The long-awaited financial audit of the Republican Party of Florida, released by the party this morning, makes for fascinating reading, and we highly suggest you download and look through the entire thing on your own. But a few anecdotes uncovered by Alston & Bird — the law firm hired to audit the party — stand out, and we’ve compiled a few of those after the jump.
They depict a party leadership with little compunction about spending donors’ money on personal items and trips, and a near-total lack of oversight.
Included in the section detailing expenses paid for by the party that Alston & Bird determined were “probably not related to RPOF Business,” there is a compelling section about a former Crist aide who may have been paid a bonus through a fictitious consulting company for going to work for the Crist Senate campaign:
Groundgame Consulting LLC (“Groundgame”) is a company formed by Erik Eikenberg (“Eikenberg”) on November 3, 2009, and to which the RPOF paid a total of $10,000 in November and December 2009. According to Florida state public records, Groundgame consists solely of Eikenberg and his wife as the Registered Agent. Groundgame did not have any other clients at the time, nor has it had any other clients since. Groundgame’s principal address is Eikenberg’s home address.
Eikenberg had worked in Governor Crist’s office. He left the Governor’s Office in late 2009, and was exploring employment opportunities when he formed Groundgame. According to Eikenberg, he formed Groundgame with the sole purpose of providing political consulting to the RPOF during the time he was looking for another full time job. He said that he provided consulting regarding (i) Greer’s attempt to invoke Republican National Committee Rule 11, which if passed, would have resulted in the RPOF officially supporting Crist for U.S. Senate; (ii) two polls conducted by third-party polling groups the previous Summer or Fall; and (iii) the upcoming quarterly RPOF Executive Board meeting. Eikenberg said that he consulted with Greer in his capacity as RPOF Chairman and not in Greer’s individual capacity, for instance to help Greer personally navigate questions about his performance. Eikenberg told us that he participated in many meetings (mostly after business hours) and phone calls only with Greer. He said that all of his consulting was delivered verbally and that there is no tangible evidence of his work product. Notably, there was no contract or other agreement between the RPOF and Groundgame.
Eikenberg said that Greer suggested that Groundgame be paid a flat fee of $10,000 for Eikenberg’s services, and they agreed to split it into two payments. On November 18, 2009, Greer asked Swarttz to issue a check to Groundgame for $5,000 for polling. Greer did not tell Swarttz that Groundgame was Eikenberg’s company (Swarttz knew who Eikenberg was), or about any payment agreement with Eikenberg. Swarttz told Greer that he needed an invoice from Groundgame before he could issue a check, and Greer said that he would provide one. Greer did not, however. Nevertheless, Greer instructed Swarttz to issue the check, and Swarttz did as instructed. The RPOF issued a check to Groundgame on November 18th for $5,000.
The next month, on December 17, 2009, Greer again told Swarttz to issue a check to Groundgame for $5,000, and again Swarttz asked for an invoice. Greer subsequently provided him with two invoices at or about the same time, one dated November 16, 2009, and one dated December 2, 2009. Both invoices describe the services rendered as “Survey/polling/analysis.” Swarttz had a check issued to Groundgame on December 17th for $5,000. In the process, an RPOF employee recognized Groundgame’s mailing address on the invoices as being the same as Eikenberg’s home address, which was confirmed by the information about Groundgame on Florida state records.
Jason Gonzalez, outside counsel to the RPOF, stated that he spoke to Eikenberg in late 2009 about the consulting that he was planning on doing for the RPOF and about whether any campaign or election laws would prevent him from doing so. Eikenberg did not describe what consulting services he was going to provide other than to say that Greer had asked to consult about several issues facing the RPOF. Eikenberg also told Gonzalez that he would be joining the Crist for U.S. Senate campaign soon. Gonzalez said that he told Eikenberg that consulting for the RPOF would be okay as long as it was not related to any work that he would be doing for the Crist for U.S. Senate campaign.
[Former Party Executive Director Delmar] Johnson told us a different story about Groundgame. He said that Greer told him that Eikenberg was going to be hired by the Crist for U.S. Senate Campaign and that Eikenberg wanted a sign-on bonus from the Campaign. The Campaign, however, could not or would not pay him the bonus, so – according to Johnson – Greer told Eikenberg that if he set up a company the RPOF would pay the sign-on bonus for the Campaign. Johnson was not a participant in any meetings or calls with Eikenberg, nor was he aware of any political consulting that Eikenberg provided to the RPOF. We were not able to discuss this version with Greer, but Eikenberg denied Johnson’s account.
From that same section comes a report on bonuses paid out to Delmar Johnson, who allegedly collaborated with now-indicted former party chairman Jim Greer in creating Victory Strategies, LLC, a front company set up to transfer Republican donor money to Greer and Johnson:
At the beginning of 2009, Delmar Johnson’s gross salary was $100,000. Johnson said that at some point during 2009 there was an agreement between him and Greer that Johnson’s salary would be increased and/or bonuses provided so that Johnson’s net salary would be $100,000. In August 2009, Johnson’s gross salary was increased to $126,000, which depending upon his effective tax rate, could approximate a net salary of $100,000. Johnson, however, also received a total of $45,000 in three additional bonuses in late 2009.
On September 29, 2009, Johnson received a bonus of $10,000; on October 29, 2009, Johnson received a bonus of $10,000; and on November 27, 2009, Johnson received a bonus of $25,000. These bonuses were described by Greer to Swarttz as being performance bonuses, but Greer did not identify anything specific about Johnson’s performance that justified the bonuses. Johnson told us, however, that these bonuses were provided so that he would reach a net salary of $100,000, not that he was being compensated for his performance. Johnson’s gross salary by the end of 2009 including the bonuses was $171,000, which would have materially exceeded a net salary of $100,000.
When we raised this inconsistency, Johnson through his counsel changed the purported reason for the bonuses and told us instead that the bonuses were performance based. He indicated that the bonuses were proposed by Swarttz and that Johnson, himself, had approved them. Swarttz denied proposing any bonuses for Johnson, although we note that others at the RPOF also received bonuses in 2009.
One curious piece of missing information in the audit is details about the party’s agreements with political consultants, aside from the Groundgame Consulting allegations addressed above. In a short paragraph at the end of the audit, Alston & Bird explains its process when examining consultant relationships, and its decision to only include Groundgame:
The RPOF, as with any political party, retains the services of various political and strategic consultants. We understand that it is not uncommon to have agreements with consultants in which they receive a certain amount of money every month even though they do not provide their services on a consistent basis. In many instances, they provide only verbal advice or recommendations, and there is no written work product to substantiate their services. Moreover, as may be expected, many of these consultants also are personal friends and confidants of Republican leaders or officials. As a result, we were not able to reach definitive conclusions with regard to some consultants. Nevertheless, for those consultants about which the RPOF raised questions, we reviewed agreements and invoices, reviewed available emails, and conducted interviews. For the purposes of this investigation, Groundgame Consulting, LLC was the only such consultant about which we reached a conclusion.
Will that answer satisfy rank-and-file GOP members who have donated to the party?