JIM FUGLIE: View From The Prairie — My Last Story Ever About Duane Sand (I Hope) — Redux

NOTE: I didn’t think I would see Duane Sand’s name on a ballot again — boy was I naive — but here he is, showing up on the District 47 Legislative Primary Election ballot Tuesday and duking it out with the Republican establishment, which once embraced him and ran him for Congress a couple of times. I wrote a story about  his campaign finance shenanigans back in July 2016, under the headline “My Last Story Ever About Duane Sand (I Hope).” So I thought I would just revisit that story and do a rerun here. It’s still my last story about Duane — nothing new — I’m just sharing it one more time for your reading pleasure. Or disgust.

CAMPAIGN DEBTS, WIDOWS AND CONSERVATIVES

As I have reported here before, Duane Sand’s campaign for the U.S. Senate in 2012 raised more than a million dollars, most of it through direct mail, using a shady Washington D.C., mail firm well-known for sending out lots of letters and keeping most of the money.

When Duane ended his short-lived 2012 campaign (he lost in the primary to Rick Berg), he was in debt to the mail house, so he kept on raising money. Or rather, they kept on raising money for him. He didn’t really have to do anything. A company called Base Connect just kept cranking out letters to conservative mailing lists. By the end of the year they hit the $1 million mark, but most of it, probably 85 to 90 percent, stayed with Base Connect and its affiliated companies.

As I explained earlier, they did everything for Duane, from conceptualizing and printing a fundraising brochure, to writing the fundraising letter, to buying the mailing lists, to printing the letters, addressing and stuffing the envelopes, affixing postage and hauling them to the post office. And picking up the mail with the responses in them, and depositing the money in Duane’s account. All Duane had to do was lend them his name. But then most of the money went right back to them in fees and mailing expenses.

There have been a lot of stories written about this company. None of them full of praise. Google them.

So when Duane filed his 2012 FEC report (actually, another affiliate of Base Connect, a fellow named Scott Mackenzie, who called himself Duane’s “Campaign Treasurer,” filed it for him), it showed that he was in debt $92,714 at the end of 2012 — almost all of that to Base Connect and its affiliates.

Duane really didn’t do much about that for a couple of years, but there’s a funny thing about FEC reports: As long as there is an outstanding debt by the candidate or his committee, they have to keep filing reports. Four reports a year, in April, July, October and at the end of the year.

So even though Duane has not been on the ballot for more than four years (he lost the Primary in June of 2012), he is still filing those reports. Or rather, Scott Mackenzie is. Each report filed quarterly between 2012 and the end of 2015 showed that debt of $92,000 to Base Connect and its affiliates.

But then on his 2015 year-end FEC report, filed in January of this year, those debts mysteriously disappeared. The companies wrote them off as bad debts. The reason: at the same time, Base Connect itself disappeared.

But the people working for Base Connect didn’t disappear. They reappeared in another incarnation: ForthRight Strategy. Same owners, same address, same phone number. Just a new name. The name Base Connect had become so notorious they had to get a new identity.

Here is what happened in Duane’s case. Base Connect and its affiliates just kept mailing and mailing and mailing, all the way through 2012, even though Duane’s campaign was over June 12, when he lost the primary. And the bills kept piling up for those mailings. Highly inflated bills. But finally the money quit flowing.

So when it was all over, Base Connect and its affiliates had raised a million dollars, and had invoices showing Duane still owed them about $90,000 for their services. Even though they had already taken almost all the money from the people who sent it in.

Well, Duane had the good sense not to pay them out of his own pocket. He outlasted them. When they shut down their business and reopened with a new name in 2015, the debts disappeared with the old name. At the very end of the 2015 FEC Report, Treasurer Mackenzie wrote: “The Committee contacted vendors to confirm the outstanding balance and was told there were no outstanding balances for Base Connect, Legacy List Marketing Inc., or Century Data Systems Corp. Therefore the balances were zeroed out …”

Just like that. Actually, it was a phony statement because Mackenzie is part of the Base Connect network, so he was just talking to himself and his partners. They all agreed there was never going to be money to collect from Duane, so they wrote it off.

But at the same time as almost $90,000 in debts to the fundraising companies disappeared, almost $60,000 in personal debts appeared on his 2015 report. $12,000 of that debt was to himself — money he lent the campaign to pay his legal bills for his North Dakota court case, which I wrote about back in April. The rest was in smaller amounts, mostly in the $2,500 range, to more than 20 people around the country. I puzzled over that for a while, until I finally put the answer together.

VIOLATIONS OF FEC RULES 

The prospect list run by Base Connect turned up some wealthy folks. Nearly two dozen people sent more money to Duane than the law allowed. In the 2012 election cycle, the limit on contributions to federal candidates was $2,500 per election: $2,500 for the primary, $2,500 for the general. A couple of dozen people sent $5,000 in separate checks of $2,500, one for each election. Except that Duane lost the primary, so he wasn’t on the ballot in the general. So he was only allowed to keep $2,500 of that. He had to return the other $2,500.

Because Duane never really saw the money, and likely never even read his FEC reports filed by Mackenzie, he likely didn’t even know there was a problem. Maybe he didn’t even know the rules.

But MacKenzie and the folks at Base Connect did. And they were careless or greedy, and not only kept the contributions, but reported them to the FEC. Somebody at the FEC was watching. And three times during 2012, Duane’s treasurer, Mackenzie, received letters from the FEC telling them some individuals had exceeded the limit, and the money had to be refunded or reallocated (by reallocated, that could mean putting some of it in a spouse’s name, for example).

So here’s what Mackenzie did: Almost everything each donor gave over the legal limit was re-listed in a new FEC report as a “debt.” In other words, if someone gave Duane $5,000, he owed them a refund of $2,500. That got listed as a debt. There were a bunch of those. Debts show up on FEC reports. And the FEC apparently was satisfied with that arrangement. A promise to pay was good as a refund, at least for the time being.

The most recent report is for the first quarter of 2016, signed by Mackenzie on April 14, 2016. In that report there are still at least 20 people who are owed money by the campaign, in amounts ranging from $300 to $5,000, all of whom donated to Duane’s campaign in amounts exceeding $2,500. The total amount comes to about $43,000.

So what’s been done is that instead of refunding the excess amounts, the campaign shifted about $43,000 to “debts” instead of “gifts.” No doubt the excess gifts went to the fundraising companies, which kept most of the money that was raised. But the company is gone now.  And guess who’s stuck for it? Yep. Duane.

Maybe Duane intends to pay them back sometime. We’ll see. He still lists a $5,000 debt to his Bismarck lawyer, Deborah Carpenter, plus the $12,000 loan he made to his campaign in 2014, for total debts to individuals now standing at about $60,000. The campaign is more than four years gone now, so raising any money from donors to pay those debts seems unlikely.

It will be interesting to see how he solves this. I almost feel sorry for him. He got taken, big time, by those Washington slicksters. They should have refunded the money to the donors immediately after the primary campaign ended in June 2012. Instead, they pocketed it, leaving Duane holding the bag. But Duane’s a big boy, and he likes playing politics, and sometimes bad things come of that. Really bad. Like a $60,000 debt.

And it HAS to be paid back because, technically, those donors gave Duane more than the law allowed, and technically, he “spent” it. Never mind that he never saw a penny of it. Friends of Duane Sand, his campaign committee, is responsible for returning excess contributions. Except there’s no money to pay it back.

If you would like an example of how he came to exceed the limits received from some donors, here’s the list on the FEC report for a lady in Georgia, Jane Pelham Doyle. Jane donated $4,375 to Duane in 2011-12. That’s $1,875 over the limit of $2,500. Here’s her giving history to the Sand Campaign:

2011-2012 Contributions to Duane Sand for June, 2012 Primary Election

Doyle, Jane W Pelham 9/6/2011 $100

Doyle, Jane W Pelham 9/20/2011 $50

Doyle, Jane W Pelham 9/28/2011 $100

Doyle, Jane W Pelham 11/8/2011 $135

Doyle, Jane W Pelham 11/23/2011 $135

Doyle, Jane W Pelham 12/19/2011 $170

Doyle, Jane W Pelham 12/22/2011 $35

Doyle, Jane W Pelham 1/19/2012 $202.50

Doyle, Jane W Pelham 2/6/2012 $203

Doyle, Jane W Pelham 3/1/2012 $203

Doyle, Jane W Pelham 3/16/2012 $250

Doyle, Jane 4/2/2012 $305

Doyle, Jane W Pelham 4/17/2012 $250

Doyle, W Pelham 5/9/2012 $305

Doyle, Jane W Pelham 6/4/2012 $100

Doyle, Jane W Pelham 6/8/2012 $458

Doyle, Jane W Pelham 6/18/2012 $458

Doyle, Jane W Pelham 7/6/2012 $458

Doyle, Jane W Pelham 8/17/2012 $458

Total in 2011-2012: $4,375

The FEC report shows that the campaign owes her $1,875. But sadly, Jane passed away this spring, on March 2, at the age of 92. I guess that’s one way to get rid of the debt. She’s still listed as a creditor on the April FEC report. Probably the estate hadn’t been settled by then. She’d only been dead a month. I’m not sure if Duane sent a sympathy card.

Most of the rest of those listed are also in their 80s and 90s. It’s a waiting game from here on out, I guess. We’ll see just how patient the FEC is about these kinds of things.

Here’s one more example. Susan Brunoff, age 87, New Holland, Pa., contributed $5,325. The FEC report shows Duane owes her $2,825.

2011-2012 Contributions to Duane Sand for June, 2012 Primary Election

Brunoff, Susan Mrs 12/20/2011 $100

Brunoff, Susan Valeria Mrs 1/16/2012 $225

Brunoff, Susan Mrs 2/6/2012 $500

Brunoff, Susan Valeria Mrs 2/28/2012 $225

Brunoff, Susan Mrs 3/26/2012 $100

Brunoff, Susan Valeria Mrs 4/13/2012 $338

Brunoff, Susan Valeria Mrs 5/8/2012 $338

Brunoff, Susan Mrs 5/22/2012 $500

Brunoff, Susan Valeria Mrs 5/31/2012 $499

Brunoff, Susan Valeria Mrs 6/14/2012 $676

Brunoff, Susan Mrs 7/6/2012 $500

Brunoff, Susan Mrs 7/31/2012 $500

Brunoff, Susan Mrs 8/17/2012 $500

Brunoff, Susan Mrs 9/13/2012 $324

Total in 2012: $5,325

OK, so you get the idea. Elderly women are being talked out of their money.

My guess is they are not all poor widows. Many are women of means. For example, Elloine Clark, the widow of a wealthy Texas lawyer who invested wisely in oil (isn’t that how all Texans get rich?), really overcontributed to Duane — she is listed as being owed $5,000 in Duane’s report. In the 2012 election, she contributed more than $334,000 to various candidates and PACs, according to FEC reports. And she gave another $311,000 in the 2014 election cycle.

And she’s still giving. She gave $100,000 to Carly Fiorina this year and smaller amounts to Bobby Jindal and Ted Cruz. The widow Clark told USA Today recently she likely will focus on contributing directly to the politicians she supports rather than filling up super PACs’ bank accounts. “I want my candidate to get the money,” she said. Plus, she added, “I’m not that wealthy. The price of oil is down.”

Well, you get the picture. I thought about calling Duane and asking him how he plans to resolve this, but he’s a busy man and I don’t want to bother him. I hope he figures it all out. I’m sure it’s no fun waking up every morning with something like this hanging over your head. Still, he liked waking up in the morning when he was a politician and seeing his name in the morning papers. I guess this is the price you pay for fame.

Meanwhile, I hope someone finds a way to put those folks at Forthright Strategy (formerly Base Connect) in the pokey one of these days. They deserve it. If you want to read some shocking things, go look at their website.

Here’s a couple of examples: They ran the fundraising campaign for South Dakota U.S. Senate candidate Dr. Annette Bosworth in 2014. They brag on their website that they raised $2,031,004 (exactly) for her campaign and gave her $500,000 of it, keeping a million and a half for themselves. For former Florida Congressman Allen West they raised $2,513,304, and sent the congressman $475,379 of that. The rest went for “expenses.” There’s a whole list of these. It’ll leave you shaking your head. It did me.  Because these conservatives fall for it. The candidates mostly don’t win, but they sure have a fun time playing politics. And what the heck, most of those widows are rich anyway.

I know I said this is my last story ever about Duane Sand, but if he ever gets those debts paid off, I’ll report in.

One last note: The latest FEC report for Friends of Duane Sand 2012, which you can look at here to see what I am talking about, lists an address of 418 Rosser Ave., Suite 100, Bismarck, N.D. 58502, the same address the committee has been using since 2011. I have a friend who works in that building and who says Duane hasn’t been seen there in a while — a few years.

So I thought I’d check. Turns out the sign on the door of that office says it is headquarters for the North Dakota Right To Life Association. Duane’s moved on. Not sure what the penalty is for giving the FEC a phony mailing address, but maybe the nice folks at Right To Life are forwarding his mail for him. Easier than going through that change of address thing.

JIM FUGLIE: View From The Prairie — My Last Story Ever About Duane Sand (I Hope)

 (NOTE: I started writing this story back in March, when I learned about former U.S. Senate candidate Duane Sand’s lawsuit against Job Service North Dakota. I finished writing about that lawsuit then — and posted the story — but never finished the financial end of the story of Duane’s campaign. Well, here it is. It’s pretty long, and I was going to run it in two parts, but then I decided it would be easier (for me) to just put it here and let you read it in two parts if you get weary of the detail involved. Have at it.) 

CAMPAIGN DEBTS, WIDOWS AND CONSERVATIVES

As I have reported here before, Duane Sand’s campaign for the U.S. Senate in 2012 raised more than a million dollars, most of it through direct mail, using a shady Washington D.C., mail firm well-known for sending out lots of letters and keeping most of the money.

When Duane ended his short-lived 2012 campaign (he lost in the primary to Rick Berg), he was in debt to the mail house, so he kept on raising money. Or rather, they kept on raising money for him. He didn’t really have to do anything. A company called Base Connect just kept cranking out letters to conservative mailing lists. By the end of the year they hit the $1 million mark, but most of it, probably 85 to 90 percent, stayed with Base Connect and its affiliated companies.

As I explained earlier, they did everything for Duane, from conceptualizing and printing a fundraising brochure, to writing the fundraising letter, to buying the mailing lists, to printing the letters, addressing and stuffing the envelopes, affixing postage and hauling them to the post office. And picking up the mail with the responses in them, and depositing the money in Duane’s account. All Duane had to do was lend them his name. But then most of the money went right back to them in fees and mailing expenses.

There have been a lot of stories written about this company. None of them full of praise. Google them.

So when Duane filed his 2012 FEC report (actually, another affiliate of Base Connect, a fellow named Scott Mackenzie, who called himself Duane’s “Campaign Treasurer,” filed it for him), it showed that he was in debt $92,714 at the end of 2012 — almost all of that to Base Connect and its affiliates.

Duane really didn’t do much about that for a couple of years, but there’s a funny thing about FEC reports: As long as there is an outstanding debt by the candidate or his committee, they have to keep filing reports. Four reports a year, in April, July, October and at the end of the year.

So even though Duane has not been on the ballot for more than four years (he lost the Primary in June of 2012), he is still filing those reports. Or rather, Scott Mackenzie is. Each report filed quarterly between 2012 and the end of 2015 showed that debt of $92,000 to Base Connect and its affiliates.

But then on his 2015 year-end FEC report, filed in January of this year, those debts mysteriously disappeared. The companies wrote them off as bad debts. The reason: at the same time, Base Connect itself disappeared.

But the people working for Base Connect didn’t disappear. They reappeared in another incarnation: ForthRight Strategy. Same owners, same address, same phone number. Just a new name. The name Base Connect had become so notorious they had to get a new identity.

Here is what happened in Duane’s case. Base Connect and its affiliates just kept mailing and mailing and mailing, all the way through 2012, even though Duane’s campaign was over June 12, when he lost the primary. And the bills kept piling up for those mailings. Highly inflated bills. But finally the money quit flowing.

So when it was all over, Base Connect and its affiliates had raised a million dollars, and had invoices showing Duane still owed them about $90,000 for their services. Even though they had already taken almost all the money from the people who sent it in.

Well, Duane had the good sense not to pay them out of his own pocket. He outlasted them. When they shut down their business and reopened with a new name in 2015, the debts disappeared with the old name. At the very end of the 2015 FEC Report, Treasurer Mackenzie wrote: “The Committee contacted vendors to confirm the outstanding balance and was told there were no outstanding balances for Base Connect, Legacy List Marketing Inc., or Century Data Systems Corp. Therefore the balances were zeroed out …”

Just like that. Actually, it was a phony statement because Mackenzie is part of the Base Connect network, so he was just talking to himself and his partners. They all agreed there was never going to be money to collect from Duane, so they wrote it off.

But at the same time as almost $90,000 in debts to the fundraising companies disappeared, almost $60,000 in personal debts appeared on his 2015 report. $12,000 of that debt was to himself — money he lent the campaign to pay his legal bills for his North Dakota court case, which I wrote about back in April. The rest was in smaller amounts, mostly in the $2,500 range, to more than 20 people around the country. I puzzled over that for a while, until I finally put the answer together.

VIOLATIONS OF FEC RULES 

The prospect list run by Base Connect turned up some wealthy folks. Nearly two dozen people sent more money to Duane than the law allowed. In the 2012 election cycle, the limit on contributions to federal candidates was $2,500 per election: $2,500 for the primary, $2,500 for the general. A couple of dozen people sent $5,000 in separate checks of $2,500, one for each election. Except that Duane lost the primary, so he wasn’t on the ballot in the general. So he was only allowed to keep $2,500 of that. He had to return the other $2,500.

Because Duane never really saw the money, and likely never even read his FEC reports filed by Mackenzie, he likely didn’t even know there was a problem. Maybe he didn’t even know the rules.

But MacKenzie and the folks at Base Connect did. And they were careless or greedy, and not only kept the contributions, but reported them to the FEC. Somebody at the FEC was watching. And three times during 2012, Duane’s treasurer, Mackenzie, received letters from the FEC telling them some individuals had exceeded the limit, and the money had to be refunded or reallocated (by reallocated, that could mean putting some of it in a spouse’s name, for example).

So here’s what Mackenzie did: Almost everything each donor gave over the legal limit was re-listed in a new FEC report as a “debt.” In other words, if someone gave Duane $5,000, he owed them a refund of $2,500. That got listed as a debt. There were a bunch of those. Debts show up on FEC reports. And the FEC apparently was satisfied with that arrangement. A promise to pay was good as a refund, at least for the time being.

The most recent report is for the first quarter of 2016, signed by Mackenzie on April 14, 2016. In that report there are still at least 20 people who are owed money by the campaign, in amounts ranging from $300 to $5,000, all of whom donated to Duane’s campaign in amounts exceeding $2,500. The total amount comes to about $43,000.

So what’s been done is that instead of refunding the excess amounts, the campaign shifted about $43,000 to “debts” instead of “gifts.” No doubt the excess gifts went to the fundraising companies, which kept most of the money that was raised. But the company is gone now.  And guess who’s stuck for it? Yep. Duane.

Maybe Duane intends to pay them back sometime. We’ll see. He still lists a $5,000 debt to his Bismarck lawyer, Deborah Carpenter, plus the $12,000 loan he made to his campaign in 2014, for total debts to individuals now standing at about $60,000. The campaign is more than four years gone now, so raising any money from donors to pay those debts seems unlikely.

It will be interesting to see how he solves this. I almost feel sorry for him. He got taken, big time, by those Washington slicksters. They should have refunded the money to the donors immediately after the primary campaign ended in June 2012. Instead, they pocketed it, leaving Duane holding the bag. But Duane’s a big boy, and he likes playing politics, and sometimes bad things come of that. Really bad. Like a $60,000 debt.

And it HAS to be paid back because, technically, those donors gave Duane more than the law allowed, and technically, he “spent” it. Never mind that he never saw a penny of it. Friends of Duane Sand, his campaign committee, is responsible for returning excess contributions. Except there’s no money to pay it back.

If you would like an example of how he came to exceed the limits received from some donors, here’s the list on the FEC report for a lady in Georgia, Jane Pelham Doyle. Jane donated $4,375 to Duane in 2011-12. That’s $1,875 over the limit of $2,500. Here’s her giving history to the Sand Campaign:

2011-2012 Contributions to Duane Sand for June, 2012 Primary Election

Doyle, Jane W Pelham 9/6/2011 $100

Doyle, Jane W Pelham 9/20/2011 $50

Doyle, Jane W Pelham 9/28/2011 $100

Doyle, Jane W Pelham 11/8/2011 $135

Doyle, Jane W Pelham 11/23/2011 $135

Doyle, Jane W Pelham 12/19/2011 $170

Doyle, Jane W Pelham 12/22/2011 $35

Doyle, Jane W Pelham 1/19/2012 $202.50

Doyle, Jane W Pelham 2/6/2012 $203

Doyle, Jane W Pelham 3/1/2012 $203

Doyle, Jane W Pelham 3/16/2012 $250

Doyle, Jane 4/2/2012 $305

Doyle, Jane W Pelham 4/17/2012 $250

Doyle, W Pelham 5/9/2012 $305

Doyle, Jane W Pelham 6/4/2012 $100

Doyle, Jane W Pelham 6/8/2012 $458

Doyle, Jane W Pelham 6/18/2012 $458

Doyle, Jane W Pelham 7/6/2012 $458

Doyle, Jane W Pelham 8/17/2012 $458

Total in 2011-2012: $4,375

The FEC report shows that the campaign owes her $1,875. But sadly, Jane passed away this spring, on March 2, at the age of 92. I guess that’s one way to get rid of the debt. She’s still listed as a creditor on the April FEC report. Probably the estate hadn’t been settled by then. She’d only been dead a month. I’m not sure if Duane sent a sympathy card.

Most of the rest of those listed are also in their 80s and 90s. It’s a waiting game from here on out, I guess. We’ll see just how patient the FEC is about these kinds of things.

Here’s one more example. Susan Brunoff, age 87, New Holland, Pa., contributed $5,325. The FEC report shows Duane owes her $2,825.

2011-2012 Contributions to Duane Sand for June, 2012 Primary Election

Brunoff, Susan Mrs 12/20/2011 $100

Brunoff, Susan Valeria Mrs 1/16/2012 $225

Brunoff, Susan Mrs 2/6/2012 $500

Brunoff, Susan Valeria Mrs 2/28/2012 $225

Brunoff, Susan Mrs 3/26/2012 $100

Brunoff, Susan Valeria Mrs 4/13/2012 $338

Brunoff, Susan Valeria Mrs 5/8/2012 $338

Brunoff, Susan Mrs 5/22/2012 $500

Brunoff, Susan Valeria Mrs 5/31/2012 $499

Brunoff, Susan Valeria Mrs 6/14/2012 $676

Brunoff, Susan Mrs 7/6/2012 $500

Brunoff, Susan Mrs 7/31/2012 $500

Brunoff, Susan Mrs 8/17/2012 $500

Brunoff, Susan Mrs 9/13/2012 $324

Total in 2012: $5,325

OK, so you get the idea. Elderly women are being talked out of their money.

My guess is they are not all poor widows. Many are women of means. For example, Elloine Clark, the widow of a wealthy Texas lawyer who invested wisely in oil (isn’t that how all Texans get rich?), really overcontributed to Duane — she is listed as being owed $5,000 in Duane’s report. In the 2012 election, she contributed more than $334,000 to various candidates and PACs, according to FEC reports. And she gave another $311,000 in the 2014 election cycle.

And she’s still giving. She gave $100,000 to Carly Fiorina this year and smaller amounts to Bobby Jindal and Ted Cruz. The widow Clark told USA Today recently she likely will focus on contributing directly to the politicians she supports rather than filling up super PACs’ bank accounts. “I want my candidate to get the money,” she said. Plus, she added, “I’m not that wealthy. The price of oil is down.”

Well, you get the picture. I thought about calling Duane and asking him how he plans to resolve this, but he’s a busy man and I don’t want to bother him. I hope he figures it all out. I’m sure it’s no fun waking up every morning with something like this hanging over your head. Still, he liked waking up in the morning when he was a politician and seeing his name in the morning papers. I guess this is the price you pay for fame.

Meanwhile, I hope someone finds a way to put those folks at Forthright Strategy (formerly Base Connect) in the pokey one of these days. They deserve it. If you want to read some shocking things, go look at their website.

Here’s a couple of examples: They ran the fundraising campaign for South Dakota U.S. Senate candidate Dr. Annette Bosworth in 2014. They brag on their website that they raised $2,031,004 (exactly) for her campaign and gave her $500,000 of it, keeping a million and a half for themselves. For former Florida Congressman Allen West they raised $2,513,304, and sent the congressman $475,379 of that. The rest went for “expenses.” There’s a whole list of these. It’ll leave you shaking your head. It did me.  Because these conservatives fall for it. The candidates mostly don’t win, but they sure have a fun time playing politics. And what the heck, most of those widows are rich anyway.

I know I said this is my last story ever about Duane Sand, but if he ever gets those debts paid off, I’ll report in.

One last note: The latest FEC report for Friends of Duane Sand 2012, which you can look at here to see what I am talking about, lists an address of 418 Rosser Ave., Suite 100, Bismarck, N.D. 58502, the same address the committee has been using since 2011. I have a friend who works in that building and who says Duane hasn’t been seen there in a while — a few years.

So I thought I’d check. Turns out the sign on the door of that office says it is headquarters for the North Dakota Right To Life Association. Duane’s moved on. Not sure what the penalty is for giving the FEC a phony mailing address, but maybe the nice folks at Right To Life are forwarding his mail for him. Easier than going through that change of address thing.

JIM FUGLIE: View From The Prairie — A Really Stupid Story

I intended to start this story with the words “This is a story about some Really Stupid People.” I thought that was a bit harsh, so I changed it to “This is a story about People who did some Really Stupid Things.” I decided that was pretty lame. So I’ve come up with a new start.

“This is a Really Stupid Story.”

It’s kind of a long one, too. Hang in there.

It starts back in 2012, when perennial political candidate ― although he’s missing in action this year, for reasons I’ll talk about later ― Duane Sand ― my favorite political punching bag ― hired some campaign staff and put them to work on his primary election challenge to Rick Berg for North Dakota’s U.S. Senate seat, the one Berg lost to now-U. S. Sen. Heidi Heitkamp.

I’m not sure what the staff did because Duane really didn’t mount much of a campaign. You can read about that in some earlier posts, here, and here and here. The primary was held June 12. When the staff woke up June 13, they were out of work.

Duane’s campaign manager, Joe Meyer, described variously as a “doofus” and “in over his head,” headed back home to Minnesota, where he promptly filed for unemployment insurance.

Well, Job Service in Minnesota contacted Job Service in North Dakota to verify that Joe was eligible for unemployment payments. There had been four people on the campaign staff, but only Meyer applied for unemployment benefits.

Job Service apparently did a little checking, found out about the four workers, and discovered that the campaign had not paid into the unemployment insurance fund. Job Service made a “determination,” based on the wages paid, that the Sand campaign owed the state for those unpaid unemployment insurance premiums. It sent an “unemployment tax due notice” for all four workers to the campaign.

The Sand campaign protested. Meyer, the campaign said, along with two others, had been hired as independent contractors, and the fourth person, a bookkeeper, had volunteered her services as a contribution to the campaign and received no pay. As an independent contractor, Meyer should not have applied for ― and should not have received ― unemployment benefits, it argued. But his application had sent up a red flag at Job Service North Dakota.

The campaign filed a formal appeal of the determination made by Job Service, saying that the paychecks to the three employees had been recorded on IRS Form 1099, the form normally used to report payments to independent contractors, instead of the normal W-2 forms used to record payments to employees. I talked to one of the employees the other night, and he confirmed that they all believed they had been hired as independent contractors.

Job Service North Dakota disagreed. They could have held an internal agency hearing to try to resolve it, but of all things, it turns out Duane Sand’s wife worked for Job Service at the time and according to the Job Service supervisor I talked to, Job Service felt it might pose a conflict of interest, so they sent the Sand campaign’s appeal to the North Dakota Office of Administrative Hearings.

The hearing officer, an administrative law judge, gave a split decision. He determined Meyer and one other staff member (the one I talked to) were independent contractors and not employees, which made them ineligible for unemployment benefits. Job Service did not appeal that decision. But the judge ruled that, for some unexplained reason, the third campaign worker, Sarah Mohler, WAS an employee, not an independent contractor. That made Duane’s campaign responsible for doing what every other business in North Dakota has to do — contribute to unemployment insurance for Mohler.

Duane’s campaign would need to pay some back taxes — probably a few hundred dollars — to Job Service, money it should have paid during the campaign.

Well, Sand, being Sand, wasn’t having any of that. He got a lawyer, named Deborah Carpenter, and they went to court, challenging the ruling that Mohler was an employee, not an independent contractor. The North Dakota District Court upheld the decision of the hearing judge. Still not satisfied, Sand appealed to the North Dakota Supreme Court, and in February of this year, almost four years after his campaign ended in the June 2012 Primary Election, the Supreme Court dismissed the appeal, on somewhat of a technicality — something about timing of the appeal and missed deadlines, which I don’t completely understand. The court didn’t rule on the merits of the case itself.

The result was the District Court’s ruling stands — the Sand campaign was employing Mohler, which means it would have had to pay into the unemployment insurance fund, even though Mohler never tried to collect unemployment payments.

I talked to Carpenter this week, and she said the campaign has never received a bill from Job Service. Which has me scratching my head — what the hell is this all about then? So I called Job Service back and asked them if that is the case. The supervisor there said he would check, but confidentiality rules may prevent him from telling me.

If you really want to know more about this, or try to make more sense of it than I could, you can click here or here for legal documents.

I called Sand a couple weeks ago and caught him on his cell phone while he was out in the oil patch loading a truck (since he left politics, he’s started an oilfield service company).

He was busy and didn’t have much time to talk, but I asked him what happens now, and he wasn’t sure. I asked him if it was over, and he said, “It’s not over until I say it is.” His lawyer said much the same thing — there could be more legal action in the future. Meanwhile, if the campaign gets a bill from Job Service, maybe he’ll pay, maybe he won’t.

But here’s the bottom line:

The amount of money involved here is likely less than $500.  The Job Service supervisor couldn’t tell me the exact amount, both because he didn’t know offhand and because that kind of information is confidential.

Sand could have just given in — agreeing he had one employee during his campaign for whom he should have paid unemployment insurance taxes — at every level: after the determination by Job Service, after the administrative hearing, or after the District Court ruling — but that’s not Sand’s nature. He believed he was right, and when Sand believes he is right, he doesn’t give up. So he went all the way to the Supreme Court.

Because he fought in court ― and lost ― he probably now stands liable for some pretty steep legal fees. According to his FEC reports, the campaign has already paid Carpenter $15,000 (most of it from money he personally loaned to the campaign in 2014), and he has a bill on his desk for $5,000 more (it’s amazing what you can find in those federal reports — you can look at them here if you want to).

I asked Carpenter if there were more fees not yet billed and she was evasive. One of the campaign workers I talked to ― not  Mohler ― told me the fees could go as high as $50,000. She said she didn’t think so. The $5,000 she hasn’t collected yet shows up on Sand’s latest FEC report as a campaign debt. More about that later.

Moreover, the state spent a lot of money pursuing a claim amounting to only a few hundred dollars. The Job Service fellow said lawyer costs were easily five figures — more than $10,000. I’m guessing it was more — way more.

I could file a FOIA request and get the amount they paid the Attorney General’s office, but the folks at Job Service have better things to do than add up lawyer’s bills. They’ve got unemployed people to take care of.

The campaign worker I talked to described the whole thing as a “witch hunt.” Sand has been a thorn in the side of the North Dakota Republican Party over the years, and this might have been “retribution” for that.

Because Sand’s wife was working for Job Service at the time, and because Job Service believed that might pose a conflict of interest, the case was quickly moved out of Job Service and into the Attorney General’s office.

A young attorney there named Mike Pitcher handled the case. He’s certainly above politics and was just doing his job, but we’ll probably never know if there was political motivation at higher pay grades than his. Job Service had to pay the bill for his time.

But the fellow at Job Service said it was the Sand campaign that dragged the case out. Once the appeal process started, Job Service had no choice but to pursue the state’s claim that the campaign was liable for unemployment insurance ― for Mohler. When the judge ruled the other two were independent contractors, the state did not appeal, although they could have.

The case has some ramifications for all North Dakota political campaigns: they better be paying unemployment insurance, or else have a good lawyer make sure that the employees really are independent contractors as defined by law and don’t go filing unemployment claims once the campaign is over.

The Job Service supervisor said he thinks it is standard practice for campaigns to set up accounts with Job Service as soon as they hire employees. He’s seen many of them over the years, and he believes that most campaigns do it. He said he’d have no way of knowing about those who don’t do it, unless, like in the case of the Sand campaign, someone files a claim. But they don’t go out checking the campaigns looking for violators.

Oh, by the way, Sand and his attorney argued in District Court that most campaigns don’t collect unemployment taxes, but the assistant attorney general pointed out Sand himself had collected them in two previous campaigns, in 2004 and 2008.

Well, it’s now the 2016 campaign season, and most candidates have access to legal advice from lawyer friends, so I hope all the 2016 candidates have their ducks in a row. (I can see a few campaign managers scrambling to talk to their bosses and checking with lawyers right about now.)

So who’s really at fault here? It’s a puzzle.

At the onset, Job Service found someone they called an “employer” who had not paid unemployment insurance taxes. It pursued that, and some legal definition found one of the Sand campaign staff qualified as an “employee” and not an independent contractor. The Sand campaign disagreed, even after an administrative law judge ruled against them. And it was the Sand campaign that filed the lawsuit and the appeal, not the state.

Unfortunately, Job Service has now spent tens of thousands of taxpayer dollars defending against the lawsuits in court, over what might end up being a few hundred dollars.

But I guess that’s what courts are for. And I guess that’s how lawyers make their living. Meanwhile, as I mentioned earlier, there’s probably a good reason Sand is not running for something this year, as he did in 2004, 2008 and 2012. There’s the matter of his campaign debt remaining from the 2012 campaign — still at about $60,000, including the $5,000 to Carpenter.

Sand owes money to a lot of people, all in amounts of $5,000 or less, from 2012. I’ve been studying that because Sand is an interesting character. His legal and financial shenanigans are something to behold. I’ve just told you about some of the legal ones. See, I told you this was a Stupid Story.

Ahead, In The Days And Weeks To Come

There’s more news about Sand. Coming up, when I get time to write:

  • He has substantially reduced his campaign debt, which stood at $145,000 at the end of 2014. We’ll look at how that happened.
  • He has been found in violation of FEC rules by the FEC a number of times for taking contributions in excess of what federal law allows. How he resolved those violations is very interesting. And maybe even legal. Or maybe not.
  • He has a counterpart in South Dakota who seems to be just as gullible — or unscrupulous — as he is.

They’re all related. I’ll try to walk you through them.