State commissioner's consulting business raises questions

Governor Dayton appointed Josh Tilsen to be commissioner of the Bureau of Mediation Services (BMS) in Feburary 2011. As BMS commissioner, Tilsen administers union elections, resolves collective bargaining disputes, and oversees labor mediation and arbitration activities. He is paid more than $95,000 per year by the State of Minnesota for this full-time role.

In addition to Tilsen's full-time work as BMS commissioner, he also maintains an outside consulting business, acting as an arbitrator for the Iowa Public Employment Relations Board (PERB). According to the official Iowa PERB website (updated March 25, 2013), Tilsen's per diem is $1,200. Notably, the office phone and fax number they list are Tilsen's official BMS numbers in Minnesota. In addition, under "Current Employment/Associations that could cause a conflict," it lists "None."

Tilsen's resume lists affiliations including (among other things): "Iowa PERB arbitration roster." And his statement of economic interest does list income from consulting. In other words, he does not deny or disguise the fact that he does consulting. And the Freedom Foundation has no reason to believe that what he's doing is illegal.

However, it is highly unusual for full-time state commissioners in Minnesota to earn outside income of any kind, and according to former Pawlenty administration officials, it was forbidden during the Pawlenty administration. And in many other states, commissioners and other senior state officials are explicitly prohibited from earning outside income.

Tilsen's case in particular, though, seems riddled with real or potential conflicts of interest. While Tilsen technically consults for the State of Iowa, he is paid in part by labor unions, as both parties to arbitration cases share the cost of the arbitrator. To that point, according to U.S. Department of Labor records, Tilsen was paid $7,451 last year by AFSCME Council 61. Meanwhile, as Minnesota's BMS commissioner, Tilsen oversees union elections and helps resolve union disputes involving AFSCME affiliates. As such, one has to ask: How can a fulltime, government official who collects income directly from a labor union be expected to act as an impartial referee of labor disputes?

Setting aside the ethical questions and potential conflicts of interest, there's the question of whether a commissioner's outside consulting work interferes with state work. For example, Tilsen recently presided over an arbitration case in Iowa involving the Hubbard-Radcliffe school district. According to the case file, the arbitration hearing "was held [Tuesday,] May 13, 2014 in the Hubbard-Radcliffe administration offices." Meanwhile, also on May 13, Tilsen (in his official capacity as BMS commissioner) signed multiple union election certificates in Minnesota. Perhaps it's possible to moonlight as a consultant without conflicting with or detracting from his official state duties, but that seems unlikely. In his role as commissioner, Tilsen would oversee the controversial union elections involving child care providers and PCAs.

If nothing else, Commissioner Tilsen's tangled web illustrates why many governors and many states simply do not allow state officials to collect outside income from extracurricular activities. On this issue, Governor Dayton could learn a lesson or two from his predecessor.

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