Ohio Republican Party Treasurer Johnson Defends GOP Chair in Accounting Tiff, Bashes ‘Malcontents’ Calling for Expansion of Audit Back to 2017

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COLUMBUS, Ohio – The treasurer of the Ohio Republican Party (ORP) has defended top management’s handling of the political organization’s financial statements against concerns the policies and procedures have created risk for improper accounting.

David W. Johnson, the 32-year incumbent Columbiana County GOP chairman now in his second term as the Ohio GOP’s treasurer, dismissed allegations of poor accounting practices in need of closer scrutiny as “built of exaggerated and unsubstantiated, even false claims” from fiscal review committee members Mark Bainbridge of Upper Arlington and  Denise Verdi of Timberlake and audit committee member Laura Rosenberger of Springfield in series of emails exchanged with GOP management since May.

Johnson did not identify with specificity which allegations of poor accounting practices made in a series of emails sent by Bainbridge, Verdi, and Rosenberger to ORP Chairman Bob Paduchik in May and June that were “exaggerated and unsubstantiated and even false claims.”

In an article published on Thursday titled, “Ohio GOP Central Committee Members Challenge Chairman Paduchik on $638k Write-Off in 2021 and $1.7 Million Deduction to Equity in 2017,” The Ohio Star reported:

The Ohio Star has obtained internal emails exchanged between three of the Ohio Republican Party Central Committee 66 members – Audit Committee member Laura Rosenberger and Fiscal Review Committee members Mark Bainbridge and Denise Verdi – and Chairman Paduchik that discuss the need to improve the financial reporting practices of the ORP to accounting industry and government regulatory reporting standards, starting with an expansion of the years covered by a standard audit just now getting underway. . .

That audit, recently begun by the firm of Clifton Larson Allen LLP (CLA), is currently limited to 2019 and 2020, but Rosenberger, Bainbridge, and Verdi want the audit expanded to include the years 2017 and 2018. . .

“As members of the Audit and Fiscal Review Committees, we have several concerns that we were hoping to review with Bob at either an in-person or Zoom meeting over the past two weeks. Since that meeting did not happen, we will just write them in this email and hope we can get a meeting together possibly next week,” Rosenberger, Bainbridge and Verdi wrote in a June 16, 2021 email to Chairman Paduchik and Executive Director Bis.

“Primarily, we believe the first steps that CLA has to take involve the critical financial issues exposed by the write-off of the $640,000 receivable in April, 2021. These issues have been highlighted in prior emails which are in the thread below and evidenced in the information Justin provided,” they added.

“This kind of material misstatement is unacceptable, and also pertinent to the 2021 financial statements as the current administration recently authorized the write-off,” they continued. (emphasis added)

Bainbridge, Verdi and Rosenberger also want an explanation from ORP Chairman Paduchik about an unexplained $1.7 million reduction in the equity in the party’s retained earnings account from the party’s unaudited 2017 financial statement.  Current U.S. Senate candidate Jane Timken was ORP Chairman at the time that $1.7 million reduction in equity was made in the party’s books.

“The questions raised by this small group of malcontents are just that: questions. They are not conclusions,” Johnson wrote in response to an email from The Star and a follow-up phone message.

Bainbridge, Verdi and Rosenberger have declined to comment on the emails at the heart of the internal battle over whether to extend an audit just underway for 2019 and 2020 to include 2018 and 2017 as well. The three have declined to comment on the documents, but Bainbridge and Rosenberger authenticated the content of the email as genuine when contacted by The Star.

Bainbridge has brought his deep expertise in accounting and, most importantly, certified public accounting knowledge to bear since joining the GOP’s central committee in 2020. He is perhaps the best qualified central committee member on matters in the application of generally accepted accounting principles or GAAP, that serve as the industry standard for business and nonprofit accounting as well as generally accepted auditing standards, or GAAS, on the CPA auditing side of the ledger.

He retired as a partner with the Ernst & Young accounting and consulting firm after 36 years and has spent the last 12 years as an independent consultant  advising on board governance, strategic growth, corporate ethics and compliance programs, and mergers and acquisitions, according to his professional LinkedIn profile.

Still, Johnson said he trusts the explanations from GOP’s day-to-day management, principally GOP Chairman Bob Paduchik.

“These questions have already been addressed by the State Chairman to my satisfaction,” wrote Johnson, who said he has now served in leadership positions under the last five state chairs with the February election of Paduchik to the post.

He said the pending audit of the 2019 and 2020 books will “validate the Party’s financials, including transactions that are alleged to be in question.”

The Star detailed two of those undocumented transactions–the 2021 write-off of about $640,000 of accounts receivable and the 2017 reduction of $1.7 million in retained earnings–in the story published in The Star  on Thursday.

Johnson added, “I have every confidence that the audit will reveal that nothing improper or even remotely questionable has been done by the Party’s current or previous officers or staff.”

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Brian Ball is a reporter for The Ohio Star and The Star News Network. Send tips to [email protected]iostar.com.

 

 

 

 

 

 

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