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Sunday, June 03, 2007

More from the Strib Story on Financial Management Problems in the Minnesota GOP

Dwight Tostenson's memo covers the period during which he worked for the party. He worked for the party during Ron Carey's term. From the Strib:

A key element of Tostenson's memo deals with his accusation that the party appears to have violated federal law by repeatedly delaying the deposit of employee payroll contributions into their retirement accounts. He said the "misappropriation" helped cover party expenses before the money was deposited.

"As reported on our payables at the state executive meetings last summer there was as much as $12,000 not deposited at any one time," he wrote. "This represented months of paycheck withholdings by the Party which had not been deposited within the 30-day legally required time limit."

The party offers Simple Individual Retirement Accounts for some employees. Federal law requires that money deducted from employees' checks for those accounts be deposited as soon as possible, and in no case later than 30 days after the month when it was withheld.

In cases of tardy deposits, employers may be required to make the plan whole by paying back any lost investment earnings. If they had mixed the employees' retirement money with general operating funds they could be required to pay an excise tax.

Party records show that money was withheld for employee retirement plans from September 2005 through May 2006, but Federal Election Commission (FEC) records reflect no deposits into the accounts during that period. In June 2006, the party made two makeup payments totaling $12,243 into the accounts.

The delay in depositing the money could have benefitted the party by giving it temporary access to the employees' funds.

Carey didn't explain why the retirement money wasn't deposited promptly.

"There seemed to be some gray areas as to what was the requirement," Carey said. Asked to explain the gray areas, he said, "I really would prefer not to get into the weeds on something like that.

"We investigated what the requirements were and made sure we were immediately in full compliance with that," he said.


Carey did not directly respond to Tostenson's claim that the employees' money was used temporarily to cover party expenses.

Did Ron Carey inherit a party run in this manner, or did he start running things this way?