Tuesday, June 2, 2015

Raw Politics and the Office of State Auditor

Most of the media has concluded that this last legislative session was a failure largely due to the usual Republican – Democrat refusal to compromise. But that is not quite accurate. After all, the Senate is controlled by the Democrats and they passed the same provisions as the Republican House that a Democrat Governor finds offensive. That would seem to suggest poor legislative management on the part of the Governor or a host of significant policy differences between the Governor and his own party in the Legislature.

One example of this not-to-subtle intra-party war is the provision in the State Departments Omnibus bill that effectively renders the office of State Auditor an empty shell. Its powers of auditing local governments is essentially eliminated and its staff unemployed.

This major policy was contained in a House bill that received a public hearing and was ultimately passed. However, in the Senate there were no comparable public hearings or a vote. Instead, it emerged from a late night conference committee in the closing hours with Democrat leaders in support.

Now, why would Senate Democrat leadership accept a Republican proposal to virtually eliminate the office of the State Auditor which is held by a Democrat incumbent?

The answer likely has little to do with the issue of privatizing the office by permitting local government to contract out their audits and all to do with the incumbent’s stance on mining leases and, particularly, the proposed copper mine located in the Iron Range of northern Minnesota. It should be remembered that in addition to an audit responsibility which charges the State Auditor with oversight of the more than 20 billion dollars spent by local governments, the State Auditor also serves as a constitutional officer elected by the people of Minnesota. As such, she serves on the State Executive Council, the State Board of Investment (pension investments), Land Exchange Board, and a variety of other state boards. One major issue that regularly arises is the management of state lands including the issuances of mining leases.

For the past several years, there has been a heated controversy involving Polymet Mining Corporation of Canada’s proposal to open pit mine near Babbitt on the eastern edge of Minnesota’s Iron Range.  There is believed to be a large copper, nickel, and other valuable mineral deposits beneath a wide stretch of forests and lakes in the area.

Understandably, it pits jobs (around 350) against the protection of the environment including the flow of harmful mining residue into the waters that flow into Lake Superior.

Rebecca Otto, as State Auditor and as a member of the Executive Council publicly announced her opposition to the project and instantly became a political target for the Iron Range legislators.

She was challenged in the Democratic Party primary and mining was a dominant issue. Otto won an easy victory and that should have been the end of this matter.

However, it appears that it resurfaced in the fading hours of this legislative session when the Republican House bill was accepted by the Democratic leadership in the Senate. All indicators are that this was largely the handiwork of two Iron Range legislators with power and long memories; Senate Majority leader, Tom Bakk of Cook County and Senator Tom Sauxhaug of Grand Rapids.

This episode represents a most dangerous threat to our state’s constitution in that it constitutes an effort to intimidate an elected official. What’s next? If the Attorney General disagrees on a policy matter with a segment of the legislature is it acceptable for the legislature then to privatize her office and render her powerless?

We, the people, created these offices and we fully expect them to be treated with respect and fairness by our other elected branches of government. There is no reason in a democratic society for such a gross abuse of power.  In this matter, the people have spoken via an election and the legislature has the obligation to honor the will of the people.

May I add that the same goes for the House Republicans and their continuing battle to privatize the office of State Auditor. In this case, the Republican candidate for State Auditor had the full opportunity to make the case for privatizing the office and changing the responsibilities of the office. Discussing policy differences is what elections should be about.    At the polls, the people spoke and spoke loudly in support of the incumbent and the preservation of the powers and responsibilities of that office.

Now, if the legislature wants to study the office and review concerns about the management, costs, competition, timeliness, etc. that is entirely proper. Apparently, that is what both houses of the legislature intended until the raw power play occurred in the closing moments of the session.

As a former State Auditor, I am deeply upset by this flippant and mean-spirited approach to an office that belongs to the people. The value of the office lies in the fact that it provides not just a financial audit but also a strong compliance review as well.  This means matching financial transactions against the law. That is a real strength of that office. It is designed to prevent financial scandals.

Private firms do an excellent job on the financial and management review front. But compliance work is where the office of State Auditor excels and that is where the taxpayers’ interests are protected.

Overall, Minnesota has a well-respected system of local government. I doubt that there is any better in our nation. Part of the reason for this success is that we take the oversight function seriously. We want it to be independent and professional. The office of State Auditor was designed with that goal in mind. And overall, it has worked well.

If the legislature has concerns about the office, then a study and public hearings are entirely appropriate. But what the legislature did is wholly unacceptable and the Governor should flatly refuse to close the special session until this matter is properly resolved.

It may also be well for the legislature to take a hard look at itself. They may find some room for improvement.

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