Giving and receiving

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June 17, 2002 // UPDATED 2:16 pm - June 28, 2007
By: Scott Russell
Scott Russell

Many Park Board members get a big chunk of their campaign war chest from lawyer Brian Rice and his associates. Rice's firm earns more than $400,000 doing Park Board legal work. Is there a conflict?

Brian Rice's law firm, Rice, Michels & Johnson, got $439,000 in 2001 from the Minneapolis Park and Recreation Board for contract legal work as general counsel and lobbyist.

Rice gave as well as received. He, his wife, his law firm and its members gave more than $5,000 to candidates in the 2001 Park Board races, campaign finance records show. Two groups that Rice represents as a lobbyist, the Minneapolis Police Relief Association and the Minneapolis Fire Relief Association, contributed another $3,600 to Park Board races. In addition to his donations, Rice said he helped organize a fundraisers for Park Board candidates.

Because Park Board campaign war chests are relatively small, with most raising under $10,000 in 2001, a few large contributions go a long way.

Six of nine sitting Park Board members received 13 percent or more of their 2001 fundraising from Rice and his connections. One, Ed Solomon, received 40 percent of his fundraising from Rice's group.

It is not illegal. Yet should someone receiving large contracts from a government body contribute to, and actively campaign for, its board members -- and should the candidates accept such help?

It depends on whom you ask.

Those pushing for tighter campaign finance reform laws say such donations undermine people's confidence in the system. If not illegal, it can create the appearance of conflicts of interest, they say.

Park Board president Bob Fine wonders why Rice's contract is getting extra scrutiny, saying Rice's donations are no different than those made by political action committees and other interested parties in City Council and other local races.

Rice said it is "the community standard" for law firms to contribute to political races. "I am happy to contribute to them," he said.

He stands on his record, Rice said, noting he recently won a court case that tried to block the Park Board's development of the Fort Snelling athletic complex -- complete with lights and bleachers.

When John Belfry looked into the contributions and saw connections between Rice's law firm and a group that rents space from the Park Board in the former superintendent's house -- a group Belfry said has a sweetheart rent deal -- he got suspicious.

Mayor R.T. Rybak pushed for the creation of a team to look at ethics in government. It has begun work on some issues -- conflict of interest, nepotism, and lobbying by former city officials, said team member Dor Mead, a former City Councilmember. It has not started work on campaign finance issues.

Speaking for herself, Mead said she believes there is a problem when elected officials accept campaign contributions from those doing business with the group they represent.

"Sometimes, you can get into some interesting gray areas," she said. "You know elected officials are prohibited from taking gifts. How do you make a distinction between this kind of a campaign contribution versus a gift from a vendor?"

Park Board Commissioner Vivian Mason has declined contributions from Rice, saying they are inappropriate.

"I feel anybody who is a contracted employee of the Park Board should not be involved in the political campaigns of any candidates," she said.

Well connected

Brian Rice comes from a political family; his father, Jim Rice, a staunch DFLer, was a long-time state representative from north Minneapolis. His uncle, Dick Kantorwicz served on the Park Board from 1955 to 1961, including a stint as president, Rice said. Family friend Ed Gearty served on the Park Board from 1959 to 1963 and later served as the Park Board attorney.

Former Park Board Commissioner Patty Hillmeyer, someone Rice knew since he was a kid, got him his first job with the Board in 1983, he said. He had just finished law school and had started his career as a municipal bond lawyer.

In a sideways way, Minneapolis DFL state Rep. Phyllis Kahn got him the job, he said. Kahn "kept sticking it to the Park Board" in various appropriations bills. Hillmeyer wanted more help at the legislature.

Rice lobbied that session and has worked for the Park Board ever since, a career spanning three different law firms, including his own, Rice, Michels & Johnson, which opened in May 2000. He became the board's general counsel in the mid-1990s.

"Yeah, I'm active. I contribute," Rice said. "When I got hired the first time, I hadn't contributed anything to anyone. If a commissioner has asked for my help, since I have been (with) the board, I've helped them out. Or if I have offered and they have accepted, I've helped them out."

He or his firm gave to all incumbent commissioners and he hosted fundraisers for them during the last election -- except Mason and Annie Young, who did not want the donations, Rice said. He would put together a fundraising memo and send it to his friends and clients, like the Minneapolis Police Relief Association and the Minneapolis Fire Relief Association.

"If they want to come, they come," he said. "It's tough running a race. Politicians don't like asking for money. It is not a fun task."

Rice said he has held fundraisers for gubernatorial hopefuls Roger Moe and Tim Pawlenty. "I do a lot of legislative stuff," he said. "I've given to the House Democrats, the House Republicans, the Senate Republicans, the Senate Democrats -- that is the way the world works."

Unlike the contributions to state legislative races, where Rice may hope to influence future legislation, the contributions to the Park Board are essentially going to his employers.

"Go to City Hall. You will find tons of lawyers and tons of law firm PACs that contribute .... They do work on special contract stuff all the time," he said. "Lawyers have always been givers to political campaigns."

Rice has backed losing Park Board candidates, usually incumbents. He supported incumbent George Puzak, who lost an at-large seat to Bob Fine in 1997. Rice backed his long-time friend Hillmeyer, another incumbent who lost to Walt Dziedzic in 1997.

"Walt was not happy with me," Rice said, smiling. "He still reminds me of it every chance he gets."

Yet in spite of past support for their political opponents, Dziedzic and Fine strongly support Rice's contract.

"I voted to hire Brian (Rice) as the lawyer/lobbyist because I saw what a good job he did over there in St. Paul," Dziedzic said. "I don't think there is anyone who comes close to him in the state of Minnesota."

A little goes far

Park Board members work part-time and tend to have lower-profile elections compared to City Council races. Park Board members get $10,200 a year compared to $65,678 for councilmembers.

The Park Board has nine members; three run citywide and six run in districts. Park Board districts are twice the size of council wards, yet those running for City Council raised considerably more money than their Park Board counterparts.

One Park Board member, Dziedzic, raised more than $22,000 in 2001. Fine had the second highest total, $9,937. The other winners averaged $6,196.

By comparison, Councilmembers Barret Lane (13th Ward) raised $16,570 in 2001; Dean Zimmermann (6th Ward) raised $24,450; Dan Niziolek (10th Ward) raised $30,280; Scott Benson (11th Ward) raised $36,400 and Lisa Goodman (7th Ward) raised $53,440.

The disparity means that the few who give to Park Board campaigns have a larger impact (see sidebar, page 6).

For instance, Rice, his wife and his law firm and the city police and fire relief associations he lobbies each gave Fine a maximum $300 donation, a total of $1,500, according to campaign finance reports. It represented 15 percent of Fine's 2001 fundraising.

How important is money in a campaign? Zimmermann, a former Park Board member, said, "it takes a certain amount of money. Ask the question about the functioning of an automobile. How important is the rotor cap? It is just a small thing, but the car won't run without it."

Zimmermann praised Rice's Park Board work. He said Rice was dedicated, thorough and stayed in communication.

However, Zimmermann returned Rice's campaign contribution when he was on the Park Board.

"I did not feel comfortable taking money from somebody who does business that closely with the Park Board," Zimmermann said. "I have taken money from him for my City Council race. There is not the same relationship there."

Currying favor

Many people -- Fine, Rice and Parks Superintendent Mary Merrill Anderson -- said lawyers and PACs routinely donate to campaigns.

Some people would like to see tighter restrictions on campaign donations at the local level.

Sen. John Marty authored the "gift ban" bill in 1994, which prohibited lobbyists from giving gifts to elected state officials. The bill also prevented "interested parties" from giving gifts to local elected officials.

Marty said he has tried unsuccessfully to include campaign contributions as part of the gift ban law for state and local officials.

"The bottom line, they are probably not doing anything illegal," Marty said of the Minneapolis Park Board situation. "Just because something is legal doesn't make it right. It would be troubling to most people, I think, when somebody who has a contract with an organization is somehow currying favor with a gift."

"They (donations) help you get access and build good will, which indirectly is going to influence behavior of public officials," Marty said.

Rybak, who pushed the government ethics issue during his 2001 mayoral bid and refused to take contributions from those seeking city subsidies, declined comment on the Park Board situation, a spokeswoman said. He will wait for recommendations from the Ethics Team.

Maury Landsman, a University of Minnesota Law School professor who teaches ethics and professional responsibility, said one question is: Are the members of the board making a disinterested decision in choosing this particular firm?

(Julie Landsman, Maury's wife, is a contributing writer to Skyway News, Southwest Journal's sibling publication.)

"Maybe it kind of doesn't feel right," Landsman said. "'Doesn't feel right' isn't enough to make it unethical. Unless there is a particular allegation against the firm or a particular park board member, I can understand why some people say it doesn't feel right. It is not clear to me that anything wrong is going on."

Conflict or witch hunt?

John Belfry of Tangletown isn't alleging wrongdoing, but he does have questions about the connections between Rice's firm, the Minnesota Recreation and Park Association (MRPA) and Park Board decisions.

MRPA rents the Superintendent's House, 3954 Bryant Ave. S., from the Park Board for $750 a month and does not pay utilities, a deal that has recently drawn criticism.

Belfry's wife, Mary Belfry, is a member of the Parks Legacy Society, a group that wants to turn the former Superintendent's House (what the Legacy Society calls the Theodore Wirth House) into a museum.

John Belfry is not a member of the Legacy Society, he said. But as a business owner and taxpayer, he thought the MRPA's lease was a bad deal. He also objected to what he characterized as the Park Board's non-responsive attitude towards Legacy Society questions.

So he started digging.

He found that a member of Rice's law firm lobbied for the MRPA - meaning Rice's firm represented the Park Board and a non-profit it contracted with. Even though there may be nothing there, Belfry said, the Park Board should avoid the appearance of a conflict.

"There are some conflicts of interest with respect to continuing the lease when they are all intertwined like that," he said.

(Landsman said the lawyer's code of conduct does not require attorneys to avoid the appearance of a conflict of interest. That provision was struck in 1983 as too vague. It still applies to judges.)

Rice, the MRPA and Park Board members and staff say nothing inappropriate has happened behind the scenes. The Park Board and MRPA signed the lease in 1997, more than 3 years before Rice's law firm began lobbying for MRPA.

Rice's firm has worked with MRPA lobbying on bleacher safety and after-school grants, Rice said. In all, the lobbying contracts were worth roughly $3,000.

Rice said working with MRPA has strengthened the Park Board's lobbying position at the Capitol; MRPA is a statewide organization and gives park funding requests greater relevance to more legislators.

The Park Board has not voted on the MRPA lease since it was signed. MRPA recently exercised its last option, extending the lease to June 2005.

The Legacy Society has the money to buy-out the MRPA lease, it says. The Park Board has not acted on that request.

Park Board member Jon Olson said he has tried to push for an alternative site for the museum, a move opposed by the Legacy Society. Other board members have raised concerns about funding museum operations if they opened one.

Superintendent Anderson said people might see a potential conflict if Rice were drawing up a new lease for the Park Board and the MRPA, "but that was not the case."

Rice said former Superintendent David Fisher negotiated the lease because he did not want to live in the superintendent's house anymore. Rice said he had "absolutely nothing" to do with any discussions about the lease's future, only a discussion about what the existing lease required.

"They must be absolutely nuts," Rice said, of people speculating on a conflict. "The discussions are, 'what are the terms of the lease?' Read the lease. You don't have to talk to your lawyer to do that. What is there to do? I am not a policymaker."

For anyone to impugn the MRPA in such a way was "despicable," he said.

Anderson referred to questions linking Rice to the MRPA lease as "a witch hunt." Park Board Commissioner Marie Hauser referred to such questions as verging on scandal-mongering.

The people who want the museum at the superintendent's house "are using all of the methods they can" to pressure this choice, she said.

Gift ban violation?

The Star Tribune reported July 2 that Park Board staff might have violated a state gift ban by accepting roughly 150 free MRPA memberships, valued at $19,000.

The Park Board doesn't believe it has violated state law, but some people may perceive a problem because of the MRPA's tenant-landlord relationship with the Park Board, said Park Board spokeswoman Emily Ero-Phillips. The superintendent and the five assistant superintendents will no longer accept free memberships.

The Park Board staff will review the legal issues around accepting free MRPA memberships and report to the board soon, she said.

Rice said he had reviewed the issue with the superintendent, including a reminder that his firm lobbied for MRPA, and said memberships did not violate the gift ban. He believes an exception exists because the gifts were given broadly, not just to decision-makers.

Ero-Phillips said the superintendent would not use Rice's firm for the review, but seek independent counsel.

Drawing the line

Fine said that accepting a campaign contribution from the Park Board's attorney is no different than accepting one from a union -- or anyone else with a special interest before the Park Board.

"What is the problem?" he asked. "What if a group of residents wants a dog park and they donate money to a campaign? ... Do we vote on union contracts or things that affect contracts? Of course. Does that mean people who belong to unions can't donate to campaigns?"

"You are almost talking about -- where do you draw the line?" he asked.

That's what PACs do

The Minneapolis Police Relief Association gave $2,200 to Park Board candidates in 2001. It is a pension fund for roughly 1,000 police officers, but it has been closed to new members since 1980, the association said. The association includes three active park police officers.

(The park police salary and benefits are derived from the labor agreement between the Police Officers Federation of Minneapolis and the city. The Park Board has to sign off on issues of work rules or anything unique to the park system.)

The Minneapolis Fire Relief Association, a pension fund for roughly 750 fire fighters, gave $1,400 to Park Board candidates in 2001.

Why donate to the Park Board?

"That's what PAC funds are for -- to invest money in candidates that you feel are doing a good job for the state, the city, the county, whatever the case might be," said Walter Schirmer, the PAC treasurer for the fire relief association. "We have a retiree group that has monthly meetings at Park Board facilities. I don't think they charge them anything, they may charge a stipend. They are pretty good about letting them use the facilities."

Rice lobbies for both the police and fire relief associations, but some say they would have received campaign contributions regardless of his ties.

Dziedzic, for instance, is a retired police officer and a member of the police relief association.

People like Hauser and Graves have strong union backgrounds.

Hauser said the Police Relief Association was one of a number of union groups that contributed. "I didn't realize Brian was a lobbyist for them," Hauser said. "I am a union member and I have been a union member for 28 years," said Hauser, a nurse.

Rice's rate lower than many

Minneapolis Park and Recreation Board lawyer Brian Rice is a significant contributor to Park Board races; his billing rate is on the low side of the public sector's going rate.

The Park Board spent roughly $372,000 on contracted legal work in 2001: $320,000 to general counsel Rice, Michels & Johnson (RMJ) and $52,000 to Best & Flanagan for real estate work, said Norman Merrifield, assistant superintendent for finance.

Rice's $125-an-hour attorney fee is less than the city of Minneapolis, the Minneapolis Public Schools and Three Rivers Parks pays for their contract lawyers.

Parks Superintendent Mary Merrill Anderson said hiring a firm has advantages over hiring a staff attorney. The Park Board gets a variety of legal expertise, such as lawyers with specialties in property issues or personnel issues.

Rice, Michels & Johnson has six practice areas, according to its website: public pensions; labor and employment; government law and litigation; lobbying; small business, commercial and contract matters; and tax law.

The Park Board is in the early stages of a new master plan, Anderson said. It will discuss whether to rely solely on contracted legal assistance or hire a staff attorney.

Park Board member Vivian Mason said many of the things Rice's firm have done have been effective, yet she thinks the board should put out bids for legal services.

"There comes a point when you have the same people representing you both as your lawyer and your lobbyist -- that there comes a point where they have done it too long and you maybe need a change," she said.

Park Board President Bob Fine, a real estate attorney, said the board benefits from Rice's 19 years working on parks issues.

"Someone else would have to reinvent the wheel and understand the entire history and background -- which would be very expensive and time consuming -- and the Park Board would have to pay for that," he said.

The Park Board hired Rice and renews his contract annually. The board has an "informal" review of his work, Anderson and Fine said.

Mason said she wants more effective reviews of contracted services, not ones done hurriedly.

Lobbying costs

The Park Board paid $160,000 for legislative lobbying in 2001.

It paid Rice, Michels & Johnson $120,000; it paid Maryann Campo $40,000 as part of the team to help with Republican legislators.

For comparison, Three Rivers Parks (formerly Hennepin County Pakrs) spent $82,000 on two lobbying contracts in 2001. It's legal spending is half the Park Board's in a budget one-third as big.