The RNC’s hidden debts

THE RNC’S HIDDEN DEBTS…. I’ve lost count of how many times it’s looked like a new controversy would force former RNC Chairman Michael Steele from his job. But in each instance, Steele looks ridiculous, the story eventually fades, the party doesn’t want to go to the trouble of ousting him, and he lives to screw up another day.

The Washington Times reports today, however, on a new matter that has nothing to do with Steele’s notorious gaffes, and more to do with his notorious mismanagement.

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.

When it comes to consequences, the financial problem could cause all kinds of trouble for Republicans. Deliberately filing deceptive FEC reports is criminal, and could lead to stiff penalties — if not formal charges — before the elections.

And while the Republican National Committee is already downplaying the significance of this, there’s reason to believe the party is aware of the seriousness of the situation.

The Washington Times also has learned that former Federal Election Commission Chairman Michael E. Toner has been retained as outside counsel to the RNC, a move Mr. von Spakovsky called unusual and significant.

“The RNC normally uses its own inside counsel to deal with the FEC,” said Mr. von Spakovsky, a Heritage Foundation legal scholar. “But if I had a really serious problem with the FEC, Michael Toner is one of the first guys I would turn to help me out.”

Not only could this generate real legal problems for the RNC, if the allegations are true, there’s also the unfortunate political message — when Republicans can’t manage their own books, they play accounting tricks and hide off-book debts, regardless of the law.

It’s a story to keep an eye on.