California GOP faces money woes POLITICS

Chairman Tom Del Beccaro address the panel discussion on Latinos in the GOP. Scenes from the California Republican Convention held at the Marriott hotel in downtown L.A. Chairman Tom Del Beccaro address the panel discussion on Latinos in the GOP. Scenes from the California Republican Convention held at the Marriott hotel in downtown L.A. Photo: Ted Soqui, Ted Soqui Special To The Chronic Photo: Ted Soqui, Ted Soqui Special To The Chronic Image 1 of / 1 Caption Close California GOP faces money woes 1 / 1 Back to Gallery

Three months before the November election, the California Republican Party is so awash in red ink that its board has approved laying off staff and vacating the party's main headquarters in Sacramento, The Chronicle has learned.

The crisis emerged after state party officials, facing an $850,000 shortfall in late June, fell behind in rent, phone bills, payments to Internet vendors and printers, and worried they would have to cut employees' health care insurance payments, according to several Republican sources who spoke on the condition of anonymity.

Since then, party officials have reportedly negotiated down the debt, but campaign finance reports to be released Tuesday are expected to show the California GOP to be at least $450,000 in the red, multiple sources said.

After the state party's board of directors on July 10 approved a plan to close the office, sources said party leaders have made frantic efforts to maintain a Sacramento presence - trying to negotiate a downsized office with four staff members paid by state legislative leaders.

Two staffers in the Sacramento office have been laid off and another has left, and the party has ordered salary cuts for others, the sources said, while some workers have been asked to work without salary as volunteers and others to work at home. The party plans to maintain a staff of two at its office in Burbank, sources said.

Discussions over downsizing or closing the party's office in the state capital, which was established more than a dozen years ago, come two weeks before the GOP holds its statewide convention in Los Angeles and a month before the national GOP convention in Tampa, Fla.

The party's fiscal meltdown in California, where Republicans are hoping to win a dozen competitive congressional races while blunting Democrats' push to gain a supermajority in the Legislature, is "a disaster if you're trying to portray yourself as the party of fiscal responsibility," said a top state Republican strategist who spoke on the condition of anonymity.

Words from the chairman

Tom Del Beccaro, the state party chairman, acknowledged Thursday that "we have liabilities on the books" but he would not confirm or deny specific figures.

"What matters is whether we get people elected, not whether we have an office in Sacramento," said Del Beccaro, who has been the subject of criticism within the party for investing $2.3 million in a ballot measure to challenge Senate redistricting lines. "Right now, Republicans are poised to do well, and I'm very pleased at how we're deploying our money."

He said the party will "reorient" in its Southern California office, "which fulfills a campaign promise of mine - which is to no longer be a 'party of Sacramento.' " Still, he said the party will maintain a presence there.

Jennifer Kerns, who recently left her job as spokeswoman for the party, said that "generally speaking, Republican candidates this fall are doing a terrific job of walking the walk when it comes to fiscal issues."

"But at party headquarters, if you are critiquing the other party for overspending, voters expect you to speak from a place of authority," she said. "It's a woefully hypocritical place to be if you're the party leaders that can't pay the bill to keep the lights on at the office."

Political implications

California Republicans say the GOP's troubles, including its failure to woo Latino voters, have major political implications.

"Demographics are going to continue to make it difficult for the Republican Party," said former state Senate Republican leader Jim Brulte. "The California Republican Party's inability to raise money, to fund a statewide voter-registration program, to hire a statewide field staff and pay to do the nuts-and-bolts organizing necessary for victory does nothing but accelerate and exacerbate the problem that demographics are causing."

In an election year, GOP insiders say it's significant that neither the campaign of Mitt Romney, the GOP presidential candidate, or the Republican Governors Association will partner with the state GOP in a fundraising agreement that in the past has shared a percentage of funds it raises at events in California with the state party.

Day-to-day problems

Republican leaders and major donors say the state party's crisis is just the latest in a series of troubling developments.

"The CRP hasn't been strong in some time, they have not been able to independently do this work for some time," said GOP strategist Rob Stutzman. "What they're having trouble with is day-to-day operational overhead."

The result, Stutzman and other Republicans say, is that other organizations and individuals are filling the void - with robust national and county-based operations like those in Tulare, San Luis Obispo and Santa Clara County, where millionaire GOP activist Charles Munger is heading up fundraising, phone banking and voter contacts usually managed by the party.

Also largely sidestepping the state GOP is the "Young Guns" super PAC, organized by Rep. Kevin McCarthy of Bakersfield, the House majority whip, who is working to boost Colusa County Supervisor Kim Vann in her race against incumbent Democratic Rep. John Garamendi, and former Lt. Gov. Abel Maldonado, who is challenging Democrat Lois Capps on the Central Coast.

At the same time, the National Republican Congressional Committee, which has its own California-based super PAC, has funded more than a dozen state "Victory Centers" that support phone banking, get-out-the-vote efforts and door-to-door voter contacts in a dozen California congressional districts that are considered key to the GOP keeping control of the House.

Crazy competition

Del Beccaro said he is in "close partnership" with those organizations but he acknowledged that "the competition for money is crazy."

"It's the most difficult fundraising year we have faced because of the presidential cycle and the changing nature of politics," he said. "It is cooler to give to a super PAC."

"Four years ago, the party had $4.5 million in debt," he said. "We have changed the way we're deploying staff ... we're reorienting how we use our resources. By the end of the cycle, we expect to be in better shape."

Jeff Miller, the former finance chair of the state GOP who left the position last year after publicly warning about a wave of donor defections, said Thursday that the GOP can make "major gains" in California this year, but "that won't happen without leadership at the party that is trusted by the donor community and has the skill sets to build a solid organization."