Michigan GOP crisis: Ex-district chair wants Kristina Karamo dismissed from leadership for putting party at risk of bankruptcy

LANSING, MICHIGAN: In a surprising turn of events that threatens to reshape Michigan's political landscape, Warren Carpenter, former Michigan Republican District chair, revealed that there are enough votes within the party to remove Kristina Karamo from her position as the state GOP chair.

Carpenter, who resigned from his post in September, has taken a bold stance, sponsoring a 140-page report titled, 'The Failed Leadership of the Karamo Administration', released Sunday night, December 10. 

Carpenter, a one-time supporter of Kristina Karamo, declared to the Michigan Advance, "We’ve got the votes. She’s gone," setting the stage for a high-stakes special meeting scheduled for December 27, where dissident Republicans plan to challenge Karamo's leadership.

Financial turmoil unveiled

The comprehensive report paints a damning picture of Karamo's leadership, alleging that her tenure has placed the party at imminent risk of financial collapse.

According to Carpenter, the party now finds itself in a significant negative financial position, accumulating an alarming $620,000 in debt since Karamo assumed control in February.

“People should get prison sentences for the stuff they’ve done because other people in our country are getting prison sentences for the exact same things,” Carpenter told the Michigan Advance.

He added, “If we’re the party of law and order, I’m not going to have people telling me, ‘We’re the party of law and order unless there’s a sacred cow'.”

The report goes further, revealing alleged violations of federal contribution limits based on the party's November profit-and-loss statement. Major donors, according to Carpenter, contributed $263,203 that month, surpassing the federal limit and potentially exposing the party to significant legal consequences.

Carpenter raises particular concerns about the undisclosed spending of nearly $75,000 for services tied to Ottawa Impact leader Joe Moss. Disturbingly, these expenditures were not reported in any of the party’s campaign-finance reports, leading Carpenter to label it "a significant compliance issue."

“Then every mistake they made is going to be seen by the FEC as adversarial,” Carpenter predicted.

He continued, “That’s a totally different shift, and once you lose Safe Harbor in your FEC account, you don’t get to keep it for your state account. You don’t get to keep it for the administrative account or any of those because all those operate under the same standards of Safe Harbor. So if you lose it for one position, you lose it for the entire body.”

Furthermore, Carpenter pointed to the party's bylaws, noting that the budget committee must have representation from all 13 districts to control the party’s spending. This lack of compliance, as per Carpenter, is a significant factor contributing to the ongoing violations.

“They’re operating a completely separate financial organization outside of the party with these individuals who are enriching their friends,” Carpenter asserted, shedding light on what he sees as a systemic issue within the party.

Legal battles and potential bankruptcy

The party reportedly accepted a $110,000 loan from the Lynnette R Wilson Trust to cover actor Jim Caviezel's speaking fee at the Mackinac Leadership Conference. Carpenter contends that these financial decisions have driven the party into an unsustainable position.

“The Karamo administration has driven the Party into an unsustainable financial operating position,” the report stated. “The Party cannot continue to operate any longer at this rate. Ms. Karamo’s financial plan has been a complete failure. And she has no new plan to bring the Party back."

"If Ms. Karamo is allowed to continue following her failed plan, the Party will endure additional financial losses and the creation of more debt — and ultimately the effective end of the Party. What seemed impossible at the beginning of 2023 has now become a reality in only nine months," it concluded.

Karamo, facing these allegations, has proposed selling the party's unused headquarters building in Lansing to alleviate some of the financial burden. However, Carpenter suggested that this move, challenged in a lawsuit against the Michigan Republican Party Trust and Comerica Bank, could trigger legal actions by Comerica Bank to collect on the debt.

“This lawsuit will likely include a judgment for the sheriff to seize all the Party’s assets for sale at auction and also a garnishment of the Party’s bank accounts and amounts that third parties owe the Party. Under this scenario, the Party will have little choice but to declare bankruptcy,” Carpenter warned, painting a dire picture of the potential consequences.

Kristina Karamo's leadership in jeopardy

Amidst these revelations, Karamo's leadership has been marked by public missteps and reports of financial shortfalls and internal strife, including reported fighting at a state committee meeting in Clare in July.

As the December 27 meeting approaches, the Michigan GOP finds itself at a pivotal juncture that could redefine its leadership and financial trajectory. As for potential successors, Carpenter remains noncommittal. 

“I will support anybody who supports the principles that I first signed up for, which are law and order, transparency and hard work,” he told the Michigan Advance.

“If any of these individuals that come forward want to sign up to that and prove that, then so be it. And if they get in and they don’t do it, then I’ll do the same thing I did with the prior administration, expose what the malfeasance is, and I’ll push to get them out. We want competent leadership,” he said.