State GOP report finds no illegal activity related to party debt

A financial report released by the Republican Party of Minnesota on Monday afternoon found that there was no theft or illegal activity by former party officers or former state Chairman Tony Sutton, but did point to a pattern of fiscal mismanagement and “questionable decision-making” that has left the party more than $1 million in debt.

The report, released just as the Minnesota House was beginning its contentious debate on a new stadium for the Minnesota Vikings, represents the second stage of a process started after Sutton resigned last December amid rumors and allegations of ballooning debt. In December, party officials, including outside financial adviser Mike Vekich, revealed that the party was about $1.2 million in debt, a sum that does not take into account more than $700,000 in legal fees accrued during the contested 2010 gubernatorial recount.

The party remains at the same level of debt, Vekich said on Monday.

“Our goal was to follow the facts wherever they go, find out what happened, why it happened and get to the bottom of whatever we can get to the bottom of,” new Party Chairman Pat Shortridge said. “Going forward, we have a much better understanding of where things got off track and we have a better understand of where things go forward from here.”

Party officials revealed little new information about the recount debt, which they claim is not the party’s legal responsibility. Lawyer Tony Trimble, who was involved in the recount effort, has claimed that Sutton signed an agreement while he was chairman putting the party on the hook for all the recount costs.

Similarly, the report offered no further clarification regarding the legal bills accrued during the past year’s redistricting efforts. “Some have asked whether allegations have been made that the [party] is responsible for debts of [Minnesotans for a Fair Redistricting],” the report read. “To our knowledge, no commitment has ever been made by any officer of the RPM to have the party serve as a financial guarantor of the MFR’s financial obligations.”

Party officials said they also expect word as soon as Tuesday regarding ongoing negotiations with their landlord, HUB Properties, which filed an eviction notice last month noting that the party has failed to pay over $100,000 in rent since last year.

Moving forward, party officials say they want to give more power to the executive committee, a group of activists appointed to an internal leadership board, in reviewing and approving expenditures. “For the past two years, there has been inadequate transparency and oversight in place at [the party] regarding financial transactions,” the report read. “In particular, some invoices for services or products provided to RPM apparently were not disclosed to the [executive committee] or others. In some cases, even the RPM Finance Director and the [the party] Secretary-Treasurer did not have knowledge of the invoices.”

Here are some key findings from a “Financial Oversight Report” released by the party:

• According to the report, monthly credit card fees “increased significantly” under Sutton’s tenure. “Whereas the average monthly credit card charges were $2,000 to $3,000 in 2008, by the end of 2009 they averaged $8,000 to $12,000, with some months totaling as much as $18,500,” the report read. “Based on our review of the available documentation and discussions with RPM employees, we determined that nearly all the charges were made for legitimate RPM expenses.”
• An August 2009 charge of  $4,383 to the firm Fusetalk, which specializes in “community and collaboration” software,  was not documented and not known to  party officials.
• Multiple undocumented reimbursements were paid to the party’s former executive director, Ryan Griffin, including about $1,000 in mileage and a total of $14,026 in “legal advice.” Officials said that Griffin did not return calls from the party about the expenses.
• The state GOP made two payments totaling nearly $18,000 to TG Med, Inc. in 2010 and 2011. “Tim Goar of TG Med claims that he was hired to do medical marijuana polling and research within the medical community to determine the validity of that issue. He also claims to have done opposition research and helped with media matters such as press releases, media research and speech preparation for Ryan Griffin, RPM Executive Director,” the report reads. “Goar claims to have very few written reports and did not think he had saved any of his work – either electronically or in paper format. He did not produce anything to us. He says he had no written contract, only a verbal agreement with Griffin, who was his main contact at the Party.”