RNC Chairman Michael Steele’s money management woes go back years

Before the Republican National Committee spent $1,946 at a bondage-themed nightclub, before its chairman, Michael Steele, drew complaints for frequently chartering private jets on his donors’ dime, before Steele redecorated his office for more than $18,000 and hosted a winter meeting in Honolulu during the worst economy since the Great Depression – before all that, Steele had already accumulated a long list of money management woes as a Maryland politician.

Take Alan Fabian, for example. Steele chose Fabian to be finance chairman for his 2006 Senate run. Now Fabian’s in jail for almost $40 million worth of fraud.

The Justice Department’s rap sheet on Fabian reads like a decade-long financial car crash. He ran a “sale-leaseback” scheme with financiers based on computer equipment he never actually possessed. Then, forced into bankruptcy in 2004 when $32 million in fraud caught up with him, Fabian finagled another $7.5 million from defrauding two banks and an invoice company. He lied under oath in the bankruptcy proceedings and filed false tax returns.

Before Fabian was sentenced to nine years in prison in October 2008, when the game was still going, the stolen money was used to pay for Steele’s air travel, records show.

Steele reimbursed a company owned by Fabian for “travel” and “air travel” nine times. The Justice Department noted that Fabian used the stolen money to finance his private jet travel. The company reimbursed, the Centre for Management and Technology, was used for Fabian’s second fraud spree.

“We’ve known for years that Michael Steele acquired his taste for private jet travel while he was Maryland lieutenant governor and convicted felon Fabian flew him around the country in charter jets bought with stolen money,” liberal Maryland-based political researcher Steve Lebowitz said.

Additionally, Fabian received a $700,000 contract for computer services from the state of Maryland in 2005 while Steele was lieutenant governor. Then, in 2006, the contract was increased by $1.5 million to a total of $2.2 million. Fabian hosted a fundraiser for Steele around the time the contract was bumped up.

Other questions about Steele’s Senate campaign have surfaced. Steele sent $37,000 in campaign money to a company – defunct for more than a year at the time – owned by his sister, Monica Turner. Turner was married to Mike Tyson from 1997 to 2003.

The FBI questioned Turner. Steele said there was nothing improper about the payment.

Another friend of Steele’s, Sandy Roberts, was also involved in interesting financial situations.

A firm owned by Roberts that ostensibly traded commodities was sent more than $400,000 from several Republican accounts related to Steele and former Maryland governor Bob Ehrlich.

Roberts was also involved in a contracting controversy involving vendors at Baltimore-Washington International Airport. Roberts was given a slot reserved for minority-owned small businesses to sell newspapers and magazines. The Maryland Aviation Administration found problems with the contract. Steele denied involvement.

As a Washington Post story on Steele’s alleged financial improprieties noted: “Over the years, money trouble has been a persistent problem for Steele.”

Steele faced foreclosure in 2001, facing debts from his first race for public office in 1998. During that campaign, state officials fined him twice for missing campaign disclosure deadlines.

Most recently, Steele paid $122,000 to a Washington law firm with a White Collar defense group during his first year as chairman of the RNC from money left over from his lieutenant governor campaign account. A source told the Baltimore Sun the money was for an “internal audit.”