Michigan

Michigan GOP rocked by financial turmoil

The Mackinac Republican Leadership Conference often lures a who’s who of GOP power players to Michigan. Wealthy donors shake hands with presidential candidates, who give rousing speeches to packed audiences in hopes of winning the conference’s straw poll.

The event is typically a money-maker for its sponsor – the Michigan Republican Party – helping to fund get-out-the-vote efforts and support campaigns to get Republicans elected throughout the state.

But this year’s conference was decidedly different.The only presidential candidate to show up was Vivek Ramaswamy, who was mostly polling in the single digits. The line-up of speakers included failed Arizona gubernatorial candidate Kari Lake; Zuby, a British rapper who occasionally appears on Fox News; and, conservative provocateur Dinesh D’Souza, who ultimately did not show up.

The biggest draw was actor Jim Caviezel, a promoter of QAnon conspiracy theories, who had a hit movie this summer but is perhaps best known for playing Jesus in “The Passion of the Christ” movie 20 years ago. He was paid a $110,000 fee to attend and give a 25-minute speech.

The event, simply put, was “a disaster,” said Warren Carpenter, an active party member and former district chair.

And, it was emblematic of deeper problems within the Michigan state party.

A CNN review of documents and interviews with more than 20 current and former party officials shows the Republican Party in this key battleground state has become entangled in financial turmoil, infighting and calls for new leadership less than a year before the 2024 presidential election.

Kristina Karamo – a former community college professor with limited political experience – became the head of the state party in February after pushing far-right election conspiracy theories and promising to end the party’s reliance on traditional wealthy donors.

Now, some of the pro-Trump party members who voted Karamo into office have soured on her leadership and accuse her administration of working to destroy the party by failing to fundraise and sparking division among the party rank-and-file.

Dozens of the party’s state committee members signed a petition calling for a meeting at the end of the month to consider the removal of Karamo and some of her deputies.

“If I would have known that Kristina Karamo would have turned out to be such a tyrannical incompetent dumpster fire I would never have worked so hard to get her elected. For that I apologize,” wrote Dawn Beattie, a state committee member, in an email sent last month to fellow Republicans and obtained by CNN.

The dire state of the party’s finances, which has generated negative headlines in local outlets including The Detroit News for months, was recently summarized in a report that concluded Karamo had pushed the organization to “the brink of bankruptcy.”

The report, commissioned by Carpenter, a former party district chair, and shared with CNN, included internal records that suggest the party had a net income of just $71,000 between March and November and had more than $600,000 in debt as of last month.

Karamo, who did not respond to CNN’s requests for comment, has said she is “course correcting” the party, which she has argued had hundreds of thousands of dollars in debt when she assumed leadership and lost multiple prior elections under old leadership despite then having millions of dollars on hand.

Still, political consultants argue effective state parties – which organize voting drives and other local efforts – are often essential to win close elections. Former President Donald Trump won Michigan in 2016 but lost to Joe Biden in 2020. A recent CNN poll found Trump has 50% support in the state to Biden’s 40%.

“You want a state party that is firing on all cylinders, and then you want a strong candidate who can win,” said Doug Heye, a GOP strategist and former communications director for the Republican National Committee. “If you have an issue with either of those two, that can be one of the things that tips the scales for a race.”

A source close to the Trump campaign described the current Michigan GOP as a mess and did not indicate any sort of loyalty to Karamo, noting that most of the Michigan Republicans who could replace her were also pro-Trump.

‘The real deal’

Karamo gained political clout in Michigan by repeatedly claiming she witnessed fraud in the 2020 election when she served as a poll challenger. A Republican-led Michigan Senate investigation concluded the following year that there was “no evidence” of widespread fraud in that election, but that didn’t deter Karamo.

She appeared at MAGA rallies and ran a failed campaign for Michigan’s secretary of state in 2022 with false claims such as the notion that “authoritarians” inside the US believe “that if they can corrupt battleground election systems, they can control America. This nefarious plot is real and it’s happening.”

She then ran for chair of the Michigan Republican Party on a platform of election reform and a pledge to buck the party’s top donors.

“You are required to do their bidding in order to get their funds, and so we just simply wind up destroying the country slower than Democrats,” she said at a debate with fellow Michigan GOP chair candidates in January when she pitched a plan to instead rely on donations from small business owners and encourage local activism.

In February, after a reported three rounds of voting at a party convention that spanned 11 hours, Karamo was elected chair. Her election meant both the chair of the Michigan Republican Party and the Michigan Democratic Party were Black women.

Many conservatives in the state celebrated Karamo’s ascent as a breath of fresh air.

“She seemed like the real deal,” Mark Forton, the chairman of the Macomb County Republican Party, told CNN.

But following her election, the party has been rocked by financial woes and finger-pointing.

The former budget chair issued a statement in June that said the party’s “spending was so far out of proportion with income as to put us on the path to bankruptcy” and that “efforts to implement responsible spending limits were met with adamant opposition from Chair Karamo and the small circle of operatives around her.”

Another budget committee member, who resigned, wrote in a statement to Karamo that the party faced “imminent default on the Line of Credit.”

That concern appears to have been justified. Last month, a lawyer for Comerica Bank sent a “Notice of Default” to the party for failure to pay interest on a principal of $509,009, records show.

Karamo and local party leaders have now plunged into a web of bitter conspiracy theories aimed at one another. Some of her detractors allege Karamo is part of a malicious plot, while her defenders make such allegations about her critics.

“Simply put, we have been had. We are dealing with a group of people who are working to destroy the MIGOP prior to the super important 2024 election year. This is not happening, this year, by coincidence,” Forton of Macomb County said in a statement with his vice chair in which they called for Karamo’s ouster in November.

Ken Beyer, the chair of the party’s fourth district, defended Karamo and argued the party’s establishment has refused to support her from the beginning of her term. He claimed he heard from someone involved in the party’s prior administration, whom he declined to name, that leadership allowed Karamo to become chair “because they feel they can make her fail sooner” than another grassroots candidate.

“It’s like they are pulling the rug out from under Kristina and then they are going, ‘Look, she fell,’” Beyer told CNN. “They caused the problem and then blamed Kristina.”

Karamo, when questioned about some of the party’s obstacles at a meeting in October, said, “Again this whole deep state thing is very real,” according to a recording of the event.

Ron Weiser, former chair of the Michigan GOP, told CNN why he thinks traditional donors have largely not financially supported the party under Karamo.

“One, I don’t think she’s asking, which is the fundamental thing, and two even if she did, I don’t think people would have confidence in giving,” Weiser said. “You need someone with experience who can be a CEO and who can raise the funds necessary to do what the party does best.”

Conference controversy

To many longtime state party members, the Mackinac conference – set on an island in northern Michigan – is seen as a consistent boost to party morale and finances, driven in part by high-profile attendees. In 2015, for instance, five Republican presidential candidates attended the conference, including Sen. Ted Cruz and former Florida Gov. Jeb Bush.

“The closest thing to it is the Iowa State Fair, so it is a jewel for our state,” Carpenter said. He described this year’s event as a “disaster” because, among other reasons, outside speakers like actor Caviezel were paid even though presidential candidates traditionally have given speeches for free or even helped cover costs.

That Ramaswamy was the only presidential candidate to attend this year seemed to be a disappointment. Hassan Nehme, a current vice chair for the party, said during a recorded panel after the conference that other presidential candidates expressed desires to attend but Karamo and another colleague rejected those offers. “They wanted this conference to be different, so … we weren’t setting it up right,” he said.

During a separate meeting, Karamo said it was “not true” that her administration didn’t reach out to candidates, and she called the conference a “net benefit” but added, “Would we have liked to have made a lot more off of it? Yes,” according to a recording.

In the wake of the conference, another controversy emerged. A spreadsheet that ranked hundreds of potential conference volunteers on a scale of one-to-four began circulating among party members. The number one on the chart stood for “Patriot” while the number four stood for “Me First or RINO…,” an acronym for “Republican in name only.”

Karamo said in October she had nothing to do with those rankings and blamed a “temporary volunteer” for creating them. In a separate interview last week, she called her critics “me-firsters” and derided the “RINO” faction of the party.

State committee member Bree Moeggenberg – who was ranked a four – said that chart is part of a broader culture of division under Karamo.

“She’s disenfranchised us,” Moeggenberg told CNN. “She has pushed the RINO’s per se away. She has pushed all sides of establishment away. She has pushed grassroots away.”

Joel Studebaker, the party’s deputy chief of staff, conceded in an interview that fundraising has been a challenge and said he believes the party has raised less than $1 million this year. Asked about the payment to actor Caviezel, he said, “Would I pay him $110,000 personally? Probably not. I think it would be something of a lower number, but I also know that we were struggling to get speakers.”

But Studebaker added that Caviezel injected energy into the conference and spoke to a packed house. More broadly, he compared the current state of the party to that of a start-up organization, in which his team started with debts and limited assets.

“We come to the table with almost no political experience and we don’t view that as a bad thing, but it does increase the learning curve in terms of politics,” said Studebaker, who said Karamo’s critics within the party also share responsibility for its current state.

“Everybody wants to make it about Karamo. We have a mentality in this state, in this country, of top down. And the reality is, it’s a we-the-people discussion,” he said.

“If they would stand down and take the energy that they’re using to try to destroy us and try to help us with their experience that they have we’d be unstoppable,” added Beyer, the party’s fourth district chair, who joined Studebaker for a CNN interview.

Election on the line

Republican strategists believe winning Michigan is essential for winning the White House, and therefore an organized state party that can provide voter outreach, donor support, and logistical help is crucial.

“Michigan has moved increasingly in the battleground-leaning column, even the Trump column, and Republicans desperately need to find a roadmap to win,” said Michigan Republican strategist Dennis Lennox.

Karamo’s critics believe a change in leadership is necessary for that to happen.

“It’s not that I don’t like her. What she’s doing, on the other hand, is rather insidious,” said Andy Sebolt, chair of the party’s second district who also chaired the state party’s policy committee until recently when Karamo had him removed after he said he pushed for more transparency.

“We should have a fighting chance in the state of Michigan to award our electors to a Republican. … With this chaos and alienation of other Republicans, we don’t stand that chance,” he said.

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