Minnesota Office of the Legislative Auditor
The auditor of Minnesota state government


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Legislative Audit Commission


June 30, 2008

Members Present:

Representative Sondra Erickson Senator Don Betzold
Representative Rick Hansen Senator Joe Gimse
Representative Aaron Peterson Senator David Hann
Representative Connie Ruth Senator Claire Robling
Representative Steve Simon

Members Absent:

Representative Michael Beard Senator James Metzen
Senator Ann H. Rest

Other Non-LAC Members Present:

Representative Pat GarofaloSenator Terri Bonoff

The Legislative Audit Commission (LAC) meeting was called to order by Representative Rick Hansen, Chair, at 1:00 p.m. The purpose of the meeting was to discuss an evaluation report on charter schools and the Legislative Auditor’s preliminary assessment of allegations concerning the Minnesota Attorney General’s Office.

Representative Hansen introduced Legislative Auditor Jim Nobles. Mr. Nobles gave a brief overview of charter schools and introduced Judy Randall, the manager of the evaluation. Ms. Randall presented the report on charter schools and answered questions. Representative Hansen invited Morgan Brown, Assistant Commissioner from the Minnesota Department of Education (MDE), to respond to the OLA recommendations. Mr. Brown said that overall the commissioner of MDE was happy with the conclusions on charter schools’ financial accountability. He said that MDE is generally in support of all the recommendations made by the evaluation.

Representative Hansen asked Mr. Nobles to discuss his preliminary assessment of allegations concerning the Minnesota Attorney General’s Office (AGO). Mr. Nobles explained that the objective of preliminary assessment is to determine whether OLA needs to conduct a full investigation. He noted that in this case the decision was to not investigate further, but the preliminary assessment itself was far more extensive than is typical. For example, seven people were interviewed under oath. Mr. Nobles said the interviews substantiated that some attorney’s in the Attorney General’s Office say they have felt pressure to do things they thought were inappropriate but also said that no inappropriate actions actually occurred. Mr. Nobles said the alleged pressure and possible action involved were rather subjective and open to interpretation as to their inappropriateness. Finally, Mr. Nobles pointed out that all seven people who were interviewed—both former and current employees of AGO—asked that their testimony be classified as not public and their requests were granted.

Mr. Nobles responded to questions from commission members about the preliminary assessment. Several questions concerned two allegations not originally presented to OLA, but were uncovered during the preliminary assessment. They concerned a settlement AGO negotiated with Capital One and the possible misuse of Medicaid money. Mr. Nobles told commission members that the Capital One settlement did concern him, but he received satisfactory responses from Attorney General Swanson and former Attorney General Hatch. He noted, however, that he is always willing to reopen an issue if new questions or concerns arise. On the allegation concerning the possible misuse of Medicaid money, Mr. Nobles said his office will examine the issue more closely during regularly scheduled audits.

Representative Hansen noted that Attorney General Lori Swanson was invited to address the LAC in response to the Legislative Auditor’s preliminary assessment. However, she decided to respond with a letter that was presented to the LAC members at the beginning of the meeting. In her letter, Ms. Swanson noted that one of the allegations involving mortgage foreclosure fraud lawsuits filed by the AGO was fully investigated by Dean Thomas Mengler of St. Thomas Law School, “who found there was no merit to the allegations.” She also noted that the Minnesota Office of Lawyers Professional Responsibility also found that her office “did not engage in any unethical conduct in connection with the filing of those lawsuits.”

Mr. Nobles gave commission members a brief overview of other audits, evaluations, and investigations OLA has in process. With no further discussion or comments, the meeting was adjourned at 3:10 p.m.

Representative Rick Hansen, Chair

Shelly Watterud, Recording Secretary



Office of the Legislative Auditor ♦ Room 140, 658 Cedar St., St. Paul, MN 55155