Thursday, September 1, 2011

State Auditor: City of Stillwater's $80K donation to St. Croix bridge lobbyists 'unauthorized'

Rep. Michele Bachmann and Stillwater Mayor Ken Harycki

Office of the State Auditor agrees with Ripple in Stillwater on legality of lobbying expenditures and recommends the city get its money back.

By Karl Bremer

The Minnesota Office of the State Auditor (OSA) has determined that the $80,000 the City of Stillwater donated to the lobbying group Coalition for the St. Croix River Crossing was an “unauthorized expenditure” and has recommended that the City “attempt to recover the money donated to the Coalition.”

The ruling was in response to a complaint filed by myself and other citizens with the OSA over improper use of taxpayer dollars to promote the proposed freeway bridge across the St. Croix River, aka the “Bachmann Boondoggle.”

The Office of State Auditor (OSA) chastised the City for its sloppy contracting procedures with the Coalition and stated that “If the City decides to contract with the Coalition for services directly related to one of the City’s authorized functions, the City should use proper contract management procedures to protect public funds,” which it did not in this case.

The OSA also took issue with the contract between the City and The Conach Group, with whom the City has contracted for $1,500 a month for “legislative consulting” services. The OSA noted that “The Conach Group’s attorney has admitted that the contract between the City and the consultant is “poorly drafted and significantly misrepresents the scope of what The Conach Group did and is doing for the City.” The OSA recommended that the City amend its contract with The Conach Group “to clearly define the roles, responsibilities, and performance expectations of The Conach Group and City staff.”

The OSA found during its investigation that the City not only donated $80,000 to the Coalition without authorization, but it also paid—at Stillwater Mayor Ken Harycki’s request—the Coalition’s $70 filing fee with the Secretary of State when it was formed. Harycki is co-chair of the Coalition. The OSA stated that the filing fee payment, along with any membership fees paid by the City to the Coalition, also were not authorized expenditures by the City under state law.

The $80,000 the City donated to the Coalition was to come from a Tax Increment Financing fund for the downtown Stillwater district. The OSA stated that it “will handle any issues related to the use of tax increment for the $80,000 donation through the procedures required under the tax increment financing laws.”

When the Minnesota Campaign Finance and Public Disclosure Board last month dismissed my complaint regarding the registration of The Conach Group’s “legislative consultant” as a lobbyist, Harycki sniffed that it was “much ado about nothing.” Perhaps Harycki and his legal advisors will listen to the OSA instead.

More to come on this story as it develops. You can read the entire Office of the State Auditor’s letter to Harycki here.


  1. So the mayor is using city money for a group he co-chairs? Isn't that some kind of conflict of interest?

  2. view from the north hill:

    Technically not, according to the State Auditor. Read the Auditor's letter to Harycki. It addresses that issue there, along with recommendations for disclosing potential conflicts of interests.

    It still doesn't pass the smell test.

  3. I find it interesting that Harycki's attorney in his city conflict of interest case a couple of years ago, Ryan Kaess, is now representing his buddy Mike Campbell.

    I wonder who is paying the legal fees?

    This doesn't pass the smell test either.

  4. Didn't Mike Campbell work for Harycki on his campaigns?

    If that is true, is it a conflict of interest to then funnel city funds to Campbell's newly formed lobbying group?

  5. Why didn't the city hire the ex-mayor Jay Kimble to be the lobbyist for the city? He obviously has the experience and the contacts to do the job. But then there would have been a need to advertise the opportunity in the sunlight.

    When will the city finally wise up and recall this obvious incompetent and self-serving mayor like they did in WI?

  6. The state auditor is a tree-hugging liberal and her opinion as most she issues has much more to do with politics than anything else. If she was so against this idea wouldn't she stand up to the cities / counties that spend millions to lobby for light rail and other mass transit boondoggles?

  7. "The state auditor is a tree-hugging liberal" and what does that have to do with the illegal donation? I know it's easier to defile the messenger than to deal with the message. That's what's wrong with our politics these days, people seem to be more interested in who said what rather then what was said. Fact is that the mayor and council (minus Cook) voted to donate to an organization that the mayor is an officer and has a conflict of interest with his participation in both as the donor and as the recipient.

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