Bankrupt treasurer runs again

Gary Spaeth
Gary Spaeth will run for re-election as Murray County Auditor/Treasurer despite filing bankruptcy last year.
MPR Photo/Mark Steil

Murray County Auditor/Treasurer Gary Spaeth has held the office since 1995. The state auditor regularly reviews the county's financial health and has not found any major problems. Voters approved of Spaeth's work by re-electing him twice.

"I understand how people could connect the two, bankruptcy and holding that office of county treasurer."

This year's contest promises to be tougher. Last October Spaeth and his wife declared bankruptcy. Spaeth acknowledges his personal finances will play a role in the outcome of the election.

"If when people come to vote, can separate personal from the job I'm able to do and have done, then I would hope that I would be re-elected," says Spaeth. "At least by filing the voters of Murray County will have the opportunity to make that decision."

Spaeth ran unopposed four years ago but faces at least three opponents this time. The September primary election will narrow the field by two.

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Spaeth says when the bankruptcy occurred he wasn't sure if he would seek re-election. His bankruptcy papers listed nearly $186,000 in liabilities compared to assets of just over $163,000. He says when friends offered support he decided to run. Spaeth says the bankruptcy will be part of the race because he's the elected official who oversees the county's money.

Bill Lundy
Bill Lundy manages an insurance agency in Slayton, the Murray County seat.
MPR Photo/Mark Steil

"It's a public position that I hold. I understand how people could connect the two, bankruptcy and holding that office of county treasurer. And they would want to know if the office holder has filed, or has gone through it," says Spaeth.

One of his opponents in the race puts it more directly. Bill Lundy says he has no plans to raise the bankruptcy question in ads or speeches. But he says if he's asked about the matter he'll respond this way.

"I think people have concerns about fiduciary responsibilities of elected officials," says Lundy. "They're concerned that this bankruptcy thing is something that they just don't feel should happen in that position. The word on the street is they're not real happy about it."

Lundy says he and the other challengers must be careful what they say. He says if they comment too strongly on the bankruptcy question the tactic could backfire.

Kathy Schwartz
Kathy Schwartz says far from running for re-election, Spaeth should resign his position because of the bankruptcy filing.
MPR Photo

"If you go to the negative side and attack the candidate personally I just don't feel that the good people of Murray County are going to respond to that in a positive way," says Lundy. Also in the race are county Economic Development Director Heidi Winter and a former banker Joann Carlson.

One voter who believes the candidates should press Spaeth for information is Kathy Schwartz. She has a strong interest in public issues. She writes occasionally for an area newspaper. As soon as the bankruptcy became public, Schwartz called for Spaeth to resign.

"Well, if a person is in charge of the finances of the county, they should probably also be responsible for their own finances. And if he can't handle his own finances it makes a person wonder how he can handle the finances of the county," says Schwartz.

Schwartz wants Spaeth to explain in detail why the bankruptcy occurred. She's especially interested in the nearly $110,000 in credit card debt listed in the bankruptcy filing.

Spaeth says the bankruptcy was caused by a series of personal misfortunes, including a fire, a car accident and tornado damage. The rest of the debt he says were expenses associated with raising six children. Kathy Schwartz believes the bankruptcy will be the central issue in the election. Auditor/Treasurer Gary Spaeth says it will be an issue, but he's not sure how big it will be.