Politicos await ruling on GOP recount fund

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Political watchers waiting for a firm ruling on the months-long debate over whether the Republican Party of Minnesota is responsible for 2010 gubernatorial recount debt might still be seeking answers after a key campaign finance board meeting next week.

In January, the watchdog group Common Cause Minnesota filed a complaint with the Minnesota Campaign Finance and Public Disclosure Board (CFPDB) accusing the state Republican Party of repeatedly failing to properly report expenses and contributions. One issue involves more than $700,000 in GOP legal fees piled up in Count Them All Properly (CTAP), a separate corporation set up to collect and spend money on behalf of Republican nominee Tom Emmer in the 2010 gubernatorial recount.

Republican Party attorney Tony Trimble told Capitol Report in December that then-state GOP Chair Tony Sutton signed a contract indicating that the party would be responsible for paying the legal bills in the event fundraising efforts fell through. But new Republican Party of Minnesota leadership — elected after Sutton’s sudden resignation amidst ballooning debt — is crying foul, claiming the party is not on the hook for the payments.

CFPDB has made no comment about the investigation. “The board can neither confirm nor deny the existence of a complaint,” CFPDB head Gary Goldsmith said this week. But Common Cause has been informed that the board plans to rule Tuesday on claims related to the “false certification of reports and violations, if any, that result from the relationship of the RPM and the corporation Count Them All Properly, Inc.,” in the words of a CFPDB letter received by Common Cause. “It is anticipated that this portion of the investigation will also include findings regarding the legal obligation for the attorneys’ fees related to the 2010 gubernatorial recount.”

First official response

The campaign finance ruling will mark the first public judgment on the matter outside of those expressed by the Republican party itself, which did an extensive audit of its own finances last December and again in May. In its latest review, the party noted that it is “vigorously contesting the allegations contained in the Common Cause complaint.” If the board rules the party is on the hook for recount debt, the state GOP debt load would officially hit nearly $2 million.

But many observers say serious fines and sanctions levied against the party are unlikely.
The campaign finance board is limited by law in the types of punishments it can deliver, and historically the board has opted out of these kinds of high-profile political fights. There have been only three instances in the past decade when the campaign finance board levied large fines against groups or campaigns.

Its largest ever came in 2002, when the board fined Tim Pawlenty’s gubernatorial campaign $600,000 for illegally coordinating $800,000 worth of independent advertisement expenditures with the state GOP. Several years later the board fined a campaign manager in northern Minnesota $12,000 for using campaign funds for personal purposes, and in 2010, the board ruled that DFL gubernatorial candidate Margaret Anderson Kelliher and the DFL Party violated a ban on soliciting and accepting earmarked contributions. Together they were fined $24,000 for improperly helping the campaign to obtain a voter database with a price tag of $13,000.

“This [board] has been extremely weak when implementing fines, so I don’t expect that to happen,” Mike Dean, executive director of Common Cause Minnesota, said. “I think they should because that’s the message that should be sent. There have been a ton of problems that have come out of this.”

Even some members of the Republican Party’s executive committee claim to feel more or less at ease facing the ruling next week. Rick Weible, who also serves as chair of the 3rd Congressional District Republicans, said he’s been hearing “mostly positive” things from GOP leadership, which is in the process of handing off paperwork and files to the board to investigate.

Possible penalties

There are a handful of ways the board could rule on Tuesday, according to political and campaign finance watchers. The most significant finding for the party would put them on the hook for the recount debt. If the board deems the misreported debt an unintentional infraction, that ruling would likely come along with some corrected paperwork. A monetary fine could come if the board believes there was an intentional effort to avoid campaign finance laws. The board could also find that the party circumvented campaign finance laws by redirecting a contribution through another individual or group, a penalty that could cost $3,000 per violation.

But while some are expecting a weak penalty from the board, the investigation itself — which will include depositions from the likes of Sutton, failed gubernatorial candidate Tom Emmer and former Supreme Court Chief Justice Eric Magnuson — could provide ammunition for watchdog groups like Common Cause and even the recount attorneys seeking fees from the state GOP. Any of those groups could use the board’s investigation to take the party to court.

Dean has already addressed the issue with Ramsey County Attorney John Choi, alleging the party received an illegal contribution from a corporation. (Common Cause’s complaint argues that because Count Them All Properly is organized as a business, not a political fund, any recount expenses it paid on behalf of the state GOP and Emmer amount to in-kind contributions, which would be a violation of state law.) That determination falls within the jurisdiction of the county attorney, Dean said. “The board will likely uncover information in this area,” Dean said. “The board is not touching this at all, but their side of the investigation will uncover evidence that will lead me to a separate investigation.”

GOP attorney John Gilmore said he he feels confident that his client, Mary Igo, will be cleared as part of the investigation. Igo is an activist and was listed as the chief executive on the Count Them All Properly incorporation papers. Dan Puhl, a former administrator for the Republican National Committee, originally filled out the incorporation papers.

One uneasy question Gilmore does expect to be answered is why the corporation had at one point listed two different CEOs who claim to have no affiliation with the party or the recount. Jon Richard Schroeder and George Fraley were both separately listed — and subsequently removed — as CEOs of the corporation.

“[Igo’s] role was completely above board with a corporation,” Gilmore said. “There was a snafu twice where the incorrect CEO was submitted to the Secretary of State’s office, but Mary Igo had nothing to do with those instances. I believe the board will explain to the best of their ability how those instances came about. Once is fishy, twice is eyebrow-raising.”