The mystery of a GOP congressman's seemingly rent-free campaign office
For at least seven years, it appears that GOP MP Jim Hagedorn has used an election campaign office provided by a political donor rent-free - a clear violation of federal electoral law, which occurs with increasing control of his finances.
In dozens of submissions to the Federal Election Commission in October 2013 and just last month, Hagedorn listed a basement suite in a building in downtown Mankato, Minnesota, as the headquarters of its campaign: Suite 7 of the Brett's Building at 11 a.m. Civic Center Plaza . However, election records show that Hagedorn has not reported any payments for use of that space over the last four elections he held to represent Minnesota 1st District in Congress, including his current race .
Hagedorn's campaign and the building's previous owner struggled to explain the situation. In recent interviews, they insisted there was no inappropriateness, but gave conflicting reports about why no payments were disclosed. It all adds up to a portrait of, at best, very irregular or sloppy spending practices; In the worst case, it is a violation of the campaign financing law. Non-partisan ethics experts meanwhile expressed deep skepticism about Hagedorn's actions.
"It sounds like something that may be a fairly serious breach of campaign finance law and ethics rules," said Bryson Morgan, a former investigative adviser to the Office of Congressional Ethics who now practices political law at Caplin & Drysdale. "You have to pay a fair market value for every space the campaign uses."
The news follows other recent revelations from the Minnesota Reformer, depicting a congressman who often circumvents the boundaries of congressional ethics. Hagedorn is on the verge of paying more than $ 100,000 in taxpayers' money to an employee-owned printer. Another company owned by his former chief of staff's brother raised an additional $ 340,000 in public funds. Hagedorn has also been criticized for appearing on a campaign provider's local radio show without revealing his financial ties.
The allegations of unethical behavior could cost Hawthorn in November. His opponent, Democratic Peasant Labor candidate Dan Feehan, has made Hagedorn's “personal corruption” a central theme of his campaign, and polls are showing a close race. Feehan lost less than half a percentage point to Hagedorn in 2018, despite President Donald Trump outperforming the district by almost 15 points in 2016. The Democratic Congressional Campaigns Committee is now spending a lot of money on the airwaves to get the seat.
And if he wins re-election, Hagedorn may look into several ethical investigations: A Minneapolis attorney has filed a complaint with the Office of Congressional Ethics about spending on Hagedorn's Congressional Bureau, while Hagedorn himself funded an internal review of the spending and fired his former boss by employees and reported to the company's ethics committee. None of the companies comment on whether probes are running.
Headquarters without a trace of paper
The historic Brett's Building is one of the best office space in downtown Mankato. With the adjacent Mankato Place shopping center, an extensive labyrinth of government institutions, restaurants, event halls and a cinema is formed. An attached Hilton Garden Inn sits on a curve in the Minnesota River.
Here, Hagedorn also opened a store for its regional convention bureau, which is different from the campaign bureau and has cost $ 2,200 in taxpayers' money per month since early 2019.
The money Hagedorn's convention bureau uses to pay for space on the third floor of the Brett's Building comes from his taxpayer-funded budget, which he can only use for official expenses. Any use of this district office for election campaign purposes or the payment of an election campaign office with taxpayers' money would be illegal. Campaign funding regulations require a strict separation between these funds in order not to give incumbents an unfair advantage.
"If he gets that basement space as part of the rent he pays for his congressional office, it's probably using Congressional funds illegally to pay for the campaign bureau," said Larry Noble, a former top FEC attorney now at American University teaches.
But even if Hagedorn is currently paying for his campaign office in taxpayers' money, that wouldn't explain the lack of payments that began prior to his election to Congress in 2018. He first reported that he used the room in 2013 for a failed congress run against now -Gov. Tim Walz.
Under campaign funding laws, a candidate must pay a fair market price for all facilities. The office space could also be donated, but then the campaign should have notified the FEC that the owner of the building made a "contribution in kind," a term for a donation of goods, services, time or other non-cash items. And as with normal cash donations, donations in kind must be capped at $ 5,600 per election cycle, with half going to an area code and half to a general election.
Hagedorn's campaign has not reported any payments in kind or office space payments in any year since its campaign committee was set up in 2013.
The only exception to these rules is that posts less than $ 200 do not need to be reported. When Thomas Datwyler was reached by phone, who manages the finances for Hagedorn's campaign, he believes it may have been.
“We were in kind, but I think it was under $ 200. I want to say it was like a $ 200 in kind contribution. That's probably why it didn't show up, ”he said. “They basically only used a percentage of the actual space itself, which was very tiny, and that's how they calculated it. And that's why they have to cost $ 200 all year round. To be honest, I'm pretty positive. "
Datwyler said he would resolve the issue and respond with more information, but did not do so and did not return any subsequent calls and messages regarding the issue.
The explanation would also suggest that Hagedorn's campaign is well below the market price. The average renter of the building pays a rent of $ 8 to $ 27 per month per square foot according to a floor plan and parking space provided by the building manager received from POLITICO. At that cost, Hagedorn's campaign office would have had to be no larger than a few square feet to be worth only $ 200 in two years. The floor plan shows that Suite 7 is significantly larger and an entrance room leads to two back rooms.
The claim is further undermined by the fact that the campaign previously reported in-kind donations of only $ 114.75.
Finally, failure to disclose this particular donation in kind would likely be in violation of Campaign Funding Act as the person who owned the building, Gordon Awsumb, was already a large donor for Hawthorn. If all he gave was a small donation in kind, it wouldn't have to be reported. However, since he donated more than $ 200 in cash during the last election, the FEC would require the campaign to disclose in-kind donations worth whatever made by him.
An important donor with changing explanations
For most of the years Hagedorn listed this address as the headquarters of his campaign, the Brett's Building was owned by Awsumb, a local developer who redeveloped the structure after Brett's Department Store, which had been there since 1868, closed in 1991.
Awsumb has donated more than $ 8,500 to Hagedorn's campaign since 2015, including $ 4,300 in this election cycle - all listed as donations in cash and not in kind. This opens up the possibility of another breach: donations in kind that reflect the true value of the office space could bring Awsumb over the statutory contribution limit, meaning the campaign would have to give him some money back.
When Awsumb was initially reached by phone, he said he had moved to Texas and did not know much about the Hawthorn campaign office, although he is still listed as a management contact for the building.
When asked whether the campaign occupies a space in the basement, he replied: "Not anymore, I don't think so. Basically, he kept signs there."
When asked why there were no rent payments, he replied, "I don't know what you're talking about."
But in follow-up emails, Awsumb had a different story to tell. He said the campaign never actually had an office in the building and that there never was a Suite 7.
"The Hagedorn campaign has never rented office space in the Mankato Place Complex / Brett building, now or in the past," Awsumb said via email. “No rent-free office space was provided for the Hagedorn campaign. In fact, Suite 7 does not exist as a physical office location within the building. "
A GOP invitation from July 2018 instructed the volunteers to work in the “Hagedorn Campaign Office; 11 Civic Center Drive; Suite 007; Mankato. "And over the course of several months of this year, from at least July to September, a number of photos posted on various social media accounts and on news outlets show Hawthorn in an office that is furnished with partitions and a couch and that bare stone walls lined with hawthorn are campaign signs and a cardboard commander of former President Ronald Reagan. Roll Call said his campaign office contained a framed portrait of Trump. Hagedorn's own Twitter account identified the place as "Hawthorn headquarters in Makato."
When Awsumb emailed this information, he said the room was "an unfinished storage space and has never been rented to a tenant as an office suite". He said the Hawthorn campaign used a conference room available to tenants and community groups.
"This is part of the lease for the tenant and usually free for community groups," he said. "The Hawthorn Campaign used this room in 2018. Our records show that the Hawthorn Campaign paid a fee to use this communal conference room."
However, the FEC files do not show any fee paid by the Hawthorn Campaign for using this area in 2018 or any other year.
Finally, Awsumb said Hagedorn only used Suite 7 for its mailing address and was given permission to do so by a local GOP organization, Republicans of Blue Earth County. Minnesota state spending records indicate that the GOP group is paying $ 100 a month for space in this building, but the group chairman said ex officio that she never agreed to allow Hawthorn to use the space .
"The campaign office [Hawthorn] was down in the basement, I believe, on the lower level of the Brett Building," said Willa Dailey. "In fact, our treasurer is such a stickler that we haven't even allowed our space to be used for." everything that has to do with the campaign. You cannot mix the federal government with the state. "
Another former county republican chairman, Minnesota State Representative Jeremy Munson, said Hagedorn's campaign never had an office in the building, but rather a communal conference room and P.O. Box.
"I know you have a P.O. Box over there, ”Munson said. “Lots of people have P.O. Boxes there and I don't think Gordon is blaming people for a P.O. Box to get your mail delivered there. "
Hagedorn's campaign should have a fair market price for a P.O. Box and even for the temporary use of the space for campaign events in accordance with campaign funding laws. And that would almost certainly be more than $ 200 in one election. For example, the UPS store in Mankato charges at least $ 25 per month for its P.O. Boxing.
The house expense records indicate that the rental payments for the Hagedorn Convention Bureau were made in 2019 to Awsumb's company Minnesota Office Investments Inc. and in 2020 to Mankato Place 1 LLC, a company that bought the building for $ 12 million last year Bought US dollars from Awsumb.
Mankato Place 1 LLC is registered in Delaware and does not disclose ownership. Awsumb declined to say who owns the company.
However, a contact number listed for Mankato Place 1 LLC reached Mike Kahler, another regional businessman who, according to Mankato Free Press, is Awsumb's partner in the proposed construction of a Marriott Spring Hill Resort in Mankato.
"As far as I know, everyone in our building pays rent," said Kahler. "I have to deal with it and get in touch with you."
Kahler did not return and did not respond to subsequent calls. Ronald Groth, a Minneapolis-based attorney who was listed as a Mankato Place 1 LLC attorney on the purchase of the Brett's Building, said in a statement that Hagedorn does not have a campaign office there.
"Although Jim Hagedorn has his convention office on the premises of Mankato Place 1, LLC, during the time that Mankato Place 1, LLC owned the property, Congressman Hagedorn has never had a campaign office on the premises," he said.
Neither Mankato Place 1 LLC, Minnesota Office Investments Inc., Awsumb, Kahler, or anyone else received rental payments from Hagedorn's campaign, according to FEC records, and the campaign has not disclosed any in-kind contributions from these individuals or their companies or any other in-kind contributions to office rent.
The campaign paid regular "Campaign Event Fees" from 2017 to 2020 to the Republican Party of Minnesota, chaired by Hagedorn's wife, Jennifer Carnahan. Could one explanation be that Hawthorn paid the State party, which then paid the office? Not according to FEC records showing the state GOP has not paid any fees to any building affiliate.
Carnahan has weathered some scandals of his own recently when the party's executive director resigned without explanation and records showed that Carnahan, as the wife of the Congressman with the National Park Service, requested private tours.
Empty offices and lingering questions
Members of Congress receiving free or cheap rents are among the campaign funding violations that occur from time to time. The mystery of Hagedorn's campaign office, however, is deepened by the fact that Hagedorn's office no longer appears to be at the address given in the official FEC files - at least not anymore.
An FEC filing just filed in September lists 11 Civic Center Plaza, Suite 7 as Hagedorn's campaign office, and its campaign spokeswoman Rachael Grooms confirmed this month that it was the campaign office. She did not respond to subsequent emails asking for payments for using Suite 7. Hagedorn's campaign manager Lon Firchau also did not return voicemail that was left on his cell phone.
However, a visit to the Brett's Building revealed that Hagedorn's campaign office is a ghost similar to the fading department store sign on the three-story building.
The basement now has Suite 8 and Suite 6, but no Suite 7. A caretaker, who did not want to be named, said Hagedorn used to have an election office in the basement, but it has now been included in Suite 11, in the Options for Women, a counseling service that discourages women from having abortions.
The worker said a postman recently looked for Suite 7 with no luck. The worker said she thought Hawthorn moved into a Blue Earth County Republican Party office in the adjacent Mankato Place shopping center.
An employee in Hagedorn's district office on the third floor referred a reporter to an office in a neighboring building that is occupied by Trump Victory, a joint fundraising committee between Trump's campaign and the Republican National Committee.
Both the county's GOP and Trump Victory offices were empty and messages left on the listed phone numbers were not returned.
A call to a number listed on the Hawthorn Campaign Facebook page was returned by a Virginia man who identified himself as Charles Harvey. His name and phone number are tied to a foundation that serves to assist non-applying for citizenship U.S. military veterans with applying for citizenship.
He said he was just a long time friend of Hawthorn who used a Google Voice number to take messages and route them to the campaign. He said he doesn't know where the office is and doesn't live in Minnesota.
Morgan, the ethics expert for Congress, said all of this creates an incredibly confusing situation, as well as another possible violation of the FEC. Giving the agency a wrong address would also be illegal.
"The question of where a member of the campaign bureau of Congress is and what they are paying for that bureau shouldn't be a mystery that takes weeks of investigative reports to find conflicting and confusing answers," Morgan said. "It's strange that there isn't a simple answer to a very simple question."
Deena Winter contributed to this report.
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