Walz reprimands IRRRB chief in wake of DFLer's resignation

Gov. Tim Walz sent his commissioner overseeing the Iron Range economic development agency an official letter of reprimand Thursday after allegations of DFL cronyism at the agency surfaced last week.

"I expect you to model openness, transparency, inclusivity, and servant leadership. In this situation, you fell far short of my expectations," Walz wrote to Mark Phillips, commissioner of the Iron Range Resources and Rehabilitation Board (IRRRB).

The Star Tribune obtained the letter after a public records request.

Phillips is facing fallout after fast-tracking the hiring of DFL insider and former state Rep. Joe Radinovich. Phillips circumvented state government's normal hiring rules and claimed the governor's office gave him the go-ahead to do so, which Walz said this week was false.

Radinovich — hired in March for a $100,000-per-year "senior policy adviser" position after an unsuccessful run for Congress last year — resigned from the job Thursday.

In a resignation letter, Radinovich wrote that he intended his resignation to "refocus the public's attention on the important mission" of the agency.

The dust-up was the first major test of Walz's approach to management and led to widespread speculation among lawmakers and lobbyists at the Capitol about whether Phillips would keep his job.

Particularly damaging to Phillips — and by extension Walz — is the fact that Radinovich was fast-tracked for the job at Phillips' behest even though a qualified woman also applied.

"It was inappropriate for you to seek to vary from [state government] requirements in this case," Walz wrote to Phillips, who is a holdover from the administration of former Gov. Mark Dayton.

"It was also inappropriate to use my Office as your stated rationale for requesting an exception. My Office never directed you to … vary from ordinary hiring procedures."

However, Phillips, who was not immediately available for comment late Thursday, has influential allies at the State Capitol.

A group of Iron Range lawmakers circulated a draft of a letter to Walz in support of Phillips.

It commends Walz for "taking swift action to ensure an open, fair hiring process," as well as Radinovich for "making the right choice."

Then the letter backs Phillips. "Despite his missteps, Phillips is an asset to the Range and the state of Minnesota."

In a statement earlier Thursday, Walz called Radinovich's resignation a "meaningful step to restore trust and refocus the IRRRB on its important work serving the people of Northeastern Minnesota."

Walz's office announced last week that he will tighten hiring rules across his administration, requiring that all classified management jobs be posted for 21 days to prevent agencies from deviating from normal hiring policies to land favored candidates in plum jobs.

The Minnesota Management and Budget agency, which is essentially state government's human resources department, had required that hiring managers advertise state job openings for at least seven days, but encourages 21-day postings. The IRRRB received an exemption allowing it to post Radinovich's job for just 24 hours.

Records obtained by the Star Tribune quote an IRRRB human resources director saying the expedited timeline was needed "to meet the expectations … as expressed by the Governor's office."

Walz said this week that assertion was false — and now he's put it in writing.

Questions linger

Rep. Sandy Layman, R-Cohasset, a former IRRRB commissioner, said that despite the letter of reprimand to Phillips, "questions remain about where the direction came from to expedite the hiring. It sounds like Governor Walz is making it quite clear the direction did not come from him personally. I think people still have questions about the waiver and how it was granted."

Layman said she will offer legislation to codify Walz's new hiring rules in law.

She applauded Radinovich's resignation, but added, "We need to make sure, as the Legislature, that this type of cronyism doesn't happen again."

The IRRRB has continued to maintain that Radinovich was hired in a competitive process. The agency said it received 12 applications, with four candidates meeting minimum qualifications. Of those four, two candidates withdrew, and Radinovich was selected as the best of the two remaining candidates who were interviewed.

Lorrie Janatopoulos was the other candidate, according to public records. She has a master's degree, won a Bush Fellowship and previously held positions on the Arrowhead Economic Opportunity Agency in Virginia, Minn., and numerous nonprofit boards. She declined to comment Thursday.

Radinovich served as a state representative before managing the campaigns of both former U.S. Rep. Rick Nolan and Minneapolis Mayor Jacob Frey, for whom he was briefly chief of staff. Radinovich also previously worked as a political appointee at the IRRRB after he lost his seat in the Minnesota House in 2014.

Staff writer Torey Van Oot contributed to this report.