News Summary -- events leading to the lawsuit filed to stop the Pawlenty administration's unallotment of the Minnesota Political Contribution Refund program
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Minneapolis, MN, July 24, 2009 -- Republican activist Bob Carney Jr., editor, publisher and owner of www.republicancontract.com, political entrepreneur, and "Moderate Progressive Republican" candidate for Mayor of Minneapolis, has commenced a class action lawsuit challenging the Pawlenty administration's attempted unallotment of the Minnesota Political Contribution Refund ("PCR') program.
The PCR program provides individual Minnesota taxpayers annual refunds of up to $50 per person ($100 per couple) for contributions to eligible state political campaigns and political organizations. According to a June 23rd Star Tribune article: "It is the only such dollar-for-dollar refund program in the country."
Carney is represented by Chestnut & Cambronne, P.A., a Minneapolis law firm that specializes in class action lawsuits. The Summons is signed by Karl Cambronne, the head of the firm. Carney's lawsuit seeks judgment including this provision:
"That the State of Minnesota and the Commissioner of Revenue be enjoined from further inhibiting or interfering with the statutorily mandated payment of PCR tax refunds."
"I have made every reasonable effort to try to avoid a lawsuit, calling on Governor Pawlenty and his administration to reconsider any attempted unallotment of the Political Contribution Refund program," Carney said. "However, the Pawlenty administration is adamant in their position, and I was left with no alternative but to take legal action," Carney added.
The Pawlenty administration claims the legal right to effectively end the PCR program for the current biennium by using the Governor's unallotment powers according to Minnesota Statute 16A.152. The unallotment procedure has historically been used as an alternative to calling a special session of the Legislature, when economic downturns cause projected budget deficits. At a June 30th Legislative Advisory Commission hearing, Minnesota House Speaker Margaret Anderson-Kelliher and Minnesota Senate President Larry Pogemiller claimed the Pawlenty administration's current attempt to use unallotment powers to close a $2.7 billion projected deficit is unprecedented in scope, and usurps the Legislature's lawmaking and policy authority. Governor Pawlenty's finance commissioner, Tom Hanson, claimed everything the Pawlenty administration was attempting to do was within the Governor's unallotment powers.
One month ago, in a June 24, 2009 letter hand delivered to Governor Pawlenty's office, Carney warned Governor Pawlenty of the dangers of attempting to unallot the PCR program. Carney wrote:
"Let’s note first that the campaign contribution refund is a refund payable to individual Minnesota taxpayers. One important point to consider is this: I, as an individual taxpayer certainly have standing to sue if you seize my refund ... Please note: I met yesterday for an hour with the head of major Minnesota law firm that specializes in class action lawsuits. He accepts my analysis regarding my standing to sue."
The text of Carney's 6/24/09 letter is online at www.republicancontract.com.
Carney was one of three public witnesses at the June 30th Legislative Advisory Commission hearing. Carney testified:
"...with particular reference to the Campaign Finance Refund… that is a tax refund. And if an individual complies with the law on that, and it’s part of the tax law, it’s their money -- they’re entitled to it…, and I think it would be a very dangerous precedent if Governor Pawlenty were to succeed in trying to unallocate this -- to say that a Governor could unilaterally, in effect, seize or confiscate tax refunds... I brought this to the attention of a Minneapolis Republican Ward endorsing convention yesterday. And after considering that, they voted a resolution that calls on Governor Pawlenty to reconsider this, and to state unequivocally that he will not attempt to unallocate any tax refund due to any Minnesota taxpayer as provided by law. I’ve also met with an attorney for a large class action law firm, in Minneapolis, last week. I have a legal memo, right here, from them, indicating that I will personally have standing, and that there will be standing for a class, to sue, if Governor Pawlenty does not relent... This is a different legal situation than any appropriation or tax policy, because it is a right of individuals to their tax refund. I want to draw your attention to that."
Video of Carney's 6/30/09 testimony is accessible online via www.republicancontract.com
Immediately following the June 30th LAC hearing, Carney spoke with both Minnesota Finance Commissioner Tom Hanson, and with Minnesota Revenue Commissioner Ward Einess. Both Commissioners indicated they believed they were on solid legal ground regarding the proposed PCR unallotment, and they planed to proceed in spite of the issues and concerns raised by Carney. "To me, it's unfortunate that the Pawlenty administration seems more concerned with their legal position than with the principles involved. 'Let the buyer beware' is not a doctrine I ever expected to see from any Minnesota administration," Carney said.
The lawsuit provides for seeking to have the plaintiff's attorney fees paid for by the State of Minnesota. "I warned Governor Pawlenty of the danger of this added expense in my June 24, 2009 letter," Carney said. In that letter, regarding the likelihood that Minnesota would have to pay attorney fees, Carney wrote:
"...not only would no 'net savings' result to the state general fund, but Minnesota would have to bear the additional cost of attorneys fees. I think such a cost would be unfortunate (the attorney I’m talking with sees this a little differently), but in my view it would be better for Minnesota to bear that cost now, than to have a precedent by which future Governors might claim a general power to unallot any and all taxpayer refunds, according to whatever scheme a future Governor might deem to be reasonable."