Florida Democratic Party's undocumented line of credit raises questions among leaders

The Florida Democratic Party opened a $200,000 line of credit last year but didn't report it on campaign finance reports, a concern some party leaders have as federal regulators demand details about a deficit in an account used for federal races.

The credit line was opened for the party by using as collateral the assets of millionaire Miami Beach real estate developer Stephen Bittel, who was elected in January 2017 and stepped down 10 months later after claims of inappropriate workplace conduct from female staffers.

“We were told that the line of credit was secured with Stephen’s assets and not the party’s, so the party would not be liable for it, but that the party could use it for digital marketing and other stuff if needed,” said Nikki Barnes, a Democratic National Committee member who was briefed during a meeting in June by Sally Boynton Brown, the party’s former executive director.

“If it was used, it would be my expectation that these funds would be deposited into the (party's) accounts, whether it be our state or federal account, as a loan with the intent that we repay it because it is a line of credit,” Barnes said.

More:FEC scrutinizing Florida Democratic Party finances and large deficit in federal campaign account

Barnes said “it would be a problem” if money was spent for party purposes and not reported.

Juan Penalosa, the party's executive director, said in an interview Tuesday the line of credit was never used and that it was closed when Bittel resigned.

Concerns about the loan come as the Federal Election Commission is demanding details about the party's finances, including a $159,333 deficit in the federal campaign account reported in November. The federal account supports party candidates seeking U.S. House and Senate seats, elections this year that will help determine which party controls Congress.

The FEC gave the party a March deadline to provide details to this and other questions about the party's finance reports, but no written response has been provided. 

“We sounded the alarms for months with the Bittel administration,” Barnes added. “Every time we sounded the alarm on something they would act sketchy, like saying nothing to see here.”

Efforts to reach Bittel for comment Tuesday failed.

Boynton Brown, the party's former executive director, told Politico Florida in June that the line of credit Bittel arranged would give the party “the opportunity and flexibility to invest in additional digital and messaging opportunities.”

Boynton Brown said in an interview Tuesday that the credit line was opened but never used. 

Penalosa has said the party is working with the FEC to resolve discrepancies in campaign reports. He said an accounting error included on a finance report perhaps as early as 2014 by the party's prior administration has led to incorrect reports being filed with the FEC, including a deficit reported last year that continues to be reported in the party's latest filings.

But Allison Tant, who chaired the party from January 2013 to January 2017 before Bittel stepped in, said Tuesday there were no accounting errors reported on her watch. She said she hired an independent accounting firm for $30,000 a year to help ensure accurate reporting and that the party had “zero findings or exceptions, no questions or issues” in 2014 and 2016 when audits were conducted.

She said that when she turned the party over to Bittel, about $400,000 remained for the state and federal accounts. She said the accounting firm she hired was replaced.

“The accounting firm hired by Bittel should perhaps take it upon themselves to acquaint themselves with the highly specialized compliance audits prepared by the ... accounting firm under at least three previous chairs,” Tant said.