MN commissioner’s moonlighting raises conflict of interest questions

By Tom Steward | Watchdog Minnesota Bureau

ST. PAUL, Minn. — His resume posted on the Iowa Public Employment Relations Board website stands out: “Conducted hundreds of grievance hearings and mediation sessions.”

So does his daily fee: $1,200 per day, plus “actual costs for meals, lodging and miscellaneous; IRS rate for mileage.”

But what most distinguishes Josh Tilsen from the other 59 arbitrators listing their services on the Iowa state government website? His full-time day job in the next state over, serving as commissioner of the Minnesota Bureau of Media Services at a salary of $95,000 per year.

Tilsen even lists his official state office phone and fax numbers on the PERB website for potential clients to contact him, along with a cell phone and personal business email address.

“He’s essentially got a license that we’ve issued,” said Jan Berry, an administrative law judge with the Iowa Public Employment Relations Board. “So whether or not parties select him and use him as an arbitrator is up to them.”

As commissioner of the Minnesota Bureau of Mediation Services, Tilsen manages “all aspects of (the) state labor relations agency.” He serves as the state’s top official for everything from holding impartial union elections to settling collective bargaining issues to arbitrating various labor-management conflicts.

Just days ago, for example, Tilsen approved “the biggest election that this agency has ever done” as 26,000 home care assistants prepare to vote on whether to join the Service Employees International Union in August.

At the same time, a Watchdog Minnesota Bureau review shows Tilsen has received at least $18,000 in fees and expenses in his part-time role as an outside neutral arbitrator who decides contract and labor disputes in Iowa, PERB and federal government records show. Iowa officials say Tilsen has been selected to arbitrate 12 cases since being added to the roster in 2006, but have no comprehensive record of how many cases he actually participated in.

Tilsen received $7,451 in 2013 from AFSCME Council 61 in Des Moines, Iowa, for arbitrating disputes at the Iowa Department of Administrative Services, Delaware County and apparently another undisclosed case.

Since management and labor typically split the bill for arbitration services, the other parties in the cases involving AFSCME also paid Tilsen at least $4,900, according to PERB records.

Minnesota law doesn’t prohibit state employees from earning outside income. Even so, Tilsen’s moonlighting raises conflict of interest concerns for the public policy group that first revealed the state commissioner’s outside consulting business.

“We have a state commissioner who regulates and oversees labor relations in the state of Minnesota and he is accepting income on the side from the very unions that he is charged with overseeing,” said Jonathan Blake, vice president of the Freedom Foundation of Minnesota. “In this particular case, that’s a very serious and immediate conflict of interest that needs to be resolved.”

Tilsen’s disclosure statement filed with the Minnesota Campaign Finance and Disclosure Board reports unspecified income from a “private arbitration business.” The commissioner’s official resume also names “Iowa PERB Arbitration Roster” under affiliations.

Tilsen didn’t respond to Watchdog Minnesota Bureau inquiries, but Gov. Mark Dayton’s office said the labor relations official appointed in 2011 follows in a lengthy line of state employees who have moonlighted as arbitrators elsewhere.

“Commissioners and other staff at BMS have been paid to serve as arbitrators in other states during the administrations of governors Quie, Perpich, Carlson, Ventura, Pawlenty and Dayton,” said Matt Swenson, Dayton’s press secretary. “They do so on their own time and at their own expense. They are selected for these arbitrations by both management and labor because of their impartiality and professionalism.”

Tilsen’s latest outside arbitration work involved a contract dispute in the Hubbard-Radcliffe Community School District in central Iowa. Representatives from the school district and Hubbard-Radcliffe Education Association met with Tilsen the morning of May 13, 2014. Tilsen signed off on agreements in two Minnesota cases dated the same day, BMS records indicate.

Hubbard-Radcliffe Community School District business manager Deb said Tilsen was paid about $5,750, with $2,878.25 coming from both the teachers union and the district. She was surprised to learn Tilsen also serves as a Minnesota state commissioner.

“Pretty good gig is what I’m thinking,” said England when contacted by Watchdog Minnesota Bureau. “…That is a little surprising.”

It may be no coincidence the scrutiny of Tilsen’s outside income occurs as BMS prepares to carry out a controversial statewide mail-ballot union election involving personal home care assistants and the SEIU.

“I don’t know how we can allow someone with such an obvious conflict of interest oversee the biggest union election in state history, nor any other union election. It’s a fundamentally unfair status quo,” said Blake.

The Dayton administration, however, contends the controversy stems from a fundamental misunderstanding of the impartial role played by arbitrators.

“Commissioner Tilsen has served Minnesotans diligently and impartially as head of the Bureau of Mediation Services,” said Swenson. “His work as an outside mediator has been a matter of public record for years, as all commissioners are required to file statements of economic interests.”