Tony Sutton, party of one
by Briana Bierschbach
Published: July 18,2012
Time posted: 4:03 pm
Document trail in CFPD investigation points to former GOP chairman as secretive overseer of party’s increasingly out-of-control finances
Before the fall of 2010, Ron Huettl had been handling most of the Republican Party of Minnesota’s bills.
Previously a phone bank operator and telemarketer, Huettl rose through the ranks of the party from activist all the way to director of finance, so his involvement made sense. But a lot of things changed after November.
The historic 2010 election saw the party get involved in a number of legislative races while devoting most of its resources to its endorsed gubernatorial candidate, Tom Emmer. Work on the legislative races paid off: Republicans took control of both the House and Senate for the first time nearly 40 years. The investment in Emmer’s candidacy was less fruitful. He lost on election night by somewhere in the neighborhood of 9,000 votes, a slim enough margin to trigger what would become a short but expensive recount battle.
At the same time, then-Republican Party of Minnesota Chairman Tony Sutton was working his way out of his failing burrito franchise Baja Sol and in to a full-time role with the party. It was also then that he decided to take the reins of the GOP’s day-to-day finances.
“Around October, November,” Huettl said in a recent deposition taken by the Minnesota Campaign Finance and Public Disclosure Board (CFPD), “all the invoices were coming to me. At that point [Sutton] asked — or decided — that all the invoices would now go directly to him and that he would decide when they would go to our compliance attorney for processing and when things would be paid.”
What followed, according to depositions and documents gathered as part of an investigation into the Republican Party’s finances by the campaign finance board, was a pattern of shoddy fiscal management from the top down — starting with Sutton — that started with keeping private a few invoices here and there and, over the course of a year, spawned more than $1 million in unreported debt. The most significant portion of the undocumented debt was accrued in Count Them All Properly Inc. (CTAP), a separate corporate entity set up to pay for legal activities related to the 2010 gubernatorial recount.
Unbeknownst to other party officials, Sutton had operated all recount activities before that point through the Republican Party and signed at least one agreement putting the party on the hook for legal fees. While Sutton and other party officials repeatedly claimed the party was not responsible for debts accrued there, the campaign finance board ruled otherwise late last week.
In parsing what had happened, the board’s report painted the portrait of an organization in financial chaos. “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,” the report noted.
“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.”
The ruling puts the state Republican Party, already plagued with more than $1 million in debts, on the hook for about $600,000 more, and Sutton and the party together were fined about $30,000 for misreporting to the board. Sutton could also face criminal charges stemming from the ruling.
Common Cause Minnesota filed a complaint on Wednesday with the state Office of Administrative Hearings asking it to find probable cause for the Ramsey County attorney to bring criminal charges against Sutton the state party and CTAP. The group is also asking the St. Paul City Attorney to file gross misdemeanor charges against Sutton for circumventing campaign finance disclosure laws.
“I don’t have a lot of regrets about it,” Sutton said in his deposition. “We’re whatever, a million bucks in debt, versus billions of dollars in tax increases. I’d trade that any day of the week.”
Sutton takes over finances
There were a few red flags for Huettl after Sutton started getting more involved in the party’s day-to-day operations.
According to Huettl, Sutton would hold private meetings with some of their vendors and then instruct him to issue partial payments himself or ask the party’s compliance company, Cardinal FEC, to issue partial payments. The chairman also made it clear that then party treasurer David Sturrock was not to know about some of the bills, Huettl said.
“In the case of Strother [Strategies, a polling company], Chairman Sutton had met privately with the Strother people periodically about their invoices,” Huettl said in his deposition. “I did not receive those. I wasn’t allowed to give those to the compliance company…. It was clearly understood by me from Mr. Sutton that I wasn’t to tell David Sturrock. Mr. Sutton made that clear.”
Sutton denies this. “That’s just not true,” he said in the deposition. “You know, I was not at the party every day managing every single invoice that came in, okay. I’m not going to be made out the scapegoat for that, for other people trying to save their jobs.”
“What’s the difference between being $400,000 or $500,000 … It didn’t really make a lot of difference. I didn’t even look at the reports that were filed with the state or the federal. I didn’t have to. I was worried with the day-to-day cash flow of the party,” he continued. “I assumed that Dan Puhl [the party’s FEC compliance consultant], who’s an excellent professional, was doing his job. If any invoices fell through the cracks, it was inadvertent.”
Attorneys hired and the recount begins
By Sutton’s account, he was contacted by Emmer’s campaign team in the early hours of the morning the day after the election asking the party to take the lead on what was looking more and more like an automatic recount. “I got a call from the Emmer campaign… saying, can you guys help us with this, we have no way to raise money, we don’t know what to do,” Sutton said in his deposition. “They needed our help and I said yes.”
Sutton appeared before the press the following morning with a gusto that surprised even the Capitol press, who were generally accustomed to Sutton’s firebrand rhetoric. Sutton and his deputy chair, Michael Brodkorb, called out the alleged failures of Secretary of State Mark Ritchie during the 2008 U.S. Senate recount, which saw former GOP Sen. Norm Coleman lose to Democrat Al Franken by around 300 votes. They said Republicans weren’t going to get “rolled,” or have the race “stolen,” this time around.
In the hours before he held the news conference, according to depositions, Sutton had contacted two if not all three of the attorneys who would go on to defend the party and Emmer in the recount. Attorney Michael Toner, the former chair of the Federal Elections Commission, woke up just before dawn on the morning after the election to a voicemail message from Sutton saying there would be a recount. The party had put Toner on retainer a few weeks earlier just in case there were any lingering questions immediately following the election. Toner was in the Twin Cities the next day.
Attorney Tony Trimble and his team were also called on to help. Trimble had been involved with the party in some capacity over the last 25 years, including extensive legal work on the 2008 U.S. Senate recount. Trimble’s involvement didn’t sit well with some of the major donors, who still partially blamed him for the failed 2008 recount effort, according to several depositions. Former Supreme Court Chief Justice Eric Magnuson also eventually joined the legal team.
All the lawyers understood that they had been hired by the party, according to the campaign finance board’s ruling. “We never took direction from Emmer or any other entity or individual,” Trimble said.
“From my discussions in terms of the billing, [it] was with Chairman Sutton and the Republican Party,” Toner said.
The origins of Count Them All Properly
The recount legal battle was a long shot from the beginning, but Republicans held out hope that the Minnesota Supreme Court would rule in their favor in a legal challenge that would force all precincts across the state to redo their election-night reconciliation tallies, purging ballots in cases where there were more ballots cast that people signed in to vote. The high court did not rule their way, and shortly afterward Emmer publicly dropped his bid for governor.
During the recount, Dan Puhl, who ran the compliance company Cardinal FEC, got the idea to start a separate corporation to help pay off the legal costs. The idea arose from Advisory Opinion 415, released by the campaign finance board just days after the election in response to questions from the Mark Dayton for governor campaign about their separate recount corporation, the “Dayton Transition Fund.” The opinion found not only that it was legal to start a separate corporation to take care of recount activity, but that such an arrangement would not require any kind of donor reporting.
Puhl thought it would be wise for the Republicans to follow suit. He saw an element of self-interest as well, as he acknowledged in his deposition. “It wasn’t my idea, it was the Democrats’ idea,” Puhl said in explaining the origins of CTAP. “I thought it was a good opportunity for me business-wise because I can have a new client for my bookkeeping, billing … And so I went ahead and started this corporation.”
“I did this entirely on my own,” Puhl added.
It wasn’t until Dec. 3 that he officially filed paperwork with the Secretary of State’s Office to launch CTAP. Afterward, he said, he “tried to tell many people as possible.” In his deposition, Sutton recalled being approached by Puhl about the corporation. The recount was over and he was under pressure to start paying the legal bills. “Then Dan Puhl, unbeknownst to me walks into my office … saying, ‘I’ve sent up a recount fund,’” Sutton recalled in his deposition.
“OK, great, perfect,” Sutton went on. “It’s at that point I said, ‘Look, there’s a recount fund, these aren’t our bills, these are the recount fund’s bills.’”
The first official meeting of CTAP didn’t take place until February at the Meritage restaurant in St. Paul. In attendance were just a handful of people: Puhl, longtime GOP activist Mary Igo, Tom Datwyler, who worked with Puhl at Cardinal FEC, and Fred Meyer, another veteran Republican activist. Puhl was a neighbor and friend of Igo, so he asked if she and her husband, Pat, wanted to sit on the board of the group. Igo was running for Republican National Committeewoman at the time, and Puhl suggested it would look good on her resume, Igo said.
Igo was quickly made chair of CTAP at the initial meeting. She also became the sole shareholder of the corporation, despite some suggestions that Emmer serve in that role. “At the time that the taxes were filed, they needed an owner,” Igo said. “Since everything else was under my name, I said I’m fine with that.”
It was also at this meeting that CTAP made its first (and only) expenditures: about $9,000 to each of the three law firms that had worked on the case. That money came from the proceeds of a single $30,000 donation from Republican uber-donor Robert Cummins, and the party would later be fined for those payments as unreported spending.
“I have to say,” Igo said, “it was one of the first meetings that I went to having no idea what the meeting was going to be about or what was going on with it.”
Cracks begin to show, Sutton resigns
Trimble was by far the most aggressive of the recount attorneys in seeking payment for his work. As the weeks went by after the recount concluded, all three firms sent invoices to the state party, but Trimble sent bills each week to both Huettl and Sutton. Exchanges between Trimble and Puhl later became so contentious that Puhl blocked Trimble from his email account. Sutton and Huettl tried to redirect Trimble’s invoices to CTAP after its formation, but Trimble wanted a guarantee that he would be paid.
“RPM committed to pay all of these costs. We can re-issue the invoices but must have RPM’s guarantee,” Trimble wrote in an email to Huettl that is included in the case file. “Please call me to discuss at your earliest convenience.” On March 16, 2011, Huettl sent Sutton an email telling him Trimble would not reroute the invoices without a guarantee from the party to pay these expenses. Sutton replied in a one-word email, “OK.” By March 22, the agreement was in writing and signed by Sutton.
In September, CTAP held its second formal meeting at the Green Mill in Woodbury. Members had only communicated by email in the meantime, and by then Puhl had moved to Washington after being appointed chief financial officer of the Republican National Committee. Because of his new job, Puhl wanted to be removed from the leadership of CTAP.
The agenda was short. The group discussed possible fundraisers with major donor Republicans, but didn’t make anything official. They resolved to meet again in November.
During this period, members of the state Republican Party’s executive committee — a small group of party leadership officials from each congressional district — had also started to raise questions about a steady stream of news coverage about the party’s delinquent bills. Leading the charge were RNC Committee members Pat Anderson and Jeff Johnson.
In October 2011 they set in motion a plan to review the party’s finances through a new financial oversight committee, but they didn’t get very far before Sutton suddenly announced his resignation on Dec. 5. In his resignation letter, delivered on the eve of a state central committee gathering at which Sutton faced a likely grilling over party finances, he listed a series of regrets during his time as chairman, a major one being the party’s involvement in the recount.
After Sutton’s departure, Huettl told campaign finance investigators, he believed it was important to inform Sturrock about the invoices that had been kept from him. “Surprise, disappointment, concern for the party,” Sturrock said in his deposition when asked how he felt upon hearing the news.
Sturrock quickly brought on Mike Vekich, a longtime activist and chair of the Minnesota Board of Accountancy, to help sort out the books. At a December news conference, Vekich and GOP leaders announced that an internal audit found the party was about $1.3 million in debt, not including the roughly $600,000 in recount legal fees, which they planned to contest.
The next meeting of CTAP in February 2012 was less relaxed than the first two. Igo said she was “bombarded” with questions about recount funds at the party’s state central committee meeting in early December, and she could only bring herself to stay at another party meeting on New Year’s Eve for a short period of time. “It was like, is there any purpose to this anymore?” Igo said in her deposition. “Or should we just close the company?”
Igo repeatedly tried to reach Emmer about the recount fund. It wasn’t until a chance meeting between the two at the Midwest Leadership Conference that Igo realized that Emmer knew as little about CTAP as anyone else.
“You know, I was never given any information, didn’t know anything about it to begin with,” Emmer said in his deposition. “I, frankly, didn’t understand why Mary Igo would have been the president of Count Every Vote [sic]. Something just didn’t seem right.”
Emmer told Igo that he didn’t need to know anything more about it.
“She wasn’t pleased, and that was the last time we spoke,” he recalled.
“He really did not want to talk to me,” Igo said. “I felt like I was sitting in a vacuum.”
Being made a ‘scapegoat’
In April 2012, the party’s dire financial straits became clear when RPM was nearly evicted from party headquarters near the state Capitol for failure to pay rent since last year. Until the campaign finance ruling came down last Friday, Republican Party officials had publicly disputed claims that the party was responsible for the recount costs that resided on CTAP’s books.
But before the campaign finance board could announce its decision on Friday, new party Chairman Pat Shortridge released a statement saying RPM officials had “assumed for some time that the debts associated with the 2010 gubernatorial recount are debts of the party.”
“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,” Shortridge wrote. “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.”
After the ruling, Sutton published this statement on his personal blog: “I am disappointed with the findings by the Campaign Finance and Public Disclosure Board concerning the Republican Party of Minnesota and Count Them all Properly, Inc. I disagree with their findings and believe they should have reached a different conclusion.”
The board’s report, meanwhile, made clear that its investigation regarding the actions of the party and Sutton is not over, and Common Cause Minnesota has already announced plans to pursue a criminal prosecution of Sutton. In the final moments of his deposition, Sutton said he felt like he was “being made out to be a scapegoat.”
“I guess I would like to say that, you know, if any mistakes were made, they were inadvertent,” he told CFPD officials. “And quite frankly, being a full-time employee of the company I worked for, the company I owned, and raising money for the party, I wasn’t there every day all day watching every single thing that came through, okay.”
See select excerpts from GOP officials statements to the campaign finance board: (click to enlarge)