Minnesota GOP leader seeks cut of big donations

Updated: 3:43 p.m. | Posted: 12:47 p.m.

The new chairwoman of Minnesota's Republican Party is seeking a 10 percent commission from large donations to the party, according to a memo obtained by The Associated Press.

Campaign finance experts said they've never heard of such an arrangement. And it risks upsetting major GOP donors and activists by diverting critical resources from a party that has struggled with debt for much of the last decade — even as it prepares for two U.S. Senate elections, a wide-open race for governor and four or more competitive congressional elections.

In the Dec. 14 memo, Jennifer Carnahan seeks party approval to take the commission on large contributions from October 2017 through at least April. The memo doesn't define "large," but an accompanying chart said it would result in an immediate payout of $24,500 in addition to her current base salary of $67,000 annually.

The commission structure would need to be approved by the party's 14-member executive committee, which is scheduled to meet Thursday.

Carnahan did not respond to a request for comment. Party executive director Matt Pagano defended the proposal in a statement as in line with previous chairs' requests for salary increases in Minnesota and nationwide.

In the memo, Carnahan said the additional money was necessary to supplement a salary she called well below "market value" while working 100-plus hours each week and raising more than $1 million for the party.

Since the memo doesn't define what qualifies as a major donation, it's unclear how much Carnahan could gain from the change — the memo does not reference a cap to those payouts. It makes clear she will propose overhauling her entire compensation structure in April.

"Unlike other state parties, Minnesota is different. Neither our Chairman or our National Committeeman and National Committeewoman are from the donor class," she writes. "To make-up for what I lack in personal wealth, I've chosen to dedicate my time to ensuring the party is set-up for short and long-term success."

Carnahan is a newcomer to the job. She was elected in April to take over the party for a two-year term after a career working for large corporations and starting her own business, a women's clothing boutique, in 2014.

Though commissions are standard in the world of business and sales as a form of performance-based compensation — including some professional fundraising organizations — it's not the case in party politics.

"We're not aware of any other party chairs with this sort of payout situation," said Catie Kelley, director of policy and state programs for the Campaign Legal Center, a sentiment echoed by an official at the National Institute on Money in State Politics.

"It raises questions of whether the party chair is going to be directing the party in ways that favors those large donors" for a personal benefit, Kelley added.

In making the case for the commission structure, Carnahan calls fundraising "the most important part of politics." She wrote that she had doubled average annual gifts from existing donors, resurrected lapsed donors and brought in new ones.

That money is particularly critical for the GOP, which has spent the last seven years struggling to eliminate $2.2 million in debt accumulated largely from a costly recount in the 2010 gubernatorial election. In December, Carnahan said she had helped raise $1.1 million since starting the job in May paid down the party's outstanding debt to below $800,000.

"The party's financial condition is the brightest it's been in over six-years," she wrote in the memo.

But her plan generated blowback from Democrats and fellow Republicans alike. Ted Lovdahl, who chairs the party's 8th Congressional District, said it could "turn off a lot of big donors, and maybe even the small ones."

"I have a sickly feeling that they're going to put it through," he said of the committee that would vote on her plan. "If they pass that, it's going to come back to haunt them."

Carnahan's predecessor, Keith Downey, sought and was approved for a more than $30,000 raise from his previous roughly $50,000 annual salary in 2015. But that raise came as he started his second term as chair.

Carnahan said she had been working at least 80 hours weekly, and sometimes more than 100 hours per week. The memo is dated Dec. 14 and addressed to several party officials, including party treasurer Bron Scherer.

Her memo concludes by saying that she will propose an entirely new compensation package when the party's current budgeting cycle ends in April.