Legalectric

From City Pages, The Republicans bliink on taxes

Let me see if I understand this — the state Senate Minority Leader is finally exposed as having paid his wife over $58,000 over the years out of campaign funds, and from what I can see there was no withholding (!) for his wife and his other employee, Tom Neuville’s kid, and Day’s whining and moaning, the Owatonna Paper joins him in making excuses and comforting noises, and now the DFL Senate candidate is bending over backwards to distance himself from this legitimate and well documented issue. HUH??? What’s wrong with this picture?

Here’s Dick Day’s 2005 Campaign Finance Report
Here’s Dick Day’s addendum to his 2005 report

Not only is Janet Day on the payroll, but so is Luke Neuville — neither had any withholding from their pay! (Luke Neuville obviously related to Sen. Tom Neuville!) There is no record of payments to IRS or MN Dept. of Revenue.

Here’s Christian Sande’s 2005 Campaign Finance Report that shows how withholding should be documented

Seems to me this is a legitimate issue that Day must address — his whining about being exposed is diversionary.

Here’s the April 15 article from the Owatonna paper:

Sen. Day under fire for putting wife on payroll

By JASON KROEKER
Press staff writer

OWATONNA — State Senate Minority Leader Dick Day has denounced DFL claims that the Owatonna Republican acted improperly by paying his wife for work she has done for his political campaigns.

Day was responding to a demand made Thursday by the DFL Party chair Brian Melendez that the senator return $58,800 he paid his wife between 1995 and 2005. Melendez said it was unethical for Day to pay his wife Janet for “constituent services” — a claim that Day firmly rejected.

“It’s one of the most mean-spirited things that’s ever happened to me in 28 years of political life,” Day said in a telephone interview Thursday. “I pay her like $400 a month. It probably amounts to about $4 an hour for what she does.”

The payments to his wife were legal, Day said, adding that he has filed reports detailing the payments every year.

“If I thought something was illegal I wouldn’t put it in a campaign report for 10 years running,” Day said.

But in a statement released by the DFL Thursday, Melendez said, “Senate rules don’t allow for Senator Day to hire his wife or relatives to work in his Senate office at public expense. Minnesotans need to question why it is permissible to use taxpayer dollars to pay his wife for alleged campaign work.

“We demand that Senator Day return to Minnesota taxpayers the $58,800 he funneled back into his own household,” Melendez said.

Melendez could not be reached for comment Thursday.

However, DFL spokesman David Ruth said Thursday that the Minnesota Department of Revenue reimburses up to $50 to donors for contributions to state campaigns. So, according to Ruth, taxpayers are paying Janet Day for her campaign work.

Day responded by saying that his wife was not paid by taxpayer money. Only a third of his campaign money came from people whose contributions are reimbursed, Day said, and that his wife’s salary did not come from that money. However, both the reimbursed and nonreimbursed money is held in the same account.

Day said many state senators have a senate office in their district where work is done. Day said he doesn’t have a local office, so work is done at home.

State records show that between 1995 and 2005, Janet Day received $58,800 for “constituent services.” Last year, she was paid $4,400 for work she did from February to December, according to the records.

On March 24, Day received a request from the Minnesota Campaign Finance and Public Disclosure Board asking him for clarification of what was meant by “constituent services.” Day responded by detailing her duties, saying she reads and summarizes information from four area newspapers, sends letters and cards to constituents, attends meetings and functions in the district which he is unable to attend and takes telephone calls.

“In the course of constituent phone calls, Janet receives information from constituents and assists them with their concerns, including contacting state agencies,” Day said in a letter to Joyce Larson, compliance officer with the board.

Larson said Thursday that it was common for the board to request legislators to clarify expenses.

But Melendez said in his statement that Day should not have hired his wife to do the work.

“Senate Rules don’t allow for Senator Day to hire his wife or relatives to work in his Senate office at public expense,” said Melendez.

Ruth stated that Melendez based his comments on an employee legislative handbook.

But according to Jeanne Olson, executive director with the Campaign Finance and Public Disclosure Board, nothing in state statutes prohibits hiring relatives to work on a campaign.

State campaign finance law allows funds to be used for wages and fees. It doesn’t define who can get a check, but makes clear the money “may not be converted to personal use.”

In a well-timed advisory opinion unrelated to the Day matter, the state Campaign Finance and Public Disclosure Board reiterated Thursday that a campaign committee can’t give compensation to a candidate running for office.

In 1998, the Day campaign paid Day himself $2,500 for caucus leadership expenses and mileage. Larson said legislators are required to keep receipts and records of expenses for four years. They don’t need to turn all the receipts and records in, but they could be audited.

Day said he doesn’t deduct mileage most years, but does once in a while.

Day is hardly alone in employing a relative who is paid through campaign funds.

Ryan Kelly managed father Randy Kelly’s mayoral campaigns in St. Paul. And Attorney General Mike Hatch, a DFLer, hired his nephew, Joe Hatch, as a campaign “contractor,” paying him more than $67,700 between 1999 and 2003. In his gubernatorial campaign this year, Hatch’s niece Kari Erickson is on the payroll.

Ruth declined to comment on the Hatch or Kelly examples.

Here’s the April 15 Barb Perkins editorial in the Owatonna paper:

Day should give the money back

Mr. Bowmanâ??s letter to the editor in the Waseca County News on March 29, stated that In 2005 Senator Dick Day paid his wife $4,400 for â??constituent servicesâ? from his campaign. Campaign funds are reimbursed through the contribution refund program from state tax dollars.

I am trying to restore faith in my elected officials after the big state shut down this past summer, and then I came across that letter. I think Mr. Bowman has a legitimate concern. 2005 was not the first time Sen. Day has paid his wife.

Over the past nine years he has paid her a hefty sum of $58,800 a total of amounts that appear on his Campaign Finance Reports. Again, campaign funds are reimbursed through the contribution refund program from state tax dollars. Werenâ??t there other people or organizations that would have happy to assist Sen. Day In his campaign and make that kind of cash?

Paying your relative with tax dollars is wrong, and understandably people are going to be upset. A politician paying their spouse for â??constituent servicesâ? does not appear to be a common practice with other elected officials â?? Where are the checks and balances? I thank Mr. Bowman for bringing his concern to forefront. I too would ask Sen. Day to do the right thing, pay back not just the $4,400 but the entire amount of $58,800.

Barb Perkins

Owatonna

Here’s a follow-up in the Owatonna paper:

Day questions motives in family pay allegation

By JASON KROEKER
Press staff writer

OWATONNA — While she says she has no political affiliation, the woman who laid groundwork for DFL accusations of impropriety about a Republican state senator’s campaign payments to his wife does have DFL connections, according to the senator.

Many of the campaign reports showing that Sen. Dick Day, R-Owatonna, paid his wife Janet for campaign work were brought to light by Barb Perkins, an Owatonna resident who stated she is neither a Republican or Democrat and that she has voted for Day in the past.

However, Perkins is the sister of Nancy Prehn, the Waseca campaign manager for Day’s democratic opponent Jeremy Eller.

“It seems like it’s kind of orchestrated,” Day said Saturday. “I can’t imagine that seven months out these people are being so negative when people want us to run positive races.”

Both Eller and Perkins said that they do not know each other.

State DFL chair Brian Melendez released a press release earlier this week calling on Day to return $58,800 Janet Day was paid for campaign work over 10 years.

Prehn said she did not know about the DFL press release ahead of time. Asked whether it was OK to pay relatives for campaign work, Prehn said she had no comment.

The Dick Day Volunteer Committee paid Janet Day about $400 a month for constituent services which included answering phones, scheduling appointments, filing and summarizing news. She was paid $4,400 in 2005.

Perkins said she began looking into Day’s campaign finance records after reading a letter to the editor in the Waseca County News.

“I think that if you have to pay your wife to support you, why should anyone else?” Perkins said.

It is not illegal to pay relatives for campaign work under state law. However, DFL spokesman David Ruth and Day disagreed on whether it violates Senate rules.

Perkins said she would not have a problem with the payments if they weren’t coming back to a legislator’s own household.

Reports have shown that payments to family members are common among DFL candidates as well. Ryan Kelly was paid to manage his father Randy Kelly’s DFL campaigns for mayor of St. Paul. Joe Hatch, the nephew of Attorney General Mike Hatch, was hired as Hatch’s campaign contractor and received about $67,000 between 1999 and 2003.

Ruth said the DFL payments were acceptable because they were not coming back to the candidate’s household.

Eller said that his wife, sister and mother are assisting in his campaign, but that they are not paid.

“We both have a desire to be leaders for the community and help the communities any way we can,” Eller said of himself and Day.

Day said when the Legislature reconvenes Tuesday he will investigate whether there are Democratic legislators who also have relatives on the campaign payroll.

And a bizarre editorial from the Owatonna People’s Press:

Too early for mudslinging

April showers have brought early mudslinging to the Senate district 26 campaign.

Last week, allegations arose against incumbent Dick Day, R-Owatonna, that stated payments to his wife totaling $58,800 for campaign work over the last 10 years were unethical.

It shouldnâ??t come as a surprise to learn that the allegations were brought forward by someone with ties to Dayâ??s opponent, Jeremy Eller, DFL-Faribault.

If, as Day claims, the payments to his wife are legal â?? and it does seem odd that after 10 years of reporting them someone is finally raising the issue â?? this issue should die and maybe even an apology will be offered. Wouldnâ??t that be refreshing?

If, however the allegations are valid, then Day should have an opportunity to pay back the money without any retribution since he was upfront in the first place by claiming his wifeâ??s payments on his financial reports.

Anyone who knows Day knows that, like it or not, he is very upfront with what he does and that he does not duck questions when asked.

We hope that this is not the beginning of the mudslinging on petty issues and that both candidates will focus on the real issues leading up to Novemberâ??s election.

So if no one complains and he does it for a long time, it’s OK? Oh, right… and when Rep. Ray Cox loaned his campaign nearly twice the allowed amount, by an outright loan of $5,000 and then paying nearly $4,000 in campaign debt, totalling nearly $9,000, because no one filed a formal Complaint, it’s OK?? …and about IRS withholding, because Day’s wife and Tom Neuville’s son are obviously employees and not independent contractors — wasn’t lack of employee withholding the issue that was regarded as enough of a problem to keep Lani Guinier off the Supreme Court? Shouldn’t it receive the same scrutiny here?

And an even more bizarre one from Sen. 28 DFL candidate Jeremy Eller in today’s Faribault paper distancing himself from this issue:

Let’s move on

To the editor:

My committee has been campaigning on the issues of transportation, education, health care and jobs. I am a leader who cares about the needs of my district first and foremost and will continue to focus on the issues that affect this district.

I read the article in the Waseca paper and made the decision that we would not touch this issue. I am sick and tired of negative and bullying campaigns and this is why I issued a statement to Owatonna People’s Press reporter Jason Kroeker. I informed Mr. Kroeker that this will not become a campaign issue for my committee. We are campaigning on the issues of highways 14 and 60, education, and a leader who will listen.

Mrs. Perkins, one of the individuals who wrote a letter to the editor commenting on the Day situation, is related to one of my coordinators. Although I instructed my coordinators to not get involved with this issue, Mrs. Perkins has the right to voice her opinion. Yes, it makes it harder for me to run a positive campaign because of who she is related to; however, I served this country so that everyone including Mrs. Perkins could observe the right to freedom of speech.

I will continue to run a campaign that will demonstrate that I’m a better leader that will spend more time worrying about my district first and foremost; while also ensuring that we properly fund our education system; ensuring that we have good paying jobs within our communities; finding a viable solution to our health care crisis; and having a leader that will listen and fight for the constituents that we are elected to represent.

Jeremy Eller
State Senate District 26 candidate

This is that strange theory that it is “negative and bullying campaigning” to disclose a serious infraction of an opponent. Doesn’t Eller have the fortitude to stand up and be heard on an ethical issue like this? This isn’t a case of Steve Sviggum and Ray Cox in the Rice Co. dump whining about pie, which is perfectly legal (even the Northfield News had to admit it, and probably regretted their encouragement of Sviggum’s antics) but a complaint about funnelling taxpayer funded campaign donations (Day took $16,318 from PCR program in 2004) to a family member and not withholding as should be done for an employee (as other campaign committees do). So Eller, should others have to do the heavy lifting to keep Day on the up and up? Why back away rather than acknowledge the problem that it is? Why not address whether there’s a tax, Social Security and Medicare withholding issue? Hmmmmmmmmmm…

And here’s from today’s Waseca County News, a rehash of the “DFL asks for payback; Sen. Day questions motives” in the Owatonna paper and the Eller editorial that’s also in Faribault, here are more:

Compelled to write

To the Editor:

Due to the recent actions of my elected State Senator, I, Barb Perkins, who is Nancy Prehn’s sister, who’s Jeremy Eller’s Campaign Manager for Waseca County, am compelled to write this letter to the editor.

Recently I read a letter from a citizen expressing concern about Senator Day’s Campaign Finance Report. Characteristically, Sen. Day replied to the citizen’s letter lashing out with harsh words of criticism. At that point I researched public records discovering this has been an ongoing practice by Sen. Day for 10 years. This practice may be legal but seems unethical. I sent to the editors of various local papers, my documentation, and my letter asking for Sen. Day to do the right thing, return the money back to the state. I did this in April 5, 2006; to date the Owatonna Peoples Press is the only one that has printed my letter, which was printed in an untimely fashion on 4/15/06 and this is a daily paper! A follow up story ran on 4/16/06; Senator Day comes out swinging, saying it was “orchestrated.” I wonder was this censorship or who orchestrated what? I freely gave the information to the reporter at Owatonna People’s Press during two separate discussions that Nancy Prehn is my sister. Sen. Day chose to be in the public eye, that being said, his actions are observed, questioned, admired and most often scrutinized.

Sen. Day has managed to once again side step the real issue; he paid his wife with taxpayer’s money.

I’m an individual with a mind and voice of my own just asking for accountability. Fortunately, we all have the First Amendment Right, and even though Nancy Prehn is my sister, it does not take that right away from me!

Barb Perkins
Owatonna

And from Pam Seaser, whom Dick Day paid for accounting work:

Democrats’ solution

To the Editor:

Democrats’ solution: Fire Dick Day’s wife. Hire someone at $10 an hour ($1,000 a month). Rent office space in Owatonna $500 a month.

Provide a phone, Internet service, office supplies, and utilities at $200 a month. All of this totals $1,700. Or keep his wife who answers the phone after 5:00, holidays, plus weekends and gets paid $400 a month. Do the math. I think Dick knows how to spend his own campaign money wisely. I should know. As his treasurer, we have been reporting this information, as is required by law, since the first day Dick took office. It is disappointing that Democrats are trying to manipulate something that is perfectly legal and ethical instead of trying to do what Dick and Janet have always done—tirelessly serving the citizens of Dick’s district in the most cost effective manner.

Pam Seaser
Owatonna

And last but not least:

Full disclosure

To the Editor:

Full Disclosure: I’ve never met Barb Perkins, and have briefly met Jeremy Ellers while working on another campaign, and Nancy Prehn was a client of mine regarding the Simon Industries power plant. My most recent encounter with Sen. Dick Day was when he introduced and promoted exemption of the Simon Industries power plant from utility personal property taxes without first consulting with the county and township to get their approval of loss of millions in tax revenue — and local governments made it clear what they thought of that exemption.

I read the article about Dick Day’s payment of campaign funds to his wife, and it seems you’re all missing an important aspect of this. Anyone can hire whoever they want to do just about anything, and as I see it, whether Day hired his wife or not isn’t an issue. However, tax withholding is an issue. I was recently comparing the Campaign Finance reports of DFL Secretary of State candidates, and noted that those reports reflect state and federal withholding and Social Security and Medicare payments for campaign workers. Shouldn’t Day’s reports also reflect these payments? $400 a month is not a lot, but $58,000 over time is, and under the IRS rules even $400 a month is subject to withholding. My memory is foggy, but didn’t that little matter of employee withholding keep Lani Guinier off the Supreme Court?

Carol A. Overland
Northfield