Battleground State Republican Party Facing 'Imminent Default' Ahead of 2024
After fighting her way to the top of the state’s GOP by condemning the party’s establishment, the current Michigan Republican Party chair has experienced difficulty in raising money from past donors, many of whom presumably consider themselves part of that establishment.
Now, says an outgoing member of the organization’s budget committee, the Michigan GOP faces an “imminent default on the line of credit” it took out to cover expenses.
Jessica Barefield was one of 13 Republicans on the committee, according to The Detroit News, but resigned this week.
Her resignation letter, of which which the News obtained a copy, “reveals the seriousness of the financial problems facing a party in a battleground state a year before the 2024 presidential general election,” the outlet reported.
Barefield apparently submitted her resignation after an “emergency meeting” on November 3 to address the looming default.
The News reached out to party Chairwoman Kristina Karamo and budget committee Chairman Dan Bonhomie for comment, but neither responded.
Barefield, however, confirmed to the outlet that she had resigned from the budget committee.
“Despite my efforts, it has become evident that the issues within leadership and the committee are deeply rooted and resistant to change,” Barefield wrote in the letter, according to the News. “It has reached a point where I feel it is no longer safe for me to be associated with this committee as it allows leadership to engage in practices that run counter to my principles and values.”
A former executive director of the Michigan state GOP, Jeff Timmer, told the News that the party’s financial situation “really is unprecedented,” calling the emergency meeting the party’s “last gasp” before insolvency.
The total amount of debt owed by the party was unclear, though Karamo said it March, the month after she had assumed her position, that it amounted to nearly half a million dollars.
Karamo said in a radio interview Thursday cited by the News that she had inherited “more than $500,000” in debt when she took over.
“We have a legal pathway to settle this $500,000 debt that a billionaire left us,” Karamo said in the interview, referring to former party Chairman Ron Weiser, who the News described as a “wealthy Ann Arbor real estate businessman.”
It’s common, the News noted, for political parties to borrow money during elections and pay it back with fundraising the following year. Much of the $460,000 said to have been owed in March may have been the result of 2022 borrowing. Campaign finance disclosures reviewed by the News showed that the party had borrowed $1 million or more on the line of credit leading up to last year’s November election.
In the emergency budget committee meeting, party leaders suggested trying to sell the party’s former headquarters, a building that tax records show to be worth more than $1 million.
The only problem with that plan is that the swing state’s GOP doesn’t own the building.
“They don’t have a legal right to do it,” said Weiser, one of the former party chairs who owns the trust that owns the company with the title to the building.
“It’s unclear what the specific financial repercussions would be if the party defaulted on its line of credit with Comerica Bank,” the News reported Thursday. “But the rocky money situation will complicate Karamo’s ability to raise additional dollars and could hinder the party’s efforts to obtain future loans.”
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