State of Red

[February 20th, 2008]

For a party that preaches fiscal accountability, the Oregon Republican Party’s latest year-end financial statement sure is ugly.

Documents submitted earlier this month to the Federal Election Commission (see fec.gov) show the party is $264,000 in debt heading into this election year when candidates count on the state GOP for organizational support.

Among the state GOP’s biggest creditors, according to filings, are the phone company AT&T, owed $67,181; the Internal Revenue Service, owed $35,152; and Certified Property, the party’s Salem landlord, owed $25,680.

The Oregon GOP ran into well-publicized financial problems before and during the reign of former gubernatorial candidate Kevin Mannix, who ran the party from 2003 until July 2005. Mannix had finished his unsuccessful 2002 gubernatorial campaign more than $500,000 in debt, and party insiders grumbled that he spent more time chipping away at that figure than in raising money for the party.

But the GOP’s financial situation has deteriorated significantly under current party chairman Vance Day, a Salem lawyer who succeeded Mannix. At the end of 2005, for instance, FEC filings show the party was in the red, but by a more modest $94,464 and, at the end of 2006, by $85,724.

Oregon GOP spokeswoman Brianne Hyder attributes the problems to a tough fundraising climate and a bookkeeper who failed to make proper tax filings.

“We absolutely will be accountable,” Hyder says. “We’re very concerned about the situation, and our chairman has an aggressive plan to get the situation fixed.”

Hyder says the party has fired its bookkeeper, worked out a payment plan with the IRS for unpaid payroll taxes and is working to resolve a dispute with AT&T over a billing that goes back to 2004.

The filings paint a picture of a party grappling to get a grip on its financial situation. Numerous periodic reports have been amended and refilled. For instance, the party has now filed at least four versions of its year-end 2006 forms.

From its filings, it appears the party has ended each year since 2001 in debt, although during that period, the year-end deficit has never topped $100,000 before. (During the same period, the Democratic Party of Oregon finished each year in the black.) Nationally, six state parties have bigger debts, and each of those is from significantly larger states.

The Oregon GOP’s debt is puzzling given the party’s emphasis on accountability and limited spending. In a section on its website titled “About the Republican Party of Oregon,” the first principle is “accountability in spending.”

And the party’s platform highlights the importance of government staying within its means: “Government agencies must work within the parameters of their fiscal authority. Elected officials should ensure that limits of authority are not exceeded.”

The inconsistency between words and actions may point to a certain hypocrisy on the part of GOP leadership. But political observers also say the party’s lousy financial situation can affect the GOP’s election chances.

“The party’s role in Oregon is primarily voter identification and get-out-the-vote work, which is expensive,” says longtime GOP activist Rob Kremer.

The consequences of debt for the party may include a failure to build an infrastructure at the precinct and county level as the state Democratic Party has done, which in turn may be an impediment to attracting competitive statewide candidates. (Democrats currently hold all statewide partisan offices, with the exception of Gordon Smith’s U.S. Senate seat. And no Republican other than Smith has won a statewide partisan race since current University of Oregon president Dave Frohnmayer was elected attorney general in 1988).

Last month, The Oregonian reported that several state Republican heavyweights, led by former gubernatorial candidate Ron Saxton and stock-brokerage owner Tim Phillips, have created a nonprofit called the Oregon Leadership Council in an attempt to buoy the party’s sagging fortunes.

Not surprisingly, the Democratic Party of Oregon says such efforts are too little too late. “The Oregon Republican Party is crumbling and does not represent Oregonians’ values,” says DPO spokesman Marc Siegel. “They are in financial ruin, [and] they can’t recruit candidates.”