Sutton admits signing recount debt agreement

Already steep party debt grows by $450K, colleagues express shock

Amid internal controversies over the Republican Party of Minnesota’s debt after state Chairman Tony Sutton’s resignation, party officers and insiders initially maintained that the state GOP was not legally required to pay the nearly $500,000 in legal fees racked up during the 2010 gubernatorial election recount.

But they were in for a shock: Although its existence was apparently unknown to them, an agreement signed by Sutton does leave the state GOP liable to pay those legal bills.

On Wednesday GOP recount attorney Tony Trimble told Capitol Report of the signed agreement regarding the legal debt, which is reportedly around $450,000. Contacted later, Sutton confirmed the existence of the agreement, which he said he does not recall disclosing to other party officials.

But Sutton went on to say that he believes the party is responsible for the debt only in the event that the recount fund in question, Count Them All Properly Inc., ceases to exist. “As long as the recount fund exists,” Sutton said, “that’s the legal entity responsible, period. At least that’s my impression.”

‘Not a little of it, all of it’

But Trimble claimed that the agreement — which he declined to provide to Capitol Report, citing attorney/client privilege — was not at all ambiguous regarding the Republican Party’s bottom-line responsibility to pay the fees. “We have a written agreement with the Republican Party of Minnesota to pay that fee, and as chairman, Tony Sutton signed the agreement,” Trimble said. “[The Republican Party is] fully committed to pay that fee — not a little of it, all of it.”

Sutton said that before his resignation, he recommended working out a monthly payment plan to retire the debt held by Count Them All Properly. But when pressed as to who was responsible for leading the effort to pay the recount bills, Sutton replied, “I don’t know at this point.”

By all accounts, Sutton made no mention of this agreement to any other top GOP officials, not even former Deputy Party Chairman Michael Brodkorb, who was considered by many to be Sutton’s closest political confidant. When asked if he had disclosed the existence of a written agreement regarding the recount debt to other GOP officials, Sutton answered: “I’m not sure I ever talked to them about it, quite frankly.”

Brodkorb, who stepped down in October to run state Sen. Mike Parry’s bid for Congress, appeared disconcerted when asked about Trimble’s claim at the Capitol on Wednesday. “It is the first time that I was made aware of such a document,” he said. “It was always presented in executive committee … and in statements by our secretary/treasurer that this was a separate legal fund and that the party was not responsible for those recount bills. This document completely contradicts the public statements that were made.”

Brodkorb chose his words carefully when asked if he thought Sutton deceived him. “I’m very loyal to Tony,” he said. “I’m still recovering from the information that I’ve heard here. … I need to have a dialogue with him. Clearly to say that I am shocked is an understatement.”

RPM Secretary/Treasurer David Sturrock echoed that sentiment when contacted about Trimble’s assertion. Sturrock said he was not aware the party had entered into such an agreement. “This is new information to me,” he said. “I’d like to know more about the information involved before I can have any opinion on it.”

Party insiders assured of ‘no legal liability’ on fees

Multiple members of the state GOP executive committee say Sutton repeatedly told members the party was not legally required to pay the recount fund debt, and that all recount work was separate from the actions of the party. “I’ll tell you what has been told to the executive committee: The party has no legal liability on the recount fund debt,” executive committee member Scott Dutcher said last Tuesday, before the contract was disclosed. “I personally asked [Tony Sutton] about that question numerous times, and every time [the answer was] that the party has no legal liability.”

“Tony was adamant,” executive committee member and RNC committeewoman Pat Anderson said. “He was angry that we were even asking questions.”

In the wake of the agreement’s disclosure, she added, “We’ve got lawyers working on it to find out if we’re in trouble legally.”

The $450,000 in recount costs only add to an already daunting debt load facing the party. At the end of October, the party’s federal account listed unpaid bills of $519,000, according to Federal Election Commission records. That sum doesn’t include a recent FEC fine, for which the party still owes more than $100,000.

“If the documents are valid,” Brodkorb said, “and all indications are that they are … the magnitude and the scope of the debt has grown at an incredibly exponential rate. But I have hope and faith, even in light of this new information that has come out, that our party will recover and that we’ll be in a strong position.
“But clearly,” he added, “this was information that was not communicated.”

Resignation came on eve of State Central meeting

The confirmation of the GOP’s additional debt came as the party was still recovering from a tumultuous weekend in which Sutton abruptly resigned from his post late Friday afternoon, just hours ahead of a Saturday morning gathering of the RPM State Central Committee at which delegates were expected to grill him about party finances. State Central delegates elected a new deputy chairwoman — activist Kelly Fenton — the following day and opted in a near-unanimous voice vote to table the proposed 2012 party budget. Fenton, who is currently serving as interim party chairwoman, said in an email statement that the party had only “recently been made aware” of the agreement. She said party officials are “working to gain a full and accurate understanding of party financial obligations before making any further comment.”

State GOP delegates are set to meet again on Dec. 31 to elect a new party chair and take another look at the budget. An internal financial review of the party’s debts — led by executive committee member Jeff Johnson — is under way. When asked how Trimble’s agreement changes the audit, Anderson said: “It brings in the attorneys.”

The Republican Party often sets up separate funds to handle specific events or political endeavors, sources said last week. The party set up a fund in 2008 to collect and spend cash related to the Republican National Convention, and more recently the GOP established funds to pay for this year’s Midwest Leadership Conference and for legal fees related to redistricting.

Trimble said that about half of the recount costs are owed to his firm, Trimble and Associates, while the remainder is due to attorney and former state Supreme Court Chief Justice Eric Magnuson and to Washington, D.C., lawyer Michael Toner, who also worked on the GOP recount legal team. When reached by phone, Magnuson said all questions regarding the unpaid legal fees must go through his client, whom he identified as the Republican Party of Minnesota.

Executive committee member Joe Westrup, who has sat on the committee since May, said Sutton was asked about the recount funds in nearly every meeting. “We were told every single time that not only were we not on the hook but that it was kind of not our business.” By Westrup’s account, shakeups in the membership of the executive board earlier this year created an opening for a more critical look at the state of the party’s finances.

“To some extent I’m not surprised [by the undisclosed agreement],” he said, “given what we are finding in the wake of what these guys left us. I think Brodkorb running for the hills changed the votes and left us with not only the ability to ask questions, but also to demand answers.”