Council candidate critical of club owner’s campaign donations

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October 25, 2013 // UPDATED 11:40 am - October 29, 2013
By: Sarah McKenzie
Third Ward City Council candidate Kristina Gronquist at a press conference in the Warehouse District this morning.
Sarah McKenzie

Kristina Gronquist, a Green Party candidate running for the Third Ward City Council seat, called into question campaign contributions made by downtown night club and strip club owner Peter Hafiz to several other candidates at a press conference this morning outside one of Hafiz’ properties in the Warehouse District.

Hafiz and his employees and relatives have contributed more than $13,000 to candidates running for office this year, including mayoral candidate Betsy Hodges, Third Ward Council candidate Jacob Frey, Fifth Ward Council candidate Ian Alexander and City Council Member Lisa Goodman (7th Ward), who faces no challengers for reelection, according to Gronquist’s analysis of campaign finance reports filed with Hennepin County.

Hafiz owns several businesses downtown including Déjà Vu, Dream Girls, the Brass Rail, Sneaky Pete’s, Smack Shack and the Gay 90s.

“In this election, we’re seeing the destructive potential of big money,” Gronquist said outside of one of Hafiz’ long-vacant properties at 325 2nd Ave. N. “Candidates are on track in some City Council races to spend amounts approaching, even possibly exceeding $100,000. Some of these candidates claim to have ‘grassroots’ organizations that are fighting against political machines. To the extent that there are any roots, they are being fed a lot of fertilizer.”

In a statement, Hafiz said his family's investment in the city includes six businesses downtown and 13 different properties. The family employs more than 480 workers and 70 percent live in the downtown area, he said.  

"So I believe with confidence that we do have a large vested interest in the leaders of our city," he said.

Gronquist argued that the large contributions undermine transparency and accountability and said candidates who receive money from Hafiz and his associates should be questioned about the relationship and what kind of influence he might have on their actions once elected.

As a Green Party member, Gronquist said she doesn’t accept contributions from Political Action Committees or from individuals who have done or will likely do business before City Hall within one year of election. As of late August, she had raised $1,290 for her campaign.

Mayoral candidate and City Council Member Betsy Hodges, who received $3,500 in donations from Hafiz and his associates, said he is one of many campaign contributors who have decided to support her vision for the city.

She said he has not made any requests of her in return for the contributions.

Goodman, whose current 7th Ward includes many of Hafiz’ businesses, said it’s “ludicrous” to suggest that the candidates could be “bought” by donations made by the business owner, his employer and relatives. Her latest campaign finance report included $900 in campaign contributions from Hafiz and related entities.

She said she has had “nothing but a positive experience” with Hafiz while she’s represented the ward, adding he is a contributor to the Downtown Improvement District and maintains good security at his businesses.

“The bottom line is that these are legitimate legal businesses and people go to them,” she said, adding Hafiz hasn’t made any special requests from her while she’s been at City Hall.

She said campaign contributions made by developers should also be scrutinized since they frequently do business before the city. Once a nightclub or strip club has secured a license, they tend to have limited interaction with leaders at City Hall.

Gronquist, however, has raised concerns about how effectively the city regulates the adult businesses. She said the city lags behind St. Paul in "implementing smart, effective regulation that would decrease the risks of exploitation and trafficking."

She said the city should have ordinances prohibiting booths and partioned rooms to decrease the potential for illegal activities. She also advocates ordinances that would allow for inspections — including identification checks — at any time during business hours to reduce the potential for sexual exploitation and trafficking.

"Make no mistake, despite statewide efforts to decrease trafficking, Minneapolis needs to make stronger prevention efforts at the local level," she said.

Frey has received $5,400 in campaign contributions from Hafiz and various groups affiliated with the club owner, according to Gronquist’s analysis. The new Third Ward includes a large portion of downtown where many of Hafiz’ businesses are located.

“We are proud of the grassroots coalition we have built, which includes small and local business owners all over the ward,” he said.

Candidates are in the process of filing updated fundraising reports, which will be posted on Hennepin County’s website on Tuesday.