The Maryland Republican Party and state elections officials reached an agreement Tuesday that allows the financially beleaguered party to incrementally repay $75,000 to Michael S. Steele's campaign account so that it can still meet monthly expenses.
The State Board of Elections had determined that Steele's account made an improper contribution to the Republican State Central Committee by covering legal fees it incurred during a redistricting fight several years ago. Steele, a former lieutenant governor and now the national GOP chairman, was the state committee's chairman back then.
Under the agreement that is expected to be completed by the end of the week, the state party will be able to keep $15,000 of funds raised each month to help cover administrative expenses such as payroll and rent, but the party must contribute 15 percent of any funds raised above that amount to repaying the Steele account.
"We're not making them fire anybody, and we're not kicking them out on the street," said Jared DeMarinis, director of the board's campaign finance division. "It's a major political party in the state, and this is an extraordinary circumstance."
Also under the agreement, a separate $2,500 contribution from Steele's account will be reported as a transfer, correcting another problem raised by state officials. That brings Steele's account closer to a legal limit for the 2010 election cycle, so it can transfer only another $1,500 to the party.
The board had given the GOP until Tuesday to reimburse Steele's account and amend campaign finance reports dating to 2002. If the party or Steele's committee fail to adhere to the agreement, they could be referred to the state prosecutor for possible charges of campaign finance violations, DeMarinis said.
State officials and the party agreed that if the GOP's financial fortunes improve substantially, the party would repay the money faster, he said.
GOP officials still disagree with the state's legal findings, the party's attorney, Robert B. Ostrom said, and retain the right to contest the issue in the future - if, for instance, a court rules on that area of the law.
"We tried to work something out as we charge ahead and prepare for the 2010 elections," Ostrom said. "The party is, not surprisingly, going through a rebuilding effort within the party structure as well as with our finances. We're trying to get our feet back on the ground."
James Pelura, the current state GOP chairman, said: "We are pleased the state board was easy to work with and very cooperative."
