MN GOP on the hook for recount debts, Sutton and party fined
The Minnesota Campaign Finance and Public Disclosure Board has found that the Republican Party of Minnesota is responsible for nearly $600,000 in legal fees accrued during the 2010 gubernatorial recount and has fined the party $27,000 and former party Chairman Tony Sutton $3,000 for failure to properly report to the board.
The report released on Friday afternoon follows a several-month investigation into Count Them All Properly, a separate corporation set up by the state GOP in 2010 to pay for legal fees related to the gubernatorial recount between GOP candidate Tom Emmer and now-Gov. Mark Dayton. The board found that instead of operating recount activities through the corporation, Sutton worked through the state party, thus putting current leadership and members on the hook for the fees.
“Mr. Sutton’s recollection and understanding of the events concerning his retention of counsel to assist with the recount was contradicted by each of the attorneys that he hired,” the report said. “All three lawyers testified that they understood they were working for the RPM. Mr. Sutton alone suggests that the lawyers understood that they would be or were working for an independent entity. In fact, after [Count Them All Properly] was formed, the law firm of Trimble and Associates had Mr. Sutton sign a guaranty agreement confirming that the RPM was responsible for its fees.”
The complaint was originally filed in February by political watchdog group Common Cause Minnesota. Sutton resigned from the position last December amid rumors of ballooning debt. The addition of recount fees to the mix officially puts the party’s debt load over $1 million.
The report adds that the campaign finance board released a memo on Nov. 4, 2010 addressing the question of independent groups set up for recount activities. In the memo, the board explained that an independent association could be formed for recount activities and any payments would not have to be reported.
But, the report continues, “Sutton did not undertake to form an association independent from the RPM to conduct the recount. Rather, he proceeded to hire attorneys and conduct the recount through the party itself…[The memo] also cautions against a party unit accepting corporate contributions or contributions from associations not registered with the board to support its recount activities.”
The board has levied a fine of $26,900 to the state party, $3,000 to Sutton personally and $3,000 to Count Them All Properly, which the board is requiring to file as a political fund. Sutton could also face the possibility of criminal prosecution in Ramsey County Court for circumventing campaign finance laws. In particular, the board’s investigation determined that he wrongly steered a $30,000 donation from GOP uber donor Robert Cummins to Count Them All Properly in order to avoid disclosure.
“Questions surrounding whether pursuing the recount was advisable, whether it was money well spent, and whether the process followed in pursuing the recount made sense, are nothing more than Monday morning quarterbacking at this point,” current GOP Party Chairman Pat Shortridge said in a statement. “It won’t change our circumstances. We have learned from the mistakes of the past and made substantial changes in the way we do business.”
On his personal blog, Dispatches from the Trenches, Sutton said merely that he was “disappointed” and “disagreed” with the ruling.
The board also made it clear in its findings that this is not the end of their investigation of the party’s finances. “These findings do not resolve the ongoing matters related to RPM financial actives and reporting,” the report read.
Among other findings:
- “The Republican Party was not able to produce records that would “reconcile amounts from the payables aging reports to the federal and state reports of unpaid obligations,” the report reads. “As a result, the Board is not confident that even the RPM’s amended reports are accurate.”
- The state party’s record keeping was in “disarray” in 2010, according to the board. The board found that former state GOP Chairman David Sturrock‘s failure to keep the party’s financial records straight is a violation of state law, but concluded that multiple parties — including Sutton — were to blame. “The board… does not believe that they ‘knowingly’ violated the statute, which is the threshold for misdemeanor prosecution. Therefore, the Board will not specifically urge criminal prosecution in this matter.”
- The board’s summary: “To summarize, in 2010 the RPM had a finance director who was recently promoted from telemarketing and who testified that he knew next to nothing about campaign Finance Board reports and professed that it was not his job to review the reports in preparation for the treasurer’s signing them. The RPM had a chair who was busy with fundraising and his own business and believed that the finance director and the party unit’s compliance company were responsible for preparation of the reports. The RPM had a compliance company that disavows any responsibility for campaign finance reports other than to put data into a system and print out the reports. And finally, the RPM had a treasurer who placed all of his reliance on these three individuals. Given that situation, it is no surprise that the RPM reports were inaccurate.”
Go here to read the full report.