Jeff Larson used RNC piggy bank to pay friends

Did use of charitable donations violate federal election law?

In early 2009, Dino continued to perform about 10 hours of work a week related to the committee, he says, though he was no longer being paid a salary. Most of the work at this point was done by the committee's accountant, who prepared for the FEC audit.

The committee's plan was to settle all debts and close out as soon as possible, says Dino. "We wanted to have everything pretty much closed out in 2009."

But Larson and his committee would take a different path.

As the CEO and treasurer of the committee, Jeff Larson was paid $400,000 after the convention
AP Images/Jim Mone
As the CEO and treasurer of the committee, Jeff Larson was paid $400,000 after the convention

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ON July 21, 2009, the RNC committee held a private meeting. Over coffee, they discussed which charities to support with its surplus.

"We ended up with money left over at the end," says committee chairman Douglas Leatherdale. "And that had to go to another charitable organization, not to the political party or any individuals."

It was agreed that the money would be donated to the Minneapolis Foundation, the St. Paul Foundation, and the Minnesota Foundation.

The other item on the day's agenda was Jeff Larson's compensation. Larson briefly stepped out of the room while the board discussed how much he would be paid. By the time he came back in, the board had voted unanimously to award him $400,000.

This would be the last time the committee would meet in person. From here on, complete control of the finances would be handed to Larson.

A couple of other obstacles prevented a speedy termination for the committee. For one, it was being sued by 3 Dog Consulting, which claimed it was still owed money for convention fundraising work.

The committee was also still preparing for the FEC audit, a thorough review of fundraising and spending. But the audit only looked at spending through December 31, 2008. Beyond that date, Larson's committee racked up large expenses that benefitted companies and individuals close to Larson, according to FEC records.

No one did better than Mike Vallante. Larson's chief of staff on the committee, Vallante received regular salary disbursements of $10,000 from the committee throughout 2009. He also expensed car rental, gas, meals, flights, and other unexplained reimbursements. Combined, Vallante's salary and benefits for that year totaled more than $130,000.

While Vallante pocketed the most money, he was not alone in receiving pay long after the convention, according to FEC records. Joining him was Matt Burns, another staff member of the committee. Burns received $7,500 in June 2009 for consulting. Compelem Strategies, a communications firm he started that month, received another $6,500.

Burns initially declined to comment, but later sent an emailed response.

"My work involved helping the host committee with post-convention survey activities (measuring economic impact of hosting the convention, etc.)," wrote Burns. "My fee for this work was entirely consistent with industry standards and what other clients were charged for similar projects."

Kiersten Schroeder, a committee staff member, was also paid for organizing a thank-you event on the one-year anniversary of the convention at the Radisson. She personally received a $7,500 consulting fee for planning the party. Out of the committee's bank account, the party ran up $25,000 on food and drinks. Another $11,000 went to an ad agency for costs related to the party. (Schroeder did not respond to requests for an interview.)

Another beneficiary is Dan Puhl, founder of Cardinals FEC Compliance, a local accounting firm that specializes in campaign accounting. According to IRS documents, Puhl did the committee's 2009 taxes for free, which the committee listed as an $79,865 in-kind donation. But Puhl has since received more than $13,000 for accounting and tax consulting.

Puhl's firm has also enjoyed the rewards: Cardinals has been paid more than $116,000 since the beginning of 2009 to compile the committee's quarterly reports.

Puhl says he does his business in private, and would offer neither comment nor explanation for how he made so much money long after the RNC left town.

Another series of expenditures went to political operatives, including a couple of Larson's old friends. Thomas McGill and Richard Nelson, who have worked as fundraisers for Norm Coleman's Northstar Leadership PAC—which Larson founded, and has managed since 2003—were paid a combined $40,500 for "donor relations."

In March 2010, the committee paid another $25,000 to Laura Van Hove, founder of LVH Consulting, also for donor analysis. According to LVH's website, its mission is "to aid principled Republican candidates in their campaigns by helping them reach their full national fundraising potential."

Both McGill and Van Hove declined to comment on the record about their work for the committee.

Nearly $40,000 of the committee's money also found its way back to Larson's firm, FLS. Throughout 2009 and 2010, FLS charged the committee for administrative fees, telephone and IT service, and rent. The last payment of $1,800, filed September 29, 2010, was described as "IT and Rent for June."

John Knapp, an attorney with local firm Winthrop and Weinstine, represented the committee in its lawsuit and dealings with the FEC. He says the first half of 2010 was spent waiting for the FEC's audit, which was finished and published in the third week in June.

"You look back in the past year, and we really haven't done much of anything except for wait for the FEC," Knapp says.

During the wait, Vallante continued to cash checks. Though his reimbursements dropped off, Vallante continued collecting a salary during 2010. He pocketed a combined $106,000—of which $32,000 came in payments on June 22, 29, and 30, in the days immediately before and after the FEC audit was finalized.

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