WASHINGTON – Federal elections officials have fined the Republican Party of Minnesota $26,000 for failing to disclose nearly $250,000 in receipts, payments and debts from 2009 to 2011.
This is the second large fine levied on the state party in four years. In 2011, the Federal Election Commission (FEC) fined the party $170,000 for misrepresenting its debts during the same period. A second case was opened in 2012 after former party Chairman Tony Sutton resigned and his then-finance chair alerted the party treasurer that there was another $249,000 in invoices in Sutton’s office that had been hidden from the feds during their first investigation.
The combined fines of almost $200,000 are among the biggest penalties ever assessed by the FEC on a state party.
“We are glad the final chapter is now closed on the 2009-2011 problems. We moved forward from these issues two years ago, and we are very pleased the Commission recognized in the agreement the comprehensive set of new internal controls put in place in 2012,” state Republican Chairman Keith Downey said through his spokesman in an e-mailed statement.
At the end of last year, the party was still deeply in the red, reporting nearly $1.5 million in debt.
According to the six-page compliance report completed by the FEC this week, Sutton, who abruptly resigned Dec. 2, 2011, was holding unpaid invoices in his office at the time that he did not include in the party’s accounting system or in official party disclosure reports as debts. The commission periodically requires state parties and campaigns to file full reports outlining debts, disbursements and contributions.
At the end of Sutton’s tenure, the Minnesota GOP had more than $2 million in unpaid bills — a burden that hampered its political efforts in the 2012 election and that sparked a near-eviction from its St. Paul headquarters, because the party had failed to pay more than $110,000 in rent.
According to the FEC report, former state Finance Director Ron Huettl “believed Sutton did not want certain invoices to be provided to [the party’s] compliance company because Sutton was concerned about the amount … of debts.”
It is a criminal violation to intentionally lie to an FEC investigator during a probe, though it is unclear whether the commission or the U.S. Department of Justice have launched further investigations into the party, Sutton or Huettl.
Reached on his cellphone Thursday, Sutton said he had not heard about the most recent fine. Asked whether he intentionally lied to federal investigators about the Republican party’s debts, Sutton said he needed to learn more before commenting.
“I’m not going to comment on anything until I know more about it,” he said.
According to the FEC, “Sutton has denied deliberately concealing [the Republican Party of Minnesota’s] debts.”
Sutton, who at one time demanded that Republican legislators oppose all tax increases and keep state spending strictly in line with revenue, declared personal bankruptcy in September 2013.
The watchdog group Citizens for Responsibility and Ethics in Washington, or CREW, filed both complaints with the FEC against the party. The first was filed in 2007 after the Star Tribune reported on a confidential memo that the party was repeatedly failing to be honest with the FEC about its debt. Federal investigators worked four years to resolve that complaint, and the fault was found with debts and reports spanning the years 2009 to 2011.
Officials there say the party should be open and honest to its donors, candidates and voters about its financial condition.
“It’s taken a while, but by assessing fines of nearly $200,000, the FEC has finally dealt the Minnesota GOP a punishment commensurate with the deliberate deception that the party committed,” Anne Weismann, CREW’s interim executive director, said in a statement.
At the end of 2014, following the midterm elections, the party was on a line of credit at Alliance Bank for a $75,000 loan. The party had $990,000 in debt in its federal account after the election.
In December, Downey told the Star Tribune that “we are on a very manageable path. We got into a position where, financially, we are able to spend money and do everything we possibly could on behalf of our candidates.”