey, Sean Duffy, Scott Brown, Steve Forbes, Timothy Walberg, Ron Johnson, Chip Cravaack, Rick Santorum

Thomas Rosen At least $12,900

2002 - 2011

Norm Coleman, Chip Cravaack, Tim Pawlenty, George W. Bush

Rick Leggott $11,250 2001, 2008 McCain Victory 2008, Coleman Leadership Committee, Sean Duffy, Freedom First PAC, Tim Pawlenty, Erik Paulsen, Mark Kennedy

John Hedberg At least $9,250

1999 - 2011

Erik Paulsen, Tim Pawlenty, RNC, Rod Grams, Steve Forbes, Citizens Club for Growth

Jack Lanners $6,500 1998 - 2008

Republican Party of Minnesota, Dennis Newinski, Rod Grams

Bruce Taher $4,500 2004 - 2012

Republican Party of Minnesota, John Kline, Erik Paulsen, Terri Bonoff, Boehner for Speaker, Goli Ameri

Harrison Grodnick

$2,800 2004, 2008 National Republican Congressional Committee, McCain Victory Fund

Cheri Yecke $2,100 2005 Cheri Yecke for Congress Thomas O.

Kelly $1,850

1999 - 2011

Paul Ryan, John Thune, Tim Pawlenty, Mark Kennedy, Rod Grams, Timothy Penny

Kimberly Crockett

$1,500 2004, 2006 George Bush, Mark Kennedy

Contributor Amount Years Notable Recipients

Richard Tostenson

$500 2003 John Kline

Annette Meeks $450 2004, 2006 Norm Coleman, Mark Kennedy

Mark Larson $250 2005 Norm Coleman’s 2008 Campaign

Mitchell Pearlstein

$200 2001 Norm Coleman

CAE staff and directors contributed at least $656,71845 to candidates and committees at the state level from 1998 – 2012. As with the federal contributions, nearly all contributions were made to “conservative” organizations and candidates.

Contributor Amount Year Notable Recipient(s)

Ronald Eibensteiner $285,900 1998 - 2011

Freedom Club State PAC, HRCC, Tom Emmer, Tim Pawlenty, Taxpayers League MN Victory Fund, Norm Coleman, Republican Party of Minn, Jeff Johnson

Thomas Rosen $122,260 1998 - 2011

Minn. Business Partnership PAC, HRCC, Tom Emmer, Marty Seifert, Republican Party of Minn, Senate Victory Fund, Patricia Anderson, Minn Chamber of Commerce Leadership Fund, Tim Pawlenty

Ronald Schutz $101,994 1998 - 2011

HRCC, Tom Emmer, Freedom Club State PAC, Tim Pawlenty, Brian Sullivan, Thomas Kelly, Charles Weaver, Republican Party of Minn., RKM&C Fund, A Stronger America-Minnesota

Lowell W. Hellervik $42,240 1998 - 2010

Republican Party of Minn, St. Paul Area Chamber of Commerce PAC, HRCC, Tim Pawlenty, Jeff Johnson, Edward Matthews, Norm Coleman

John F. Gibbs (Lobbyist)

$22,935 1998 - 2010

Minn. Cable Comm Assoc. PAC, Jan Schneider, Minn. Business Partnership, Norm Coleman, James Gilbert, Margaret Cavanaugh, Charles Weaver, Tim Pawlenty, Brian Sullivan, Thomas Kelly, Senate Victory Fund, RKM&C Fund, Patricia Anderson, Jeff Johnson

Charles Spevacek $21,175 2002 - 2011

Tim Pawlenty, Michael Hatch, Lori Swanson, Tom Emmer, HRCC, Joe Hoppe, Meagher & Geer PLLP Political Fund, Lorie Gildea

45 www.cfboard.state.mn.us, accessed 09/03/13

Contributor Amount Year Notable Recipient(s)

Richard Morgan $17,842 1998 - 2011

DRIVE (Democrat Republican Ind. Voter Edu.), Freedom Club State PAC, Tom Emmer, Tim Pawlenty, Norman Coleman, Republican Party of Minn., Paul Kohls, Lorie Gildea

Robin Norgaard Kelleher

$15,292 1999 - 2011

Freedom Club State PAC, Tim Pawlenty, Thomas Kelly, MABC PAC, Marty Seifert, Jeff Johnson

Edward Anderson $9,750 1998 - 2010

Tim Pawlenty, Republican Party of Minn, Patricia Anderson, Michael Fetsch, Charles Weaver, Norm Coleman, Brian Sullivan, James Gilbert

Jack Lanners $8,900 2000 - 2011

Freedom Club State PAC, Andrea Keiffer, Patricia Anderson

Thomas Kelly $8,350 1998 - 2010

Mark Ritchie, Tim Pawlenty, DFL House Caucus, Patricia Anderson, Thomas Kelly, Judi Dutcher, Dorsey Political Fund, Jeff Johnson, Alan Page, Hubert Humphrey, David Lillehaug, Norm Coleman, Mary Kiffmeyer, HRCC, Tom Emmer

John Hedberg $6,160 1998 - 2011

Jeff Johnson, Tim Pawlenty, Republican Party of Minn., HRCC, Senate Victory Fund, Marty Seifert, Tom Emmer

Keith Kostuch $4,750 2010 - 2011

HRCC, Keith Downey, Patrick Mazorol, Freedom Club State PAC, Tom Emmer

Mitchell Davis $3,000 2002 - 2011

Tim Pawlenty, Minn AGPAC, Peter Trocke, Andrew Davis

Bruce Taher $2,050 2003 - 2010

Twin West Chamber of Commerce PAC, Steve Kelley, Mart Seifert, Terri Bonoff

Rick Leggott $1,750 2000 - 2010

Geoffrey Michel, Marty Seifert

Thomas Stauber $1,000 2006 Julianne Ortman

Carolyn Erickson $1,000 2010 Tom Emmer

Kim Crockett $545 2006, 2009

Jeff Johnson, 33rd Senate District RPM

Mark S. Larson $500 2005 - 2006

Tim Pawlenty

Kenneth Morris $250 2009 Marty Seifert

Scott C. Rile $250 2006 Tim Pawlenty

PART II: K Street, St. Paul

Impact on Policy Making The SPN affiliates in Minnesota clearly have an agenda – drive up profits, find new avenues for profit, and increase corporate lobbying power, to name a few. Often these goals are at odds with everyday Minnesotans; however, everyday Minnesotans do not possess a vast network of highly paid lobbyists, think tanks, and well-connected advocates pushing their interests. Corporations and their CEOs do.

So-Called Right to Work Among some in Corporate America, the biggest goals are to keep labor costs as small as possible and prevent workers from organizing unions to advocate for employee rights. In order to achieve this corporate end, ALEC has provided model legislation and constitutional amendment language to dramatically reduce workers’ rights and gut labor unions. A key centerpiece of these efforts is the Right to Work (RTW) movement. ALEC provides model legislation and amendment language on so-called “Right to Work” in order to forward its corporate, anti-worker agenda. It should really be called Right to Work for Less Money. ALEC “model” language on Right to Work is as follows:46

Section 4. {Freedom of choice guaranteed, discrimination prohibited.} No person shall be required, as a condition of employment or continuation of employment: (A) to resign or refrain from voluntary membership in, voluntary affiliation with, or voluntary financial support of a labor organization; (B) to become or remain a member of a labor organization; (C) to pay any dues, fees, assessments, or other charges of any kind or amount to a labor organization; (D) to pay to any charity or other third party, in lieu of such payments, any amount equivalent to or a pro-rata portion of dues, fees, assessments, or other charges regularly required of members of a labor organization; or (E) to be recommended, approved, referred, or cleared by or through a labor organization.

Minnesota Senator and current candidate for Governor Dave Thompson proposed a strikingly similar constitutional amendment in 2012. The proposed constitutional amendment language (SF 1705) is:47

Section 18. No person shall be required as a condition of obtaining or continuing public sector or private sector employment to: (1) resign or refrain from membership in, voluntary affiliate with, or voluntary financial support of a labor organization; (2) become or remain a member of a labor organization; (3) pay any dues, fees, assessments, or other charges of any kind or amount, or provide anything else of value, to a labor organization; or (4) pay to any charity or other third party an amount equivalent to, or a portion of, dues, fees, assessments, or other charges required of members of a labor organization. An agreement, contract, understanding,

46 www.alecexposed.org, accessed 09/03/13 47 www.revisor.mn.gov, accessed 09/03/13

or practice between a labor organization and an employer that takes force or is extended or renewed after adoption of this section and that violates this section is unlawful and unenforceable.

Piggybacking on Thompson’s ALEC-based efforts to pass Right to Work in Minnesota, CAE released a report in support of the measure. Not surprisingly, the SPN-written report was shown to be both duplicative to reports from other states and inaccurate.

The CAE report is substantially similar to a report released in Ohio a few months later by Ohio’s right-wing think tank the Buckeye Institute. CAE’s report48 was released in January 2012 and Buckeye’s report49 was released in March 2012. Both have the same three authors, substantially similar introductions and conclusions (some parts are word-for-word the same), and use the same facts and research. In fact, these same three authors released similar RTW reports in Indiana50 and Michigan,51 illustrating the reach of SPN within and outside of Minnesota. This outright duplication also calls into question the validity of CAE’s research on RTW, and raises doubts about the credibility of their so-called “reports” overall. Both the MN AFL-CIO52 and Minnesota SEIU State Council53 released fact sheets against CAE’s RTW report that provide further evidence of the biased and inaccurate information CAE was pedaling. Not surprisingly, Policy Matters Ohio54 criticized the Buckeye Institute’s report, which is largely the same as CAE’s report. Policy Matters used research from the Economic Policy Institute55 to debunk the claims Vedder and Buckeye made in their report. Below are a few examples of how CAE’s and the Buckeye Institute’s RTW reports are largely the same. Some of the same passages can also be found in the Indiana and Michigan reports. Similar language is highlighted below:

Minnesota Right to Work: How the

Freedom of Workers in the Workplace Enhances Prosperity (Center of the

American Experiment, January 2012)56

Ohio Right to Work: How the Economic Freedom of Workers Enhances Prosperity

(Buckeye Institute, March 2012)57

Executive Summary Unlike most southern and western states,

Minnesota has no right-to-work law, a law which guarantees workers the

freedom to join, or not to join, a labor

Unlike most southern and western states, Ohio has no right-to-work law. Such laws lower

labor costs, increase business investment, and tend to increase income levels. The evidence

48 Center of the American Experiment, January 2012 49 Buckeye Institute, March 2012 50 Indiana Chamber of Commerce, January 2011 51 www.protectingtaxpayers.org, accessed 09/03/13 52 www.mnaflcio.org, accessed 09/03/13 53 SEIU MN State Council, 01/26/12 54 Policy Matters Ohio, 03/28/12 55 Economic Policy Institute, 09/15/11 56 Center of the American Experiment, January 2012 57 Buckeye Institute, March 2012

union as the individual worker may choose. A wealth of research suggests

that right-to-work laws are a significant factor in explaining state variations in

industry location, human migration, and economic growth. The evidence

presented here for Minnesota suggests that the state’s economic growth would have been greater if a right-to-work law had been adopted several decades ago. Specifically, we estimate that personal income per capita, on average, would

have been $2,360 to $3,072 higher annually in 2008 if Minnesota had

adopted a right-to-work law in 1977. On a per household basis, personal income would have been somewhere between

$5,960 to $7,740 higher if such a law had been in place. Instead of being 14th in the nation in per capita income in 2008, the

state would almost certainly have been in the top 10. Excepting the low-tax and

resource rich Dakotas, Minnesota probably would have led the Midwest in economic growth. The passage of a right-

to-work law would end monopolistic practices in labor markets that have

been an important factor in keeping the state from being nearer the top with respect to the standard of living of its

citizenry. Moreover, the cost to the state government of doing so would be trivial

as enacting a right-to-work law would require no expenditure of taxpayer

dollars.

for Ohio suggests that a majority of Ohio’s substandard performance with respect to

economic growth since the late 1970s would have been eliminated if a right-to-work law

had been adopted several decades ago. Specially, we estimated that personal income for a family of four, on average, would have been about $12,000 higher annually if the

Buckeye State had adopted a right-to-work law in 1977. Ohio’s overall growth rate has been

abysmal in recent decades, and the passage of right-to-work laws would end monopolistic practices in labor markets that have been an

important factor in the state’s economic stagnation. Moreover, the cost of doing so

would be trivial. The state has had a good deal of discussion of the liberalizing of labor

markets for public employees (for instance, Senate Bill 5), and the evidence suggests even

greater benefits would be conferred by a generalized right-to-work law that applies to

all workers.

Common Law Tradition Prior to federal legislation passed during

the 1930s, labor unions were largely governed under the same common law

principles that apply to ordinary citizens. Under this system, special labor laws were unnecessary because the Constitution itself

guarantees property and contract rights. Disputes between labor and management

were handled through private negotiations or, if necessary, in court. Unions were

permitted to organize workers, but union membership could not be a requirement

Prior to the federal legislation passed during the 1930s, labor unions were largely

governed under the same common law principles that apply to ordinary citizens.

Under this tradition, there was no need for special labor laws because the Constitution

itself guarantees property and contract rights. Any disputes that may have arisen

between labor and management were handled through private negotiations or, if necessary, in court. If employees thought

they could be better represented by a union,

for employment. Similarly, employers were also free to decide whether they desired to

enter into contractual agreements with unions.

they were free to join one, but unions were not permitted to make membership a

requirement for employment. Similarly, employers were also free to decide whether

they desired to enter into contractual agreements with unions

Theory Behind Right-to-Work’s Contribution to Economic Growth

It is the goal of labor unions to increase wages and benefits for their members. A

union that does not raise wages for workers above what exists in a non-union

environment is usually perceived as unsuccessful by its membership—

particularly since workers have to pay dues to maintain the paid union leadership who negotiate and administer labor contracts.

Historically, there is some evidence that the short-run effect of unionization is to raise

wages, perhaps by 10 percent or more from what would otherwise exist.

It is the goal (or at least is supposed to be the goal) of labor unions to increase wages and

benefits for their members. A union that does not raise wages for workers above what

exists in a non-union environment is usually perceived as unsuccessful by its

membership—particularly since workers have to pay dues to maintain the paid union

leadership and negotiate and administer labor contracts. Historically, there is some

evidence that the short-run effect of unionization is to raise wages, perhaps by 10 percent or more from what would otherwise

exist. Conclusion

America operates with Depression-era labor laws that are increasingly out of

touch with the realities of a global labor market. The Taft-Hartley Act of 1947

provided states an opportunity to sharply reduce some of the adverse effects of these laws by passing “right-to-work” legislation

that gives workers the right to decide whether they wish to join and/or pay its

dues. Minnesota has failed to avail itself of that opportunity thus far, and has paid a

high economic price for not doing so. RTW laws attract productive resources (both

capital and labor) to a state, and the absence of such laws repels them.

Following a decade of relatively lower economic growth, it may well be time for

Minnesota to become the 23rd state to pass a RTW law.

America operates with Depression-era labor laws that are increasingly out of touch with

the realities of a global labor market. The Taft-Hartley Act of 1947 provided states an opportunity to sharply reduce some of the

adverse effects of these laws by passing “right-to-work” legislation that gives workers the right to decide whether they wish to join and/or pay its dues. Ohio has failed to avail itself of that opportunity thus far, and has

paid a high economic price for not doing so. RTW laws attract productive resources (both capital and labor) to a state, and the absence of such laws repels them. Using econometric

procedures, we estimate that in the year 2008, the typical Ohio family of four would have had over $12,000 more income had RTW laws been adopted 31 years earlier. Even if those estimates are high—say by a

factor of two—the impact of Ohio moving to become a right-to-work state is potentially quite sizable. Ohio has suffered a growth deficit for several decades—growing less than the nation as a whole, and its income levels have fallen below several southern

states—historically the poorest part of the

nation. In a time of budget stringency, governments cannot afford to use financial resources to impact growth, but they can

change the legal environment in which labor, the most important factor of production,

operates. It seems to us the time has come for Ohio to move towards positive consideration

of a right-to-work law. While ALEC, SPN, and Minnesota’s affiliate CAE were unsuccessful in pushing the anti-worker RTW amendment in 2012, there is a very real threat that this amendment, and its corporate backers, will be successful in the future.

Voter ID The right to vote is one of the most fundamental rights in a democracy, but now that right is under attack across the country. In 2011, legislatures in 18 states debated Voter ID legislation, which would create unnecessary hurdles to voting by requiring law-abiding citizens to show government-issued photo identification in order to cast a ballot. Wisconsin was one of the states that passed a Voter ID bill in 2011 with the support of ALEC alumnus Governor Scott Walker. The Wisconsin bill goes even further than the ALEC model bill by requiring the photo identification include a person’s current address (even if the ID is not expired). It was blocked in the courts. However, this national push for Voter ID restrictions that make it harder for Americans to vote is further evidence of the vast impact of ALEC and SPN networks nationally and the way they push cookie-cutter legislation in lockstep. The ALEC “model” language on Voter ID is as follows:58

(b) Any person desiring to vote in this state shall present proof of identity to the election official when appearing to vote in person either early or at the polls on Election Day. … (e) An identification card shall be issued without the payment of a fee or charge to an individual who: (1) Does not have a valid driver’s license; and (2) Will be at least eighteen (18) years of age at the next general election, special election, or municipal election.

In Minnesota, the 2012 constitutional amendment (HF 2738) that was defeated proposed:59

An amendment to the Minnesota Constitution is proposed to the people. If the amendment is adopted, article VII, section 1, will read: Section 1. (a) Every person 18 years of age or more who has been a citizen of the United states for three months; who has resided in the precinct for 30 days next preceding an election; who presents valid photographic identification as prescribed by law; and whose eligibility to vote

58 www.alecexposed.org, accessed 09/03/13 59 www.revisor.mn.gov, accessed 09/03/13

has been established under this section shall be entitled to vote in that precinct. All voters must be subject to identical standards of eligibility verification before voting, and the state must make photographic identification available to eligible voters at no cost to them. The place of voting by one otherwise qualified who has changed his residence within 30 days preceding the election shall be prescribed by law. The following persons shall not be entitled or permitted to vote at any election in this state: A person not meeting the above requirements; a person who has been convicted of treason or felony, unless restored to civil rights; a person under guardianship, or a person who is insane or not mentally competent.

This language is strikingly similar to ALEC’s model language, and once again, SPN network member CAE stepped in to release a “report” – later proven largely false – in support of the ALEC-based effort to restrict voting rights with Voter ID in Minnesota. CAE’s Voter ID report was proven false by a coalition of academics and advocates in the summer of 2012. Professor Max Hailperin of Gustavus Adolphus College wrote an article60 criticizing CAE’s report on photo ID as biased and using faulty research. Non-partisan organizations Common Cause and Citizens for Election Integrity Minnesota (CEIMN) (both who criticized CAE’s support for photo-ID)61 also teamed up with a critical, line-by-line debunking of the 2010 CAE report on voter fraud.

CEIMN arguments against the report were:62 'Citizens for Election Integrity Minnesota and Common Cause Minnesota... released a report that refutes erroneous claims about the 2008 US Senate recount and Minnesota’s election law and practice, made by the Center of the American Experiment (CAE) - "No Longer a National Model." Read our report here. CAE proposes significant changes in Minnesota‘s election systems. However, the CAE report provides no documentation to back up its claims and, upon close scrutiny, its claims are found to be highly inaccurate and misleading. For example, they state that the rejection rate for military absentee voters was 16 times greater than regular absentee voters, when in fact it was double. In our response we argue that the orderly resolution of the 2008 Senate recount stands in sharp relief to the more chaotic results of contests in Florida (2000) and Ohio (2004). We also state that the preponderance of evidence supports our conclusion that Minnesota's elections are indeed a national model.'

Voter ID restrictions are another strong example of CAE advancing a nationalized agenda written by ALEC and SPN and delivered in Minnesota locally. Even if CAE needs to trump-up evidence to support the ALEC-written bill, they appear to be more than willing to do so.

Assaults on Public Education Controversial CAE fellow Katherine Kersten has been a consistent and vocal public school detractor in Minnesota. Her criticisms have ranged from state curriculum standards to anti-bullying legislation and even to efforts to make Minnesota schools more welcoming to diverse students.

60 Bluestem Prairie, 09/14/12 61 www.muusja.org, accessed 09/03/13 62 www.earc.berkeley.edu, accessed 09/03/13

Behind Kersten’s efforts, though is an ALEC/SPN agenda to turn the billion-dollar investment in public schools into a new source of revenue for corporate education profiteers.63 ALEC’s education agenda is fairly straightforward: move public resources into private schools, drive down labor costs by de-professionalizing teaching, and discredit public education to facilitate corporate takeovers of schools.64 ALEC has written literally dozens of pieces of model legislation to achieve these aims, and SPN policy think thanks throughout the country are churning out reports and opinion pieces for newspapers in support of these privatization initiatives.65 Kersten recently showed just how far she was willing to take her crusade when she and CAE released a report entitled, “Our Immense Achievement Gap: Embracing Proven Remedies While Avoiding a Race-Based Recipe for Disaster.”66 The National Education Policy Center (NEPC) knocked CAE for “shoddy and unbalanced” analysis in “irredeemably awful” education study. In February 2013, the University of Colorado’s National Education Policy Center announced it was giving a “Bunkum Award” to Kersten and CAE for bad educational research.67 The NEPC gave what it called the “Scary Black Straw Man” Award to CAE for a CAE report that argued against Minnesota efforts to increase racial diversity in schools. According to the NEPC, CAE’s report was “irredeemably awful” in that it “set up straw men,” provided a “shoddy and unbalanced literature review,” and “reeks of hypocrisy.”68

CAE Playing Outside the Rules? All of CAE’s advocacy and lobbying activity begs an important question: How can CAE—a 501(c)(3), tax-exempt, non-partisan organization—engage in these activities legally? Unlike many other advocacy organizations, like the Freedom Foundation and Freedom Club, CAE does not have a separate 501(c)(4) issue advocacy non-profit affiliate (which does not qualify donations as tax-deductible, unlike a 501(c)(3)). Instead, the Internal Revenue Service (IRS) classifies CAE as a 501(c)(3), charitable organization. While 501(c)(4) groups can engage in broad advocacy on issues, and even spend up to 49% of their budget on electoral-type advocacy under current IRS interpretations, 501(c)(3) organizations are strictly limited in their ability to engage in advocacy or lobbying. The reason 501(c)(3) organizations are treated differently by the IRS is that 501(c)(3) status is the most beneficial tax status an organization can receive. With this status, organizational donors are allowed to write off their contributions as charitable donations on their individual income tax returns. However, this special tax classification comes with a heavy restriction on advocacy and lobbying. According to the Center for Association Leadership,69 the limitations are as follows:

63 www.prwatch.org, accessed 11/08/13 64 Alec Exposed, accessed 09/18/13 65 Center for Media and Democracy, accessed 09/18/13 66 Center of the American Experiment, February 2012 67 MinnPost, 02/27/13 68 www.nepc.colorado.edu, accessed 09/03/13 69 www.asaecenter.org, accessed 09/03/13

Under the expenditures test, an organization can quantify exactly how much lobbying it may engage in each year. A sliding scale specifies the amount an organization may expend on all lobbying activities in relation to the amount it spends on most of its other activities (i.e., expenditures in furtherance of the organization's tax-exempt purposes). Under Section 4911(c)(2) of the Code, the maximum allowable annual lobbying is the sum of: 20% of the first $500,000 of an organization's exempt purpose expenditures, plus 15% of the second $500,000 of such expenditures, plus 10% of the third $500,000 of such expenditures, plus 5% of the remainder of such expenditures, with a cap of $1 million in annual lobbying expenses. On top of this cap, there is a further restriction that an organization may not spend more than 25% of its permitted lobbying total on grassroots lobbying. It is important to note that lobbying expenditures include, among other things, the value of the allocable portion of staff time attributable to lobbying; such salary allocations must be substantiated through the use of time records (see below).

If CAE and its staff is spending more than the above outlined limits on advocacy – for example on the Voter ID amendment in 2012 – then they are in violation of federal tax law. Perhaps more startling is that CAE is unwilling to disclose their lobbying activities. Recently, Kevin Diaz of the Star Tribune reported that CAE officials Pearlstein and Crockett refused to disclose if they were lobbying or spending money to defend ALEC-written “Stand Your Ground” laws in Minnesota. According to Diaz’s report, Crockett indicated that CAE’s spending was “nobody’s business.”70 Actually, CAE is required to report their spending on lobbying both to the Minnesota Campaign Finance Board and to the IRS. A refusal to disclose lobbying expenditures is a violation of both state and federal law.

70 Diaz, Minneapolis Star Tribune, 08/14/13

Part III: Impact on Politicians

Gubernatorial Candidate Scott Honour Corporate CEO and venture capitalist Scott Honour ran the Gores Group before he moved his family back to Minnesota from California and subsequently announced his campaign for governor. Honour’s corporate ties are clear, but his connections to lobbyists, ALEC, and SPN deepened when he was chosen for the board of CAE in July 2012. Honour’s business, board, and campaign loyalties are already being tested by his role at CAE. For example, Honour is chairman of FirstCNG, an LLC he and his brother founded in 2011 that operates compressed natural gas filling stations. In 2012, FirstCNG applied71 for a share of $30.2 million in public funding from California’s Alternative and Renewable Fuel and Vehicle Technology Program,72 which subsidizes the development of alternative fuels and related infrastructure. In August 2012, the California Energy Commission recommended that the state award FirstCNG $300,000 for an unmanned public CNG fueling station in Newport Beach.73 FirstCNG also stands to benefit from other government incentives for natural gas.74 Meanwhile, in Minnesota, CAE has consistently criticized subsidies and incentives for alternative energy:

In an April 2013 commentary that appears on CAE’s website, CAE senior fellow David Strom wrote, “One of Democrats’ favorite ‘economic development’ tools is the targeted tax break. It’s right up there with outright payments and subsidies, as well as the ever popular mandate to purchase the product or service of a favored industry (think ‘renewable’ energy).”75

Strom added, “[Democrats] make all the other businesses and the individual taxpayers pick up the growing tax burden to subsidize the businesses favored by the politicians.” 76

In a December 2012 CAE commentary, CAE COO and General Counsel Kim Crockett and

Policy Director Peter Nelson wrote that the federal government should end wind power subsidies, arguing, “Government doesn’t pick winners and losers well.”77

A May 2013 CAE blog arguing against a solar electricity mandate claimed that “other nations

have experimented with solar subsidies and mandates, and the results have been discouraging.”78

71 California Energy Commission, 08/16/12 72 www.energy.ca.gov, accessed 09/03/13 73 California Energy Commission, 08/16/12 74 www.afdc.energy.gov, accessed 09/03/13; www.afdc.energy.gov, accessed 09/03/13 75 Center of the American Experiment, 04/23/13 76 Center of the American Experiment, 04/23/13 77 Center of the American Experiment, 12/17/12 78 Center of the American Experiment, 05/15/13

Additionally, FirstCNG is listed as being represented by Natural Gas Vehicles for America (NGVAmerica), a national organization that advocates for the natural gas vehicle industry.79 While CAE has decried the 2009 federal stimulus,80 NGVAmerica has touted it for providing “billions of dollars in new funding for transportation related programs”81 including funds for the transition to natural gas powered vehicles and has advocated incentives targeting the industry.82 CAE’s attacks on the American Recovery and Reinvestment Act have included:

In a 2011 column republished on CAE’s website, Katherine Kersten wrote, “Obama's policies—the gargantuan, failed stimulus; out-of-control spending; Obamacare and other huge expansions of government, and an out-of-control regulatory state— not only failed to extricate us from economic stagnation, but made our problems far worse.”83

An August 2010 CAE publication included the following passage, attributed to Kim Crockett,

President of the Minnesota Free Market Institute: “President Obama and Congress pile on bailouts and stimulus spending, new regulatory schemes, and massive legislation based on faulty premises and bad science (e.g., ObamaCare, Cap and Trade). All of this only further distorts markets and adds to the cost of business.”84

In a 2011 CAE symposium transcribed on CAE’s website, software company owner Gary M.

Miller ridiculed ARRA for benefiting his company, stating, “I was one of the last people who needed a stimulus.”85

A September 2009 CAE publication called the stimulus an example of “the redistributive

state.”86 As the campaign for governor continues, Honour will face a simple question: where and to whom do his loyalties lie? Do they lie with his corporate aims and corporate-backed organizations like CAE, or do they lie with Minnesotans? Perhaps the strongest illustration of Honour’s divided loyalties is on government pensions. Honour is among a number of Republican candidates seeking to better portray the “much-derided”87 private equity industry by noting that investors have included “sympathetic entities such as pension funds,” according to Politco. Honour claims, “We brought in state pension plans as investment partners and they received the vast majority of any profits we made.”88

79 www.nvgc.org, accessed 09/03/13 80 Center of the American Experiment, Fall 2010 81 www.nvgc.org, accessed 09/03/13 82 www.nvgc.org, accessed 09/03/13 83 Kersten, Star Tribune, accessed 09/06/13 84 Center of the American Experiment, August 2010 85 Center of the American Experiment, 07/18/11 86 Center of the American Experiment, September 2009 87 Politico, 05/30/13 88 www.honourforgovernor.com, accessed 09/03/13

Meanwhile, CAE has advocated for replacing state employee pensions in Minnesota with a 401(k)-style defined contribution plan,89 calling guaranteed pensions “unsustainable.”90 Honour is clearly trying to have it both ways. On the one hand, he portrays himself as pro-pension. On the other, he is on the board of an organization specifically attempting to eliminate public pensions. This again raises questions about where Honour’s loyalties actually lie.

U.S. Senate Candidate Mike McFadden In August 2013, Mike McFadden’s U.S. Senate campaign announced that Molly Corrigan Cronin would serve as campaign chair.91 Cronin has been described in media reports as a relative newcomer to politics; however, Cronin is very involved at CAE. Cronin was one of eight individuals chosen for the CAE board of directors in July 2012.92 Duties of CAE board members include attendance at regular meetings, oversight of the organization’s finances, and setting compensation for the president and COO. According to the organization’s IRS 990 form covering 2011, directors do not have a day-to-day role in managing CAE (“average hours per week” worked for board members was listed as “0.00”), nor are they compensated.

Cronin has authored only one piece that appears on CAE’s website, a brief February 2013 birthday tribute to Ronald Reagan in which she worried that “too many of our fellow citizens, men and women and children, don't know what it is to feel that pride in our country because no one has taught them what makes us exceptional and what that requires of us as citizens. I also fear that we are witnessing our greatness as a nation slip away.”93 Perhaps more important is the connection between McFadden, Cronin, and potential campaign donors. Cronin is co-chair of the Minnesota Republican Party’s Elephant Club, “a vital segment of the party’s traditional large donors.”94 MinnPost’s Michael J. Bonafield described the Elephant Club in 2010: “The well-dressed, successful membership runs the gamut from entrepreneurs to some of the most famous names in Twins Cities business, with a large contingent of doctors, lawyers, financial planners and other professionals.”95 Cronin’s role on the CAE Board connects McFadden to all of the large corporate donors sitting on the board, including Comcast VP John Gibbs, Tom Rosen of Rosen, Inc., and Bruce Taher of Taher, Inc.

McFadden is currently on leave from a corporate position, and his deepening ties to corporate money via Cronin are concerning. Cronin’s connections to CAE, and thus SPN and ALEC, should draw extra scrutiny of McFadden and his campaign donors.

89 Center of the American Experiment, 04/10/13 90 Center of the American Experiment, 04/05/13 91 www.mikemcfadden.com, accessed 09/30/13 92 Center of the American Experiment, Fall 2012 93 Center of the American Experiment, 02/05/13 94 Politics in Minnesota, 08/07/13 95 MinnPost, 01/25/10

Conclusion CAE is deeply connected to politicians in Minnesota. Its leaders invest time and resources into influencing these individuals to support a nationalized, corporate agenda by directly lobbying and releasing research – often generated by SPN or affiliates – in support of ALEC legislation. These connections and the legality of this work deserve close scrutiny. In the end, however, it is clear that the network of corporate influence is vast and decidedly not working on behalf of everyday Minnesotans.