The Big Story Blog

MN GOP details debt, previously unreported spending

Posted at 9:57 AM on December 30, 2011 by Paul Tosto
Filed under: Politics

MPR News political editor Mike Mulcahy just posted the full memo from the Minnesota GOP on its financial situation -- nearly $2 million in debt -- on the Capitol View blog.

I've published it below. Also, MPR News reporter Tom Scheck notes the memo's acknowledging $415,000 in payables were not previously reported.

The MNGOP plan also says $415k in payables were not previously reported. That is a campaign finance violation.
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Here's the GOP memo:

Friday, December 30, 2011

TO: Republican Party of Minnesota State Central Delegates and Alternates
FR: Kelly Fenton, Acting RPM Chair, Jeff Johnson, Republican National
RE: Internal Financial Review
As most of you know, the Executive Committee of the Minnesota Republican Party appointed an Internal Financial Review Committee at its October 2011 meeting to perform an internal review of the financial records of the Party. Jeff Johnson serves as chairman of that committee and its members are Pat Anderson, Scott Dutcher, Diane Johnson, Terry McCall and Steve Perkins. The Memorandum of Understanding regarding the role of this committee is attached.

A short time after Kelly Fenton's election as Deputy Chair of the Party, she asked Republican businessman Mike Vekich to step in and help the Review Committee in its task. Mike agreed to provide his services to the Party on a volunteer basis and he and his team have been actively reviewing the Party's finances for the past two weeks. This financial review did not constitute a certified "audit."

Prior to tomorrow's State Central Committee meeting in St. Cloud, we wanted to make this information available to Party activists so you have the opportunity to review it in advance of our gathering. Mike and Jeff will make a presentation at State Central about these findings and you have our commitment that we will continue to work with our activists in an open and transparent manner as we raise money to resolve these obligations and put the Party in a position to play an important role in the 2012 elections.

Here is a summary of the RPM financial situation:

Previously reported obligations

Obligations previously unreported on RPM financial statements

Obligations recorded as completed, where checks had not been sent to vendors

Refunds sent to contributors that have not been cashed by contributors

Remaining obligation - FEC fine - Aug. 2011

Unreconciled credit card debt

Bank - line of credit

Bank - installment note

Some of the payables from the total above have not been previously reported on Party financial statements. We became aware of them through the team's work over the past two weeks. We are attaching the vendor list of payables in order to be completely transparent about what is owed to whom.

In addition to the amounts above, there are two major considerations that must be acknowledged. First, several law firms did considerable work in late 2010 on the Emmer-Dayton recount. These law firms claim they are owed approximately $719,000. The Party's position has been that those obligations belong to a separate corporation set up in 2010 to fund the recount. At least some of the law firms are claiming the obligations belong to the Party. We are not acknowledging these bills as Party obligations, but are reviewing the claims with attorneys.

The other consideration is a request from the receiver in the Tom Petters receivership to recover funds contributed by Petters to the RPM in the amount of $75,000. Again, we are not acknowledging that as a Party obligation at this point pending legal review.

Both of these sets of claims will be discussed more fully at the State Central Committee meeting tomorrow. In addition, the obligations outlined here will be disclosed on the appropriate Federal Election Commission reports, in consultation with the FEC.

We have also attached a copy of the FEC document explaining the $170,000 fine assessed against the RPM earlier this year (that fine has been paid down to $120,000). This is public information available online, but since some activists have been asking about the details we wanted to make it simple for you to find.

While these numbers are large, we believe it is important to provide a complete and fair accounting to everyone involved in the Republican Party of Minnesota so we can look squarely at the problem and begin to resolve it. The RPM is not the first political organization to be in debt and it won't be the last, but we will do everything in our power to improve our Party's standing.

It's also important to note that this financial review is only Step One in a multi-step process. Before we can decide how to work our way out of debt, we need to have a clear understanding of the magnitude of that debt. Now that we have that understanding, we can move on to putting together such a plan.

We know that all of us are resolved to work together to build a stronger and more responsive party. The extremely important 2012 elections are just over 11 months away. Control of the White House and our state legislature rests in our hands. We are hopeful you will pledge to work with us and our new Chair to grow our Party. Thank you for your support and your willingness to work for the important principles we all share.

About Paul Tosto

Paul Tosto

Paul Tosto writes the Big Story Blog for MPR News. He joined the newsroom in 2008 after more than 20 years reporting on education, politics and the economy for news wires and newspapers across the country.

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