RPM asks: Where do we go from here?

CFPD investigation grinds on as state GOP raises money, reorganizes record-keeping

From the outside looking in, the Republican Party of Minnesota shows little sign of life.

The tumble started in early December, when former party Chairman Tony Sutton resigned just hours before a sure-to-be-testy state GOP central committee meeting amid rumors that the organization’s debt was ballooning out of control. Turns out that was the case, revealed to the remaining party officials only after they undertook an internal audit of the books. Just days before the New Year, the party revealed that it had discovered about $1.3 million debts, not including nearly about $600,000 in debts accrued in Count Them All Properly (CTAP), a separate corporation set up to handle legal bills from the 2010 gubernatorial recount. At the time, there seemed to be some confusion as to who was on the hook to pay the bills: the Republican Party or officials associated with the corporation.

Then, in April, the party had a close encounter with homelessness. RPM officials were served with an eviction notice for failing to pay rent for a year. The state GOP managed to work out a deal that kept the party situated in its office space near the state Capitol, but the legal action, which was noted in national media outlets, put in plain sight the continuing woes of the Minnesota GOP.

Just last week the Minnesota Campaign Finance and Public Disclosure Board put a bow on the party’s last seven months, ruling that the debts accrued during the 2010 recount were, in fact, the debts of the party. In addition, the party was slapped with a $27,000 fine for a campaign finance reporting violation.

“I think the ruling is just what it should be,” said Tony Trimble, a veteran party attorney who worked on the gubernatorial recount. “I’m not going to say anything more, but I’m confident they are going to pay their obligations.”

The party has made some progress in fundraising in recent months, and according to the RPM’s July report to the Federal Elections Commission, its debt stands at about $920,000. (That’s about $44,000 less than the party reported owing the previous month.) But the campaign finance ruling adds about $600,000 to that figure, leaving the party to face down more than $1.5 million in debt ahead of a critical campaign cycle in which all 201 seats in the Minnesota Legislature are up for grabs.

RNC Committeewoman Pat Anderson, who was one of the leaders in pushing for an internal financial probe of the party’s books, says new leadership atop the party has cleaned up its mismanaged financial process so these things never happen again, but there’s still a long way to go in retiring all the debts. “It’s going to take years to get out of debt,” she said. “I think the party is defunct for several election cycles. What can they do?”

Investigations continue, prosecution threatened

In addition to wiping their debt load clean, the party faces continuing investigations from the campaign finance board. While the board’s ruling last week closed the door on the original complaint filed by watchdog group Common Cause Minnesota in February, there are still lingering questions about whether the party’s spending is accurately reported.

“During the course of this investigation, the board requested and received various records from the RPM … however, the RPM is not able to produce records or worksheets that would allow the board to reconcile amounts from the payable again reports the federal and state reports of unpaid obligations,” the report read. “As a result the board is not confident that even the RPM’s amendment reports are accurate.”

The ruling made clear that the board’s investigation into the party’s finances is not over. Campaign finance board Executive Director Gary Goldsmith says in particular, the board will continue to look into the relationship between the party’s state and federal reports.  Political parties maintain separate checking accounts and separate records for each account, but Goldsmith says the board wants to be sure reports are being kept in line with the law.

“These types of investigations are usually repaired by amendment” to previously filed reports, Goldsmith said. “But that doesn’t mean we might not find something else that could be a serious violation.”

A handful of Republican Party activists and officials could also face criminal charges as a result of their affiliation with Count Them All Properly. Common Cause Minnesota is asking the Office of Administrative Hearings to determine whether there is probable cause for the Ramsey County attorney to bring criminal charges against former party chairman Tony Sutton and others involved with the corporation. Common Cause Executive Director Mike Dean says donations from the corporation to the party are illegal and could constitute a felony. Dean is alleging three counts of illegal activity for three separate donations, each one carrying a possible five year prison sentence and/or a $20,000 fine.

Named in Common Cause’s complaint alongside Sutton: Mary Igo, a longtime activist and chair of Count Them All Properly; Dan Puhl, who started the CTAP corporation, Ron Huettl, finance director of the party, and Tom Datwyler and Fred Meyer, two other executives named in CTAP business filings. Common Cause also wants St. Paul City Attorney Sara Grewing to look into possible misdemeanor charges against Sutton for campaign finance violations.

“At a time when public trust in government is at an all-time low, it’s critical that we hold politicians accountable when they break that trust,” Dean said. “[Prosecutors have] an opportunity to send a message that Minnesota’s disclosure laws will be enforced and those that attempt to circumvent the law will be held accountable.”

Anderson is among a circle of Republicans who want to see Sutton criminally prosecuted. “Our hope is that the county attorney does something,” she said. “I think that Tony surrounded himself with people that were incompetent.”

New leaders change course

But there are those within the party who see reason for a sunnier disposition. RNC Committeeman Jeff Johnson is one of them. He says a change in leadership at the top has made the Republican Party more fiscally transparent.

In December, Republican operative Pat Shortridge was elected to replace Sutton, and after the resignation of the party’s treasurer, David Sturrock, Shortridge appointed accountant Bron Scherer as the party’s new treasurer. Mike Vekich, a GOP activist and chairman of the Minnesota Board of Accountancy, led the party’s fiscal review back in December. He’s staying on board to continue to help, and the party has set up an internal financial control and review committee.

In particular, Johnson describes Shortridge as the “blunt and straightforward” presence the party needed to restore confidence in donors.

“Of anyone we could have there right now, [Shortridge] is the guy,” said Scott Dutcher, a former member of the executive committee who left to run for the state House. “There’s his fundraising ability, which is obvious, but you just talk to the guy and you realize that he is a competent individual. He doesn’t have the bluster and the gusto; he’s going to get in there and he’s going to get the job done. He doesn’t have a personal agenda.”

Johnson says Scherer’s presence has vastly improved the situation, too. For one, Scherer has background in bookkeeping as an accountant, Johnson said. Second, he is at the party headquarters almost every day working. Sturrock, a professor at Southwest Metro State University, lived in Marshall and often worked with the party via phone.

Scherer was blunt in his deposition to the campaign finance board, describing the party’s current situation as “combat mode.”

“We’re just not spending money on, really, anything outside just paying the normal recurring bills, and even some of that’s tough to do, payroll,” he said. “We’re not spending money on political projects, for example, where you’d have a consulting agreement.”

But he went on to say the outlook is improving, albeit slowly. “I went through every unpaid invoices file from the end of the year, every invoice, every vendor, again just to assure myself, since I was going to be signing these reports, that we had all the aggregate of the liabilities in-house on the books,” Scherer told CFPD investigators.

“You know, you can imagine the mess. But overall from a fairness standpoint … I think we’re in as probably as good as shape as we’ve ever been, which isn’t maybe saying much.”

Staff writer Paul Demko contributed to this report.

2 Responses to “RPM asks: Where do we go from here?”

1. Roger Says:
   July 21st, 2012 at 11:34 am

   As a life long republican until the last 10 years , I believe the party needs new more moderate leaders that are willing to remove the tea party crazy people, over religious phony nuts and narrow minded Bachmann’s from the party. Until that happens the party is doomed to fail!

2. Max G Says:
   July 23rd, 2012 at 2:23 pm

   Actually Roger, the party leadership was moderate for the last ten years, routinely doing everything they could to silence more conservative factions and candidates in order to preserve the politically correct and “electable” perception of Tim Pawlenty and their favored legislative leaders.

   No wonder that with out the convictions of conservative principals, they failed to live up to the bar of fiscal responsibility (Sutton) and family values (Brodkorb) that real conservatives stand for. Until the party gets back to its principals, (weather or not you agree with them) it is doomed to fail.