Sitting in his St. Paul office overlooking the Minnesota state Capitol, Republican Party of Minnesota Chair Keith Downey says there was a point in his life when, in his “wildest dreams,” he never would have imagined sitting at the helm of a state political party.

In January, Common Cause Minnesota filed a complaint with the Minnesota Campaign Finance and Public Disclosure Board accusing the state Republican Party of repeatedly failing to properly report expenses and contributions.

Minnesota Republicans started the 2011 session having conquered titans. In the Legislature, GOP lawmakers had made a historic 54-seat gain in the House and Senate that fall, a swing that handed them majorities in both chambers for the first time in 38 years.

The Republican Party of Minnesota faces numerous lingering questions about the state of its finances heading into the 2012 election season. Last month GOP officials announced that an internal financial review determined that the party has $2 million in debts. That’s roughly four times more than most party activists had been led to believe just a month earlier.

On Saturday, Pat Shortridge was elected as the state party chairman in a statewide gathering of GOP activists in St. Cloud. Afterward the veteran GOP strategist suggested that the party had turned an important corner.

David Sturrock has resigned from his post as Secretary-Treasurer of the Republican Party of Minnesota. His departure follows the revelation that the state party is likely facing $2 million in debt ahead of a crucial 2012 election campaign.

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.

On Wednesday one of the GOP attorneys on the recount, Tony Trimble, told PIM that then-RPM Chairman Sutton signed an agreement legally obliging the party to cover the full cost of the recount legal fees, reportedly around $450,000. And late Wednesday afternoon, Sutton confirmed the existence of an agreement that he says he does not recall disclosing to other party officials. But Sutton went on to claim that he believes the party is only responsible for the debt in the event that the recount fund in question, incorporated as Count Them All Properly Inc., ceases to exist.

In late November, a group of roughly two dozen Republican activists gathered at a residence in Edina to discuss the future of the state Republican Party. The meeting included a broad cross-section of the GOP’s notoriously fractious base.

In 2010 U.S. Rep. Tim Walz survived a Republican wave. Despite representing a quintessential swing district, Walz triumphed over state Rep. Randy Demmer by 5 percentage points.