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Democratic Party faces fiscal woes
New rule puts brakes on spending
By W. Gardner Selby
AMERICAN-STATESMAN STAFF
Tuesday, April 19, 2005
The Texas Democratic Party spent $400,000 more than it raised last year and has around $40,000 in the bank, leading party leaders to put a leash on future spending.
"Kind of like living paycheck to paycheck," said Latrice Sellers of Corpus Christi, a member of the finance committee of the State Democratic Executive Committee.
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Party Chairman Charles Soechting of San Marcos told party leaders at a meeting Saturday that upcoming events will swell coffers. He's previously said that a fund-raising specialist will help raise $1.5 million this year for the party.
The party holds no statewide office and is in the minority in both chambers of the Legislature. It also has less than one-tenth as much money on hand as the Republican Party of Texas.
A five-person Democratic Party subcommittee recently found party finances "interesting and troubling," with $1.9 million in spending outpacing revenue by $400,000 last year, according to a March memo obtained by the American-Statesman.
"We are very concerned that we are perilously close to outspending our means," read the memo, in which the words "very concerned" were underlined for emphasis.
The subcommittee's findings led party leaders to approve a new rule Saturday that limits how much the party chairman can spend without approval from other officers.
The memo also states that a $250,000 inheritance that committee members had voted to save for a permanent party headquarters was instead spent in the 2004 elections.
Democrats also are liable for more than $200,000 in legal bills connected to a continuing court fight over 2003's Republican-led congressional redistricting, which contributed to Democratic defeats last fall, party officials learned Saturday.
Soechting said he expects Democratic U.S. House members to help raise money to cover the debt.
"Right now, it's hard for people to give any money at all" to cover the redistricting expenses, Soechting said, "because they know they face political retributions if they help us."
Buck Wood, an Austin lawyer and Democratic stalwart, agreed Monday, saying: "It's nothing like I've ever seen before.
"If you're a contributor, you're going to have trouble with anything you want from the Legislature, or in many cases, state agencies."
The March memo states: "As members, we all have a responsibility to help revitalize our Party, and the Party needs our help now more than ever.
"It is our belief that we are spending beyond our means and we must scale back our operating budget if we cannot pay our obligations on a cash basis."
The state GOP, operating with 15 staff members in leased space in a downtown bank building, has more than $500,000 on hand, a spokeswoman said.
Soechting told the Democratic Party's finance committee Saturday that the party is meeting its monthly obligations, including salaries for seven employees, though he will consider cutbacks if necessary.
Soechting apologized for spending the $250,000 donated by a Dallas woman. He said he never understood the money to be in a "lockbox" to purchase a headquarters.
The money "filled the void of a lot of people who weren't there for us this time," Soechting said, pointing to the party's charter of a plane to rush lawyers from Austin to Houston on behalf of Hubert Vo, a Democratic House candidate.
Vo's narrow victory over Rep. Talmadge Heflin resulted in a recount and then a challenge before the Texas House. A House committee preliminarily sided with Vo, prompting Heflin to withdraw his challenge.
The Democrats retain a right of refusal to purchase the building they rent off West Sixth Street.
"It's not like we've forgotten that we want a home sometime," Soechting said.
At the recommendation of the Subcommittee on Party Finances, the 62-person executive committee approved a rule Saturday requiring the party chairman to submit an annual operating budget for review and to get approval from the committee's other top officers before spending more than $10,000 on a line item not in the budget.
"It's just a matter of checks and balances," Sellers said.
Soechting predicted that the party's newly contracted fund-raiser, Brandy Coletta, will spur donations.
An upcoming $5,000-a-person reception in Houston featuring former Democratic vice presidential nominee John Edwards will raise more than $150,000 for the party, Coletta said.
"We are rocking and rolling," she said.
Boyd Richie of Graham, chairman of the subcommittee that made the recommendations, said that while he's disappointed in the party's fiscal status, he never suspected improprieties and remains optimistic.
"Even having to live paycheck to paycheck, for the first time in 32 years we had a net gain of a (Texas) House seat" in November, Richie said.
Democrats picked up one seat in the 150-member House, where Republicans now hold an 87-63 edge.
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