Is the South Dakota Democratic Party a money funnel? Reports are saying that Matt Entenza, who recently withdrew from the Minnesota Attorney General's race after disclosing he was digging up dirt on a fellow DFL member and the current Attorney General Mike Hatch, may be guilty of money laundering. It appears that Entenza and his wife sent money to South Dakota Democrats in order to shuffle it back into Minnesota to get past donation limits and financial disclosures (it should be noted he's violated election law before when he donated $300,000 to 527s which laundered it back to the Minnesota DFL campaigns). The documents claim that money "went through the PACs to the South Dakota Democratic Party then to the
Minnesota DFL Party and eventually to the Minnesota House DFL campaign
committee." The "$45,000 to a South Dakota Democratic House campaign committee" mentioned must mean a donation to Representative Stephanie Herseth. Anyways, some of the documents causing this political storm in Minnesota can be seen here (pdf alert), which again claims that Entenza gave huge amounts of money to the South Dakota Democratic Party which funneled it back into his organizations. The big question is this: if this is true, who in the Democratic Party coordinated all the money shuffling?
UPDATE: According to this (pdf), the South Dakota Capitol Committee PAC is embroiled in this controversy (see page one). The person filing the report for the Capitol Committee PAC is Debra Elofson (pdf), who is now legislative director of the South Dakota Democratic Party.
UPDATE: The documents (pdf) also discuss the South Dakota Wanalain PAC. Former South Dakota Democratic Party Executive Director Bret Healy, brother of the Democratic School and Public Lands Commissioner Bryce Healy, filed the reports for Wanalain PAC. Bret Healy was also the one who claimed in 2004 that South Dakota voters were "intimidated" because they had to show an ID when voting and was involved in a voter fraud case in 2002.
UPDATE: See this report from the Center for Public Integrity:
Democrats in South Dakota needed every dollar they could find in 2002 to
help U.S. Sen. Tim Johnson defend his seat against a challenge from then-Rep.
John Thune. Five state Democratic Party committees sent valuable "hard dollars"
to South Dakota's Democratic Party during the 2001-2002 cycle, and four of those
states got non-federal money from South Dakota, often more than they gave.
"We were concerned that we would run short on hard money, so we were
actively seeking it out," said Bret Healy, a political consultant who served as
executive director of the state Democratic Party in 2002.
Healy found
willing partners in California, Florida, Kansas, Michigan, Minnesota, New York
and Virginia where state party committees combined to send a total of $1,101,800
in hard money to South Dakota between June 2001 and August 2002. In return,
those committees received a total of $1,178,750 in soft money from South Dakota.
The generosity of other state parties was such that Healy was able to
dole out hard money to other states as the election approached. Party committees
in Massachusetts, Montana and Louisiana got a total of $204,667 from South
Dakota between Sept. 25 and Oct. 31, 2002.
UPDATE: SDWC asks:
Why are the checks written out to these political action committees, when neither one can be found anywhere in any of their PAC Reports? Because the next time you see any evidence of this money is not in either of these committees.
UPDATE: To clarify, I remain somewhat skeptical that anything illegal happened and, until we have more information, I defer any judgment on the legality of this (I've offered the same opinion to Tom DeLay, who was also accused of laundering campaign money, so it's only fair that the other side is treated the same way.) The purpose of this post is to offer some observations and connect faces (Elofson and Healy) to the PACs involved. As the Pioneer Press reported: "But it appeared, at least initially, that while the donations were
unusual there was nothing illegal about them or the route the money
allegedly took to the House Democratic campaign."
One last note: it's odd that no South Dakota media outlet has covered this story.
UPDATE: A reader at Captain's Quarters has more questions:
This could get even more interesting. It is unlikely that Entenza
& spouse carried out that (apparent) laundering operation
themselves. Who among the South Dakota Democrats knew about it and was
involved? Who else in the MN DFL knew about it?
Did all of the well-washed money come back to the Entenza campaign, or did some of it go to other DFL candidates?
I'm sure that the Star Tribune will rush to investigate.
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