In Part 1 of this continuing Cooked Books series, we looked at how FEC Tony Sutton’s MN GOP couldn’t (wouldn’t?) accurately report to the FEC how much they owed a vendor they hired to ensure accurate FEC reports. In Part 2, we noted there are now 2 citizen watchdog groups looking into the MN GOP’s Cooked Books — Citizens for Responsibility and Ethics in Washington – which nailed ‘em last time (the MN GOP got smacked with a near-record $170,000 fine), and Common Cause MN. In Part 3, we looked at how a payroll deductions “no, NO!” that got the MN GOP in trouble last time seems to be a pattern. In Part 4 we looked at the MN GOP using a strange address for one of it’s fundraisers.
In Part 5 we looked at at the official FEC Complaint – filed 12 Jan 2012 – by Citizens for Responsibility and Ethics in Washington (“CREW”). In Part 6 we looked at the MN GOP misrepresenting their expenses. In Part 7 we looked at how the MN GOP categorized pay for a guy that they very well may have been paying to run for state senate – Lakeville’s Dave Thompson in SD-36. In Part 8 we looked at at a Mn GOP Campaign Finance Report line item that begs the question: did the State GOP pay for a lawyer for a State Representative’s drunk driving case?
In Part 9 of the continuing Cooked Books Series we looked at a Mn GOP Campaign Finance Report line item that looks mighty clear: when it comes to paying rent, these Republicans are deadbeats! In Part 10, we looked at an internal Mn GOP reports (presumably, leaked to Politico) that show just how far behind in rent those Mn GOP deadbeats are. In Part 11 we looked back at the 2008 Mn GOP Convention in Rochester, where then-Chair republiCon Ron (in a must-see YouTube) infamously said:
“At the end of the day, those that are criticizing us are to be shamed – because the truth will get out and the truth shall set us free.” — Ron Carey
In Part 12 we took a quick look (a real quick look!) at the Mn GOP’s Federal Elections Commission Report covering the month of April 2012. What that report showed is the MnGOP still believes it can spend more money in a month than it takes in. Hey, why not? After all, they ARE the “Party Of Fiscal Responsibility”, aren’t they? In Part 13 we looked at how these Financial Geniuses reported to the FEC they were in debt to themselves.
Seriously. Can’t make this stuff up.
Today we’re going to take a look at the Minnesota Campaign Finance Board’s “Findings and Order in the Matter of the Complaint of Common Cause Minnesota regarding the Republican Party of Minnesota and others” dated 13 July 2012.
Long story short? The Keystone Kops would be proud – let’s look!!!
When I saw the tweet (from @TheUptake, and if you’re on Twitter and you’re not following them – you should!) I went to go pop some popcorn; I knew this was gonna be good!
Was NOT disappointed!!!
From page 4:
In his deposition, Mr. Sutton, states that the lawyers knew that they were working for some as yet non-existent entity that would pay them. For example, Mr. Sutton testified that he verbally informed Tony Trimble that his work on the recount was “separate from his party work.” He says: “I remember telling him at the time that this recount was separate from the party stuff, especially once you guys brought out the advisory opinion saying that a recount fund could be set up.”
Mr. Sutton’s recollection and understanding of the events concerning his retention of counsel to assist with the recount was contradicted by each of the attorneys that he hired. All three lawyers testified that they understood they were working for the RPM. Mr. Sutton alone suggests that the lawyers understood that they would be or were working for an independent entity. In fact, after CTAP came was formed, the law firm of Trimble and Associates had Mr. Sutton sign a guaranty agreement confirming that the RPM was responsible for its fees. (emphasis added)
Too funny! I can almost imagine Tony “The Check’s In The Mail” Sutton tellin’ the Campaign FInance Board: ”Who ya gonna believe – me, or yer lyin’ eyes?”
From page 6:
During the course of this investigation, the Board requested and received various records from the RPM, including accounts payable aging reports and invoices. However, the RPM is not able to produce records or worksheets that would allow the Board to reconcile amounts from the payables aging reports to the federal and state reports of unpaid obligations. As a result, the Board is not confident that even the RPM’s amended reports are accurate.
“…the Board is not confident that even the RPM’s amended reports are accurate.”
Well, that’s why we call ‘em “Cooked Books”!
From page 9:
David Sturrock testified that he became RPM treasurer on June 29, 2009, and served through January 19, 2012. During 2009 and 2010, the RPM had in place a minimal set of budgets, reports, policies, and procedures to ensure treasurer authorization of expenditures. Mr. Sturrock testified that he received and reviewed reports on a weekly basis. In 2009, the RPM processes for spending money were not as formal as the Board would recommend for an association of the RPM’s size. However, they were minimally sufficient to support a conclusion that the requirement for treasurer authorization of expenditures was met.
However by the end of 2010, whatever financial controls had been in place had deteriorated.
Additionally, if there had previously been treasurer control of regular spending, it was gone. Mr. Sutton personally took over control of spending late in 2010.
“Minimally sufficient” – “deteriorated” ”…it was gone.”
That’s the Party of Fiscal Responsibility, in action!!!
While regular spending appeared to be out of control, not even the most rudimentary budgets, approvals, or controls were in place for the costs undertaken by the RPM for the 2010 recount.
Can’t make this stuff up!!!
Nor this, from page 11:
Mr. Sturrock testified that during 2010 he did not know that the party unit had obligations that he was unaware of. He testified about what he learned late in 2011:
A. Mr. Huettl advised me very shortly after Mr. Sutton’s resignation that there were bills, invoices, not entered into the system which were not known to me. He described them in general terms. And that, then, directly led to the process of bringing in Mr. Veckich and undertaking the internal review.
Q. Okay. What was your reaction to finding out from your – from Mr. Huettl informing you of that?
A. Surprise, disappointment, concern for the party.
Q. When Mr. Huettl provided you with that explanation or that information, I should say, did he provide any explanation as to why that information was not provided on the report?
A. He made one reference, that he was under direction not to share that information with me.
Q. Did he indicate who gave him that direction?
A. Mr. Sutton.
Ruh – ROH! Let the blame game begin!!!
A significant problem with the RPM’s approach to reporting is disclosed by the following exchange during Mr. Huettl’s deposition:
Q. In 2010 when an invoice was given to the compliance company, was it at that point always approved for payment or were invoices given to them that were not approved for payment?
A. No, they were all approved. Whether they were — But we didn’t know — There wasn’t an order of when to pay them yet, but they were all approved to be eventually paid, yes.
In other words, if the RPM had received an invoice but it was not yet approved to be paid, it never went into the accounting system and, thus, was never shown on a report. This practice would result in a violation of the requirement that all unpaid obligations be included on periodic reports.
This little exchange is telling; it’s Huettl talking about Sturrock:
Q. Did you make anyone aware of your knowledge of these unpaid invoices other than Mr. Sutton, who already was aware?
A. I did not.
Q. So when you prepared Mr. Sturrock for his periodic presentations to the executive committee, you did not inform him that there were unpaid bills?
A. I did not inform him that there were unpaid bills, not at that time.
Q. So you were aware that he was presenting as accurate an inaccurate report?
A. I was aware of that, yes.
Q. Now, you said you didn’t inform him at that time. I presume that means you meant — means that you informed him at some later time?
A. After Chairman Sutton had resigned.
So Ron Huettl, the Mn GOP’s Finance Director, knew KNEW – that he was withholding information that caused David Sturrock, the Mn GOP’s Treasurer to give inaccurate reports – because Tony Sutton, the Mn GOP’s Chair, told him to.
Q. Did you have any responsibility for the Campaign Finance reports that were filed with the FEC?
A. No. As finance director they were presented to me for my review, but I did not approve them. In 2010 I was learning, you know, the ropes of the job, basically, so I wasn’t qualified enough to know what the reports should look like. That’s why we have a compliance company. But it’s not my responsibility, though, to approve the reports. (emphasis added)
But, what’s the “compliance company” say ’bout that?
Q. Does your company work with the Republican Party of Minnesota on preparing its reports that are filed with the Campaign Finance and Public Disclosure Board?
A. We’re a federal reporting company. When we have state parties as clients, as a courtesy we will, you know, in the case of Minnesota we’ll load up the information into the database, but we don’t provide any assurance. We don’t provide any assurance on our federal reports either. We put these reports together.
As for the Minnesota one, basically we did that. We did data input into the database, with the information they provided us, and then provided it to their decision-makers for approval and filing, things of that nature.
In further testimony:
A. We don’t go back and say, gee, is this everything, it’s not an accounting firm that we have.
A. We just – We do recordkeeping and reporting for these organizations. If we get the records, if we have the documents, then, you know, we will put those into the system. In the case of the Republican Party of Minnesota, we didn’t get the mail. (emphasis added)
Hmmm… “Thats why we have a compliance company” versus “…but we don’t provide any assurance.”
Can’t make this stuff up!!!
Oh, and about THIS one?
“as a courtesy“
Well, as much as the “compliance company” was charging, that “courtesy” was the least they could do!!!
From page 16:
To summarize, in 2010 the RPM had a finance director, who was recently promoted from telemarketing and who testified that he knew next to nothing about Campaign Finance Board reports and professed that it was not his job to review the reports in preparation for the treasurer’s signing them. The RPM had a chair who was busy with fundraising and his own business and believed that the finance director and the party unit’s compliance company were responsible for preparation of the reports. The RPM had a compliance company that disavows any responsibility for campaign finance reports other than to put data into a system and print out the reports. And finally, the RPM had a treasurer who placed all of his reliance on these three individuals. Given that situation, it is no surprise that the RPM reports were inaccurate.
“…it is no surprise…”
We’ll take a look at the rest of this 27 page document in our next installment of this continuing Cooked Books series — stay tuned!