CHEYENNE, Wyo. – Wyoming Republican Party officials say they’re investigating years of unfiled Internal Revenue Service paperwork and sloppy bookkeeping by party employees, as well as possible misconduct by a former executive director.
The investigation started in September, after top party leaders said they were blindsided by a penalty of more than $10,000 from the IRS that was imposed after previous party workers didn’t file required tax paperwork dating back to 2008.
About the same time, party officials also discovered documents on a party office computer, raising questions about whether former Executive Director Evan Ridley sold party donors’ financial information and public voter registration lists to a Washington, D.C., political consulting firm he was moonlighting for, according to party Treasurer Doug Chamberlain.
Wyoming Republican Party Chairwoman Tammy Hooper, along with Chamberlain and other top party leaders, said they’re appealing the IRS penalty and are now working to discover any other party miscues.
They also said they’re working to create new financial and employment rules to make sure the problems don’t happen again.
Ridley didn’t return multiple phone calls seeking comment.
The IRS penalty, which with interest totaled $10,365 as of Nov. 30, came after the party failed to file W-2s in 2008, didn’t submit income tax returns in 2008 and 2010, and didn’t file payroll tax forms in 2009, party leaders said.
During that time, the party paid all of its federal taxes, leaders said.
Hooper and Chamberlain, both of whom took office after the missing paperwork was due, said they were surprised by the penalties and had no idea anything was wrong.
Both said they’re still unsure why party employees failed to file the paperwork, even after the IRS repeatedly mailed letters of warning to the state Republican Party office.
An added twist, Chamberlain said, was their discovery in recent days that the party already paid the IRS more than $2,500 in penalties and fees for the missing paperwork: $938.59 in 2010 via a check signed by then-Treasurer Donna Robitaille, and $1,572.08 paid electronically by Ridley during his last day as executive director in late August.
Robitaille didn’t return a phone call seeking comment.
None of the state party’s past or present leadership could explain why the paperwork lapse occurred, nor why it wasn’t noticed and fixed earlier.
Amy Larimer and Bruce Brown, who served as the party’s executive director and treasurer, respectively, in 2008 and 2009, both said last month that they weren’t responsible for sending the forms in and didn’t know why it took so long to discover they hadn’t been sent in.
Hooper suspected the errors may have taken place and weren’t corrected for so long because party workers were either volunteers or staffers who had no accounting backgrounds.
“I don’t think they realized the severity of an IRS penalty,” Chamberlain said.
Hooper said the party is appealing the $10,000-plus IRS penalty. That amount, equal to 10 percent of party employees’ combined salaries during 2008 and 2009, was the maximum penalty the IRS could have imposed, Chamberlain said.
Since the party has paid all of its taxes, hasn’t tried to defraud the government and is working in good faith to fix the problems, the party shouldn’t have to face the maximum penalty, Hooper said.
Top party leaders are also looking into possible misconduct by Ridley, who now works in the Washington, D.C., press office of U.S. Sen. Mike Enzi, R-Wyo.
After Ridley left as executive director, Chamberlain and other state GOP sources said party officials were surprised to discover work invoices on his party office computer from the Washington, D.C., consulting firm of Weber Merritt. They also found an invoice from a tech company Ridley hired to copy the entire hard drive of the computer, Chamberlain said.
A state Republican Party source said Ridley’s office computer contained detailed lists of party donor information, including their donation history, addresses, phone numbers and credit card numbers.
In addition, a party source said Ridley’s computer contained voter registration lists from the Wyoming secretary of state’s office that, under state law, can’t be used for commercial purposes.
Such information about voters and donors could be sold to political consulting firms for thousands of dollars, according to political fundraisers and consultants, though Chamberlain said to date no evidence has been found indicating Ridley took any such action.
When party legal staffers asked Ridley to explain the invoices, Ridley refused to answer, Chamberlain said.
Phone calls to Weber Merritt weren’t returned.
Chamberlain emphasized that, to date, the party has found no direct evidence that Ridley did anything illegal.
Chamberlain said that in early November, he called the U.S. attorney’s office and the FBI, laying out the facts about the tax miscues and Ridley and asking if any aspect of his story warranted a criminal investigation. Both agencies replied that they saw nothing that appeared to be criminal or worthy of an investigation, Chamberlain said.
U.S. Attorney’s Office spokesman John Powell confirmed that an assistant U.S. attorney told Chamberlain that, based on the information Chamberlain presented, no federal laws were broken.
An FBI spokesman said that under standard bureau policy, he couldn’t comment on the phone call and could neither confirm nor deny whether an investigation was taking place.
Fixing the problems
Hooper and Chamberlain said they and other top party officials are continuing to search party records to see if there are any other errors that need to be rectified.
They said they’re also working on reforms to ensure the problems they’ve already uncovered don’t happen in the future.
Hooper said she’s formed a three-member committee composed of Chamberlain, prominent GOP donor Bill Scarlett and former Wyoming House Speaker Roy Cohee to find ways to streamline and improve the party’s financial system.
“We’re going to leave no stone unturned,” Chamberlain said.
Some changes are already in place. From now on, Chamberlain said, all of the party’s accounting duties will be handled by the party’s Utah-based accountant, Mike McCauley, instead of volunteer officials or party staffers untrained in tax law. In addition, all party checks now have to be countersigned by a second official, he said, and future executive directors, as a condition of their job, will be banned from moonlighting.
McCauley said he looked over the party’s books in recent weeks after the IRS penalties were discovered. He said he found that the party’s bank accounts hadn’t been reconciled, though when he brought the records up to date he was able to account for all the money and didn’t find anything else that would violate the law or IRS rules.
“There was nothing there that would cause me concern,” McCauley said.