ST. PAUL, Minn. (AP) — The Minnesota Republican Party is nearly $1.3 million in debt, with another $719,000 in legal expenses under review, party officials said Friday in releasing an accounting they called a necessary first step toward mending their finances.
"The debt number is honestly higher than any one of us want it to be," said Jeff Johnson, a Hennepin County commissioner who chaired a financial review committee. "There's some ugly stuff in here."
Details of the review come less than a month after party Chairman Tony Sutton resigned amid internal criticism of party finances. The GOP is due to elect a replacement Saturday when its Central Committee meets in St. Cloud, and the party said it wanted activists to have time to go over the review before that vote.
The GOP's money troubles were widely known, but the review showed the problem at the high end of estimates of just how bad. Mike Vekich, an accountant and businessman frequently tapped by the GOP, said the review stopped short of a forensic audit.
The largest new item in the party's summary was about $415,000 in obligations that hadn't been reported before. Asked to detail some of those, Vekich described them simply as accounts payable. The summary also included about $18,000 in unreconciled credit card debt. Vekich said that comes from "one to two" credit cards, one held by former party Chairman Ron Carey, who departed in 2009. He said he wasn't sure who else held the cards.
The legal expenses stem from the 2010 governor's race recount, a costly exercise that Republican Tom Emmer eventually lost to Democrat Mark Dayton. The GOP said it believes the expenses are the responsibility of a separate corporation set up to fund the recount, but Tony Trimble, one of the recount attorneys, has said the party was the client.
Vekich said the review findings would be shared with federal and state regulators for any possible penalties.
Johnson, who also serves as a Republican National Committeeman, compared the party situation to that of the RNC before it cut $24 million in debt nearly in half.
"In less than a year, they have completely turned that ship around," Johnson said. "There's no reason that can't happen with the Minnesota Republican Party."
Money woes are just one problem for the GOP. Besides Sutton's departure, the party has been rocked in recent weeks by a scandal involving Sen. Amy Koch, who resigned as majority leader and then acknowledged an improper relationship with a male staffer. Koch was widely credited with helping Republicans win majorities at the Capitol in 2010 that will be threatened in 2012.
Johnson insisted the party will be a factor in supporting candidates while rebuilding its finances.
"I think it's absolutely possible," he said.
Candidates to lead the party include political consultant Pat Shortridge, businessman Todd McIntyre and Terry McCall, the party's 2nd District chairman. Others could emerge at Saturday's meeting in St. Cloud.
Copyright 2011 The Associated Press.