Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 6, 1990 TAG: 9005060257
SECTION: VIRGINIA PAGE: C1 EDITION: METRO
SOURCE: MARGIE FISHER RICHMOND BUREAU
DATELINE: RICHMOND LENGTH: Medium
The leak to the media of an internal audit committee report that criticized Huffman and Elton's stewardship of the party's financial affairs "can only be described as a dastardly deed done to damage and discredit party leaders in pursuit of personal agendas," said GOP vice chairman Hugh Mulligan of Alexandria.
Mulligan presided at an hour-long news conference at GOP headquarters during which he and other members of the executive committee and central committee denounced whoever had leaked the secret report and tried to explain its allegations of mismanagement.
The report charged that "falsified financial statements were provided to the Executive Committee and State Central Committee on a regular basis. Tax payments were shown as having been distributed when in fact, they had not. Other income was not reported and no accounting was made of disbursement of unreported income."
The report charged that "a general breakdown in stewardship" had led to incomplete and in some cases nonexistent record-keeping at state party headquarters, including more than $1 million in contributions and expenditures in 1989 that went unreported. The party's official budget for the year was just more than $1 million.
The report also said the party's bills were not paid on time, resulting in unnecessary late charges, and it had regularly overdrawn its checking account, piling up more than $4,700 in overdraft charges that were not disclosed to the central committee.
While there is no question that "things were very screwed up" last summer, Fifth District Chairman Don Moseley of Buckingham said, any "real" managerial problems identified by the audit had "been fixed or are being fixed" by Huffman and Elton.
Mike Thompson of Fairfax Station said the eight-member audit committee found "no evidence that anybody purposely did anything wrong" but had put out "a political document" designed "to stir up animosity toward the leadership."
Privately and publicly, several Republicans have blamed the leak on Chesterfield Sen. Robert Russell. Russell has strenuously denied that. On April 31, Russell declined to promise to keep the audit confidential when the central committee reviewed it, and he has been harshly critical of the party leadership in the media.
Those participating in Saturday's news conference said they do not feel the party has lost credibility with donors and the public. "I have talked to major donors who have every confidence" in the GOP, said First District Chairman Sandra Combs.
They also said that President Bush's son, Marvin, had agreed to serve as the state party's financial chairman "during the middle of all this." Bush's involvement "clearly shows this party has weathered the storm," Thompson said.
The audit committee began its inquiry in December after Huffman disclosed that the party owed the Internal Revenue Service $240,000 in unpaid payroll taxes, interest and penalties. A fired bookkeeper was blamed.
Those loyal to Huffman stressed that "he made no effort to interfere" with the committee's work. "He wanted it to be very open and he wanted full disclosure," Mulligan said.
Huffman was repaid, Mulligan said, with a report that contains many "distortions of fact."
Touching on some of the audit report allegations, Mulligan said:
When the IRS problems surfaced, the party took immediate action to secure its financial records and implement procedures to protect its financial integrity. "The suggestion that . . . any party official knew of the problems in March 1989 is incorrect."
He said an IRS agent visited the bookkeeper in March at GOP headquarters. "The agent at no time took it upon herself to discuss the situation with Joe Elton, even though she passed by his office . . . "
Because they did not want information on the GOP's tax troubles to become public during statewide elections last year, Huffman and members of the executive committee decided to keep it a secret until after November. The party also took a loan to pay the IRS bill.
Checks alleged to have been missing were in a file drawer. Many problems cited by the audit committee could have been explained if members had asked the right questions or the right staffers, he said.
As for bounced checks and overdraft charges, Moseley said at one time a bank was charging the party "$17 a pop" when it did not have enough in a checking account to cover a check. But, he said, the party had another account at the same bank that had at least $100,000 in it and the bank made no effort to ask the party if it wanted to transfer funds to cover the overdrafts.
"Yes, it's our fault, but I ain't real happy with the damn bank, either," Moseley said.
by CNB