Reverberations from the RNC’s hidden-debt problem

REVERBERATIONS FROM THE RNC’S HIDDEN-DEBT PROBLEM…. Other news stories this week helped keep the Republican National Committee’s problems off the front page. That’s a silver lining, however, to an otherwise massive cloud.

We learned on Wednesday that the RNC’s own treasurer believes the party deliberately failed to report more than $7 million in debt to the Federal Election Commission recently, as part of a scheme to make the RNC’s finances look better than they really are. Hiding off-book debts is not only illegal, it also points to more system problems at party headquarters.

The Republican National Committee’s disarray — ABC characterized it as a “civil war” — comes at a bad time for the party, and Marc Ambinder reports that Republican strategists fear the “chaos” at the RNC could lead to electoral consequences.

During midterm elections, the national committee plays two essential roles. First, it serves as a bank account that can be drawn upon to shore up House races or put others into play. Second, it coordinates the party’s field operations and funds joint “Victory” committees with state parties. The RNC, at the moment, is barely fulfilling the second function and has less than $10 million on hand, so it cannot help much with House races. […]

The degraded political environment, the sluggish or non-existent economic recovery, and the enthusiasm of Republican base voters are intangibles that, properly harnessed, could easily put Republicans over the top. But without a solid field program to bring voters to the polls, and with ranks of well-funded Democratic incumbents, that edge could be lost on election day.

The party’s well-regarded political director, Gentry Collins, has seen his budget slashed considerably, and state parties have complained about the condition of the party’s Voter Vault datamart. Many state parties are outsourcing their targeting operations, which would have been unthinkable during the flush years of the Bush-Cheney administrations.

The latest scandal, involving $7 million that the RNC’s own treasurer categorized as unreported debt, will undermine any opportunity the party has to regain its financial footing before the election.

Remember, as we talked about the other day, 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.

Oh, and for good measure, also note that if the FEC penalizes the party for its accounting tricks — which seems likely — the RNC would likely have to pay fines before the election. That’s money the party would much prefer to spend on competitive races.

There’s a reason Democrats tend to look at Michael Steele as the greatest party leader of all time.