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Hypocrisy, eviction, lawsuits and porn: what does the business career of Rep. Ernie Leidiger mean?

Government is the problem, not the solution.  — Ernie Leidiger, Chaska Herald, 2010

One of the consistent building blocks of State Rep. Ernie Leidiger’s political ideology has been his call that government (at the federal and state level) needs to get out of the private sector’s way, cut spending, and let the “job creators” do their work.

How has that ideology played out in Leidiger’s life and business career?

Rep. Leidiger hasn’t been the most ardent supporter of public education in his career in the legislature.  Leidiger has voted against the last two bonding bills in the State House, both of which had vital projects in both the MnSCU and University of Minnesota systems.  He also flip-flopped on a campaign promise and voted in favor of shifting $700 million away from our K-12 schools.  Leidiger, it should be pointed out, graduated from the most public of public schools — the U.S. Naval Academy and U.S. Naval War College — with all tuition expense paid by taxpayers.

Rep. Leidiger often trumpets his private sector experience as the head of Brothers Office Furniture.  In fact, Leidiger has a number of business entities registered with the state of Minnesota, most of which lead back to a company called Jelco Parts, Inc. — these include Brothers LiquidationBrothers Office InstallersBrothers Office PartsBrothers Office ServicesBroBid.com, and Brothers Recycling.  Brothers Office Furniture and Brothers Office LLC are registered under Leidiger’s business associate Mike Soderquist at the same address as the other Brothers businesses.  Then, there’s Brothers Liquidation & Recycling LLC, registered at the same address as Brothers Office Furniture, but with no listed contact.

Leidiger and Soderquist are also involved in a venture called SJK International, a nonprofit that works to bring foreign students to the United States to work on J-1 visas.  J-1 visas were originally designed for cultural exchange, but have come under fire for increasingly being used by employers as a cheap way to supplement their workforces or worse. [EDIT:  Let me make it perfectly clear that I have no knowledge of SJK International being involved with such abuse.]

The extent to which Leidiger wants to be known as being associated with his businesses seems to vary, as well.  His original economic disclosure form didn’t include Brothers, then was amended during the 2011 session to include it, and the most recent revision excludes it.  In fact, his July 2012 economic disclosure form shows no sources of income for Leidiger outside of his position in the legislature, despite the long list of companies he has registered.

Leidiger’s business receives federal stimulus dollars

Setting the conditions for private sector growth and reducing government spending is the answer to economic stimulus. One only needs to see what has happened to the failure of the federal stimulus plan to realize that more government spending is not the answer.  – State Rep. Ernie Leidiger, “News and Views“, February 2012

According to Leidiger, the federal stimulus plan was a failure and claims that more government spending is not the answer.  It’s an interesting perspective, given that Jelco Parts, Inc. received a $500,000 Patriot Express loan from the Small Business Administation in July 2009 as part of the federal stimulus plan.

While the Patriot Express program began before the stimulus plan, under the stimulus bill several key changes were made to the program.  First, the SBA guarantee on loans like Leidiger’s increased from 75% to 90% and eliminated the 3% fee on the guaranteed portion of the loan.  On A $500,000 loan, that’s a savings of $13,500.

So the taxpayer — you — paid the fees to originate Leidiger’s loan.  And if Leidiger’s business fails, the taxpayer — you — are on the hook to help cover his losses.

SBA loans, with their guarantees, are also only available to applicants who can’t get funding on their own through normal financing methods.  So in Rep. Ernie Leidiger’s “government spending is not the answer” world, the market would have spoken and his business would go without that additional capital.  Businessman Ernie Leidiger was happy to take the federal-backed funding and run with it.

Eviction, lawsuits, and pornography

Ernie knows what it’s like to make payroll and how to keep a concern running … these days what works is running lean, being nimble, and stay true to your business.  – Ernie Leidiger 2010 campaign website

How have Leidiger’s companies failed since the infusion of government money? Not so great, really.

Former employees tell stories of a mismanaged operation with internal strife and unhappy customers.  Brothers Office Furniture and Brothers Liquidation both carry “F” ratings from the Better Business Bureau as testament to those assertions.

Jelco Parts (and Leidiger’s other businesses) were evicted (Case 27-CV-HC-10-4859) from their Brooklyn Park offices in August 2010, just 13 months after receiving that guaranteed government loan.  Since then, the businesses have relocated to north Minneapolis.  The registration of the Brothers Office Furniture business under Soderquist comes at a timeframe concurrent with the legal dispute with their landlord in the eviction process.

Two corporations — the original Brothers Office Furniture and Brothers Office Corporation — that rolled up to Jelco Parts were discontinued around this time.  It appears Leidiger and his associates were trying to disassociate the two businesses.  Why would you need to do such a thing?

Experts consulted indicate that this may be a strategy to protect the assets of Brothers Office Furniture should Jelco Parts default on its SBA loan, as that company’s assets would be at risk to cover the portion of the loan that was not guaranteed if the two organizations were still legally bound together.  This may also explain why Leidiger’s residence in Mayer is registered under the name of his wife Jan, and sister-in-law Linda — as Leidiger’s personal assets could also be at risk if Jelco Parts defaulted.

Meanwhile, Brothers Office Furniture lost a lawsuit and was ordered to pay $7,500 in damages in April 2011 and still hasn’t paid up (Case 27-CV-11-11245).  Per state law, such judgments are supposed to paid within 30 days.  The plaintiff in this case has had to go to court to get a writ of execution in an attempt to collect from Leidiger’s company — as of yet, unsuccessfully, as the judgment is still listed as active in the state court system.

And, that’s not the only lawsuit the Leidiger businesses have endured recently.  Judgments against Brothers Recycling & Liquidation ($32,389,90 from May 2011, also resulting in a writ of execution, Case 73-CV-11-4601) and Brothers Office Furniture & Liquidation ($1,415.28 from November 2011, Case 27-CV-12-3581) are also unpaid at this time.  Total it up and you’ve got over $40,000 in unpaid legal judgments against the Brothers family of businesses.

That’s not to say, though, that there haven’t been some high points.  Although Rep. Ernie Leidiger is a noted supporter of “traditional family values”, Brothers Liquidation did have a major sale last year —  selling off the inventory of the Shinders bookstore chain, which included 20,000 X-rated magazines (all of which I’m sure were the “traditional family values” kind of pornography).

Pulling up the ladder

So what does this all mean?  Some people who read this will no doubt be concerned about some of the specifics listed above.  And while there are certainly things to be troubled about there, I think the most important lesson to learn from this comes not from focusing on any individual event, but about what the totality of this record means in context with the political positions that Leidiger advocates for.

While Rep. Ernie Leidiger voices opposition to many forms of government spending and votes against bills that would create jobs, businessman Ernie Leidiger happily collects government-guaranteed loans originated with no fees.  Rep. Ernie Leidiger supports traditional family values, while businessman Ernie Leidiger sells pornography.

(And let’s not forget about Rep. Leidiger’s creative interpretations of campaign finance law that violated two state statutes and generated $800 in civil penalties or his embrace of radical preachers who espouse hateful agendas.)

This is not to suggest that the programs that Leidiger has benefited from are bad programs, or that Leidiger’s military service wasn’t noble.  To the contrary, the programs in question are good programs and should be continued and Leidiger’s Naval career is honorable.

And I’m not going to deride Leidiger’s entrepreneurial spirit.  It’s great that we have people like Leidiger who are willing to take risks and start businesses.  We need more of them.  But, Leidiger’s policies and positions don’t reflect the reality of his own life.

Leidiger says “government is the problem” — yet, government has been there at nearly every step of the way in his adult life.  He served in the Navy and got two taxpayer-funded degrees.  His business is supported by a $500,000 SBA loan — guaranteed by the federal government and originated with fees paid by the taxpayer.  His business has had over $16,000 in state contracts since 2008.  He is the recipient of numerous government benefit programs due to his military service and his position as a state legislator.

Would Ernie Leidiger have the same level of achievement today without the products of government to help him on the way?  It’s impossible to say, but the journey certainly would have been more difficult.  And now that he’s made it, Ernie Leidiger has set out to undo the sorts of programs that allow people to have the same journey he has had.  He’s pulling up the ladder, leaving future generations (and those pushed to the sidelines by our current economic woes) to fend for themselves.  That’s what concerns me the most here.

This is exactly the kind of “leadership” that we don’t need.  Being ignorant of your past and our present is no way to point this state towards the future.

[UPDATE]:  More problems for Leidiger here.

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Final tally for Leidiger’s speeding ticket: $978

A three-judge panel at the Minnesota Office of Administrative Hearings concluded the case against Rep. Ernie Leidiger and his campaign treasurer (and Carver County GOP Chair) Steve Nielsen Monday, by unanimously finding a violation of Minnesota Statute 211.B12 (7) and assessing a civil penalty of $500 against the two gentlemen.

Instead of finally taking responsibility for their actions, however, Leidiger and Nielsen went out swinging in their responses to the charges, though, continuing to insist that paying speeding tickets out campaign funds is permissible under the cited statute because it occurred “in the line of duty” and because Rep. Leidiger is a large donor to his own campaign.  Even more outrageously, Leidiger and Nielsen suggested that the Minnesota DFL Party, who raised this complaint, be required to reimburse Leidiger and Nielsen for the cost of the speeding ticket and Nielsen’s $300 fine previously paid to the Campaign Finance and Public Disclosure Board.

So the final tally for the Leidiger speeding ticket fiasco:  1 speeding ticket, 2 state statutes violated, and $978 in expense ($178 for the ticket itself, $300 in fines to the Campaign Finance and Public Disclosure Board, and $500 in fines to the Office of Administrative Hearings).

The entire order by the Office of Administrative Hearings is below.  It really is worth the read.

House passes final Vikings stadium bill; Leidiger votes no, Hoppe votes yes

The Minnesota House approved the conference committee version of the bill to build a new Minnesota Vikings stadium on a 71-60 vote last night.  Carver County’s House delegation split on the vote, with Rep. Joe Hoppe voting yes and Rep. Ernie Ledigier voting no, just as they did on the original version of the bill Monday night.

Here are the key provisions of the final bill:

  • Here is the final breakdown of the financing:  the team’s contribution will be $477 million ($50 million higher than what they originally committed to), the state’s contribution will be $348 million, and the City of Minneapolis will contribute $150 million.
  • The state’s portion of the financing will be handled by allowing electronic pulltabs and bingo.  If those sources do not produce adequate revenue to cover the state’s portion of the expense, the following provisions will “blink on” (in order) to cover the funding gap:  a sports-themed lottery game, and a 10% tax on suites in the new stadium.
  • The length of the team’s lease will be 30 years.
  • Cost overruns on construction of the stadium will be the responsibility of the builder.  (That should make for some interesting negotiations upfront with the company selected as the general contractor for the facility!)
  • Naming rights revenue will count towards the team’s contribution
  • The team receives a five-year exclusive arrangement to bring a Major League Soccer franchise into the facility
  • Provisions instituting an internet sales tax and financing for the Mall of America expansion were removed from the bill

The Minnesota Senate will take up the bill later today.  You can watch the action here.  State Senator Julianne Ortman has indicated she will vote no on the current proposal because she does not favor using gambling as the means to fund the facility.  If the Senate passes the bill, it will go to Governor Mark Dayton for his signature.

[UPDATE]:  Correction made to the MLS provision.  The bill does contain a provision that would charge rent to the prospective MLS team.

House approves Vikings stadium bill; Hoppe votes yes, Leidiger votes no

The Minnesota House approved a proposal to build a new Minnesota Vikings stadium on a 73-58 vote last night.  Carver County’s House delgation split on the vote, with Rep. Joe Hoppe voting yes and Rep. Ernie Ledigier voting no.

40 of the 73 yes votes came from the DFL minority, while only 33 of the 72 Republicans in the House voted yes.

Dozens of amendments to the bill were debated yesterday, most of which were defeated, but there were some substantial changes to the bill that did get through.  These include:

  • Reducing the state contribution by $105 million and adding that to the team’s contribution, including a provision that would share naming rights proceeds.  This is a potential sticking point in the bill, as the Vikings have not agree to pay more (at this point) than the $427 million contribution agreed to in the original bill
  • Putting the Vikings on the hook for cost overruns during construction of the stadium; this is similar language to the Target Field bill, but it does imply giving the Vikings control over the construction process
  • Increasing the lease from 30 years to 40 years
  • Increasing the amount of revenue that has to be shared if the Wilfs sell the Vikings after the stadium is built

The bill moves to the State Senate today, which is in session beginning at 9 a.m.  State Senator Julianne Ortman of Chanhassen has indicated she will be voting no on the current proposal.

Hoppe, Leidiger, Ortman vote against bonding bill [UPDATED]

The Minnesota House has passed a $496 million bonding bill by a 99-32 vote this afternoon.  The bill will fund a number of key infrastructure projects and will create a number of jobs.  You can see the details of the bill here.

The fact of the matter is that this an excellent time to aggressively use our bonding capacity to upgrade our infrastructure.  Why?  Let’s quickly summarize the reasons:

  • Interest rates remain at or near historic lows.  In fact, even with Governor Dayton’s proposed $775 bonding package, our average interest expense over the life of the bonds would actually decline over the current payments.
  • Minnesota’s construction industry still has lots of excess capacity, despite the economic recovery finally just starting to take hold.  State and local governments have been consistently receiving bids lower than estimated for what projects have been completed in recent years.  We can get good bang for the buck in the current environment.
  • While  bonding is additional debt, it’s the very best kind of debt.  Bonding goes to projects, like new buildings and renovations at our colleges and universities, flood prevention and mitigation, roads and bridges, pollution control, and public safety.  These projects are the foundation for future prosperity, and will give benefits to the state for years and decades to come.

Carver County’s House delegation of Rep. Joe Hoppe and Ernie Leidiger voted no on the proposal.

The Minnesota House’s voting tracker for the bonding bill. (Screen capture via The Uptake)

This is a disappointing vote.  The bonding bill is shaping up to be one of the few highlights of this year’s session, and our representatives are on the wrong side of the issue.  Hoppe and Leidiger are going to have very little to show for themselves when voters ask about what they have accomplished since the 2010 election.

[UPDATE]:  The State Senate took up the bill this afternoon, passing it on a 45-22 vote.  State Senator Julianne Ortman of Chanhassen also voted against the bill.

[UPDATE #2]:  Reps. Hoppe and Leidiger voted against the final conference committee version of the bonding bill on Tuesday afternoon.  The bill passed 97-33.

Leidiger “authors” ALEC right-to-work constitutional amendment

If we know one thing about Rep. Ernie Leidiger, it’s that he’s always looking for his own special ways to squeeze more efficiency out of state government.  We’ve talked in the past about his support of misguided policies like the 15/15 proposal.  Well, he’s found a way to bring that ethos to his own job as a state legislator.  Last week, Leidiger (and several other legislators) were listed as authors on H.F. 3009, a new version of a constitutional amendment to institute the so-called “right to work” regulations in Minnesota workplaces.

Leidiger and his co-horts have lived up to their own proposals by outsourcing the work of actually, you know, writing legislation — instead doing a copy-and-paste job from model legislation from the American Legislative Exchange Council (ALEC).  This isn’t exactly a novel approach from the Republican caucus, though.  Some analyses show over 60 bills share the same “copy-and-paste” method.

Let’s look at one section from the two bills and see just how much this holds true:

H.F. 3009 text:

Section 1. CONSTITUTIONAL AMENDMENT PROPOSED.
1.6 An amendment to the Minnesota Constitution is proposed to the people. If the
1.7 amendment is adopted, a section shall be added to article I, to read:
1.8 Sec. 18. (a) No person shall be required as a condition of obtaining or continuing
1.9 employment to: (1) resign or refrain from membership in, voluntary affiliation with, or
1.10 voluntary financial support of a labor organization; (2) become or remain a member of a
1.11 labor organization; (3) pay any dues, fees, assessments, or other charges of any kind or
1.12 amount, or provide anything else of value, to a labor organization; or (4) pay to any charity
1.13 or other third party an amount equivalent to, or a portion of, dues, fees, assessments,
1.14 or other charges required of members of a labor organization.

ALEC Bill:

Section 4. {Freedom of choice guaranteed, discrimination prohibited.} No
person shall be required, as a condition of employment or continuation of employment:
(A) to resign or refrain from voluntary membership in, voluntary affiliation with, or
voluntary financial support of a labor organization;
(B) to become or remain a member of a labor organization;
(C) to pay any dues, fees, assessments, or other charges of any kind or amount to a labor
organization;
(D) to pay to any charity or other third party, in lieu of such payments, any amount
equivalent to or a pro-rata portion of dues, fees, assessments, or other charges regularly
required of members of a labor organization;

This wording is almost exact.  You can review the other sections of the bill and find the rest of the amendment is built similarly.

Which leads me to my next thought — instead of electing individual Republican legislators, we can subcontract with ALEC to have one person that can write all the bills and press the voting button for everyone in the caucus.  The salary and per diem savings will be significant, don’t you think?

Leidiger treasurer fined $300 over campaign-paid speeding ticket [UPDATED]

The first shoe has dropped in the Rep. Ernie Leidiger campaign-paid speeding ticket fiasco, as Leidiger’s treasurer Steve Nielsen has been fined $300 by the Campaign Finance and Public Disclosure Board for knowingly filing a false campaign finance report.

The CFPDB complaint was filed by Steve Timmer.  You can read Timmer’s account of the situation at The Cucking Stool.

You can read the entire decision here.  Here’s an important passage from the findings:

The responses to the complaint show that Representative Leidiger was on his way home from a late session of the legislature when he received a speeding ticket. Representative Leidiger therefore rationalized that the fine could be characterized as an expense for serving in public office, which is an allowed noncampaign disbursement. Although Mr. Nielsen did not initially agree with Representative Leidiger, Representative Leidiger ultimately persuaded Mr. Nielsen that this characterization was justified.

Representative Leidiger and Mr. Nielsen then discussed how to describe the payment on the year-end report. According to Mr. Nielsen’s statement, Representative Leidiger did not want to call the payment a speeding ticket because he did not want to draw attention to the fact that he had paid this expense with campaign funds. Representative Leidiger eventually convinced Mr. Nielsen that they should use the word “transportation” to describe the payment on the year-end report.

Mr. Nielsen states that, in hindsight, it was poor judgment to call the expense “transportation.”

Yes, it was poor judgment.  It’s too bad for Nielsen that he allowed Rep. Leidiger to convince him to go against his better instincts, and that the statutes require that Nielsen be on the hook for the penalty.

Meanwhile, the second shoe is poised to drop.  The first hearing in the DFL Party’s complaint against Leidiger and Nielsen was this morning.

[UPDATE]:  Judge Luis has ordered the parties to submit motions for summary judgment or motions to dismiss by April 18.  The parties will then have until April 30 to respond.  A panel of three judges will review the motions and make their decision (likely in mid-May) whether to grant one of the motions or to move on to additional evidentiary hearings on this issue.

Hoppe, Leidiger vote against Sunday liquor sales

Once again, the common-sense quest to allow liquor sales on Sunday in the state of Minnesota has fallen prey to legislative indifference and the power of special interest lobbies.

On a 97-25 vote, an amendment to the omnibus liquor bill allowing such sales was defeated this afternoon.  Carver County Representatives Joe Hoppe and Ernie Leidiger voted against the amendment, as shown in this picture of the voting record provided by Rep. John Kriesel.

Liquor is a legal product.  You can go to a bar and order your favorite beverage on a Sunday.  It makes no sense at all not to allow people to be able to go to a liquor store and buy it for their personal consumption.

Maybe someday, Minnesota will catch up to its neighbors and allow Sunday liquor sales.  And — dare to dream — maybe someday we will allow liquor sales in grocery stores and other retail establishments as well!

[DISCLOSURE:  I work for a company that owns and operates grocery stores, and advocates for such a change in the law.]

Opponents of liquor sales on Sundays argue that allowing sales on Sundays would add little new revenue — it would just re-arrange existing sales across seven days instead of six — and add expenses of being open on that seventh day.

That may very well be true.  But you could say that of every kind of business.  (Except for auto dealerships, that is, who also have the same protection in the law that liquor stores have.)  Consumers should have the ability to buy the products on the day they like, and businesses can make the decision on when they want to be open to respond to that business.    Liquor stores could choose not to be open on Sunday.  It has been done in other industries that operate (sometimes) on a 24/7 schedule.

Judge orders hearing on Leidiger campaign-paid speeding ticket [UPDATED]

Administrative Law Judge Richard C. Luis of the Office of Administrative Hearings has ruled that the complaint filed by the DFL Party against Rep. Ernie Leidiger regarding paying a speeding ticket out of campaign funds represents a prima facie violation of Minnesota Statutes § 211B.12.  Luis has ordered that a prehearing conference and evidentiary hearing take place in the next 90 days

At the hearing, both sides will be allowed to present evidence about “whether Representative Leidiger’s $178 expenditure was for a permitted political purpose reasonably related to the conduct of his election campaign, or whether the funds were converted to personal use in violation of the statute.”

The full order by Judge Luis is below:

[UPDATE]:  A prehearing conference on this case has been scheduled for April 4.

“Just another cost of serving”: Leidiger tries to rationalize it all away

In response to the story we broke on Monday, Rep. Ernie Leidiger has filed an amended 2011 campaign finance report.  In the filing, Leidiger’s treasurer (and SD 34 GOP Chairman) Steve Nielsen explains the rationale for paying a speeding ticket out of the campaign fund:

So to summarize:  Rep. Leidiger and Nielsen believe that violating the law by racking up speeding tickets is a “direct result of serving in the Legislature”.  Fines from such activity are “just another cost of serving” and that there’s “merit” to having those fines paid by his campaign contributors.

How does that sort of attitude strike you, folks?  I would say: when you’re in a hole, stop digging.

Here’s the full amended filing, which also includes disclosure of a $100 contribution by a lobbyist not previously reported.

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