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Wednesday, October 1, 2014 |  Madison, WI: 49.0° F  Overcast
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Dave Magnum's mystery backers
Candidate's failure to disclose may be a violation of law
Magnum says his consultant is looking into it.
Magnum says his consultant is looking into it.
Credit:Carolyn Fath

In the final weeks of his failed bid to unseat Rep. Tammy Baldwin this fall, Dave Magnum loaned his campaign $525,000. But Magnum hasn't paid state income taxes since 2002 because, he says, his broadcast company has not been profitable. So if he has no income, where did Magnum get half a million dollars to loan his campaign?

At the time, his spokesman, Chris Lato, told the Associated Press: 'He has had success as a businessman, he is basically using the clout that he's built up and the goodwill that he's built up to borrow money to help fund the campaign. He's doing things with his business and his personal holdings to obtain the funds needed to run for office.'

Lato's quote implies that Magnum either borrowed the money from friends, or obtained it by mortgaging his home or business. Either way, the Federal Election Commission requires him to report where he got the funds. If it's a bank loan, he must list that on his campaign finance filing. If friends loaned him money, the FEC considers those campaign donations, which must be reported and are subject to contribution limits. Individual donors may not give a congressional candidate more than $2,100 per election.

In his post-election campaign report, filed last week, Magnum did not indicate where he got the money. When asked about this, he replied in an e-mail, 'My FEC compliance consultant is reviewing the report to see if any additional information needs to be filed regarding loans.'

Magnum's campaign filings reveal something else: He never paid payroll taxes to the state or to the Internal Revenue Service for the staff who worked on his campaign.

'He has an aversion to paying income taxes,' says Glenn Carlson, assistant treasurer of the Democratic Party of the Second Congressional District. According to FEC reports, every other congressional candidate in Wisconsin ' Republican or Democrat ' either paid taxes directly to the government or used a payroll service to handle it. 'Magnum is the only one who didn't,' says Carlson.

Magnum says that everyone who worked on his campaign did so as a consultant, not staff, 'so they're responsible for their taxes.' He doesn't think it's unusual to have a staff made up entirely of freelancers: 'To obtain experienced help, I determined the most practical way to build my campaign was around consultants.'

Carlson says Magnum is just being cheap, forcing his employees to pay their own payroll taxes and unemployment benefits. 'It's really scamming the employees of the campaign.'

And Carlson, a retired accountant, questions whether this is legal. He says that under federal rules, people who are told by an employer what to do and how to do it are employees. 'The IRS could take one look at his reports and determine he should pay payroll taxes,' says Carlson. 'It's pretty black and white.'

Whites only?

There was a moment last week when Ald. Brian Benford briefly considered staying on the Common Council. Benford, who is finishing his second term, decided long ago to leave this spring. But when he heard that Alds. Isadore Knox Jr. and Santiago Rosas were both also leaving, he hesitated. With all three of them gone, there would be no minority alderpersons left.

'That's a big deal,' says Benford.

So far, none of the candidates who have formally announced they're running for the council are persons of color. An Asian woman named Thuy Pham-Remmele plans to run for Ald. Cindy Thomas' seat on the southwest side. But she may be up against (white, male) former alder Gary Poulson. It's possible, unless more minority candidates run ' and win ' that the next council could be all white for the first time since 1968.

Rosas agrees the council needs minority reps, noting that racism persists in 'liberal' Madison. He runs a post-construction cleaning company and says a construction worker recently made a disparaging remark about Mexicans to one of his employees. 'There's still a lot of work to be done,' he says.

Benford also worries that, once he leaves, there won't be anyone on the council representing low-income residents. A single father of four, Benford is purportedly the council's poorest member. 'Who's going to have a voice for those people?' he wonders.

But when Benford asked his kids if he should stay on the council, they answered, 'Don't run!' So during the next few weeks, 'I'm going to do all I can to encourage candidates of color.'

Conserve this!

The Madison Plan Commission is slated to vote next week on a proposal to create neighborhood conservation districts. The ordinance by Ald. Judy Olson would let neighborhoods of eight contiguous blocks stop development that is deemed out of character with surrounding buildings.

Phil Salkin of the Realtors Association of South Central Wisconsin has problems with the plan. He says that while other cities require that a certain percentage of property owners agree to form a conservation district, the Madison ordinance lets any alder set things in motion. 'If this is supposed to be about neighborhoods wanting to preserve themselves, then why shouldn't it come from them?'

Salkin says the Realtors prefer historic districts, which have specific criteria for what should be saved. The proposal for conservation districts doesn't. 'Right now, literally, a conservation district is anything you want it to be.' And without set criteria, Salkin thinks they'll be used as a weapon to block development: 'There has to be a reason for it, other than somebody wants to stop a project.'

But Olson doesn't see a need to change her proposal. She says conservation districts will arise naturally from neighborhoods, as do urban design and historic districts: 'Neighbors decide there's something they want to preserve. There's no formal petition, but they make their desires known to their alder.'

And Olson doesn't think neighborhoods will misuse the districts. She notes that when the First Settlement neighborhood wanted to become a historic district, it took two years.

'It didn't just pop into somebody's head and was created,' she says. 'It was all very grassroots-driven. I see conservation districts operating in much the same way.'

Both sides now

Mayor Dave Cieslewicz's fund-raiser at the Palace Latin Club last month raked in $22,570, about one-tenth of what he spent on his last election in 2003.

'It was a bigger event,' says campaign manager Megan McGrorty, who noted that more than 200 individual donors contributed to the mayor that night.

The next campaign reports are not due until the end of January, but in his last report in July, Mayor Dave had already raised more than $78,000. His only declared opponent so far, Ray Allen, had raised just $58,000, mostly from loans to himself. Allen's campaign refused to comment on his fund-raising, or any future events he might have.

McGrorty says Cieslewicz will be holding more events, including an 'intimate gathering' later this month with singer Judy Collins. And she expects Cieslewicz will have no problem raising more money: 'A lot of people really like him and want to see him in there for another 48 months.'

Blaska a liar

David Blaska, the acerbic former county supervisor, says there's no truth to the rumor that he may run for the Common Council seat being vacated by Cindy Thomas. But he knows why people are asking.

'I started that rumor ' it's misinformation,' he laughs. 'All the time I was in office, I never lied. Now that I'm out, I'm lying a lot.'

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