Former RNC official: Steele struck a deal with Michigan GOP to increase fundraising numbers, possibly to circumvent federal funding limits

Alex Pappas Political Reporter
Font Size:

Into the RNC coffers, and back out again.

The Republican National Committee at the end of last year struck a deal with the Michigan Republican Party that if the state party could raise what turned out to be a half a million dollars for the RNC from its donors, the committee would immediately give the money back, in a scheme apparently devised to increase the RNC’s 2009 fundraising numbers.

“It was a known secret that a deal had been struck on the topic,” a former RNC official confirmed to The Daily Caller.

“I think the benefit to them was them getting guaranteed money,” the source said of the Michigan GOP, “and the benefit to the RNC was getting higher fundraising numbers.”

RNC spokesman Doug Heye, contacted by a reporter Tuesday afternoon, did not comment.

The allegations appear to be backed up by FEC reports: Fifteen donors from Michigan maxed out their donations to the committee on a single day —Dec. 31 — the last day of 2009 — giving $456,000 to the committee. Over the next two months, $500,000 was disbursed back from the RNC’s coffers to those of the Michigan Republican Party, with $250,000 given in January and another $250,000 disbursed in February.

Chairman Michael Steele has boasted bringing in over $90 million dollars since his term as chairman began in 2009. Michigan state law allows individuals to donate an unlimited amount to political parties, though contributors who give to the party are subjected to federal campaign laws that restrict spending on federal races to $10,000 per year, per individual.

Asked the motivation for the individual contributors to donate to the Michigan Party through the RNC, the official said by doing so, “they would be able to give more money to the Michigan state party than the federal limit of 10k.” Calls by The Daily Caller to the individual contributors were either not returned, or the donor refused to comment.

Steele and Ken McKay, who just on Monday resigned from the committee following reports by The Daily Caller of money spent at a risqué night club, were behind the deal with Michigan party chair Ron Weiser.

The Daily Caller reached out to McKay, who did not return calls and emails asking for comment. But Weiser, through a spokeswoman, denied any sort of deal having been brokered, saying by email that, “Michigan donors have a long history of contributing to the RNC and the RNC has a long history of supporting Michigan GOP efforts.”

“The claim that there was some deal between the RNC and the MI GOP is patently false,” said Jennifer Hoff, director of communications for the Michigan Republican Party. “Enemies of Chairman Steele can make up all sorts of stories and there are plenty in the press who have an interest in peddling sensations.”

No state came close to reaching the half a million dollars disbursed back to the Michigan GOP over the following two months. Michigan received by far the most disbursed money of all states over January and February, followed by Delaware, $129,800 (including in-kind equipment); Oregon, $75,000; Colorado, $66,500; Massachusetts, $42,000; and Mississippi, $15,000.

Out of the 28 donors across the country who in December contributed to the RNC $30,400 — or the maximum amount that can be contributed to the committee under law — all but five had Michigan addresses.

The arrangement was not discussed with the committee’s finance director or the political director, the official said, other than Steele’s office saying, “‘this is happening, prepare your budgets accordingly.’”

“It angered people mostly that the chairman’s office would say, ‘this is happening,’ almost, ‘deal with it.’ They were not consulted on whether Michigan was worthy of that money,” the official said of both the committee’s political and finance departments upon hearing the deal was arranged without their consent.

“People were not happy about it. The department heads in the know were not happy about it.”

Hoff said she is unaware of any specific December fundraising events that could’ve also explained the large donations from Michigan donors. She did, however, say that, “many large donors at year-end make decisions on where to invest to make change happen.”

“Following Chairman Steele’s visit to Michigan in the summer as well as major GOP victories in Virginia, New Jersey and the state special senate election in Michigan, people were excited to help turn the tide and are looking for the RNC to make a big difference in Michigan this November,” Hoff said by email.

But while a competitive governor’s election is set for November, neither of the state’s senators is up for election in 2010. Asked the reason why Michigan received the most money of the states, Hoff said in an email that it is because the state GOP began their victory program “earlier than any other state in the country.” She did not return additional inquiries into the specifics of the money spent.

Michigan’s August primaries are later than other states, and the funds came when all eyes were on another election in another state. When $250,000 was disbursed to Michigan in January — the same month of the competitive Massachusetts senate special election — the Massachusetts GOP only received $42,000.

UPDATE: The RNC announced its fundraising numbers for March 2010 on Wednesday, claiming to have raised $11.4 million, a record high for a mid-cycle March. The RNC has $11.3 million cash-on-hand and no debt, according to a release.

Email Alex Pappas and follow him on Twitter