State v. Eibensteiner, No. A04-792.

• Decision Date: 28 December 2004
• Docket Number: No. A04-792.
• Citation: 690 N.W.2d 140
• Parties: STATE of Minnesota, Appellant, v. Ronald E. EIBENSTEINER, Respondent.
• Court: Minnesota Court of Appeals

690 N.W.2d 140

STATE of Minnesota, Appellant, v. Ronald E. EIBENSTEINER, Respondent.

No. A04-792.

Court of Appeals of Minnesota.

December 28, 2004.

Mike Hatch, Attorney General, St. Paul, MN; and Patrick W. Flanagan, Mower County Attorney, Austin, MN; and Earl P. Gray, Special Prosecutor, St. Paul, MN, for appellant.

John M. Huberty, William J. Mauzy, Amos Cohen, Minneapolis, MN, for respondent.

Considered and decided by WRIGHT, Presiding Judge; SCHUMACHER, Judge; and HALBROOKS, Judge.

OPINION

WRIGHT, Judge.

The state appeals from a pretrial order dismissing a grand jury indictment that charged respondent with violating laws prohibiting corporate campaign contributions. The state argues that the district court erred in ruling that the case was not properly venued in Mower County and that the evidence was insufficient to establish probable cause to proceed. We reverse and remand.

FACTS

A Mower County grand jury returned an indictment, charging respondent Ronald Eibensteiner with aiding and abetting two violations of Minn.Stat. § 211B.15, subd. 2 (2002), which prohibits both direct and indirect corporate campaign contributions made to promote or defeat a candidate for political office. The indictment also charged Eibensteiner with two counts of violating Minn.Stat. § 72A.12, subd. 5 (2002), which prohibits soliciting or knowingly receiving political campaign contributions from an insurance company. The grand jury's findings of fact in support of the charged offenses were summarized in the indictment and alleged that:

Defendant, Harry Bassett, Jr., is the Vice President of government relations of the [A]ssurant [G]roup. Within the [A]ssurant [G]roup is the Defendant American Bankers Insurance Company of Florida. Defendant Jerome Atkinson is general counsel for [A]ssurant [G]roup and American Bankers Insurance Company of Florida. The Defendants Harry Bassett, Jr., and Jerome Atkinson, on behalf of the Defendant [C]orporation American Bankers, and within the scope of their authority, made two corporate campaign contributions to the Republican Party. The contributions were made on or about September 9, 2002, ($10,000.00) and on or about October 17, 2002 ($5,000.00).

According to the Defendants Bassett and Atkinson, the corporate contributions were made to influence the outcome of the Minnesota State governor's election. Their purpose was to defeat [I]ndependent candidate Tim Penny because Penny had made it known that he was going to retain the Commerce [C]ommissioner, James Bernstein. At the time of these contributions, the Defendants American Bankers, Bassett and Atkinson had an administrative action pending with the Commerce [C]ommissioner, Bernstein.

Defendant Ronald E. Eibensteiner was the chair of the Republican Party in the State of Minnesota. According to Defendant Eibensteiner, the first corporate check of $10,000.00 was received by his political committee on or about September 9, 2002, and his committee forwarded the check to the National Republican Committee. The National Committee then sent the money back to the state Republican Party. After this contribution, on September 9, 2002, Defendant Ronald Eibensteiner sent a letter as chair of the Republican Party of Minnesota thanking the Defendant American Bankers Insurance Company and soliciting it for more funds. On October 17, 2002, Defendant American Bankers Insurance Company, through Defendants Harry Bassett and Jerome Atkinson, sent another $5,000.00 corporate contribution check. The money was again sent to the National Republican Party and then sent back to the state Republican Party. The state Republican Party, after receiving the $15,000.00, spent money in Mower County promoting the election of Tim Pawlenty.

The grand jury received as an exhibit a letter sent by Eibensteiner to Ronald Jerich, a lobbyist for American Bankers Insurance Company (American Bankers). The letter, dated September 9, 2002, states:

Dear Ron, Hi!

I want to take this opportunity to say thank you for obtaining from American Bankers Insurance Company of Florida a $10,000 contribution to the R.N.S.E.C. (Republican National State Election Committee). I believe that we share the same goal in making the Republican Party the majority in the new Millennium.

As you know, this is a pivotal year for the Republican Party and Minnesota has been targeted as a key state this year. That means the pressure has been put on us to raise enough money to make sure our major candidates, Norm Coleman to replace Paul Wellstone, Tim Pawlenty for Governor, and John Kline to replace Bill Luther (in the new 2nd District), can win.

Our overall budget for this year requires us to raise $7.3 million, a daunting goal. Of that amount, $1.5 million has been earmarked for a media buy to promote Tim Pawlenty for Governor ... the media ads begin running Labor Day weekend.

With the General Election only 58 days away, we are pleased that your contribution will help us accomplish our budget goal. Without the necessary funds to support our candidates, we could end up disappointing President Bush. He needs our support, right here in Minnesota, to make sure we can make Minnesota a Republican state!

Once again, we appreciate your help and the contribution of $10,000 from American Bankers Insurance; it will go a long way in helping to make the Republican Party the majority President Bush needs right now.

Yours very truly, Ronald E. Eibensteiner, Chair, Republican Party of Minnesota. Thanks so much!

P.S. Since we're not sure who to thank at American Bankers Insurance, if you would do that on our behalf, I would appreciate it.

(ellipses, italics, and parentheticals in original; bold text handwritten).

Minnesota Solicitor General Lori Swanson testified before the grand jury. She explained the process that she used to review the official government records of the Federal Election Commission, filed by the Republican National State Election Committee (RNSEC) for calendar year 2002. Swanson verified from the records that American Bankers made two contributions to the RNSEC. A contribution of $10,000 was received on September 12, 2002, and a contribution of $5,000 was received on October 17, 2002. Swanson testified that, from her review of these records, she determined that the RNSEC sent more than $2.1 million to the Republican Party of Minnesota after the RNSEC received the initial contribution from American Bankers. Swanson could not determine from the records that she examined whether the two particular contributions from American Bankers totaling $15,000 were actually returned to the state of Minnesota as part of the $2.1 million received from the RNSEC, but stated that the letter from Eibensteiner to Jerich was evidence that the money was returned to Minnesota.

Minnesota Legislative Auditor James Nobles also testified before the grand jury. As part of an investigation into alleged improprieties regarding American Bankers in early 2003, he conducted a telephone interview of Harry Bassett, Jr. and Jerome Atkinson, executives employed by Assurant Group, the parent company of American Bankers. Nobles testified that Bassett and Atkinson advised him that they intended their political contribution¹ to be used to help elect a new governor in Minnesota who would appoint a new commerce commissioner. Bassett and Atkinson also advised Nobles that they were aware that gubernatorial candidate Tim Penney had promised to reappoint Bernstein as commerce commissioner if Penny won the election. Bassett and Atkinson stated that their intention in making the political contribution was to help defeat Tim Penney.

Nobles also testified about a telephone interview that he had with Eibensteiner. According to Nobles, Eibensteiner stated that he did not know of Jerich's affiliation with American Bankers, nor had he ever heard of the company until the newspapers reported the controversy on the corporate contributions. Eibensteiner told Nobles that the September 9, 2002, letter to Jerich was a form letter prepared for him by staff and that he simply signed it as he did many form letters, often without reading them. Eibensteiner stated that, as a policy, if a contributor wanted to give a corporate contribution to the Republican Party of Minnesota, state party staff members were instructed to ask for a personal contribution instead. But if the contributor persisted in making a corporate contribution, state party staff would facilitate sending the contribution to the National Republican Party, which could accept corporate funds. Eibensteiner advised Nobles that there was a mechanism at the party's national office for using corporate contributions in state campaigns.

Joseph St. George II, general manager of a television station in Austin, Minnesota, also testified before the grand jury. He testified that the station ran ads for then gubernatorial candidate Tim Pawlenty on September 12, 17, 19, and in October 2002, that were prepaid either by the Republican Party of Minnesota or the candidate's election committee. Austin is in Mower County.

On October 1, 2003, the grand jury returned an indictment, charging Eibensteiner with two counts of aiding and abetting prohibited campaign contributions, in violation of Minn.Stat. § 211B.15, subds. 2, 13 (2002), and two counts of soliciting prohibited campaign contributions by an insurance company, in violation of Minn.Stat. § 72A.12, subd. 5.

Eibensteiner subsequently moved to dismiss the indictment on numerous grounds, including lack of probable cause, and requested a probable cause hearing pursuant to Minn. R.Crim. P. 11.03 and State v. Florence, 306 Minn. 442, 239 N.W.2d 892 (1976), which pertain to dismissal of a complaint for lack of probable cause. For purposes of this appeal, the other relevant grounds for dismissal were that (1) venue of the grand jury in Mower County was improper and, therefore, the grand jury lacked legal authority to return the indictment; and (2) the district court...