State Alleges Minn. Public Radio Misled Donors About Frequency of List Sharing

Minnesota’s Attorney General has sued the state’s main public radio station, charging that it misled donors about its policies for releasing their names and contact information to other organizations.

In the suit, Attorney General Mike Hatch said that Minnesota Public Radio told its donors their names and other information would be released only “occasionally,” when he says the station does so with much greater frequency. He said the station had violated the Minnesota Charities Act, which prohibits organizations from using deceptive fund-raising practices.

Minnesota Public Radio denies that it has done anything to deceive donors and says that its practices are in line with those of other non-profit groups in the state. MPR has more than 88,000 regular donors who contribute a total of $6-million a year. Like many other charities nationwide, the station has long exchanged the names of its donors with other non-profit organizations. Charities swap names as a way of expanding the pool of people they can solicit.

The lawsuit is the latest wrinkle in a controversy that erupted last spring after news reports revealed that some public broadcasting stations had exchanged, rented, or sold donor information to political organizations. Congress subsequently passed a measure to prevent all stations that receive federal aid from providing their lists to political groups, and it became law last month.

After MPR acknowledged it had exchanged donors’ names with the Democratic National Committee, a number of Minnesota citizens and legislators requested that Mr. Hatch investigate the station and determine whether it had made any deals with such organizations that could be construed as improper political contributions. Mr. Hatch said his investigation found that the station had not made any improper political transactions. However, he said he did uncover other list-sharing practices that he believes violate the law.

In the lawsuit, the attorney general said Minnesota Public Radio:

* Says that it only occasionally exchanges names of its donors with other organizations. But, the lawsuit says, since January 1, 1995, MPR allowed over 100 organizations to use the names and addresses of its supporters in over 400 transactions. MPR also provided the phone numbers of its donors to at least nine organizations in 27 different transactions. In total, names, addresses, and phone numbers of three million donors were released.

* Does not disclose in its brochures or on its Web site the volume or identity of organizations to which the station provides donor names, addresses, and phone numbers.

* Does not mention in its brochures that it provides donors’ addresses and telephone numbers to other organizations, and that those organizations are likely to use that information to solicit MPR donors.

* Tells donors that it releases their names to groups it believes will be of interest to contributors, when in reality, the Attorney General says, the station is mainly interested in releasing its donors’ names so that it can obtain the names of donors to other organizations and raise money from them.

Minnesota Public Radio senior vice-president for public affairs, Will Haddeland, said the case is “a frivolous lawsuit without merit.” He added, “It’s principally based upon the meaning of the word ‘occasional,’ and we’re surprised that we have to go litigate over what the word ‘occasional’ means.”

Mr. Haddeland said the station had exchanged the name of individual donors an average of about six times a year over the past five years, which he said fits the definition of “occasional.” It says it released the names to only 80 groups, not 100, as the attorney general charges, and in 230 transactions, not 400.

And, Mr. Haddeland said, MPR conforms with the law, and with good fund-raising practices — such as the ethical guidelines of the Direct Marketing Association — by informing its donors that it exchanges their names with other organizations, and by providing them the option of dropping their names from lists that are exchanged.

Max Hart, director of fund raising for the Disabled American Veterans, which raises funds nationally, including in Minnesota, says the case sets a bad precedent.

“I’m sure in their eyes they feel they are doing the right thing in protecting the interest of the consumer,” Mr. Hart says. “But I think they will end up hurting a lot of good organizations, more so than they realize.”

Some charity officials and legal experts say that regardless of how the lawsuit is resolved, they believe the action by the Attorney General will lead many non-profit organizations across the country to take a close look at their disclosure policies and consider making more-formal efforts to tell donors how their names are used.

Mr. Hatch said that already at least a dozen non-profit groups had called his office inquiring about the suit and stating that they planned to take steps to make sure their disclosure policies were clear and easily available to donors.

Mr. Hatch said that he decided to sue after he asked Minnesota Public Radio to change its disclosure language but the radio station refused the state’s request.

“I’m amazed that any non-profit would be so arrogant,” Mr. Hatch said, noting that over the last five years he had contributed over $40,000 to the radio station through his law firm. “You have to fairly disclose information to the contributor.”

Mr. Haddeland said no such discussion had taken place before Mr. Hatch filed the suit.

The full text of the complaint filed by the Minnesota Attorney General can be found at http://www.ag.state.mn.us/home/files/news/pr_mpr_122899.html.

Minnesota Public Radio’s response to the lawsuit can be found on its Web site at http://access.mpr.org/aboutMPR/docs/list_reaction.html.