State GOP has its own bookkeeping woes

The Minnesota Republican Party has scored a series of body blows against DFL U.S. Senate candidate Al Franken over business irregularities that Franken attributes to his accountant's mistakes.

But the state GOP has some bookkeeping issues of its own, problems that persist despite a yearlong, self-initiated audit. The party has spent some $78,475 on accounting services since early 2007, according to its reports to the Federal Election Commission (FEC).

Failure to fully disclose expenses, questionable transfers of funds, math errors and other reporting problems have been flagged by the FEC in 28 letters to the state GOP since mid-December 2006.

The party has repeatedly missed deadlines to fully correct its reports and has told the agency it is working on solving the problems.
The irregularities are not unusual, said University of Minnesota law Prof. Guy-Uriel Charles, an expert on election law, after reviewing some of the correspondence. He said the problems are related to complex campaign finance laws.

The DFL Party has been questioned 19 times by the FEC over reporting problems during the same period. The DFL, however, has been able to address the issues raised, with the exception of what it calls a persistent software glitch.

The problems with the GOP bookkeeping take on added weight given the party's attacks on Franken for irregularities with workers' compensation and disability insurance premiums and the filing of taxes.

Last month, GOP party chairman Ron Carey said, "Why do Hollywood celebrities think there is one set of rules for them and one set of rules for everyone else when it comes to paying taxes?"

Carey did not respond this week to Star Tribune requests for an interview about the FEC filings.

"Just like any political entity, the Republican Party of Minnesota continues to work with the FEC to make certain our filings are in compliance," party spokesman Mark Drake said in an e-mail Tuesday.

Sorting things out

Minnesota GOP financial disclosures to the FEC itemize $78,474.82 paid to several firms for accounting services since early 2007.

t's unclear how much the party spent on its special audit, or who was doing it. Campaign Financial Services of Bethesda, Md., collected most of the money — $43,694 — in four payments this year.

The difficulties became apparent early last year when the party amended 52 disclosures to the FEC. The revisions took place in the wake of staff resignations and complaints that the party misused employee retirement money, improperly reported its finances, and retaliated against staff who reported the problems.

Since then, the FEC has repeatedly demanded that the party reconcile conflicting financial reports.

The FEC hasn't explained the significance of its letters. But it did repeatedly threaten an agency audit of the party finances and warn that "failure to comply … may also result in an enforcement action against the committee."

"It's pretty clear there isn't a process in place that enables them to respond to correct the errors in a timely fashion," said law professor Charles. "There are repeated requests from the FEC. To some extent, that is troubling."

In May 2007, the FEC sent the state GOP letters taking issue with a series of revisions to finance reports in 2005 and 2006. The amended reports failed to include previously itemized disbursements, the agency wrote, demanding an explanation by June 4, 2007.

In the note , the Minnesota GOP said it had spoken with an FEC official in May and believed no further response was required.
The next day, the FEC took issue with a GOP amended report dealing with spending shortly before and after the 2006 election.

'Candy for employees'

Totals on a report summary page "appear to be incorrect," the agency wrote. Reimbursements for pizza at a GOP phone bank, "candy for employees" and other expenses lacked details on the vendors. A payment entry labeled "sound for video" lacked proper disclosure.

The party responded on the last day of an FEC deadline with this statement: "We are engaged in a thorough review of our financial activities during the time frame for these reports and anticipate filing amendments that will correct the issues raised."

Here are other steps taken by the FEC, and the state GOP's response:

• The GOP responded: It said it was involved in a "thorough review" of its finances and expected to file corrections. It also said it corrected the loan problem.

• The FEC last September questioned: The party's fundraising expenses "which do not equal 100 percent when added together," and $24,619 in spending that wasn't explained.

• The GOP responded: The expenses will be explained on amended returns.

• The FEC in March questioned: A reported loan balance was $2,349 more than its own calculation of the balance.

• The GOP responded: The loan discrepancy resulted from a clerical error. But it didn't fix it. "This will be amended in the near future," the party wrote.

• The FEC last month questioned: One or more contributions totaling $3,821 from "Innovative Web Strategies," which appears to be a corporation." Federal law "prohibits the receipt of contributions from corporations" unless made from a separate, segregated fund, such as a Political Action Committee, the FEC said.

The party's response is due by May 23.

pdoyle@startribune.com • 651-222-1210