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The Republican Party of Minnesota faces numerous lingering questions about the state of its finances heading into the 2012 election season. Last month GOP officials announced that an internal financial review determined that the party has $2 million in debts. That’s roughly four times more than most party activists had been led to believe just a month earlier.

Repairing the Republican brand

GOP officials are treading carefully after a frenetic December filled with unpleasant revelations about party operations. “We just sort of took a breather after everything that we had been doing,” said Republican National Committeewoman Pat Anderson. “We wanted to give (new Chairman) Pat (Shortridge) some time to get his arms around the party.” (Staff photo: Peter Bartz-Gallagher)

GOP officials debate whether a deeper inquiry into Sutton-era party finances would help or hurt

The Republican Party of Minnesota faces numerous lingering questions about the state of its finances heading into the 2012 election season.

Last month GOP officials announced that an internal financial review determined that the party has $2 million in debts. That’s roughly four times more than most party activists had been led to believe just a month earlier. It includes roughly $1.3 million in debts incurred directly by the party and $719,000 in legal bills stemming from the 2010 gubernatorial recount.

The party’s finances are already the subject of a complaint filed by Common Cause with the state’s Campaign Finance and Public Disclosure Board. But irrespective of any action by campaign finance watchdogs, some party activists are calling for a full independent audit in light of the party’s financial troubles. “The lack of transparency is a major source of distrust between the base and the party,” said John Gilmore, an activist from the 4th Congressional District. “The base wants to help the party very much. In order to be able to do that, it needs to believe that the party is being forthcoming and transparent and we can correct whatever mistakes were or were not made in the past.”

But Republican National Committeeman and executive committee member Jeff Johnson cautions that an audit should be carefully weighed. “With respect to looking further into a forensic audit, that is a decision that we will have to make and we will have to make soon,” said Johnson, who helped oversee the internal financial review. “If you do that, you’re going to spend a lot of money on that, and you’re not going to spend that money on elections.”

But Gilmore suggests the opposite: that donations won’t roll in until there is a full vetting of the party’s books. “You’re not going to get the money for 2012 elections unless you have enough of a forensic audit to restore the trust,” Gilmore said. He suggests that donors will instead turn primarily to the House and Senate caucuses. “If the goal is to hang on to the House and Senate, the better vehicle may be the caucuses,” he said.

The prospect of fines from the Federal Election Commission for campaign finance reporting violations also looms over the party’s operations. GOP officials have indicated that they have reached out to the FEC to come clean about any transgressions and blunt any potential financial penalties. The party is still paying off a $170,000 fine assessed last year for failing to accurately report financial transactions.

“Based on what we know, I’d be surprised if there weren’t repercussions,” said Joe Westrup, an activist from the 6th Congressional District, on the possibility of FEC fines. “It is part of the deal, and it’s part of the cleanup process.”

In addition, there are questions about whether some form of punishment should be sought against former party Chairman Tony Sutton and other officers. Sutton has acknowledged that he did not inform other GOP officials about an agreement he signed making the party responsible for any legal debts associated with the 2010 recount. David Sturrock, the party’s departing secretary/treasurer, indicated in his resignation letter last month that he was unaware of the legal bills as well as other debts accrued during his tenure.

“I don’t have ill will against some of the folks,” said Rick Weible, co-chairman of the GOP in the 3rd Congressional District. “I’m still trying to figure out what the heck happened. Was it intentional? I don’t know yet. I’m not there yet in trying to go after anybody.”

There will also likely be a push to change some of the party’s bylaws to lessen the likelihood of similar surprises in the future. One possible change: requiring that the party’s executive committee sign off on all contracts. In addition, there will likely be a clearer spelling out of the fiduciary responsibilities of the party’s officers.

But many GOP officials are reluctant to push forward with more scrutiny of past financial decisions for fear of further tarnishing the party’s brand ahead of crucial 2012 elections. Veteran GOP strategist Pat Shortridge was elected party chairman on Dec. 31. He did not return two calls from Capitol Report seeking comment.

Privately, sources close to the process say there is mounting pressure to move past the episode and to forgo the expense and potential embarrassment of a more prolonged investigation. In speaking to reporters after his election, Shortridge suggested that it was time to move beyond recriminations for past mistakes.

“We’ve got to restore [the] confidence of our donors, whether they’re small, medium, large or extra-large donors,” Shortridge said at the time. “But I think we can do that. I think we’ve got a great opportunity to start fresh, to turn the calendar to 2012, to put some of the past behind us and move forward.”

There’s been little clarity since Shortridge’s election on exactly what further scrutiny might be undertaken. Many GOP officials suggest that a break was needed after a frenetic December filled with unpleasant revelations about party operations. “We just sort of took a breather after everything that we had been doing,” said Republican National Committeewoman Pat Anderson, who also worked on the internal financial review. “We wanted to give Pat [Shortridge] some time to get his arms around the party and around his thoughts about moving forward.”

Johnson is also reluctant to spend too much time dwelling on the past. “Personally, I think we should be looking ahead now,” he said. “I think it’s reasonable for people to say we would like to know more about how this happened, so we will have to do a little more review or a spot audit. At the very least, that will help us make any changes we need to make sure this never happens again.”

Steve Perkins, GOP chairman in the 1st Congressional District, argues that there’s no reason to rush forward with a costly investigation if it’s going to be at the expense of 2012 election efforts. “When you’re looking back like this, it is more like a postmortem, an autopsy,” Perkins said. “The body’s not going to up and run away.”

Some clarity will likely arrive in the next couple of weeks. This week four key officials — Anderson, Johnson, Shortridge and Deputy Chairwoman Kelly Fenton — are in New Orleans for a gathering of the Republican National Committee. They undoubtedly will discuss what additional steps are needed to make sure that the party has established the trust of activists and donors ahead of the 2012 campaign season.

And next Thursday, the state party’s executive committee will meet for the first time since Shortridge’s election. That gathering will represent the first opportunity for party officers to discuss whether further action on the debt is necessary to restore the party’s credibility.
“The honest answer is we haven’t been able to sit down as a team and lay everything out on the table and figure out the next steps,” Weible said. “All cards are on the table until we meet as a team to figure out what options are available to us.”

Briana Bierschbach contributed reporting to this story.

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