published Tuesday, July 27th, 2010

Review finds GOP ‘deficit’ on Smith exit

NASHVILLE — The Tennessee Republican Party had a $100,842 “deficit” when its then chairman, Robin Smith, left on May 31, 2009, according to a copy of a routine financial review conducted after Mrs. Smith departed to run for Congress.

The status of the GOP’s finances when Mrs. Smith left has become an issue in the 3rd Congressional District’s Aug. 5 Republican primary.

An ad by one of Mrs. Smith’s rivals, Chuck Fleischmann, charges that Mrs. Smith “left the state Republican Party over $100,00 in debt. Worse, on the way out the door, Smith handed her future congressional campaign staff lavish bonuses.”

There was no “audit” per se that was performed. But there was a financial “review” conducted by Chattanooga-based accounting firm, Decosimo & Co. Tennessee Republican Party bylaws require a review whenever a chairman leaves.

Chip Saltsman, a former state Republican Party chairman and Fleischmann campaign consultant, brushed away the distinctions and said what matters was the bottom line.

“It’s pretty simple,” he said. “It’s in black and white. The day she left, the checking account was overdrawn by $19,000, ... and (she) left the party over $100,000 in debt.”

He said Mrs. Smith “talks about balancing the budget and she talks about being fiscally conservative but certainly in her actions in the past, she’s been none of that.”

Smith campaign manager Chris Meekins attributed most of the debt to outstanding vendor payments from the 2008 campaign in which Tennessee Republicans won majorities in both chambers of the Tennessee General Assembly for the first time in 140 years.

“The vendor debt remaining after her departure was on scheduled payment terms and was resolved with revenue from the annual Statesmen’s Dinner as scheduled,” Mr. Meekins said in a statement.

He said it was not unusual to have payments scheduled with vendors following the campaign season, particularly one as successful as Robin Smith had in winning control of the legislature for the first time since Reconstruction.

The entire argument, Mr. Meekins said, “is a smokescreen to prop up” Mr. Fleischmann’s failing campaign.

He charged the Fleischmann campaign “continues to mislead the public with forged documents bearing the Tennessee state seal and making blatantly false statements about alleged bonuses and mismanagement. His ad is the last gasp of a trial lawyer’s failing effort.”

A copy of the review states the state GOP’s unrestricted accounts had a bank overdraft of $19,090 as well as accounts payable and receivable of $108,785 and a $4,927 note payable on May 31, 2009, when Mrs. Smith left.

Those total liabilities of $132,802 were offset by $31,960 in total assets, including $14,893 in equipment. That left a $100,842 deficit, according to the review.

Nicole Thorne Jenkins, an associate professor of management and accounting at Vanderbilt University’s Owen School of Management, said that generally speaking a review “is significantly less in scope than an audit. There’s less work done.”

Professor Jenkins, a CPA, said an accountant’s statement in a review would be along the lines of stating he or she was not aware of any material modifications that should be made.

In a full-fledged audit, the auditor would state he or she believes the statements were prepared correctly and presented fairly in conformity with Generally Accepted Accounting Principles or similar standards. The auditor would test items, such as actually contacting vendors to gain assurances about what was presented.

Meanwhile, Mr. Saltsman continued to hammer away on the “bonus” issue. Nineteen days before stepping down as chairman in 2009, Mrs. Smith signed a contract committing the party to continuing employment of her chief of staff, Mark Winslow, for seven more months.

But Mrs. Smith’s successor, Chris Devaney, exercised a contractual clause to end the deal. Mr. Winslow was paid $12,504 over a three-month period through August 2009, according to documents and federal financial disclosures.

Mr. Winslow left the party on June 4, 2009, he told friends and on June 30 began issuing news releases as an unpaid assistant for Mrs. Smith’s campaign.

“What we’re basing that (ad’s lavish bonus charge) on is that Mark Winslow got paid $12,000 from the Republican Party, basically to work on Robin Smith’s campaign,” Mr. Saltsman said. “And as documents show, Robin Smith signed a contract with Mark Winslow two weeks before she left. Then Mark Winslow went to work for her campaign almost immediately.”

Mr. Winslow didn’t start getting paid by Mrs. Smith’s congressional campaign until the fourth quarter of 2009.

Three Republicans knowledgeable about the situation said the final severance agreement Mr. Winslow entered into with Mr. Devaney “replaced the employment agreement” signed earlier by Mrs. Smith.

Summing up the situation, one of the Republicans maintained Mr. Winslow’s package “included no bonus money and was a settlement of salary owed under the prior agreement. The agreement with Devaney immediately terminated all employment and responsibilities between Winslow and the state party.”

about Andy Sher...

Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...

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gm1220 said...

Thank You Andy. . . finally the truth about Robin Pelosi Smith. People we need to vote and make sure that Mrs. Smith never returns to politics! Basil could do a better job!

July 27, 2010 at 8:39 a.m.
gjuster said...

It's not about the debt left at the end of Ms. Smith's reign - it's about the cover up of the information from the Smith Camp. She lied about it and tried to keep the information from seeing the light of day.

July 27, 2010 at 11:32 a.m.
gm1220 said...

Juster . . You are right! She covers up lots of stuff. Example: Most people do not know that she had a huge salary with the GOP! $100,000 plus a bonus! What is the average income of the people in the 3rd district? But her campaign manager Meeks said that the outstanding debt (he admitted there was one!) was vendor payments and they would be resolved at the Stateman's Dinner (which is held in July)! So, it's OK to carry debt and take a bonus without actually having the money in the bank for two months. No Way, I think Washington is doing this already!

We must call on her to pull out of the race but more importantly we must ban together and vote her out of the race. We must send her a clear message to never run again!

July 27, 2010 at 1:05 p.m.
sickofit said...

Chuck is the one that is telling half truths. Maybe we should go back and look at Chip's records after he left the state party. NOW that would be interesting. No one accomplished less in that position. Hummmm-- Look at the two people who posted these rants. One is a Van supporter and the other a Tim Gobble supporter. Click on their profiles. One has posted on 59 articles that pertain to either Tim Gobble or Robin. This is getting ridiculous. Do these campaigns have people who simply sit all day and post nasty things about Robin Smith? Shouldn't they be knocking on doors and talking with people?

July 28, 2010 at 9:52 a.m.
gm1220 said...

sickofit -- you don't have to read anything or listen to TV! Sounds like you are a Robin Pelosi Smith supporter that needs to seriousl listen to her candidate. She attacks Chuck and then tell him to stop the negative ads. If she can't stand the political heat she needs to get out of the race! And as for me knocking on doors, I am, come join me! I don't want Robin Pelosi Smith going to Washington and she shouldn't either!

July 30, 2010 at 7:03 p.m.
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