The Ticket

Vice President Pawlenty? Three attacks Democrats may use against him

Chris Moody
The Ticket

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Tim Pawlenty and Mitt Romney (Bruce Smith/AP)

Perhaps the second time's the charm. Former Minnesota Gov. Tim Pawlenty is once again rumored to be on the vice presidential shortlist of a Republican presidential candidate, with Mitt Romney doing the honors this time around. After serving in the Minnesota House of Representatives, two terms as governor and making a brief run for president in 2011, Pawlenty is now working as a tireless advocate to help his potential boss get elected. His first brush with VP fame occurred when Republican presidential nominee John McCain started looking into Pawlenty's record as a potential running mate in 2008.

But should he receive the call this time, Democrats will be ready to pounce. For months, campaign arms and liberal super PACs have been gathering opposition research files on the possible Republican vice presidential contenders. American Bridge, a liberal super PAC, released more than one thousand pages of documents on three of the rumored candidates earlier this month. Pawlenty made the cut.

So what kinds of attacks would the former governor face should Romney choose him as his second fiddle? Here are three stories from Pawlenty's past that Democrats have surely looked into. And these just might re-emerge before Election Day:

1. While in the Minnesota House, Pawlenty served on the board of a corporation whose subsidiary was charged with scamming customers

While Pawlenty was majority leader of the Minnesota House of Representatives, he sat on the Board of Directors of a phone company, NewTel, for two years. During his tenure, Pawlenty approved NewTel's purchase of a subsidiary called New Access Communications, which regulators in ten states accused of cheating its customers by deceptively signing them up for its services.

Regulators charged that New Access was engaging in "slamming," an industry term that describes an illegal practice in which companies switch a customer's phone service without permission. New Access reached a settlement and agreed to pay about $2 million in fines--$1.2 to the allegedly fleeced customers and $750,000 to regulators in the ten states where they were charged at the time. The company claimed innocence, but paid the money to avoid a legal battle.

A Saint Paul Pioneer Press investigation unearthed the connection between Pawlenty and the New Access buy in July 2003. In interviews with the Pioneer Press, NewTel President Elam Baer, who advised Pawlenty's gubernatorial campaign, defended the company, saying that customers had misread the written Terms of Agreement. "We do not think that we are in any way outside the norm of the industry," Baer told The Pioneer Press at the time. "I'm not saying there was never a customer who was wronged, but it's unprofitable and we do what we can to correct it."

Pawlenty did not focus on New Access after he approved the purchase in 2001, choosing instead to spend his energy on other projects within the company, according to his interviews with the Pioneer Press. While a subsidiary, New Access had its own leadership structure, so the NewTel board members played a hands-off role, Pawlenty said. He added that he did not know about the company's legal trouble until 2003, two years after he stepped down from the board. But the Pioneer Press investigation at the time disputed those claims. "Through almost all of 2001," The Pioneer Press reported, NewTel "owned between 60 percent and 100 percent of New Access; it made a significant financing decision on New Access' behalf; and New Access accounted for more than one-third of NewTel's $29 million in revenue that year."

In July 2003, Pawlenty told the Pioneer Press that NewTel's accusations of wrongdoing were "a leap."

"To the best of my memory, we never discussed it," Pawlenty told the paper. "You want to say, 'Pawlenty's on the board of NewTel, ergo he's responsible, or to blame, for these operational issues,' but I think that's a leap."

When Yahoo News asked for a response to the near decade-old story, Pawlenty spokesman Brian McClung pointed to NewTel board records that show that Pawlenty was not made aware of New Access' alleged conduct and that any allegations against Pawlenty "have no merit."

"New Access was owned by NewTel," McClung told Yahoo News. "However and importantly, New Access was a separate company with its own board of directors. Pawlenty did not serve on the board of New Access. When Minnesota Democrats first raised this issue nearly a decade ago, the attorney for NewTel reviewed records of NewTel board proceedings and publicly certified in a letter that issues relating to allegations of "slamming" by New Access did not come before the board of NewTel while Governor Pawlenty was on the board of NewTel. So, these allegations have no merit."

Before Pawlenty ran for governor, he sold his shares for $10,000, using the 1,000 shares and 3,000 options given to him as a director of the company. In interviews with the Pioneer Press in 2003, Baer, president of New Tel, said he "deliberately paid less than market value because Pawlenty was about to become governor."

2. Pawlenty's first gubernatorial campaign had to pay $600,000 in fines for improper coordination with the state party

When Pawlenty ran for governor in 2002, the State Campaign Finance and Public Disclosure Board charged his campaign with "illegal collusion" with the state Republican Party after Pawlenty's campaign provided them with footage for ads. The board fined the campaign $100,000 and forced it to pay $500,000 in ad spending originally picked up by the state Republican Party. The Minnesota GOP "purchased raw footage from the campaign media consultant and produced a series of supposedly independent ads," the Star Tribune reported in November 2002.

The board ruled "that the interactions between the party and the campaign were too cozy and amounted to illegally acting in 'cooperation and concert.' ...The law prohibits any coordination on spending or advertising with candidates who take state money and agree to the limits," the Tribune reported.

Pawlenty addressed the issue in his 2011 memoir "Courage to Stand: An American Story:"

We agreed to abide by a spending cap, to receive some gubernatorial campaign money. Other groups are allowed to make "independent" expenditures, but they essentially couldn't talk to my campaign. I hired a media consultant to help create some TV ads. We shot a whole bunch of footage. What happened next is where the problem arose. The media consultant sold some of that footage to the Republican Party, which began airing ads with that footage included. My media consultant thought there was nothing wrong, as long as the party leaders were the ones who decided when and how the party was going to buy ads. The Independence Party filed complaints with the Campaign Finance Board, which found that the campaign may have violated the rules. Nobody had intended to do anything wrong, much less illegal. We accepted the finding without further contesting that matter. My campaign negotiated to accept the party's spending as counting toward our cap and to pay $100,000 or so in fines. The total impact was about $600,000.

The campaign paid the fines leveled and Pawlenty went on to win the election and serve two terms.

3. Pawlenty's campaign treasurer was charged with deceiving homeowners facing foreclosure

While Pawlenty was governor in 2004, his re-election campaign treasurer Ron Esau resigned after being charged with running a scheme that allegedly took advantage of families undergoing foreclosure on their homes. The "equity-stripping scheme...targeted families facing foreclosure by offering to buy their houses and sell them back for what they owed plus interest," the Associated Press reported at the time. Instead of selling the homes to the families facing foreclosure with just interest included, the company involved with Esau sold it back to them at full market value plus equity instead. Esau ultimately settled and paid restitution over the charges.

Pawlenty said he knew nothing of Esau's business practices and ultimately parted ways with him. "We have intentionally separated campaign activities, my official office and regulatory matters," Pawlenty said in a written statement in February 2004. "I am hopeful the concerns raised by Rob's private business practices will be addressed and resolved in a matter that is fair to all concerned."

Esau was later banned from dealing in residential mortgages, and the Minnesota Commerce Department fined him $10,000, half the amount recommended by Assistant Attorney General Michael Tostengard, who prosecuted the company.

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