Watchdog Files Complaint Against Hagedorn Over Campaign Office

By: - October 13, 2020 4:54 pm

U.S. Rep. Jim Hagedorn attended the Duluth re-election rally for President Donald Trump on Sep. 30, 2020. Photo by Ricardo Lopez/Minnesota Reformer.

WASHINGTON — A Democratic aligned campaign finance watchdog group filed a complaint against Rep. Jim Hagedorn with the Federal Election Commission on Tuesday, accusing the first-term Republican of getting free or below-market-value office rent and lying to cover it up.

The complaint from End Citizens United, which asked the FEC to investigate and sanction the campaign, comes days after a Politico report that outlined how Hagedorn has used a Mankato address — 11 Civic Center Plaza, Suite 7 — for his campaign office since 2013 in a building owned by a political donor, but has not reported any payments for the use of the space in those seven years.

“This is damning evidence that Hagedorn broke the law and now he’s lying through his teeth to cover it up,” said Tiffany Muller, president of End Citizens United, in an emailed statement.

End Citizens United has donated $20,000 to the campaign of Hagedorn’s opponent, Dan Feehan, over the past two election cycles. Bawadden Sayed, a spokesman for End Citizens United, said the Feehan campaign did not ask the group to file a complaint against his opponent.

The questions surrounding the free or deeply discounted campaign office come on the heels of scrutiny of Hagedorn’s congressional spending. As the Reformer reported, his office spent about $450,000 of taxpayer money to print and send out positive mailers about Hagedorn, with the contracts flowing to companies controlled by a member of his staff and the brother of his former chief of staff.

The End Citizens United complaint asks the FEC to look into whether the Hagedorn campaign failed to report to the FEC that it received free or cheap use of space in the building. If the Hagedorn campaign had use of a rent-free office, it would have had to report the value of the rental as an “in-kind contribution,” or a donation of goods or services, rather than money. 

Muller charges that because the building was owned for much of that time by a company — which was in turn owned by a large Hagedorn donor — Hagedorn’s failure to report the rent constitutes “illegal corporate contributions.”

After the Politico report was published, Hagedorn’s campaign took to Facebook and subsequently to KEYC News to deny he ever had a campaign office in the building, stating that the campaign used the Suite 7 address simply as a P.O. Box. The statement went on to claim that the campaign did use a space in the basement of the building temporarily.

“The campaign has utilized a USPS post office box, associated with Suite 007, beginning in 2013. The P.O. Box remains in use today, and all arrangements are made directly with USPS,” according to the statement from the campaign shared with KEYC. “From March 2018 through November 7, 2018, the campaign rented an unfinished basement location in the Brett’s building to store signs and hold meetings. The payment of $100 is recorded on the Friends of Hagedorn FEC report for the 2018 election cycle.”

As Muller noted in her complaint, however, “Friends of Hagedorn does not show any disbursements during the relevant period for rent, nor does it show any disbursements to the U.S. Postal Service for P.O. box rental,” an assertion backed up by the records the campaign filed with the FEC, which are available to the public.

“Thus, there is strong evidence that the campaign received in-kind contributions in the form of free or deeply discounted rent, and the use of a P.O. box without charge. This has resulted in at least two, and possibly three, separate violations,” according to the complaint.

Rep. Jim Hagedorn represents Minnesota’s First District after a narrow victory in 2018.

If the campaign did make these payments but simply failed to report them to the FEC, Muller claims that $100, or $12.50 per month for eight months, is well below market rate. Campaign finance regulations require that any goods or services donated to a campaign must be priced at a fair rate, to prevent creating a loophole that would allow donors to exceed contribution limits.

The complaint casts doubt that $100 could be a fair price. Politico reported that office space in the building rents for — at a minimum — $8 per square foot in the building. Congressional records show Hagedorn’s official congressional district office in the same building upstairs rents for $2,200 per month, while his predecessor, now-Gov. Tim Walz, rented an office in the area for $1,800 per month.

The only exception to the reporting requirement would be if the donation is less than $200, and that’s what the Hagedorn campaign’s treasurer, Thomas Datwyler, told Politico he believed to have happened, an explanation that contradicts what the campaign is now claiming.

Finally, Muller asked that the FEC look into whether the true cost of the office space for those eight months would constitute an illegally large in-kind donation. In 2018, any campaign was only allowed to take in $2,700 per primary or general election from a single donor.

It’s unlikely the complaint would see a speedy resolution. The FEC has been operating without a full quorum, leaving the agency unable to vote on enforcement matters.

Separate from the complaint, campaign finance records show the campaign paid for internet service as recently as this summer, even though the campaign denies it had a physical office.

FEC records show the Hagedorn campaign paid for “Internet” from Charter Communications, which services the Mankato, Minn. area, including providing internet to Hagedorn’s official congressional district office in the same building. The congressional office pays for its own internet separately, according to congressional spending records.

A campaign spokeswoman declined to answer where the internet that the campaign pays for is hooked up. But a representative of the internet company on the phone and another in a chat through the service provider’s website, confirmed that the address 11 Civic Center Plaza, Suite 7 did indeed have internet service starting in April 2019 and continuing into 2020, though both said it would be against company policy to divulge who pays for the service there or what name is listed on the account.

Those service dates correspond with the payments made on the Hagedorn campaign’s FEC disclosures. The first payment to Charter Communications was made in late June 2019 in the sum of $211.49 — likely for several months of internet plus an activation fee — while payments of $59.99 continued for a full year of service until April 2020. In May of 2020, the fee increased to $89.99 per month.

It’s unclear whether the campaign currently pays for internet. Campaign spending records are only available through the end of July, but new disclosures are due Oct. 22.

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Daniel Newhauser
Daniel Newhauser

Daniel Newhauser is a freelance journalist based in Washington, D.C. His work has appeared in the Atlantic, Roll Call, VICE, National Journal and several other publications.