The money trouble that threatened the future of St. Paul’s Grand Old Day this spring has prompted a criminal investigation into its organization’s finances, festival and police officials said Monday.
St. Paul police began an audit shortly after Grand Old Day officials announced plans to put the event on hold. The probe has grown to include federal investigators poring over several years of finances for the Grand Avenue Business Association, said Bob Lawrence, association president who joined the board in January. Lawrence said no current GABA board members are under investigation.
Festival financial woes threatened St. Paul’s unofficial start to summer last April, when organizers abruptly announced a one-year hiatus after it appeared they wouldn’t have enough money to cover the cost of the event.
KSTP Eyewitness News first reported the story of a federal investigation into GABA finances Sunday night.
Grand Old Day, which attracts an estimated 200,000 people to the avenue on the first Sunday of June, is a major fundraiser for the business association. But the festival’s bank account, which usually has about $100,000 by April each year, had only $30,000 this past spring, Lawrence said. The festival costs about $190,000 a year, with vendors and sponsors covering about half the cost.
A week later, after a handful of business owners and sponsors scrambled to fill the void and raised more than $100,000, organizers announced that Grand Old Day was saved.
St. Paul police soon after volunteered to audit GABA financial records to find the cause of the shortfall, Lawrence said. They found “irregularities” in the books, he said, and the U.S. Attorney’s Office also became involved. Investigators have been going over the association’s finances from about 2011 through 2018, he said.
Police spokesman Steve Linders on Monday confirmed that the investigation that began in May “is ongoing.”
In an Aug. 19 letter to GABA members that laid out a brief chronology of events over the past year, Lawrence wrote that the U.S. Attorney’s Office has “taken over” the investigation. A spokeswoman for the U.S. Attorney’s Office did not immediately return a call seeking comment Monday.
Former GABA president Jason Koenig and former treasurer Andy Gesell, who resigned from the GABA board in April just before the decision was made to cancel the event, did not immediately return calls seeking comment.
James Farnsworth, a former GABA employee, said new board members in January peppered board leadership with questions about the organization’s financial health that went largely unanswered.
Farnsworth, who worked at the association from September 2018 to mid-March 2019, said he also saw a handful of e-mails “that were eyebrow-raising,” including from a former executive director to someone in marketing and membership asking for a wire transfer of funds in Oklahoma.
“It was clear that something was going on,” said Farnsworth, now interim executive director of the Highland Business Association. “When something looks funny, it usually is.”