Oops: Steele's Campaign Spending Being Investigated

I suspect that the GOP thought they'd be crafty and elect Michael Steele as RNC chair so that they party could claim that it really not racist - even though it is (remember the lily white Republican National Convention last fall?). In any event, it looks like the strategy may end up backfiring now that it has come out that federal prosecutors are investigating Steele for misuse of campaign funds. So much for a different kind of GOP. Here are highlights from today's Washington Post:

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Michael S. Steele, the newly elected chairman of the Republican National Committee, arranged for his 2006 Senate campaign to pay a defunct company run by his sister for services that were never performed, his finance chairman from that campaign has told federal prosecutors. Federal agents in recent days contacted Steele's sister, a spokesman for Steele said yesterday. The claim about the payment, one of several allegations by Alan B. Fabian, is outlined in a confidential court document.

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Fabian's claims emerge as Steele begins his new role at the RNC, where he oversees the raising and spending of hundreds of millions of dollars in party money. The former Maryland lieutenant governor has faced questions about his handling of campaign money in prior elections and was twice fined for missing filing deadlines.

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In one of his allegations, Fabian points to a February 2007 payment by Steele's Senate campaign of more than $37,000 to Brown Sugar Unlimited, the company run by Steele's sister, Monica Turner. Campaign finance records list the expense as having been for "catering/web services." Turner filed papers to dissolve the company 11 months before the payment was received.

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Over the years, money trouble has been a persistent problem for Steele. His first race for public office, a 1998 bid for the Republican nomination for state comptroller, ended nearly $35,000 in debt, much of it to his sister. He was fined twice by state officials for missing deadlines to file campaign finance reports and was in debt and had faced foreclosure in 2001, the year before he was selected as Ehrlich's running mate. The state party threw Steele a financial lifeline, awarding him an unusual $30,000 consulting contract.