Ralph Hallow at The Washington Times:
The Republican National Committee failed to report more than $7 million in debt to the Federal Election Commission in recent months – a move that made its bottom line appear healthier than it is heading into the midterm elections and that also raises the prospect of a hefty fine.
In a memo to RNC budget committee members, RNC Treasurer Randy Pullen on Tuesday accused Chairman Michael S. Steele and his chief of staff, Michael Leavitt, of trying to conceal the information from him by ordering staff not to communicate with the treasurer – a charge RNC officials deny.
Mr. Pullen told the members that he had discovered $3.3 million in debt from April and $3.8 million from May, which he said had led him to file erroneous reports with the FEC. He amended the FEC filings Tuesday.
Campaign-finance analysts said that simply misreporting fundraising numbers to the FEC can lead to millions of dollars in fines and that criminal charges can be levied if the actions are suspected to be intentional.
“This is significant because the civil penalties could mean big fines that take a significant bite out of the RNC‘s finances close to the November congressional elections, when state parties need the RNC‘s financial help for their ‘victory’ programs,” said former FEC Commissioner Hans A. von Spakovsky.
Ben Smith at Politico:
To: Members of the Republican National Committee
From: Tom Josefiak, HoltzmanVogel PLLC Michael Toner, Bryan Cave LLP
Date: July 21, 2010
Re: Correction of Misinformation Regarding RNC Debt
As outside counsel to the Republican National Committee, we write this memorandum to address concerns raised by some RNC members based on media stories this morning claiming that the RNC has improperly failed to report $7 million of debt. These reports are extraordinarily misleading. As reflected on the monthly report the RNC filed yesterday, which covers the month of June, the RNC had approximately $2 million in unpaid invoices at the end of the month, which were completely paid in the first half of July. In other words, as reflected on that report, all of this debt – as well as the debt reflected on the amended reports for April and May – has been paid off. Contrary to the hyperbolic claims in the media reports, the RNC has not at any time carried $7 million of debt, and all the debts at issue have been paid.
The RNC seeks to scrupulously comply with all FEC reporting regulations, including those that govern the reporting of debts and obligations. With the arrival of a new Chief of Staff and Finance Director several months ago, the RNC began a thorough review of invoices and contracts to ensure the legitimacy of billings, the extent of services provided in connection with those billings, and the overall fiscal discipline of the Committee. Also at the direction of Chairman Steele, the RNC has conducted a thorough internal procedures review, which has included a careful review of invoices received and paid to further ensure that the RNC’s monthly FEC reports are as comprehensive and accurate as possible. As a result of these efforts, the RNC is confident that these protocols ensure not only that the invoices reflect services actually provided to the RNC but also that the information concerning payments by the RNC is timely and accurately reported.
It is unfortunate that misinformation concerning internal RNC procedures has been somehow disseminated to the media, as the spreading of these inaccuracies operates to the grave detriment of the RNC. Contrary to today’s media accounts, the RNC has been and will remain committed to accurate FEC reporting, transparency, and fiscal discipline with its donors’ money.
Nicole Allan at The Atlantic
How serious is the problem? The RNC quickly retained former FEC chair Michael Toner as their attorney, a high-priced move that Hans von Spakowsky — another former FEC commissioner — called “unusual and significant,” according to the Washington Times. The fines for failing to report debt on time can run into seven figures and could seriously impact the ability of the GOP to support candidates in the waning days of the midterm elections, if immediately imposed.
Perhaps even more disturbing is what prompted Pullen to double-check the books. The fundraising numbers have fallen well below goals set by the RNC, but the cash on hand figures kept increasing past expectations. Supposedly this came from better efficiency in operations and cost-cutting, but last month Pullen got suspicious and rechecked invoices, payment for which had slipped significantly. Pullen claims that Steele attempted to block his access to the data and that Leavitt locked the invoices in his office; Steele denies that charge.
If Pullen’s claims turn out to be true, it’s a potential disaster for the RNC and Republican candidates, and not just because of the restricted cash flow. The GOP has been arguing that they are the party of fiscal responsibility and reform. The DNC will have a field day with this story.
Right. What makes this story serious is the fact that it has multiple angles, all of them bad news for the RNC. We have (1) the in-fighting among RNC officials, with the chairman going up against his own treasurer; (2) potentially illegal accounting tricks; (3) weak RNC fundraising in advance of a critical election season that necessitated the illegal accounting tricks; (4) another distracting scandal for Steele to deal with, just a few weeks after the last one; and (5) the fact that the controversy itself steps all over the Republican message of fiscal responsibility.
Doug Powers at Michelle Malkin’s place:
Seven million dollars? Sounds like somebody made over 3,500 more trips to Voyeur West Hollywood.
My relationship with the RNC is a little like Al Pacino’s famous line in Godfather III, except in reverse: Just when I thought I was in, they push me back out.
There need to be changes at the top of the RNC chain, and fast. Hand out leather hoods, ball gags and whips as severence pay if need be, but clean house at the top and find somebody able to lead the RNC so the Republicans it supports don’t look stupid and hypocritical when they speak of “fiscal responsibility.”
In a year where the base is motivated and the RNC should be cash heavy heading into an election that will determine the future of the country, they’ve run up a debt and may have tried some bookkeeping sleight of hand to make things look not as bad as they are. Sounds like the kind of thing that has gotten America in deep trouble already, doesn’t it?
The RNC coffers should be overflowing more than the coin tray in the White House’s ice cream cone/cigarette/arugula vending machine, but they’re not. Explanations are in order.
A recent RNC internal report showed that the party’s major donors program was spending $1.09 for every $1 raised. What a great way to convince voters (and major donors for that matter) to give them the keys to DC so they can lead America out of its fiscal hole.
Can we get Tom Vilsack to fire Michael Steele? Yeah, he doesn’t have any justification for firing Steele either, but this is just getting sad.
Just fire him, Republicans. If you are worried about the black thing, hire Alan Keyes. Certainly he is available. YES, he may be a bit crazy, but you have to at least try somebody else