Reprinted from 

Auditor: Ho-hum financial-analysis job becomes election hot spot
The candidates in the race accuse each other of harboring partisan agendas under the spreadsheets, and of not having the right temperament for the job.

Pat Doyle, Star Tribune
October 27, 2006
 

In the unusually tough race for state auditor, the accusations and alliances are adding up.

The last Republican governor to serve two terms has thrown his support to the DFL candidate over the Republican incumbent.

The DFLer has accused the auditor of bad math. The Independence Party candidate -- a high-ranking Minneapolis police officer -- says the auditor sometimes overreacts in blowing the whistle on the finances of local governments.

And the auditor shrugs off criticism with a style more characteristic of a bookie than a bookkeeper.

"That's ridiculous," said Patricia Anderson, regarding the claim that she's sometimes unduly harsh on local governments. "I'm just doing my job."

In a time of tight budgets and rising property taxes, the often-overlooked office of state auditor has taken on particular significance, and with it, greater political visibility and importance.

Anderson has used it to advocate forcefully against waste in cities, counties and government pension funds.

But her DFL opponent, former state legislator Rebecca Otto, accuses Anderson of crafting audits to promote the conservative tax agenda of Gov. Tim Pawlenty, a fellow Republican. Otto's prime example is a 2003 audit that said local governments could do without much of the money they receive each year from the state.

Otto said the report "greased the skids" for an upcoming Pawlenty budget that proposed cuts in state aid. "It was very politically timed," Otto said.

Independence Party candidate Lucy Gerold agrees. "It really appeared that [Anderson] was softening the beachhead for him," she said.

Otto also says Anderson applied partisan value judgments -- defining parks and libraries as nonessential services -- in concluding that local governments could operate with less state money. Her audit said the state's larger cities could afford to lose half of their state aid and still not need to raise property taxes to provide the same level of police and fire protection and other services she deemed essential.

Anderson defends her report as "dead-on" and dismisses the notion that it was written to provide Pawlenty a justification for a budget that cut state aid while avoiding tax increases by the state. She said she initiated the report on state aid because some cities and counties thought they were being shortchanged while other local governments got state aid they didn't need.

"We wanted to show for the first time ever where the money was actually going," she said. "The purpose of [the aid] was to make sure everybody could provide public services, essential services ... no matter what your tax base, but it had gotten warped through time."

As evidence of neutrality, she noted that her office issued a study on school financing when Republicans and DFLers were embroiled in tough budget negotiations in 2005.

"The study showed that education spending was flat, and when you take inflation into it, going down, which actually made the case of the Democrats," she said.

Another report, she said, had the effect of supporting the arguments of a teachers union, even though they "didn't endorse me and they're not going to."

Lost independence?

But among those concerned about the independence of the office is Arne Carlson, the Republican governor in the 1990s and a former state auditor.

"I think that independence has been lost," he said in a statement last week endorsing Otto.

Anderson isn't bothered. "They're obviously pals from way back," she said. "If Otto was running for senator or dogcatcher, he'd endorse her."

Carlson was unavailable for comment Thursday.

Anderson isn't the only candidate in the race accused of harboring a political agenda under the spreadsheets. Gerold said Otto is "running on kind of a platform of reducing property taxes," which is beyond the scope of the auditor's job.

In an interview, Otto said she might do a report on the impact of rising property taxes if she becomes auditor, but said it would be "straightforward, no spin."
 

Bad math or mere typos?

Otto has tried to make the case that Anderson has been sloppy, identifying a "$180.1-million error" in a report on special-district finances. The inaccuracy occurred in a summary above a graphic about revenues.

"Under my leadership we'll make sure the numbers add up," Otto said. "I will also take responsibility when there are errors."

Anderson acknowledged that the number was wrong but characterized it as a typo, not a fundamental mathematical mistake. "It's so petty," she said. The summary has been corrected.

And Anderson asserts that Otto's critique of the audit report was riddled with errors.

Both Otto and Gerold have criticized Anderson for her style as auditor, arguing that she'd rather issue tough press releases than work with local governments to avert financial problems.

Gerold, on leave from her job as deputy chief of investigations for the Minneapolis Police Department, said some local officials regard Anderson's style "as simply a way to gain headlines and self-promote, as opposed to being there to serve local government."

When Anderson held a news conference this month to call for a criminal investigation into operators of the defunct Minneapolis teachers pension fund, she was accused of grandstanding. Tom Heffelfinger, a Republican, former U.S. attorney and lawyer for an administrator of a trust created by the operators, said Anderson's announcement was unnecessary and driven by "pure personal political motivation."

Pension oversight praised

But Anderson gets high marks on pension oversight from Patrick Born, chief financial officer for the city of Minneapolis. He said Anderson and her staff aided the city by urging action to resolve serious problems with fire and police pension funds.

Born said the auditor's office encouraged the city to try to get the fund managers to curb their payments. If the pension plans are overpaying beneficiaries, "the city's payments to these pension plans is more than it ought to be," Born said.

Anderson was particularly tough on the Minneapolis teachers plan, which had accumulated nearly $1 billion in unfunded liabilities.

In April, she denounced a "golden parachute" for the administrator of the collapsing fund, saying the arrangement underscored the urgency of merging it with a successful retirement account.

"This fleecing of the taxpayers' coffers is but the latest example of why this merger needs to take place right now," she said at the time.

In a recent interview, Anderson defended her style and suggested that her opponents favored "holding hands and singing kumbaya" with local officials, rather than tough oversight.

Pat Doyle • 651-222-1210 • pdoyle@startribune.com