Georgia Democratic party exec resigns; chairman denies financial crisis

Updated at 3:07 p.m. with new material below:

Original: The state Democratic party has problems.

On Saturday, the chief of staff of the party, Page Gleason, handed in her resignation. The letter announcing her decision included these lines:

I have dedicated my adult life to fighting for the Democratic Party and its ideals throughout the State of Georgia. The situation at the Democratic Party of Georgia, however, has made it impossible for me to continue serving effectively as your Executive Director.

…I strongly recommend that the Executive Committee and the By-laws Committee review the sections of the Democratic Party of Georgia by-laws…. A thoughtful review and additional wording would more clearly define the role each plays within the Party so that individuals who serve as State Chair, Executive Director, and members of the Executive Committee may effectively lead the Democratic Party of Georgia in the future.

Gleason’s resignation came a day after minutes of a wildcat meeting of the Democratic executive committee were circulated via e-mail. You may read the official minutes here.

Some attended last Wednesday’s meeting in person, at a local law firm. Others checked in by phone:

As calls came in, callers were asked to identify themselves. A number of callers hung up following this request. After several requests for identification, two callers were disconnected.

Attention was drawn to Russell Edwards, treasurer of the party:

Mr Edwards distributed a document showing cash balances for several months, beginning with February 2011, ending with February 22, 2012. A budget was not presented. He explained the dire financial situation of the organization. Upon review and discussion of the document it was generally agreed that the current financial approach was unsustainable.

Considering the current balances and previous revenue trends, funds are available for approximately 30 days of expenses. Discussion continued regarding monthly expenses, an explanation of the Call Center/Canvassing program, the lack of Executive Committee approval for new hires outside of standard budget, and other financial matters. Inquiries were made regarding hiring. Mr Edwards and Mr Hadley asked to limit discussion to specifics.

Ms Johnson and Mr Halpern urged candor considering the nature of the meeting. Further discussion continued concerning monthly expenses. The question was raised as to the employment of Tasso Knight (member of the Executive Committee) and the body agreed to table the discussion until those with direct knowledge of the hiring arrangements were present. It was noted by Mr Reilly, with agreement from the full body, that Mr Knight had served the party well for many years.

So we called Michael Berlon, chairman of the Democratic Party of Georgia. Berlon acknowledged that, “unfortunately,” Gleason did indeed resign. But Berlon said her departure was the result of other opportunities, and had “nothing to do” with any questions about the party’s financial outlook.

Which Berlon said was tolerable. He denied that the party was 30 days away from insolvency. “If our treasurer had picked up the phone and called me, he would have learned we were solvent through the Jefferson-Jackson Day dinner,” Berlon said. That’s in May.

Berlon said he had not talked to the party’s state treasurer in 14 months. Yes, in 14 months. If that sounds questionable, Berlon explains that the state treasurer really isn’t in charge of the party’s books. That duty is privatized, to an outfit called Political CFOs. The responsibility of the state party treasurer is to make sure that financial statements are reported to the proper authorities on time, he said.

Berlon acknowledges that Knight, political director of the state AFL-CIO, has received reimbursements as a lobbyist for Demcrats at the state Capitol – which apparently has emerged as an issue.

Berlon has been pre-occupied. He wasn’t able to attend the Wednesday meeting of the executive committee. And, over the weekend, he fell off of a ladder, probably separating his shoulder. He may have broken his left arm. (He’s right-handed.)

Previous to a conversation with Berlon, Democratic party spokesman Eric Gray couldn’t provide specifics, but acknowledged the financial pressure that his party was under.

“We all knew that it was a challenge when we didn’t have a statewide officer. Fundraising has not been easy,” Gray said.

New material: This afternoon, Russell Edwards, treasurer of the party, sent out a note that included these paragraphs:

First, it is false that Chair Berlon and I have not communicated in 14 months. The Chair and I, in fact, have traded many emails, communicated by phone, and have also communicated at official meetings where many of you all have seen us seated at the same table.

With regards to the current state of the DPG’s finances, it is true that the DPG currently spends more than it raises. This unsustainable situation should raise red flags since the DPG’s current cash on hand is $37,230.15, not counting the Senate and House Caucus accounts.

– The DPG must meet semi-monthly payroll this Friday of approximately $28,000.00.

– The due date of the DPG Visa credit card is tomorrow in the amount of $2,110.00.

– The due date of the DPG United Healthcare expense is Wednesday in the amount of $1,414.22.

–The DPG also has a bill due to Political CFOs [a bookkeeping firm] this Wednesday of roughly $3,750.00.

– Next week, the DPG has a rent payment due for its headquarters of approximately $5,500.00.

The above expenses amount to $40,774.22.

All of this information has been verified by our accounting firm, Political CFOs.

My forthcoming semi-annual treasurer’s report will shed more light. At last week’s Executive Committee meeting, I pointed out the situation with balance sheets produced by the DPG’s accounting software that I thereafter collected from the attendees considering the sensitive nature of the situation. I have daily access to this system and have been accessing it regularly throughout my tenure as treasurer.

That being said, it’s not as if the present situation cannot change. We have an upcoming Jefferson Jackson dinner for which we have received pledges.

- By Jim Galloway, Political Insider

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