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VERIFY: Attack ads target Dean Phillips

Attack ads against Democrat Phillips are based on facts, but mislead viewers

MINNEAPOLIS -- The 2018 campaign season has already produced a bumper crop of attack ads, as partisans strive to define candidates before they have a chance to introduce themselves to voters.

Dean Phillips, the DFL candidate for Congress in Minnesota's 3rd District, has been targeted with two ads claiming he doesn't practice what he preaches when it comes to health care access.

Our Verify truth test found these negative claims are based, in part, on facts. But the presentation and lack of full context results in ads that are misleading to viewers.

Phillips' Republican opponent, five-term Republican incumbent Erik Paulsen, launched one of the negative ads.

"Phillips claims health care's a moral right, but he didn't provide it to workers at his coffee shop because he said he wouldn't make money," the narrator can be heard saying.

The Congressional Leadership Fund, a Republican super PAC linked to House Speaker Paul Ryan, is flooding the airwaves with an ad making similar claims. The CLF is going all out to keep that largely suburban west metro district in the GOP column.

The CLF ad has a more sensational tone, claiming Phillips "got caught" not offering health insurance, falsely implying he violated some rule.

Basis of claim

The claim is based on a 2017 story by Minneapolis Star Tribune columnist Jon Tevlin, who had met Phillips in his Penny's coffee shop to talk about his campaign. The article as a whole was positive, but the attack ads seize on this one line:

"Phillips pays his workers $15 an hour but does not provide health care because it would cause him to lose money."

Tevlin, who has since retired from the newspaper, said the attack ads missed the context and are outdated.

"We were in his coffee shop. I had to ask, 'Are you paying health care?" I thought his answer would be 'No' and it was, no, and it was," Tevlin told KARE. "Because I know of no independent coffee shops that pay health insurance, and none of them were paying $15 an hour."

Phillips told KARE the coffee shop only had part-time employees at the time of his Tevlin interview, and they were either on other family members' plans or were able to buy coverage on their own.

"We didn't have full-time employees at that time. The first one we hired we paid an extra $7,000 so he could buy health insurance," Phillips explained.

"Now we have multiple coffee shops and full-time employees, and of course we provide health care benefits to our full-time employees, the same way I have at Phillips Distilling, Talenti Gelato, our family foundation, and even this campaign for Congress."

By contrast, Phillips notes Rep. Paulsen has voted dozens of times for the repeal of the Affordable Care Act and other legislation aimed at weakening the federal health care law. The insurance and pharmaceutical industry groups have donated heavily to Paulsen.

Taxes Claim

The Paulsen campaign's attack ad also claims, "Phillips repeatedly failed to pay his own business taxes on time. Time after time."

This claim dates to 2012 and 2013, when Phillips owned and operated Talenti Gelato. It's based on interest that Talenti was charged for paying property taxes late on the Talenti ice cream plant in Marietta, Georgia. The ad goes on to trash Phillips as a "shady business man."

Again, it's a claim that can be verified but is devoid of context.

The campaign readily turned over Cobb County property tax payment receipts, showing that Talenti paid a grand total of $89 for three different late charges over that one-year span. But the company did pay its taxes, which totaled more than $15,000 during the same period.

And, for added context, Talenti was one of the fasted growing companies in Minnesota at the time, with annual revenue topping $70 million.

"I’ve always paid my taxes. Our businesses have always paid their taxes. A lot of taxes," Phillips remarked.

"If that’s what they’re referring to -- the $89 --I own it and I apologize. And it has been paid in full!"

Inheritance claim

Both of the attack ads claim Phillips inherited millions of dollars from his family. He doesn't dispute that he was very fortunate to be adopted as a child by the family that owned Phillips Distilling.

"My father was killed in the Vietnam War when I was six months old. My mother was 24 and widowed. We lived with my great grandparents the first two and a half years of my life," Phillips recounted.

"When I was three I was adopted into the Phillips family, and my father Eddie Phillips was a wonderful man who certainly afforded me opportunity."

But he has been actively engaged in the company business, and other enterprises.

"My first job at age 14 was a bus boy at Runyon's in downtown Minneapolis. I started my first business when I was 16. I worked hard," Phillips said.

"I worked at our production facility and our warehouse, worked my way up the ladder, went to business school, helped grow Phillips Distilling, and eventually managed it."

He eventually left the liquor and spirits business to concentrate more fully on Talenti Gelato, which was sold to Unilever in 2014. Phillips and business partners eventually turned their attention to Penny's coffee.

"I’m really disappointed at the tenor and tone of politics, particularly from our elected officials. I believe members of Congress should be held to a high standard."

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