School district case nearing the finish line

As we report this week, a three-judge panel at the Office of Administrative Hearings fined the St. Louis County School District last Friday for its failure to file a complete campaign finance report, as a previous OAH panel had ordered the district to do.

Specifically, the panel found that the campaign finance report prepared by business manager Kim Johnson failed to account for what was easily tens of thousands of dollars in campaign-related services provided by Johnson Controls through a number of subcontractors, including public relations firms, pollsters, and campaign consultants. In addition, the panel found that the school district failed to identify the source of funding that paid for it all, as is required in all campaign finance reports.

There are certainly times when fighting legal battles is justified, but for the school district this was a losing fight from the start, one that school officials could have easily avoided.

For full disclosure, I’ve had a direct involvement in the case, which I have acknowledged on more than one occasion. My involvement included contacting school district officials, as part of an effort by complainants to get the school district to amend its faulty report without requiring further litigation. We knew almost immediately that the report prepared by the business manager was inadequate, and we laid out our specific concerns in a series of emails to several board members and the superintendant shortly after Johnson’s report was filed.

We specifically identified the work of a polling firm, known as Decision Resources, as well as the work of campaign consultants from the firm of Himle-Horner and additional work of the public relations firm, Greenfield Communications, all of which the district failed to report. We also identified Johnson’s failure to list any source of campaign funding as a key oversight.

As it turned out, the three-judge panel agreed with our position on all of these issues, ordering the school district to include the cost of the polling, the consultants, and the public relations firm, as well as identify where the district obtained its campaign funds.

The judges also agreed that the time spent on the campaign by school district staff should have been accounted for, but given the passage of considerable time, they opted not to require the district to account for such in-kind contributions in a new campaign finance report that the district must file by Aug. 15. But they put other districts on notice that such accounting will be required for all future reports.

For advocates of government transparency, these are all victories.

Despite the good news, complainants were rightfully disappointed that the three-judge panel declined to rule on the broader underlying question, namely whether school districts can ever spend tax dollars to promote a ballot measure.

For more than 50 years in Minnesota, the answer to that question had been no, but some ambiguous language included in the previous OAH decision in this matter has left confusion where once there was clarity. Those are the risks that always come with litigation. Judges are only human, after all, and sometimes their words aren’t as clear as they should be— which is one reason attorneys rarely want for work.

Complainants believe it’s important to clear up the current confusion, and on that point both school district officials and complainants should be able to agree. Superintendent Steve Sallee, in his testimony in the just-decided case, acknowledged that in his training as a school administrator, he was always told that school districts can present neutral information to voters, but cannot promote passage of ballot measures. He also agreed that there’s a need to clarify the issue given the current uncertainty.

The OAH judges, in declining to address the issue, acknowledged it is a question now ripe for appeal, and that is potentially the next step for complainants. The Court of Appeals has already ruled that school districts are not authorized to expend tax dollars to promote ballot measures, so it’s very likely the court would find similarly in any new appeal. That would then provide the clarity that all sides in this case desire.

While the school district will no doubt complain about additional costs, in reality they need not incur any substantial expense. The school district, in this instance, has no real dog in the fight. If complainants ask the Court of Appeals to clarify that school districts have no authority to expend tax dollars to promote referenda, why should the school district object? That was the law of the land for half a century in Minnesota, and school districts managed just fine. They could tell the Court of Appeals they welcome the clarification, whatever it is, and call it a day. Indeed, that would be the sensible thing to do.

Such a decision would finally settle the issues complainants had hoped to resolve from the beginning of this process. While the transparency of campaign finance reporting is important, our ultimate goal has always been to obtain a clear message from the courts that school districts can’t spend tax dollars on one-sided campaign material designed to “sell” a referendum, and to have a prompt and affordable remedy for citizens when school districts do just that.

Complainants in this case were faced with the question of what to do when their own school district abused their authority by disseminating inaccurate and misleading claims to voters.

Taking the case to a district court would have been astronomically expensive, which would have made it difficult to pursue in this case (since complainants were reliant on donations) and equally difficult for others facing similar situations in the future.

Pursuing the campaign finance angle allowed us to wage this fight under the auspices of the OAH, which is a far quicker and more affordable administrative process. Yes, the case dragged on for years, but that’s mostly due to the fact that we were plowing new ground, and that took years of appellate review. That likely won’t be necessary in most future cases.

Normally, a campaign finance case at the OAH is resolved in a matter of a few months, not years.

Given the precedent-setting decisions this legal case has yielded, school districts are now on notice that if they do this kind of thing in the future they’re going to have to acknowledge it publicly, or face campaign finance complaints and fines if they don’t.

Now, if we can clarify that school districts lack the authority to wage political campaigns—period— we will have established a legal framework that clearly establishes the rules of the road and that gives citizens an affordable path to seek remedy if school districts violate these rules in the future. That was the outcome we had sought in this case from the beginning. It’s been a long fight, but there’s definitely an end in sight.