Should a private company endow a government official?

Palo Alto’s Emerson Collective LLC appears to have done exactly that in the case of an Assistant Commissioner slot at the state Department of Employment and Economic Development (DEED).

In Minnesota’s executive branch, a state agency (like DEED) is headed by a cabinet-level official called a commissioner, appointed by the governor, and confirmed by the state senate.

The commissioner is assisted by two levels of political appointees: one or more deputy commissioners and several assistant commissioners. These lower-level officers are government officials: they must all file a financial disclosure statement with the state Campaign Finance Board and are subject to conflict-of-interest laws and bans on receiving gifts. The idea is to make sure that the decisions made by these high-ranking government officials are not influenced by an official’s private, individual economic interests.

A late-afternoon-Friday news dump uncovered an interesting bypass to these “good government” safeguards. Two years ago (October 2022), I had sent a public data request to DEED regarding the August 2022 departure from the agency of an Assistant Commissioner. I received the response yesterday. The response consisted of an 88-page PDF, with numerous redactions.

Some more background: in June 2020 Anisa Hajimumin was appointed to a brand-new Assistant Commissioner position. This position was to be in charge of “Immigration and Refugee Affairs.” As stated in the DEED press release:

This new leadership role will serve as the State’s primary specialist on immigrant and refugee affairs and focus on the impact of immigration on Minnesota’s economy.  

Note the use of the word “State.” As the Friday document dump revealed, this position coordinated on the immigrant issue across state government (interagency), not just at a single department.

At the time of these events, the DEED commissioner was Steve Grove, a former Silicon Valley executive (Google) who was later to become the publisher of the Minnesota Star Tribune.

After more than two years in the job, Anisa Hajimumin was ready to move on and that’s where the complication begins. Here’s an excerpt from an August 2022 internal DEED email:

Who is “Monica” and what “funding” is being referred to? “GO” in this context appears to refer to the office of Gov. Tim Walz. “Frosch” appears to refer to Elizabeth Frosch, the Deputy Commissioner and COO of DEED. Another email:

“Emerson Collective” appears to refer to an LLC based in Palo Alto, California. Emerson Collective LLC was founded and is headed by Laurene Powell Jobs, the widow of Apple-founder Steve Jobs. Emerson Collective’s website is here. Emerson has a Wikipedia page!

The widow Jobs ranks 53rd on the Forbes 400 list of American billionaires. Her fortune is estimated at more than $15 billion. This summer, Jobs purchased the most expensive home ever sold in San Francisco, a $71 million, 17,000 s.f. Pacific Heights mansion. The Pacific Heights neighborhood hosts the city’s famous billionaires’ row, among other attractions.

Among its many holdings, the Emerson Collective owns a majority, controlling interest in The Atlantic magazine. This week, The Atlantic endorsed Kamala Harris for President.

Campaign finance databases show that Jobs is a frequent and generous donor to Democratic candidates and causes. But why give money to election campaigns when you can purchase government directly?

Back to the internal DEED emails:

“Monica” appears to refer to an executive at Emerson Collective in charge of immigration strategy and policy:

What I infer from these emails is that this Assistant Commissioner position is/was being directly funded by a private California corporation, rather than by state taxpayers, and not via a legislatively-enacted budget. And I infer that this “public/private partnership” went on for a number of years. Another DEED email:

The following is an excerpt from a DEED supplemental budget request submitted in January 2022 to the state legislature. (Dollar amounts are in $thousands),

“Foundation” appears to refer to Emerson Collective LLC. “1 individual” appears to refer to the Assistant Commissioner position for Immigrant and Refugee Affairs. This internal July 2022 email from the Governor’s Office implies that the budget request didn’t go through,

DEED’s Office of New Americans (ONA) was eventually created in the next budget cycle.

The problems with this arrangement are obvious: cross-government operations are being funded directly by an out-of-state, private corporation. This process bypasses the elected legislature, the public state budgeting process, and the executive branch’s elected officials and those appointed officials subject to Senate confirmation. All the carefully arranged checks and balances (power of the purse, etc.) are thrown out the window.

This excerpt is from an email that originated from inside the Governor’s office:

Why does Monica from Palo Alto get to decide?

A further note on Emerson Collective LLC. The website Influence Watch notes the leftwing leanings of the LLC and also that:

Despite its considerable influence and enormous size, with over $1.8 billion in assets and 184 employees, the Collective largely operates in secrecy and maintains a low profile.

Further:

While most charitable non-profits are organized as 501(c)(3) tax-exempt nonprofit corporations, the Emerson Collective is a Limited Liability Corporation (LLC), a structure ordinarily used for for-profit businesses.

…

By operating as an LLC, the Collective can use its funds for a wider variety of purposes than traditional charities, including political advocacy. It also enjoys less rigorous reporting requirements, and does not publicly reveal its financial statements nor grant award amounts.

Due in part to the Emerson Collective’s structural opacity, left-of-center philanthropy website Inside Philanthropy named Powell Jobs its “Least Transparent Mega-Giver” of 2019. 

So, Jobs can fund and direct public policy without any public disclosures. Campaign donations from individuals and corporations must be disclosed. Corporate lobbying expenditures must be disclosed. Grants to government from nonprofits and foundations must be disclosed. But an out-of-state private company can endow and direct a public official position without any legally required disclosure.

Now, that’s a loophole.