Jan Malcolm’s Horse, and Other Things to Glean Through Minnesota Financial Disclosures
What do state Rep. Mary Franson, a conservative Republican from Alexandria, and Steve Grove, a former Google executive who is now DFL Gov. Tim Walz’s top economic official, have in common? Financial disclosure statements filed with the state suggest they, at some point, have owned investments in the electric car company Tesla worth at least $10,000.
That fact is brought to you by Minnesota’s campaign finance laws, which require a wide range of public officials in the state to disclose some of their economic interests, including properties, investments and speaking fees. Officials even have to say whether they or a family member have a financial stake in horse racing, though only one top state official has reported such an investment: Jan Malcolm, commissioner of the Department of Health, who reported a stake in a four-year-old horse that races at Canterbury Park in Shakopee.
“His name is Big Boy McCoy because he’s a very large horse,” Malcolm said.
The disclosures, available on the Campaign Finance Board’s website, can give insight into the financial holdings of public officials, while providing a safeguard against self-dealing in government, experts say.
How Minnesota’s economic disclosure law works
Matt Ehling, executive director and founder of Public Record Media, a nonprofit that advocates for government transparency, said Minnesota’s campaign disclosure laws were largely passed around the middle of the 1970s when there was public interest in government reform amid the Watergate scandal.
Ehling said the purpose behind the financial interest disclosure law, the first version of which was passed in 1974, was to fully inform the public about the financial background and assets of officeholders. “So if they take votes that are more in, say, the interest of self aggrandizement or bettering their financial situation that would be more obvious,” Ehling said. There are also requirements for lawmakers to recuse themselves in certain situations where they have self interest.
Minnesota economic interest disclosure law covers all kinds of people deemed “public officials.” That includes statewide office holders and legislators (and candidates for these jobs), state commissioners, judges and some local officials, among others.
The statements require officials to report their address, employer and other sources of compensation that paid more than $250 in a month, including honorariums; non-homestead property in Minnesota (that would include things like rental properties and cabins that aren’t primary residences); and securities — which can include stocks, shares, bonds, options and other categories — worth at least $10,000.
What we know about the interests of Minnesota officials
Different positions have different requirements dictating when economic interest statements must be filed. Generally, they are required to be updated once per year, in January, which means the forms found online are not necessarily up-to-the-minute. Franson, for instance, sold her investments in Tesla, said a House GOP spokesman.
Former state Rep. Jason Metsa reported securities in U.S. Steel and Cleveland-Cliffs, which both own mines in the state, when he was deputy commissioner of the Department of Iron Range Resources and Rehabilitation (IRRRB) — which distributes money from a taconite tax for development projects in northeast Minnesota.
In an email, Metsa said he made several large stock purchases during a market dip in early 2020 that were “short term and speculative in nature” but doesn’t own any securities in either company anymore.
“The reporting structure requires us to list every stock, or fund, that we had over $10,000 in value at any point in the year (which includes any retirement accounts),” Metsa said. He said he has been reassigned to pandemic response work at MDH for more than a year, though he did buy the mining stock while at IRRRB.
Metsa isn’t the only Cleveland-Cliffs investor in state government. State Rep. Dave Lislegard, an Aurora DFLer and frequent mining supporter at the Legislature who sits on the IRRRB board, also reported securities in the company.
“My strong support for mining on the Iron Range is no secret,” Lislegard said in an email. “Cleveland-Cliffs is the largest employer in our region and is leading the way in the transformation of the steel industry. Under its current leadership, Cliffs has developed into a strong, viable company. I’m excited for future growth and new opportunities, not just for Cliffs, but all companies looking to invest in our region’s success.”
Other Minnesota-based companies have attracted investment from state officials. Rep. Ron Kresha, R-Little Falls, Sen. Kari Dziedzic, DFL-Minneapolis, Rep. Jim Davnie, DFL-Minneapolis, and Minnesota Secretary of State Steve Simon reported securities in Target. Rep. Kelly Morrison, DFL-Deephaven, Department of Human Services Commissioner Jodi Harpstead, Sen. Tom Bakk, I-Cook, Sen. Jim Carlson, DFL-Eagan, Sen. Susan Kent, DFL, Woodbury and Sen. Nick Frentz, DFL-North Mankato, reported securities in 3M. (3M is located in Kent’s district.)
Big tech companies also figure prominently in the reports: DEED Commissioner Grove and Rep. Pat Garofalo, R-Farmington, both reported Amazon securities. Kresha and Supreme Court Justice Paul Thissen reported Google securities, while Morrison and Grove (who formerly worked for Google) reported securities in Google’s parent company, Alphabet. Sen. David Tomassoni, I-Chisholm, and Harpstead reported Apple securities. Simon, Morrison and Grove reported securities in Facebook.
State Sen. Paul Gazelka, an East Gull Lake Republican who is running for governor and recently served as Senate Majority Leader, reported receiving honorarium as a public speaker in addition to securities such as State Farm mutual funds. (Gazelka is a State Farm insurance agent.) Securities reported by Scott Jensen, a doctor and former state Senator also running for governor as a Republican, include: a Waconia golf course, a sports pub and the company Recombinetics — which describes itself as a leader in livestock gene editing.
Gov. Tim Walz reported no securities, properties or income other than his state salary. State Sen. Michelle Benson, a Ham Lake Republican running for governor, reported property in Swift County and income from a property management company, but no securities.
And then there’s the matter of Jan Malcolm’s horse.
Minnesota’s disclosure law requires public officials to report any horse racing interests they or an immediate family member has in the United States or Canada. According to a list kept by the National Conference of State Legislatures, that specific requirement to publicly report a horse racing interest is unique in the country.
The rule was first added to Minnesota law in the 1980s when lawmakers created a large new set of regulations for the industry and started a racing commission.
Malcolm, the MDH commissioner, was the only prominent official MinnPost found with any horse racing disclosures.
Malcolm said the horse is really owned by her sister, who has been a horse lover since she was a child. Malcolm said she contributes money for training and other costs. While she said she has attended races that are “very nerve wracking,” the horse has yet to win a race. “I mean the whole idea is the horse is supposed to pay for itself by winning races but so far, we’re underwater as they say,” Malcolm said, laughing.
Malcolm said her horse interests have never factored into decisions as a commissioner, including talks of shutting down or opening large venues like Canterbury during the COVID-19 pandemic. “I swear to God, no,” Malcolm said. “I probably would have kept it closed this year, too, if it was up to me.”
How Minnesota compares to others
Overall, Ehling said Minnesota has generally “pretty robust laws” for government transparency, though he said the state’s “clean government accolades” have been overinflated over time. The state’s public record laws generally are strong, but not implemented well, he said.
The CFB can fine public officials if they file an economic interest statement late, or if their reports contain false information or omit information. In the latter case, the board can also refer the case to a county attorney or the Minnesota Attorney General, which could file criminal charges.
Ehling said the economic interest disclosure law gives the public a sense of where the financial interests of public officials lie, even if they can’t see the exact amount of stock a lawmaker has, for instance.
Some states’ laws are more specific when it comes to details about stocks public officials own. In Wisconsin, for example, public officials are required to disclose securities like stocks and bonds valued at $5,000 or more — half the threshold in Minnesota. Furthermore, they are required to check a box that indicates whether that security is worth between $5,000 and $50,000 or more than $50,000. In Minnesota, only the name of the security is required to be disclosed, with no approximate value threshold or range, so it’s unclear if a public official holds securities worth $10,001 or $100,000.
States also vary in how accessible the forms are to the public. In Minnesota, the information is online via the Campaign Finance Board’s website. Wisconsin’s forms are available only by request. In Washington, forms were customarily only available by request, and public officials balked when they were posted online, citing security concerns. Washington’s reports also show more specific ranges of assets’ values.
Lawmakers most recently changed the economic interest disclosure laws earlier this year. Megan Engelhardt, assistant executive director of the Campaign Finance Board, told a House committee in March the revisions were “kind of housekeeping technical changes.”
Legislators did increase the threshold for when public officials need to report honorariums — which is income from things like speaking fees — from $50 to $250.
The Legislature also amended the law to include the chancellor and members of the Board of Trustees for Minnesota State Colleges and Universities as public officials subject to campaign finance and disclosure laws.