Six years ago, members of the ad hoc Coalition for Community Schools took on a legal quest that, I’m quite confident, came to a final conclusion on Monday with an unpublished ruling by the Minnesota Court of Appeals.
The legal effort, in which I was heavily involved, was backed by strong public support, drawing financial contributions from more than 400 individuals, most of whom resided in or owned property within the St. Louis County School District. They were upset that the school district had apparently spent tens of thousands of dollars on a misleading and highly promotional campaign to win passage of a 2009 bond referendum.
At the time, it was a well-established legal principle that school districts could not promote referenda with tax dollars, a view based on a 1966 attorney general’s opinion and state statute (Minn. Stat. 8.07) which gives AG opinions the force of law as they pertain to school districts.
The coalition, in filing a complaint with the Office of Administrative Hearings (OAH) back in November 2010, sought to show that the school district had, in fact, spent tax dollars in an unauthorized way to promote its referendum and that, in doing so, it acted as a campaign committee, subject to campaign reporting requirements.
And while the case traveled a long way to get there, including three evidentiary hearings at the OAH, two trips to the Court of Appeals, and one to the state’s Supreme Court, we have achieved the major precedents we had sought from the start. As a result of the case, known as Abrahamson v. St. Louis County Schools, a school district has, for the first time, been shown to have unlawfully promoted a referendum and been forced to file a financial disclosure report, revealing well over $60,000 in campaign expenditures.
The suggestion that the school district’s expenditures were unlawful had been somewhat in question up until this week’s ruling. The first of the two OAH panels that heard the case, headed by Judge Ann O’Reilly, determined after three days of testimony that the school district had promoted their referendum, citing one-sided, misleading, and inaccurate information that the district had sent to voters. But in a preamble to the guts of that decision, O’Reilly included language that some interpreted as authorizing promotional spending by school districts and, in effect, overturning the attorney general’s 1966 opinion. We never read it that way and were shocked when the state auditor’s legal counsel used the language in a subsequent auditor’s opinion that suggested promoting with tax dollars was now acceptable.
I argued with the auditor’s office at the time that their opinion was baseless, but I was told that since I’m not an attorney, I should be quiet. The auditor’s legal counsel also denied that there was a statute giving attorney generals’ opinions the force of law as they relate to school districts, and he never responded when I subsequently emailed the statutory citation to him.
It was the auditor’s flawed interpretation of the O’Reilly decision that forced us to make a second trip to the court of appeals to argue an issue we thought was settled from the start. Auditors’ opinions, after all, are used as legal guidance by public bodies, so it’s important that those opinions are based on sound legal footing.
In its decision this week, the Court of Appeals restored the foundation that we had sought, albeit in a backhanded manner. The court determined that the OAH has no jurisdiction over the question of the propriety of promoting with tax dollars. That question, it said, is one properly left to the courts, not an administrative agency like the OAH.
It’s not the clear-cut prohibition on promotion we would have preferred, but it gets the job done. In ruling as it did, the court of appeals, in effect, affirmed that the language in the O’Reilly decision is moot. Whichever way the auditor wants to interpret that language is now unimportant since the O’Reilly panel, as with any OAH panel, had no legal jurisdiction to overturn an attorney general’s opinion on this issue. Only the judicial branch can do that.
That sets everything back to the status quo that existed for years in Minnesota— namely that school districts cannot promote referenda with tax dollars. Period. We will be following up with a letter to the auditor asking for a revision to her office’s opinion regarding this issue.
Our overall legal effort puts taxpayers in a stronger position than ever before in the event that a school district fails to abide by the prohibition on the promotion of referenda. If a school district files a campaign finance report claiming promotional expenditures, that filing is an admission of wrongdoing, one that could quickly become the basis for a broader taxpayer case in district court that could seek serious corrective action.
And if school districts promote referenda, but don’t disclose their spending, taxpayers can easily and inexpensively file a complaint with the OAH. Now that the legal precedent is set, taxpayers should be able to get a ruling within weeks, not the years it took this case to conclude. And any determination that a school district promoted without disclosure will now lead to stiffer penalties. In terms of fines, the St. Louis County School District got off lightly because they were the first school district caught in such a violation and could credibly argue they didn’t realize they were subject to reporting. Other districts are unlikely to get off so easily.
And such an OAH determination may be just the first step. Should an OAH panel find that a school district promoted a referendum with tax dollars that, again, will be the basis for a very winnable taxpayer case in district court. In either case, the last thing a school district wants in the heat of a referendum battle is a finding that they’ve violated campaign laws. Forget about passing a referendum under those circumstances.
Getting to this point hasn’t been easy. Along the way, the chief complainants, Steve Abrahamson and Tim Kotzian, and others, have been subjected to unfair criticism from school officials who have complained about the cost of the litigation.
But the school district must take responsibility in my book. It was the district that chose to flout the law and spend tens of thousands of dollars to wage a campaign of misinformation. It was the school district that appealed to the Supreme Court when lower rulings didn’t go their way. And the school district could have, indeed should have, acknowledged their error from the beginning, rather than spending hundreds of thousands of dollars seeking to explain away blatant wrongdoing.
From our perspective, we felt we had to see the issue through to final resolution. We had made a commitment to the hundreds of people who contributed financially to this effort, who joined us in wanting to see something done. You don’t quit half way through just because you face criticism.
While we had plenty of help from contributors to this legal effort, residents of the area should be aware of the assistance from the law firm of Mohrman, Kaardal, and Erickson, which provided far more legal work than we could have ever afforded. Attorney Erick Kaardal is one of those rare lawyers who is willing to put a principle ahead of the dollar, and when it comes to government accountability, Erick is as strong an advocate as you’ll find.
Personally, I couldn’t be happier to see this case conclude. We had thought we were done two years ago when the OAH ordered the school district to file a campaign finance report.
But the report the district filed was deeply flawed, and when school officials ignored our requests to amend it, we felt we had no choice but to take the matter back to the OAH.
The second OAH panel found in our favor, fined the district and ordered the preparation of an amended report. But we had also asked the panel to weigh in on the muddied language of the O’Reilly decision, in hopes we could get the auditor’s office to revised its flawed opinion.
The OAH panel had declined, citing lack of jurisdiction. We asked the Court of Appeals to take up the question. They also declined, but in ruling that the OAH lacks jurisdiction to decide the propriety of promoting with tax dollars, they effectively cleared up the issue anyway. And that’s a reasonable conclusion to this longstanding case.
It’s been a long road to this point. But, I think it’s fair to say we’re at the destination we had hoped to reach when we began the journey six long years ago.