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.