Yesterday, California Republican Party Chairman Duf Sundheim sent out an e-mail , presumably to CRP Members, where he addressed the issue of the CRP’s debt, and specifically assured Party Members that there was a plan in place to retire this debt in the next few months.
Based on what I have heard, the CRP ended the election with somewhere between $4.5 and $5 million in debt — $3 million being a loan taken out and the rest being various expenditures in the final weeks of the campaign that, when the dust cleared, exceeded what was in the bank.
To be honest, my primary concern here is not the debt itself. It is actually fairly common for political parties and campaign committees to incur debt — albeit this is a very large one. I am more concerned about the process. Specifically, how we got into debt. Questions in my mind include who authorized the debt, and who knew we were spending funds beyond what was readily available to pay the bills.
For example, a big piece of this debt is what I have heard is a $3 million dollar loan that was taken out by the CRP, that will not be paid back before the term of Chairman Sundheim is over. The Bylaws of the Party are quite specific that this level of indebtedness may not be authorized by the Chairman, or even the Board of Directors. Because of past experiences where the Party has been left with debt, specific provisions were placed in the Bylaws that would prohibit massive debt without authorization of at least the Party’s 100 member Executive Committee, or a vote of the fuller 1600 member full Central Committee. This provision was seemingly ignored, despite strong provisions (which I helped author over a decade ago) that makes CRP Board Members personally liable for unauthorized debt of this magnitude. Apparently that did not serve as enough deterrence.
That said, at least this $3 million note was actually planned for by elected CRP leaders — the Chairman supported it, and it was part of a plan with ‘buy in’ from the Governor, legislative leaders, and it is my understanding that the Board of Directors voted to approve it (which they could do for a short-term loan under the bylaws, but as I said, they could not authorize beyond the end of the Chairman’s term, which ends one week from tomorrow).
There are safeguards in the bylaws, specifically designed to make sure that our elected officers are making key decisions, such as the Board of Directors deciding whether to authorize $1.5 to $2 million in expenditures knowing that there were not funds available to pay them right away (which, to my knowledge, did not occur) or the Executive Committee authorizing a $3 million loan, in advance as is required under the bylaws (which I know did not take place).
Concerning the $1.5 – $2 million of debt that is not in the loan, I do not know how approval of these expenditures occurred. Maybe the Chairman and or the Chief Operating Officer knew about them, and approved them. But I am fairly certain that the Party’s Board of Directors was not consulted about going into debt (beyond the loan).
Again, I am not saying that taking on the debt, or spending more money in the final weeks of the campaign than we actually had in the bank, were necessarily poor decisions. But what I am saying is that the decisions were not made by the people who have the responsibility, under the Bylaws, to make them. And that is very disturbing.
[I extend an invitation to any member of the CRP Board of Directors or Staff to either comment below, or send me their thoughts on this matter which I will post to this blog.]
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