And Norman Coleman must deal with it.
Strib reports it via a flat June 27 AP wire feed first, here; then via in-depth local analysis and detail, here, (Kevin Duchschere, June 30,2008).
For a fullest understanding, reading the National Journal report, and the Duchschere report by Strib is helpful, hence the extended excerpting, below.
The best summary I have seen, with links, is Ben Pershing, Capitol Briefing, here.
Same source, a brief follow-up re CREW filing an ethics complaint, here.
It is the classic, "You hang around with dogs you are going to get fleas," story.
In a quick summary, the lobbyist in things, Jeff Larson, gives a basement apartment in walking distance to the Capitol and Senate offices to Coleman, at what reportedly is a significantly discounted "rent" with suspicious circumstances of whether a true working landlord-tenant relationship exists, with, instead, "rent" arrearages, a month's stay in exchange for "used furniture" in the basement area - office stuff apparently - next to where Coleman flops. Coleman says, "a place to place my head" and claims that he works so long and hard at the office, that it is just that, a flop, not even with a kitchen or hot-plate allegedly. Nothing special, he's said. Friendship, he's said.
Larson has fund-raising ties and GOP convention ties; and the Coleman-Larson fund-raising ties go way back. The biggest slush I see to it, Larson's wife in the Coleman Twin Cities office, on payroll [campaign or federal is unclear, whether it is the Senatorial space or a campaign space] but there under her maiden name, and reportedly the gatekeeper - doing "constituent relations." You want to deal with Norm, you want that access, you go through the lobbyist's wife.
There's not any really good appearance to that. Even if influence and access simply were being managed, by a staff person in the ordinary course of things, and access was not being peddled, there is still an appearance of great potential for impropriety. It makes it look as if such peddling was possible. Possibly contemplated, in assigning office responsibility.
That's just plain bad, even if it was only an appearnace of the possibility, and not a situation where a consultant's fee to the husband's business might have an effect on the skids being greased or rough - in getting a matter to Norman's direct and personal and immediate and responsive attention.
Things just look bad.
It is hard to pass anyone's ordinary smell test with that sort of arrangement. There's a fragrance that is inescapable.
Moreover -- Reporters start asking questions, and lo, Norm sets up a payroll deduction for future rent and the lobbyist's wife quits for personal reasons; a locking of the barn door after some may guess the horse has been sold, not stolen.
Here are interesting and extended excerpts; National Journal first:
Along the road to the top of the political heap in Minnesota, Coleman had plenty of help. But in the last dozen years, few if any supporters have played a more important role than a little-known Republican operative named Jeff Larson. Larson works in St. Paul but has gold-plated GOP connections in Washington and across the country. Or, as Coleman puts it: "He's the most connected person in D.C. that nobody in Minnesota knows."
Their relationship--the ambitious, energetic, can-do lawmaker and the low-key, behind-the-scenes strategist--has proved to be mutually beneficial. Larson's political telemarketing business appears to have profited handsomely from the relationship, and Coleman has turned to his close friend in times of need, including in his tough battle to win a second Senate term in November.
Most curiously, Larson provides Coleman with a place to live in Washington. In July 2007, Coleman began paying Larson $600 a month in rent for a portion of a one-bedroom basement apartment in a Capitol Hill town house that Larson owns. The way Coleman explained the arrangement, the apartment serves as a crash pad. The 58-year-old senator sleeps in a bed shoehorned into a 10-by-10 bedroom, and he said he spends perhaps only "three waking hours a night" in the place.
Earlier this month, after National Journal questioned Coleman and Larson about the living arrangement, the senator said he discovered that his rent for last November and January had not been paid. In mid-June, Coleman covered the back rent with a personal check for $1,200 made out to Larson and signed by the senator's wife. Last year, Coleman sold furniture to Larson to cover one month's rent, according to Larson. And Larson held on to yet another month's rent check for three months, cashing it a few days after NJ's inquiries.
Larson's St. Paul-based company, FLS Connect, is a critical component of Coleman's political operation. The firm, which has raised money and hustled up voters for Coleman, has been paid about $1.6 million since mid-2001 by Coleman's Northstar Leadership political action committee and two Senate campaigns, according to reports filed with the Federal Election Commission. Larson serves as the PAC's treasurer and provides it with office space in St. Paul; Coleman's Senate campaign stopped renting space from Larson last year.
Coleman has yet another Larson connection. He has employed Larson's wife, Dorene, for more than two years as a "casework supervisor" in the senator's St. Paul office. She is listed on his Senate payroll under her maiden name. After NJ questioned Coleman about the arrangement, his staff said that she would be leaving her constituent-services job on July 10.
Coleman and Larson are also widely credited with persuading senior Republican leaders to select Minneapolis-St. Paul as the host for the GOP's national convention in September. Larson holds a prominent role as the unpaid CEO and chief fundraiser for the local host committee, a position that Coleman helped arrange. Additionally, Coleman took the lead in arranging a $50 million congressional appropriation for security at the Republican convention. Without that earmark, Larson and the host committee would have been required to raise the security funds privately. (Democrats also got $50 million for their Denver convention in August.)
In separate interviews, Coleman and Larson said that their dealings were aboveboard. The senator said that the apartment deal he struck with Larson was appropriate, that Larson's wife was one of his best employees, and that Larson's telemarketing business provided "great services" to his campaign and PAC. "Where's the benefit for me? ... What do I get out of this?" Coleman asked.
Later, in a prepared statement, Coleman said he moved into Larson's town house in a belt-tightening move to cut his living expenses; his previous apartment in Washington cost him $1,780 a month. Coleman's Senate salary is $169,300.
Meanwhile, Larson said that the town house arrangement was not a favor to Coleman. "I am not trying to peddle influence or get more business out of him, curry favor with him," Larson said. He said he was "merely trying to meet my mortgage.... I was thrilled that it worked out for him." Larson also described Coleman's living arrangements: "He has one bedroom in the back. I was actually surprised [the bed] fits into it. Somehow, he jumps into it at night and has just a bathroom, sink, and small refrigerator." He said that the apartment does not even have a stove.
Larson and his longtime partner, Tony Feather, are close to the Bush White House. Republican operatives said that Feather is especially close to Karl Rove, the former senior White House adviser who masterminded both of George W. Bush's presidential campaigns. In the 2003-04 presidential election cycle, the Bush-Cheney campaign paid FLS Connect, then known by other names, nearly $7.6 million, FEC records show.
But that's virtually chump change compared with what the Republican National Committee has doled out to FLS Connect since 2003--some $29.5 million, according to an analysis of federal campaign reports by the Center for Responsive Politics. And those numbers don't include money funneled to FLS Connect by at least 20 state GOP parties and House and Senate candidates.
In the end, Coleman's ties to Larson could prove politically damaging. Democrats, trying to unseat Coleman in his bid for a second term, have already publicly attacked him for his association with Larson's FLS Connect and another firm, DCI Group, a powerhouse Washington lobbying outfit.
Minnesota's Senate race is being closely watched. Republicans hold 49 seats in the Senate and can ill afford to lose Minnesota. Democrats have sharply criticized Coleman for "shifting positions" on big issues such as the Iraq war. They pointedly note that Coleman served as President Clinton's state co-chairman in 1996, switched parties, and became Bush's state chairman in 2000. Democrats also contend that Barack Obama's coattails will carry Franken to victory, despite recent controversies over his ribald humor and failure to pay out-of-state taxes.
In the NJ interview, Coleman expressed confidence that Minnesotans will return him to the Senate. "I think the contrast on three levels is so enormous," he said, "in terms of experience, accomplishment, temperament, demonstrated ability to get things done at a time when people are really--they're scared, they're anxious. The cost of energy, the price of food, keeping a roof over their head, the security issue out there."
n his private life, the Brooklyn, N.Y.-born Coleman is married to a former runway model and actress; he and Laurie Coleman have two children, Jake, 22, and Sarah, 18. Coleman is not wealthy--"I am not a millionaire," he said. Excluding his house in St. Paul, Coleman's largest asset is an individual retirement account valued at $615,000, according to his latest financial disclosure report, released in mid-June. Separately, Coleman lists his wife as drawing a salary from Hays Cos., a Minneapolis insurance broker. The amount was not revealed, and Coleman is not required by law to disclose that information.
Apart from the insurance work, Laurie Coleman has been out touting her new invention--"Blo & Go," a blow-dryer holster that attaches to flat surfaces and frees up both hands for hair styling. The senator's financial report shows no income from the device, but, Coleman says, he's hopeful that his wife's product will become a success. On the day National Journal interviewed him, Coleman said that his wife would be promoting Blo & Go that afternoon on the Home Shopping Network.
Laurie Coleman once used her husband's role as a senator to sell her device on Blo & Go's website but removed the language after a reviewer criticized his politics, the senator said.
In Larson, Coleman relied on the right man. Well connected with RNC officials and party leaders throughout the country because of his telemarketing business, Larson was seen as a crucial player in the process by those who worked with him to bring the convention to Minnesota. Erin Dady, the director of convention planning for the city of St. Paul, describes Larson as "a behind-the-scenes, get-it-done kind of guy" who used his "personal relationships in the Republican Party" to help win over GOP officials. "This was personal to him," she added. "He wanted to bring the convention here."
As the CEO of the nonprofit Minneapolis-St. Paul 2008 Host Committee, Larson has the job of raising private money to pay for the big party, which will be held at St. Paul's Xcel Energy Center. Earlier this month, the host committee announced that it had raised $31 million, still a long way from its stated goal of $58 million. Much of the money has come from corporate supporters, including Fortune 500 companies based in Minnesota.
Without the help of Congress--and, specifically, Coleman--the host committee would be facing an even bigger fundraising challenge. In December, Coleman spearheaded the successful effort to give St. Paul $50 million in federal funds for convention security. Under its agreement with the city, Larson's host committee would have been required to raise the security money if Congress had not acted.
Sen. Tom Coburn, R-Okla., a staunch opponent of earmarks, objected last year to the appropriations for both parties' conventions. In a recent interview with National Journal, he said that the money would indirectly subsidize "lavish" parties for politicians and amounted to an "economic development grant" to the host cities. "We just charged $100 million to our grandchildren," he declared. But St. Paul officials said they will use the money to hire additional police and noted that the Justice Department will closely monitor expenditures. Coleman added that after the tragedy of 9/11, security is paramount. "This is not about parties," he told NJ. "This is about security."
In his free time, Larson likes to dabble in thoroughbred racing--he is part-owner of five horses, including Devil Not Me--and owns a 36-foot cabin cruiser.
Larson, it became clear, does not enjoy the spotlight. He said he agreed to talk to National Journal only because Coleman had asked him to. The two men go back at least a dozen years. Larson said he started working for Coleman after Coleman became a Republican in 1996 and decided to run for a second mayoral term. "I was doing telemarketing and polling type stuff for the mayoral campaign," he explained. In 1999, Larson and his partners created Feather, Larson & Synhorst, the telemarketing company now known as FLS Connect. The firm was a fixture in Coleman's 2002 Senate campaign and is raising money and contacting voters for the current race. In the first quarter of this year, Coleman's campaign reported paying FLS Connect at least $157,482, mostly in telemarketing and consulting fees. The way he sees things, Larson said, Coleman is a "dynamic leader, somebody who really gets things done."
Larson will get no argument on that score from his wife, Dorene Kainz, who went to work for the senator in September 2005 handling requests from Coleman's constituents in his St. Paul office. Senate records show that she has been paid $101,218 through March 31.
Coleman and his staff emphasized how valuable an employee Kainz has been. The senator described her variously as "extraordinary," "the best employee I had," "one of the best employees I've ever had," "legendary," and "a saving angel."
Coleman said he did not know why she was on his payroll under her maiden name, but insisted that there was no attempt to hide her employment. "She was really extraordinary," the senator said. "I want you to know this--there's no hanky-panky, goodness gracious.... Listen, everything in our business is public. There are no secrets." Asked how he happened to hire Kainz, Coleman said, "I make my reputation on [serving constituents], and I was looking for somebody really good, and I had known Dorene, a talented woman, and she was available."
Larson, too, said there was no attempt to hide his wife's employment. He said that she retained Kainz as her legal name when they were married 23 years ago in Bismarck, N.D. Larson explained that she "goes back and forth"--sometimes using Larson, sometimes Kainz.
In explaining why his wife was leaving Coleman's staff next month, Larson said they both work 60 to 70 hours a week, and "she made the decision a couple months ago to step aside" so she could spend more time with their two sons.
Although they don't stay in Washington often, Larson and his wife bought the town house on Capitol Hill in March 2007 for $989,900--a decision that turned out to be a fortunate one for Coleman and a senior official at the Republican National Committee. Property records show that Larson and Kainz took out a $692,000 mortgage from Wells Fargo Bank.
Larson said he intended to use the town house as a place for him and other FLS officials and employees to stay when they were in Washington. In the past, he said, he had found it difficult to book a hotel room when he visited Washington to consult with his Republican clients, including the RNC. "After I looked at what our company paid for hotel rooms, how hard it is to get a room in D.C.," Larson said, " I said, 'I ought to just buy a place--people who work for us will have a place to stay.' "
As it turned out, he said, he decided to rent a portion of the basement apartment to Coleman and the top two floors to Rich Beeson, an FLS Connect partner who is on an unpaid leave of absence while serving as the RNC's political director. Both Larson and Beeson declined to say how much rent Beeson and his family are paying, except to say that it was "fair market value."
Beeson also said in an interview that since joining the RNC in February 2007, he has played no role in contract awards to FLS Connect. He said he has complied with RNC ethics and conflict-of-interest standards, and had no "deferred compensation arrangement" with FLS Connect.
Meanwhile, Coleman and Larson have had a rather loose arrangement when it comes to the senator's monthly $600 rent payments. Copies of the checks they provided to National Journal showed that the checks were often written nine or more days after the first of the month. Larson didn't cash a check written on March 10 until June 17--after NJ questioned Coleman and Larson about their arrangement.
To cover one month's rent, Coleman sold Larson a couch, a table and chairs, and a desk from his old apartment. How did they determine that the furniture was worth $600? Larson: "We just looked at it, estimated it was $600 and one month's rent. We were always conflicted--if it was too high, somebody would say it's not worth that much. We erred on the side of taking one month's rent, valued at $600."
In addition, neither man could find checks from Coleman for two months' rent. In a statement issued to NJ, Coleman said that, in reviewing his records, "it's clear that two months of rent were not paid." He said he took "full responsibility for that, and the situation has been remedied with a personal check" to Larson for $1,200. "This will not happen again."
Before moving last July to the basement of Larson's town house, which sits on a tree-lined street four blocks from the Capitol, Coleman said he was paying $1,780 a month for a larger apartment at the Lansburgh in downtown Washington.
Coleman has a bedroom and a bathroom in Larson's town house and shares the remaining living space, which includes his old couch, table, and chairs, with FLS Connect. A company employee uses a portion of the apartment to work and take calls on some days, according to Larson. "There's no kitchen. There's a sink," Coleman said, in describing the apartment. "And there's a little refrigerator that I keep water in. There's no cooking, no nothing."
He insisted that Larson hadn't given him a special deal. Coleman said that before taking the place, he had consulted colleagues in Congress who rent rooms, and they, too, paid "600 bucks" a month in rent. "I went from having a place with a swimming pool and 24-hour service to literally a bedroom," Coleman told National Journal. "But that's all I need. Some of my colleagues live in their office."
In his prepared statement, Coleman said he moved into Larson's apartment "to dramatically reduce my living expenses in Washington. While my Senate salary is generous, the demands of maintaining two households, putting two kids through college and simply covering living expenses in both Minnesota and Washington are substantial."
Duchschere of Strib adds a bit of flavor to that general stew:
Referring to a National Journal article on Coleman's living arrangement that was posted last week, {DFL Party Chairman Brian] Melendez said he believes Minnesota's senior senator is making below-market monthly payments to rent garden-level living space in a row house owned by St. Paul businessman Jeff Larson.
Larson, whose telemarketing firm has provided services worth more than $1.5 million to Coleman's campaigns and political-action committee since 2001, is the CEO of the local host committee for September's Republican National Convention and was instrumental in bringing the convention to the Twin Cities.
Until April, Larson's wife worked in Coleman's St. Paul office on constituent requests.
At a State Capitol news conference, Melendez said Washington's Capitol Hill-area real estate listings show Coleman is getting a much better deal than other renters would for comparable quarters. DFL officials found similar apartments around the Capitol were fetching rent ranging from $1,100 to $1,450, while Coleman pays $600 a month.
"Senator Coleman is getting a sweetheart deal. He's paying far less than market value and far less than anyone else without his connections would pay. If you're not Norm Coleman, you don't get that kind of deal," Melendez said.
Coleman, a Republican who is being challenged for reelection by DFL candidate Al Franken, was not available for comment Monday. But last week he said he was simply renting "cramped space" from a friend to cut living expenses as his son enters law school and his daughter enters college.
His bedroom isn't quite 10 by 10 feet, he said, and he has a bathroom but no kitchen.
And he acknowledged not only that he had missed two monthly rent payments, but that he paid for another month by giving Larson some of his old furniture for the common area of the lower level, which is used as office space occasionally by a Larson employee. He has since set up an automatic withdrawal system for his rent checks.
"I take responsibility for any negative perceptions, but again, [Larson] is a friend, not a lobbyist," Coleman said. "There are no taxpayer dollars involved, no government contracts. ... No Senate rules have been violated. I have nothing to hide. At this point, I'll continue [to rent there]."
The residence is on North Carolina Avenue S.E., a quiet street lined with classic row houses four blocks south of the Capitol. A Star Tribune reporter knocked on the door Monday, but a woman who answered declined to comment.
Melendez said that a 2007 listing for the row house makes the accommodations sound much more comfortable than the "little room in the basement" that Coleman has described.
The three-story row house, which was listed for $989,900, has "a huge English basement with a media center, office space, gorgeous custom marble and oak bar plus an airy guest bedroom and bath," according to the real estate notice.
Is it a dump, a flop, or a pleasant well-below-market-rate garden level apartment?
Either way CREW does not like it.
The CREW complaint basically is that a lobbyist is giving a gift of value above a threshold cutoff value, discounted rent with "loose" payment arrangements few landlords would tolerate, and that gifts by lobbyists to legislators is an ethical breach. It has been made off limits because of wanting to defuse in advance any potential of more Duke Cunningham getting-bought types of GOP or Deomcratic Party situations developing, so nip it all in the bud. Be firm, be fast, be insistant - build trust or ignore potentialities that can reflect badly on the entire legislative body and process. That's the rationale underlying having ethics norms.
There're legs to be grown from the entire favors for favors, and the gatekeeper job, appearing from the National Journal report to be at taxpayer expense, not a campaign function.
"Like Wow!" As Norm might have said in Hofstra-hippie days.
We pay the doorkeeper lady over a hundred grand a year. The husband gives discounted rent. Not to us. To Norm. It's Norm's. We only, in a sense, bought it. But, we taxpayers cannot use the toilet there, even if we're in DC and need to go. It's Norm's. Picking up the gatekeeper staff salary, it's ours - it's using other peoples' money, not Norm's.
Like Awsome!
Our yin, his yang.
That's not an exact Zen symmetry. Is it?
A GOP symmetry perhaps. Not Zen. Not anything bullhorn-Norman would have foreseen as his lot, back in his student radical days and times.
_____UPDATE_____
I may have misread a part of the National Journal story, Jeff's wife on the Coleman-taxpayers' payroll, $100,000+ from 2005 to present vs. $100,000 per annum. If someone could clarify, was it an aggregated amount reported, with hours and duties set to accomodate flex-time, or was it popping out $100,000 each year? I'd expect a clarification would be no problem. The time-and-billing records would have been kept in the normal course of business, and that and all the campaign telemarketing and other services, invoicing, fees and payments for all that stuff would have been made using the mail and wire transmissions. And I suppose that if errors or liabilities arise in a telemarketing business, specialized insurance could be arranged to hedge any risk.