Ehrlich approved paying consulting fee to Steele

Running mate is receiving $5,000 a month from GOP

August 28, 2002|By David Nitkin | David Nitkin,SUN STAFF

Republican gubernatorial candidate Robert L. Ehrlich Jr. said yesterday that he approved an arrangement to pay running mate Michael S. Steele a $5,000 monthly consulting fee with state party funds, but did not recall where the idea originated.

"I'm sure I expressed support for it, but I can't tell you how it started," Ehrlich said. "And today I support it. It's acceptable. It's fine. I just don't know where the genesis of it was."

The Sun reported this week that Steele signed a consulting contract with the state GOP shortly after he was selected as Ehrlich's running mate last month.

Steele took a leave from his unpaid position as state Republican Party chairman, but was immediately retained as a consultant on party issues.

The payments are legal under state law, but Democrats have questioned their propriety, saying the GOP appears to be paying a candidate to run for office.

A former corporate lawyer, Steele started a consulting company that has foundered since its inception in 1999. He has refused to disclose his other clients.

Ehrlich said Steele's financial worries were only a small part of their discussions before agreeing to join as a ticket.

"We knew, obviously, there was some struggle with the business," Ehrlich said. "It was mentioned, but it was not a dominant part of our conversation."

Steele did not demand a consulting position in return for becoming a running mate, Ehrlich said.

"It just was not that big a deal. We obviously wanted to make sure it was legal. Other than that, that was the end of it," he said. "It was not a deal-breaker. It was not even part of our initial discussion."

G. Madison Powers, director of the Kennedy Institute of Ethics at Georgetown University, said the agreement seems "somewhat fishy," and notes that political campaigns can be adept at "finding some way for a candidate and his or her family to have an income during a full-time campaign."

Sometimes campaigns create "corporate shells" and pay office expenses that eventually reach a candidate's pockets, he said.

"A more frequent approach now is to put the candidate's spouse on the campaign payroll as a full-time employee, and the amount paid is disclosed on regular forms, usually in the filing that follows the close of the campaign," Powers said.

Steele said his work for the party includes helping implement a 10-year strategic plan that he helped draft.

He said he believes his personal affairs are being held to a different standard than those of the leading Democratic ticket of Lt. Gov. Kathleen Kennedy Townsend and retired Adm. Charles R. Larson, both of whom have sizable assets.

"Lots of state party chairmen are paid," said James C. "Chip" DiPaula, Ehrlich's campaign manager and former Republican National Committee worker.

"State parties always hire professionals and consultants to assist them in their duties. This is totally consistent with that," DePaula said.

Party leaders, including Maria Pena Faustino, the GOP secretary, said they did not know of the consulting contract until being told by a reporter.

Faustino said Steele had good ideas, and deserved to be paid for them.

"People talk about the rich Republicans," she said. "But we're all in need."

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