Former Minnesota GOP chairman Tony Sutton declares personal bankruptcy

A hard-charging former state Republican Party chairman whose constant refrain to DFLers and even GOP lawmakers was "live within your means" has declared personal bankruptcy, the latest twist in one of the most dramatic political downfalls in recent state history.

At the height of his power, Tony Sutton demanded that Republican legislators oppose all tax increases and keep state spending strictly in line with revenue. Few realized it at the time, but the GOP's finances under Sutton's management were a shambles, and the same scenario was playing out in his personal life.

Sutton and his wife, Bridget Sutton, an Inver Grove Heights school board member and former Republican operative, say they owe $2.1 million, including $70,000 of credit card debt, $20,000 in federal student loans, unpaid state and federal taxes, and hundreds of thousands of dollars in unsecured personal loans to cover business expenses. At the time they filed, the Suttons had no life or health insurance.

Sutton did not respond to repeated requests for comment.

A party insider for 20 years, Sutton, 46, has held virtually every staff position the party has, including field director, treasurer and executive director.

In 2009, he made the leap to party chairman, winning on the first ballot. He told delegates then that "We've got to regain credibility with folks for whom fiscal issues are important."

That message resonated with voters in 2010, with Republicans winning control not only of the House but also the Minnesota Senate, where DFLers had ruled for more than 40 years. Their triumph, however, was tempered by losses of every statewide office, including the governorship, where Sutton had bet heavily that nominee Tom Emmer would best DFLer Mark Dayton.

The losses didn't end at the ballot box: Sutton had vastly outspent the party's incoming revenue, including a costly recount battle that Emmer lost. So tight were finances that he stopped paying rent on the party's headquarters.

At the end of 2011, amid mounting concerns about debt and mismanagement, Sutton abruptly resigned. A bleak picture soon emerged for state Republicans. The GOP was left with a staggering $2 million in bills, a debt load that crippled its 2012 efforts. That year, DFLers regained power, with majorities in the House and Senate, putting them firmly in control of both the executive and legislative branches.

Big donors fled the party and debts continued to stack up, including more than $700,000 in previously undisclosed bills from the recount. Shortly after GOP Chairman Pat Shortridge stepped in to right the mess, the landlord served the party an eviction notice for $111,000 in back rent. Party leaders have since slashed staff, dramatically cut spending and are slowly paying off debt.

Sutton hasn't always worked for the party. In 2003, with a growing family, he went to work for Pat Anderson, then state auditor, as her deputy. In 2006, he left that post to join forces with Republican mega-donor and banker Bill Cooper to buy the Baja Sol Mexican restaurant chain.

With business debts piling up, Cooper — the CEO of TCF Financial Corp. and also a former GOP chairman — and the Suttons parted ways in early 2011 and Sutton returned his focus to party politics.

By that time, the bankruptcy filing shows, he and Bridget Sutton had personally guaranteed loans for more than $1.6 million to various businesses.

Anderson, who serves on the state GOP executive committee, said there was always a sense that Sutton had a "desperate need for money" and that he had "severe personal business problems" after leaving Baja Sol.

But nobody questioned it, at least publicly, as the party seemed more energized and unified under his rule than it had been in years.

"He became a political figure in his own right, and made it very public. He chose this way, and so if you fall, you fall hard," said Anderson, who led the effort to force out Sutton as chairman after committee members got a fuller look at the party's growing debt.

Around that time, Sutton started Winning Strategies, which he touted as a political strategy and grass-roots advocacy firm. According to the bankruptcy filing, Winning Strategies has no assets and is largely "a fiscal conduit" for accepting state government money from a nonprofit organization to help care for the Suttons' autistic son.

According to the bankruptcy filing, the Suttons owe $51,000 more on their Inver Grove Heights home than its current assessed value. Included in that is a second mortgage for $80,000 that they then loaned to Sutton Enterprises, one of 16 businesses registered at their home address.

The Suttons are now in the midst of divorce proceedings.

The Chapter 7 bankruptcy filing means the Suttons will ask the court to discharge all or most of their unsecured debt — some of it owed to well-known names in Republican circles.

The Suttons owe more than $460,000 to Cooper State Bank in Ohio, a bank founded by Cooper. According to the Aug. 23 filing, the Suttons signed a loan guarantee with Cooper's bank and absorbed the debt into their personal finances.

They owe $31,000 to Elam Baer, a GOP donor and strategist and a major backer of former Gov. Tim Pawlenty. Tony Trimble, a prominent GOP attorney who represented the party during the 2010 gubernatorial recount, is owed $20,000.

Cooper and Baer could not be reached for reaction. Trimble declined to comment.

Sen. Dave Thompson, R-Lakeville, a gubernatorial candidate who ran against Sutton for party chairman in 2009, said he would not comment on Sutton's financial troubles.

"There are Democrats, Republicans, independents, Libertarians and Green Party members that as individuals don't take care of their financial responsibilities," Thompson said.

Ben Golnik, a longtime GOP strategist and former executive director of the state party, called Sutton's problems "inside baseball" that would matter little in the coming election cycle.

"We are already two chairmen beyond that now," Golnik said. "We are looking forward now, and not at the personal, business dealings of someone in the past."

Those who worked closely with Sutton at the GOP office paint him as a visionary who sometimes lacked the ability to make an honest assessment of the political or financial landscape.

"Tony had an image of himself as a business guy like Bill Cooper — he could be in their financial shoes if he hadn't gone into politics," said former state GOP spokesman Craig Westover. "I think that clouded his judgment; I think he'd rather be decisive than make the best decision."

Baird Helgeson • 651-925-5044