Payments in question

Steele used Md. campaign funds for legal bills, which ran to at least $188,000

February 20, 2010|By Paul West |

WASHINGTON — — Former Lt. Gov. Michael S. Steele's personal political accounts were billed at least $188,000 by Washington law firms during his first year as chairman of the Republican National Committee, according to state and federal disclosure reports.

Steele used state campaign funds to pay the law firms, but the specific purpose for most of the expenditures wasn't disclosed, in apparent violation of Maryland reporting guidelines.

Some of the costs appear to involve activity that predated his tenure as Republican national chairman. An RNC spokesman declined comment, on grounds that the payments didn't involve national party business.

Steele's state campaign committee, which dates from his 2002 run for lieutenant governor, paid a total of $122,195.01 during the second half of 2009 to the Washington office of Bryan Cave LLP, according to the committee's Jan. 20 filing with the State Board of Elections.

One person with knowledge of Steele's political activities said the payments were for an internal audit of Steele's campaign finances, "to make sure that everything was OK."

Last February, shortly after winning election as Republican national chairman, Steele said he would voluntarily provide records from his 2006 U.S. Senate campaign to the FBI as part of an effort to clear up questions raised by the campaign's former finance chairman. The former official, Alan B. Fabian, made the accusations in an attempt to gain a more lenient prison sentence in an unrelated fraud case.

Steele said at the time that he would give the FBI "everything that they think they need. And if that's not enough, we'll give them more." The FBI had already contacted Steele's sister, Monica Turner, after Fabian claimed that she was paid more than $37,000 for campaign work that was never performed.

No charges have surfaced in connection with the allegations, and there has been no indication that either Steele or his sister is now under investigation.

The payments to the Bryan Cave firm were made in three installments, from July 23 to Nov. 3, 2009, according to the disclosure report. The payments to the law firm consumed one-third of the $366,720 that Steele's political committee had in the bank at the start of last year.

Rodney F. Page, managing partner of Bryan Cave's Washington office, said that as a matter of policy, the firm had no comment.

Details of the payments to the law firm were not given. Steele's report lists them only as "salaries and other compensation."

The State Board of Elections requires disclosure of the specific purpose behind each payment, said Jared DeMarinis, director of the campaign finance division.

According to elections board guidance, campaign finance reports "are supposed to inform the public on how the campaign funds are being used. Simply recording a large expenditure for 'consultant services' is not sufficiently descriptive."

When disclosures are not sufficiently detailed, the agency typically follows up by requesting further information, DeMarinis said.

State officials said Friday that if Bryan Cave conducted an internal audit for Steele, the payments would probably be permissible under Maryland election law. However, state campaign funds could not be used for legal expenses in connection with an investigation into Steele's Senate campaign, since that was a federal election, not a state contest.

In 2009, a Steele associate asked the elections board whether funds from thestate account could be used to defray expenses of his run for Republican national chairman, on the theory that winning the party post would further Steele's prospects for a future run for Maryland governor. Steele was advised that this would be permissible, though there is no indication that he used state campaign funds for that purpose.

Steele's state disclosure report also lists law-firm payments that appear related to a 2009 enforcement matter with the elections board.

Last summer, the Republican State Central Committee agreed to return $77,500 to Steele's state campaign committee, which improperly spent leftover campaign funds to help settle an old legal bill dating from Steele's service as Maryland Republican chairman.

In its most recent filing, Steele's state committee reported total payments of $36,158.81 to the law firm of Dewey & LeBoeuf LLP in Washington. Two lawyers from the firm represented Steele's committee before the state elections board. The payments, listed only as "salaries and other compensations," were made Nov. 3 and Dec. 30, according to Steele's filing.

Separately, a year-end disclosure report for 2009, filed by Steele's U.S. Senate campaign committee with the Federal Election Commission on Jan. 29, shows a debt of $30,072.10 to Dewey & LeBoeuf. The debt, for "legal consulting," was accumulated between April 1 and Sept. 30 of last year, according to FEC documents.

It could not be determined why the law firm would have billed Steele's federal account if its legal work on his behalf was limited to the matter in Annapolis involving his state committee.

Stephen A. Best, head of Dewey & LeBoeuf's white-collar criminal defense group in Washington and one of the attorneys who represented Steele before the state elections board, declined comment.

Over the years, Steele has been dogged by questions involving finances.

His decision to continue giving paid speeches while serving as party chairman drew criticism recently from some former RNC chairmen, who said that he should treat the position as a full-time job.

Steele, who is paid $223,500 a year plus benefits, also received undisclosed royalties for a book published last month. His defenders have pointed out that some of his predecessors as Republican chairman also received outside income in addition to their party salary.

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