October 27, 2022

CFB Finds Prima Facie Campaign Finance Violation by Jim Schultz

Schultz’s violation could result in the largest fine in Minnesota history – over $3.3 million for Schultz and $6.6 million for MN for Freedom

Yesterday, the State of Minnesota Campaign Finance Board determined that there is prima facie evidence that Jim Schultz’s campaign violated campaign finance laws by illegally coordinating with the independent expenditure group Minnesota for Freedom.

This determination resulted from a complaint filed by the DFL Party alleging that Schultz’s campaign and Minnesota for Freedom both bought ads using Steve Syckes as an agent, which is expressly prohibited by Minnesota campaign finance law.

In addition to finding a prima facie violation of the law prohibiting coordinated activity, the CFB also found that Schultz dramatically exceeded his contribution limit of $2,500, once Minnesota For Freedom’s at least $847,000 ad buy was properly counted as a contribution to Schultz.

Schultz’s lawbreaking could result in the largest fine in Minnesota history. 

“Let’s be clear about exactly what is happening here, Jim Schultz is cheating to win an election,” said DFL Party Chairman Ken Martin. “The Campaign Finance Board’s initial ruling found that Jim Schultz broke the law by illegally coordinating with a dark money group funded by big oil, big pharma, and big tobacco. If Schultz can’t even follow the law, how can he possibly enforce it?”

“Schultz has shown voters that he will cut any corner in his desperate bid to win, no matter how sleazy or illegal,” added Martin. “Minnesotans deserve better in their Attorney General. Given the historic and significant fines he is now facing I would advise Jim Schultz to hire a real lawyer, someone who actually has courtroom experience. Schultz is going to need it.”

The Numbers

Schultz’s campaign faces a potential fine of at least $3.3 million. 

This is because Minnesota for Freedom’s $847,000 worth of illegally coordinated ads count as contributions to Schultz’s campaign, which exceeds Schultz’s contribution limit of just $2,500. Schultz’s maximum penalty, pursuant to section 10A.28, subd. 2(4) is up to four times the amount by which the contribution exceeded the limit which is $844,500. The maximum penalty is $3.3 million.

The potential penalty is only increasing, however, as Minnesota For Freedom is continuing to pour corporate money into its coordinated efforts to support Schultz.

Minnesota for Freedom faces a possible fine of at least $6.6 million.

The first piece of that fine comes from their excess donation to Schultz, which just like Schultz is subject to a penalty of up to four times the amount of the excess contribution. The second, much larger piece, comes from their illegal coordination. As the CFB notes on page 3 of their determination:

“An independent expenditure political committee or independent expenditure political fund is subject to a civil penalty of up to four times the amount of the contribution or approved expenditure…”

Given that Minnesota for Freedom spent at least $847,000 on illegally coordinated ads for Schultz, their possible penalty is upwards of $3,388,000. Combined with their penalty for exceeding Schultz’s contribution limit, Minnesota for Freedom could be on the hook for as much as $6.6 million.

In 2002, Tim Pawlenty received $600,000 in fines and penalties for illegally coordinating on $600,000 worth of ads. This was called “unprecedented” at the time. The fines for Schultz and his cronies could be dramatically higher.

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