Is Ohio GOP’S financial house in ‘total disorder’?
The Ohio Republican Party is beating back allegations of financial impropriety within its ranks, the latest fault line between GOP leaders and a faction of conservatives who want to shake up the organization.
The conflict centers around behindthe-scenes accounting practices critical to an operation that funnels hundreds of thousands of dollars to Republican candidates across Ohio.
On one side, critics within the state central committee say the party’s finances are in “total disorder” because of missing funds and a failure to adequately audit the books. Mark Bainbridge, a certified public accountant elected to the committee in 2020, has led the charge against chairman Bob Paduchik that culminated in a lawsuit filed earlier this week.
“He needs to be fired,” Bainbridge said. “He broke his trust with the committee and the Republican Party. He’s basically another Matt Borges in there with no moral compass.”
However, party leaders contend Bainbridge and his allies have misrepresented the state of ORP’S finances for their own gain.
“It’s clear they are a fifth column element determined to destroy the Ohio Republican Party,” Paduchik said in a letter this week to GOP insiders.
2017 report reveals accounting gaps
When Jane Timken ousted Matt Borges for the position of chair in 2017, officials admit the GOP’S financial house was in disarray.
An audit of the party’s accounting practices in 2016 found leaders failed to maintain records and implement policies to ensure its finances stayed in order, according to a copy of the 2017 report obtained by USA TODAY Network Ohio Bureau. For example, one employee unilaterally handled banking, reporting and accounting duties without oversight, and some employees signed their own paychecks.
Auditors found no evidence of “misappropriation or intentional misreporting” but argued the party could have been fined by regulators based on the problems they discovered. The report outlined several recommendations to improve processes, such as limiting transfers between accounts and maintaining updated records for joint fundraising committees.
ORP hired an outside firm and inhouse staffer to handle compliance issues months before auditors recommended that change. The party also created a written set of policies and began requiring staff to take Federal Election Commission training once a year, according to documents reviewed by USA TODAY Network Ohio Bureau.
But months after joining the central committee, Bainbridge told Timken and then-executive director Rob Secaur that he feared some problems hadn’t been corrected. He recommended additional changes and later offered to run for assistant
treasurer.
“While it is easy to blame it on (Borges), the truth is that the Republican SCC and the related standing committees were ‘asleep at the switch’ and not performing their fiduciary responsibilities,” Bainbridge wrote in August 2020. “I am not comfortable that this has changed since the report was issued.”
$640,000 write-off or reporting error?
Since then, tensions between party leaders and their critics have escalated. The discord comes ahead of a key election year that Republicans hope will result in control of the governor’s residence and a U.S. Senate seat.
Bainbridge has peppered his Republican colleagues with letters in recent months outlining his concerns about party finances. Among the allegations: ORP wrote off $640,000 without explanation and is violating its own rules by not hiring a certified public accountant to audit the books annually.
Separately, the party owed delinquent property taxes on its Columbus headquarters but paid off $48,900 in August and the remaining $3,500 in fees and penalties in October.
The lawsuit filed Monday in Franklin County contends the party’s books from 2017 to present should be audited and accuses Paduchik of removing Bainbridge and others from committee assignments as punishment for speaking out.
According to ORP’S bylaws, the audit committee is tasked with examining the treasurer’s accounts – with the help of a CPA if they choose – and making an annual report to the committee. The party isn’t required to conduct an audit, spokeswoman Tricia Mclaughlin said.
Party officials called Bainbridge’s write-off claim a lie and said there was instead a reporting error that misidentified roughly $654,000 in invoices largely issued to former U.S. Rep. Steve Stivers’ congressional campaign.
“Please know, every penny that comes in and every penny that leaves the ORP is reported either to the Federal Elections Commission or the Ohio Secretary of State,” Paduchik wrote in his letter. “Quite simply, Mark is making crazy accusations of fiscal malfeasance to damage the State Central Committee.”
Ohio Senate talking point
Meanwhile, talk of ORP audits has spilled into Ohio’s Senate race.
The party’s audit committee selected Cliftonlarsonallen to conduct an audit of 2019-2020 finances earlier this year after seeking proposals from multiple firms – a process that began before Timken launched her Senate bid. Bainbridge decried the choice as a conflict of interest after claiming the firm handles taxes for Timken and her husband’s business.
However, Timken disputed that during a candidate forum this week and said the only connection is a partner at the firm who previously did work for family businesses.
“I’m proud of my record, and those people who don’t understand the Ohio Republican Party are just using these words to try to attack me,” she said.
Cliftonlarsonallen walked away from the audit in September “to allow the organization to prioritize its efforts on current accounting and reporting matters,” according to an email from the firm. Mclaughlin said the audit committee issued a new request for proposal for a financial review that covers 2017 to 2020.
Paduchik blamed the firm’s withdrawal on a “harassment campaign” from Bainbridge and accused him of threatening the auditors. Bainbridge denied those allegations and said he had a handful of “professional” conversations with an auditor that Paduchik later reprimanded him for.
A call to Cliftonlarsonallen was not immediately returned.
Haley Bemiller is a reporter for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizations across Ohio.