In revelations some Republicans say top their worst fears, the new leader of the Massachusetts GOP said the party misreported hundreds of thousands of dollars to state campaign finance officials under its former chairman, and may owe vendors as much as $600,000, potentially further hobbling the cash-strapped party.
Amy Carnevale, who was elected last month to replace Jim Lyons as party chair, issued a new accounting of the party’s finances that reveals potentially much higher debts than previously disclosed and depict a political operation in disarray under her predecessor. In a letter to Republican State Committee members Tuesday, Carnevale said she and other officials are trying to “get our financial house in order.”
The party, she said, has as much as $602,152 in unpaid invoices from vendors, more than five times what party officials had estimated just one month ago.
However, Carnevale said many of the invoices are “unsubstantiated” and appear to “not be the responsibility of the party.” That means some large unpaid obligations — including hundreds of thousands in ads for Geoff Diehl’s unsuccessful gubernatorial campaign — may not ultimately land on the party’s ledger.
But party officials said some invoices do not have documentation or contracts, further muddying the picture. Carnevale said the party hired a compliance firm, Red Curve Solutions, to review them to determine “who authorized these payments and in what capacity they were acting.”
“Though the Chair does not believe we are liable for this total amount, it is important for the committee to be aware of the situation,” according to a one-page memo that accompanied Carnevale’s letter and was obtained by the Globe.
There are, however, costs the party has to address. Carnevale said the Stirm Group — which the party hired to investigate rumors about Governor Maura Healey’s romantic life ahead of last fall’s election — has sent invoices for $55,415 worth of opposition research. The party also has $119,157 in invoices for coordinated mailings for which individual candidates provided funds to the statewide operation, but those funds were “redirected elsewhere,” Carnevale said.
“This is worse than we thought,” said Jay Fleitman, the state GOP vice chairman. “We knew there were financial issues. . . . But it is a harder road to hoe when you have deficits that you have to make up before you can start building up to what you want to do.”
Before narrowly losing his bid for a third term, Lyons had faced heavy criticism from opponents on the state committee for not being transparent about the condition of party finances.
But the diversion of funds from candidates away from the mailing costs has whiffs of a “Ponzi scheme,” said Mike Valanzola, a Republican State Committee member who also serves on other local boards, including the Wales select board and a regional school board.
“I have never in any of those capacities not had stem-to-stern visibility of the financials — until the last year with the Republican Party,” he said. “I had grave concerns about what eventually we would find out when Jim exited, and unfortunately my worst fears appeared to have come true. Anybody, after all of this, who stands by and supports Mr. Lyons probably needs to have their head examined.”
The party’s financial accounts had dwindled to just $35,000 at the end of last year, party treasurer Pat Crowley told party leaders in January. At the time, Crowley documented $117,000 in debts the party owed to five vendors for campaign-related expenses.
In addition to hiring a compliance firm, Carnevale also retained Brian Kelly, a former assistant US attorney who helped prosecute James “Whitey” Bulger, to help review four pending lawsuits the GOP is a party to, and if necessary, assist with some of these financial matters “if we need to push back on any of the vendors.”
“I came into the position knowing we had little to no money,” Carnevale said Wednesday. “I did not anticipate we would have invoices totaling $600,000. That makes my job all the more difficult moving forward.”
Lyons did not respond to a request for comment Wednesday.
The state GOP has other financial problems. The Massachusetts Office of Campaign and Political Finance is in the midst of auditing the party and has already said that the GOP misreported $372,652 in expenditures, and that it did not report the more than $119,000 in coordinated mail costs, Carnevale said.
Of the misreported spending, most of it — roughly $300,000 — was listed as “print expenses,” even though it went toward various TV, radio, and digital ads.
Another $8,600 went toward door hangers that urged voters to repeal a law that allows undocumented residents to apply for driver’s licenses. (Residents in November voted to uphold it.) The hangers, however, were printed with the disclaimer saying they were paid for by “Fair and Secure MA,” a separate ballot question committee formed by the law’s opponents.
Carnevale said party officials “are waiting on guidance from OCPF” about the mailers.
The party had weathered a series of setbacks and controversies during Lyons’s tumultuous four-year run as chairman. E-mails, invoices, and other documents obtained by the Globe showed that Lyons used party funds to investigate two fellow Republicans. He also appeared to have communicated directly with an outside political action committee about digging up dirt on Healey during last year’s election, according to the e-mails. State law prohibits independent expenditure PACs from “directly or indirectly” coordinating with candidates or political parties.
Carnevale said Wednesday that the party “reported” the situation to OCPF, but has not heard anything further.
In 2021, the state’s top campaign finance regulator referred Lyons and others, including a state senator, to state prosecutors, saying he had evidence they may have violated various campaign finance laws. A state grand jury heard testimony about the potential violations, but the attorney general’s office has not indicated whether it will pursue charges.
In her letter to Republican State Committee members on Tuesday, Carnevale said she and others are working to “resolve” its issues and stabilize the party.
“We must take these steps to win back the trust of voters, supporters, and contributors to our party,” she said.
Emma Platoff of the Globe staff contributed to this report.
Matt Stout can be reached at email@example.com. Follow him on Twitter @mattpstout.