politics

At least two staff members have left the Minnesota Republican Party since February after they complained that the party misused employee retirement money, improperly reported its finances and ignored or retaliated against staff who reported the problems.

The departures included former finance director and GOP stalwart Dwight Tostenson. He wrote in a Feb. 15 confidential memo that state GOP chairman Ron Carey fired him after he repeatedly pressed the chairman to address what Tostenson regarded as serious financial problems in the state GOP office.

"Since I started reporting these suspected violations, I have felt increasing harassment and other types of retaliation," Tostenson, the party's chief fundraiser, wrote in the memo to the party's executive committee.

Carey on Friday denied any retaliation and said any problems identified in the memo have been fixed.

"We've looked at all the issues that he raised, and where there was corrective action required, we took corrective action," Carey said. "Dwight and I came to a mutual, amicable agreement for our separation."

Tostenson's four-page memo detailed his longstanding complaints and efforts to get Carey to resolve them. In it, he urged the committee to direct Carey to conduct a full investigation and audit. The Star Tribune obtained a copy of the memo.

Carey said Friday that he has asked the committee for permission to commission an external audit.

The controversies arise as the party is gearing up for the 2008 election season, when it will play host to the Republican National Convention and attempt to reverse its setbacks of last November, when the GOP suffered heavy losses in legislative contests and a drubbing in a U.S. Senate race while narrowly reelecting Gov. Tim Pawlenty.

Carey, who's running for reelection this week as party chairman, blamed the leak of Tostenson's memo on political enemies within the Republican Party who are out to get him on the eve of the Republican state central committee meeting.

But he didn't accuse Tostenson of having political motives for writing his memo.

Retirement deposits disputed

A key element of Tostenson's memo deals with his accusation that the party appears to have violated federal law by repeatedly delaying the deposit of employee payroll contributions into their retirement accounts. He said the "misappropriation" helped cover party expenses before the money was deposited.

"As reported on our payables at the state executive meetings last summer there was as much as $12,000 not deposited at any one time," he wrote. "This represented months of paycheck withholdings by the Party which had not been deposited within the 30-day legally required time limit."

The party offers Simple Individual Retirement Accounts for some employees. Federal law requires that money deducted from employees' checks for those accounts be deposited as soon as possible, and in no case later than 30 days after the month when it was withheld.

In cases of tardy deposits, employers may be required to make the plan whole by paying back any lost investment earnings. If they had mixed the employees' retirement money with general operating funds they could be required to pay an excise tax.

Party records show that money was withheld for employee retirement plans from September 2005 through May 2006, but Federal Election Commission (FEC) records reflect no deposits into the accounts during that period. In June 2006, the party made two makeup payments totaling $12,243 into the accounts.

The delay in depositing the money could have benefitted the party by giving it temporary access to the employees' funds.

Carey didn't explain why the retirement money wasn't deposited promptly.