The Democratic Governor’s Association, chaired by Minnesota Governor Tim Walz, was recently implicated in an alleged union money laundering scheme. Complaints circulated this past summer, when Walz was still former Vice President Kamala Harris’ running mate, that the organization funneled union dues back to gubernatorial campaigns.
According to allegations from the Freedom Foundation, the Democratic Governor’s Association (DGA) colluded with the Pennsylvania State Education Association (PSEA) to launder approximately $1.5 million in teacher’s union dues back to Pennsylvania Governor Josh Shapiro’s 2022 gubernatorial campaign. The Freedom Foundation filed the complaints with state and federal authorities.
The conservative think tank reported in July, “Pennsylvania campaign finance and collective bargaining laws prohibit unions from using their general treasury funds to make contributions to political candidates, though federal court rulings allow unions to use such funds to independently purchase their own advertisements supporting or opposing candidates for office.”
The group explained how the funds were allegedly allocated to Gov. Shapiro. “Nevertheless, the complaints document how PSEA made two, six-figure contributions from its general treasury to the Fund for Student Success (FSS), a little-known political fund operated by the union, which then contributed the funds to the DGA in May 2022 which, in turn, contributed heavily to Shapiro’s successful campaign for governor,” the statement continued.
Maxford Nelsen, the Freedom Foundation’s director of research and government affairs, weighed in on the controversy. “PSEA’s scheme to secretly launder nearly $1.5 million in members’ dues through the Democratic Governors Association to support Josh Shapiro’s 2022 candidacy appears to have violated both an array of Pennsylvania laws and the Internal Revenue Code,” he said.
Nelsen continued, “In the process, PSEA executives displayed as much contempt for their own members as they did for Commonwealth law and voters. Pennsylvania teachers deserve to know that their union’s assurances that the dues deducted from their hard-earned paychecks aren’t being used to back political candidates are worth no more than a politician’s campaign promises.”
The Freedom Foundation accused those allegedly involved in the scheme of “willful violations” of the law. “The exhaustive complaints show that PSEA officers were well aware of the applicable laws, but chose to ignore them anyway, deceiving Pennsylvania teachers in the process,” the statement from the think tank continued.
Gov. Tim Walz’s administration has also faced massive criticism regarding its handling of the large-scale fraud that occurred in what has been described as the “biggest pandemic fraud case in the nation.” The nonprofit organization, Feeding our Future, allegedly led a $250 million conspiracy to defraud taxpayer-funded organizations.
Walz responded to the controversy maintaining that there wasn’t any wrongdoing at the state level. “There’s not a single state employee that was implicated in doing anything that was illegal. They simply didn’t do as much due diligence as they should have,” he said. “So, there’s been leadership changes in these organizations since that time, and we have new leadership in sense the certainly over at the Department of Education.”
Walz was previously subpoenaed over the scandal, given he is the highest-ranking authority in the state. “As the chief executive and the highest-ranking official in the state of Minnesota, you are responsible for the MDE and its administration of FCNPs. Article V Section 3 of the Constitution of the State of Minnesota which lays out the powers and duties of the governor, states in part that the governor “may require the opinion in writing of the principal officer in each of the executive departments upon any subject relating to his duties,” and “he shall take care that the laws be faithfully executed,” the subpoena read.
