In the wake of its former chairman Jim Greer’s long-ranging fiscal abuse, culminating in his arrest Wednesday, the Republican Party of Florida cut up all but one of its credit cards. Now it will seek reimbursement for unauthorized expenses on those cards. Meanwhile, a report by an ad hoc Oversight and Governance Committee is expected to be released this month recommending changes to the party’s fiscal controls.
Greer is charged with organized fraud, money laundering and grand theft for allegedly setting up a secret company to which he funneled party money. For roughly two years prior to his arrest, the Democratic Party, the media and even fellow Republicans had been criticizing Greer for his lavish spending on the party’s expense account, as well as creating a system of financial abuse within the party.
The Republican Party of Florida issued 31 American Express credit cards to various elected officials, party officials and staffers to use for business-related purposes. But it’s not clear what controls were used to authorize expenses. Records leaked to The Miami Herald and the St. Petersburg Times revealed hundreds of thousands of dollars were spent on meals, trips and personal expenditures like groceries that could not be confirmed as legitimate expenses.
Due to the pressure, Greer resigned his party post in January. In February the new chairman of the Republican Party, State Sen. John Thrasher, authorized a forensic audit of the party’s books, which helped uncover Greer’s secret control of Victory Strategies, the company Greer used to allegedly take money from donors and enrich himself.
Thrasher then authorized a committee chaired by Ambassador Alfred Hoffman Jr. and comprised of Chris Sullivan (founder of Outback Steakhouse) and Peter Rummell (CEO of the St. Joe Company) to review the party’s internal controls in order to help restore donors’ confidence that their money would be safe. The report is expected to be unveiled at the party’s quarterly meeting in Tampa on June 18.
In the meantime, Republican Party officials have discontinued issuing credit cards to members.
“The RPOF will seek to collect any additional compensation from any credit card holder during the previous administration who incurred personal or otherwise inappropriate expenses that have not been reimbursed to the RPOF, or paid directly to the credit card company,” RPOF Communications Director Katherine Gordon Betta says in an email statement. “Additionally, the Party operates from one American Express card in the name of our Chief Financial Officer, Richard Swarttz.”
State Democrats have been aggressively pursuing issues surrounding Republican spending. In January 2009 Florida Democratic Party Communications Director Eric Jotkoff helped a citizen write a complaint filed against former Republican House Speaker Ray Sansom, who was later indicted on corruption charges. This March Democratic party chair Karen Thurman filed a complaint with the state Elections Commission alleging the Republican Party was skirting financial disclosure laws by not fully reporting the spending on its credit cards.
“This is not a problem we have to deal with,” says Jotkoff. “The Democratic Party does not issue credit cards.” Party-related expenses are paid for by the individuals, he explains, and then invoices are submitted seeking reimbursement. The expenses must be approved by a department head, the comptroller, the executive director and the chair. The party does have two check cards controlled by the comptroller, which are used for electronic purchases (buying a domain name for instance). Wire transfers are used for large expenditures.
Republicans can expect similar procedures. The audit committee must now approve all expenses for the chairman and executive director. Additionally, Gordon Betta adds, a list of checks issued by the party are emailed to the executive director, CFO, and treasurer.
“That being said, travel by the Chairman and staff has been virtually eliminated,” Gordon Betta says. “In fact base operating expenses have been reduced nearly $1 million in the first quarter of 2010 vs. the first quarter of 2009.”
[Pic via flickr.com/photos/48063283@N07]