Adding in recount bills, GOP debt reaches $2 million

New records show the Republican Party of Minnesota is $2 million in debt, including more than $700,000 owed to lawyers in last year's gubernatorial recount.

Republican officials released the new financial information Friday, for the first time disclosing previously unreported debts, credit card bills and fees from the gubernatorial recount. Republican officials said they found no immediate evidence that anything illegal had occurred. State GOP leaders are already working with federal election officials to correct campaign finance reports dating back to 2009, which could result in fines.

"There are some warts in here," said Jeff Johnson, a Republican National Committeeman who has led a review of party finances.

Johnson and businessman Mike Vekich, who is assisting the GOP in digging through party finances, discovered $415,211 in debt that had never been reported. In addition, the party owes $100,000 in refunds to contributors and in checks that had been reported as paid but had not been sent to vendors.

Vekich and Johnson also discovered $18,000 in credit card debt and $200,000 in bank lines of credit that are tapped out. They are still trying to learn more details about the credit cards and what they were used for.

All told, the party owes $1.28 million, the newest records show. That doesn't include $717,000 in unpaid legal fees amassed during the gubernatorial recount between Republican Tom Emmer and Democrat Mark Dayton, who ultimately won by a razor-thin margin.

Party officials say it remains unclear whether they are legally obligated to pay the recount debt, but lawyers who represented Emmer and the GOP insist the party is liable for the bills.

The release of the grim financial portrait comes a day before party activists are scheduled to select a new party chairman, who will have to pivot and focus on digging the party out of debt.

The mounting financial pressures come as the party must find a way to wage campaigns to hold control of the Legislature, defeat President Barack Obama and find a credible candidate to challenge Democratic U.S. Sen. Amy Klobuchar.

Former GOP chairman Tony Sutton abruptly resigned early this month under mounting pressure from activists about the bills and untamed spending. Deputy Chairwoman Kelly Fenton, who presented information about the party's finances Friday, has been acting as interim chair.

Johnson would not say whether Sutton, who was unanimously re-elected as party chair a year ago, had misled party officials about the financial health of the GOP.

"I am not going to go there today," Johnson said.

Republicans could not say when everyone would be paid.

Johnson said he expects that everyone owed money by the GOP would eventually be paid, however.

The fresh revelations cap what has been one of the most traumatic months in the history of state Republican Party. Soon after Sutton left, Senate Majority Leader Amy Koch resigned after admitting she had an improper relationship with a Senate staffer. The next day, the Senate fired tenacious communication chief Michael Brodkorb, who had been deputy party chairman under Sutton.

Republicans are not the only ones facing party debt.

The DFL Party started the year with about $725,000 in red ink.