Republicans will learn this week how deep in debt their party is - and who their leaders will be. Successors for both former GOP chairman Tony Sutton and former Majority Leader Amy Koch are to be chosen this week.
Still struggling to recover from the loss of three top leaders in the last month, Minnesota Republicans will learn the full extent of their party's money troubles this week.
Financial expert Mike Vekich is scheduled to meet with the GOP executive committee Wednesday to discuss debts that party insiders estimate may top $1 million. The problems began to surface earlier this year when counties across the state said the party was not paying its bills from the 2010 gubernatorial recount.
"We are a volunteer organization, and we owe it to Republicans across the state, not just donors and activists, but everyone, to be honest and lay out what's happened and take corrective action, which we're doing," said Pat Anderson, the party's national committeewoman, who has been involved in the effort to make the party's books more transparent.
The financial woes, including complaints of overspending, are coming to a head as party leaders prepare for a crucial election cycle.
They also cap a month in which Senate Majority Leader Amy Koch resigned after admitting she had an improper relationship with a Senate staffer, Michael Brodkorb was forced from his job as communication director for the Senate caucus, and State Party Chairman Tony Sutton quit. Successors for both Koch and Sutton are scheduled to be chosen this week.
Sutton, who resigned amid complaints that he hadn't kept fellow party leaders informed about the mounting debts, including a $170,000 fine levied by the Federal Election Commission (FEC), remains unrepentant about his stewardship of the party and its bank accounts.
He said that his critics are "Monday morning quarterbacking" and that it was his duty to do everything he could to help the GOP candidate for governor, Tom Emmer, pursue a recount after his narrow loss to Mark Dayton. Sutton also noted that in 2010, the GOP took control of both houses of the Legislature for the first time in decades.
Sutton said he was betting on the party's ability to raise enough funds this year to bring its books back to even, but he fell short.
"I said at the time I'd rather be in debt and win elections than have a whole bunch of money in the bank and be in the minority," Sutton said. "I have a clear conscience. I did what I thought the activists wanted."
By the end of 2011, however, party activists were growing disgruntled with Sutton and his management of party finances.
Adding to their complaints was the FEC fine that was disclosed in August. According to commission documents, the party had failed, among other violations, to disclose at least $994,319 that was owed to vendors during 2006. At the time, Sutton was the party's treasurer. In agreeing to pay the fine, the party contended that errors and omissions in reports filed between 2006 and 2008 were unintentional.
Party leaders say they understand the organization's credibility is at stake as they head into 2012, a year in which they had hoped to defend their legislative gains and challenge U.S. Sen Amy Klobuchar's re-election effort. But they are confident the financial problems will be fixed soon enough.
"It's bad, but we can overcome it," said Rick Weible, an executive committee member who was part of a chorus of concerned party members who started pressing for answers over the past several months. "It's time we've lost. It's money we've lost. But we've still got a party to run."
At the Republican State Central Committee Convention this month, party leaders told delegates "2011 was a mixed bag for the State Party. On the smaller dollar side (people who give $100 or less) it has been a challenging year. Prior to the recession ... our average gift from small donors was over $60 per donation, today it is less than $28."
Disgruntled delegates refused to pass a budget until they got more answers. Some distributed fliers declaring that the party was broke and demanded transparency in its financial books.
"The Minnesota GOP is broke,'' the flier contended. "Worse? Nobody knows how broke it is. Ask the leadership for a balance sheet -- nobody can provide one. There is no transparency to this party's budget process. ... You wouldn't run your business this way.''
The budget debate will be revived Saturday, when the central committee convenes in St. Cloud. Also on the agenda is the election of Sutton's successor.
Candidates for the chairman's post say that repairing the damage caused by the financial disputes and the Koch scandal will be among their top priorities.
"Largely what we have is a trust issue," said candidate Terry McCall, a current member of the executive committee. "No one has the one answer of how we're going to turn this around. But together as a group we can do this."
One of his opponents, Todd McIntyre, said he's heard that the party's debt is anywhere between $500,000 and $1.5 million.
The latest accounting before Sutton left put the debt at $775,000.
McIntyre said balancing the books must be accomplished by better organization at the local level.
"It will be through the grass-roots," McIntyre said. "It's not the responsibility of large donors, it's the responsibility of all Republicans." He characterized the debt as "an overspending issue."
"It's surprising,'' he said. "Republicans are supposed to be the party of fiscal management.''
Candidate Pat Shortridge, the other announced candidate, could not be reached for comment.