Republicans question RNC’s finances, say debt may be far ‘more dire’ than it seems

Jonathan Strong Jonathan Strong, 27, is a reporter for the Daily Caller covering Congress. Previously, he was a reporter for Inside EPA where he wrote about environmental regulation in great detail, and before that a staffer for Rep. Dan Lungren (R-CA). Strong graduated from Wheaton College (IL) with a degree in political science in 2006. He is a huge fan of and season ticket holder to the Washington Capitals hockey team. Strong and his wife reside in Arlington.
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Top Republican party officials are questioning the health of the Republican National Committee’s (RNC) finances following an announcement that the RNC will have $12 million less to spend on “get out the vote” efforts for November’s midterm elections than anticipated in previous budget projections.

Six sources, including current and former RNC members, say they’ve been told by those with more direct knowledge the RNC’s financial picture is more dire than what the RNC is representing on its disclosure forms submitted to the Federal Election Commission (FEC).

Three say RNC Treasurer Randy Pullen, a certified accountant said to be of a cautious temperament, is deeply uncomfortable with how the RNC’s finances are being handled. Pullen, who is legally responsible for those FEC filings, did not reply to repeated requests for comment.

However, two members of the RNC budget committee, Oregon Republican Party Chairman Bob Tiernan and South Dakota national committeewoman Mary Jean Jensen, strongly denied allegations the RNC has more outstanding debt than it is letting on.

The questions come as RNC Chairman Michael Steele is under fire for the latest in a series of mishaps during his tenure – telling an audience the war in Afghanistan is essentially unwinnable and “a war of Obama’s choosing.” The comments were out of line with most Republicans’ stance on the issue and angered hawks such as Bill Kristol and Liz Cheney.

Steele has faced repeated calls to resign in the days following the comments. Over the July 4 weekend, Jim Pelura, a former chairman of the Republican Party of Maryland and personal friend of Steele, called for his resignation as well.

In a July 3 e-mail to Steele and hundreds of RNC members and Republican officials, Pelura wrote, “After serious thought and reflection on the recent misstatements made by you as well as the numerous financial misappropriations by the RNC under your direction, I have no choice but to call for your resignation.”

While Steele’s Afghanistan comments have drawn the most attention, top Republicans are increasingly anxious about the RNC’s financial health as well.

A top-ranking RNC member said he was worried the RNC listed $760,141 in debt in its June 20 filing, the first time the RNC has carried debt in years.

The source said he was told by other RNC members the debt reflects expenses that were actually incurred in April, not May, past a 30-day deadline required by federal election law for reporting such liabilities.

Other well-connected Republican sources described the problem as much deeper. One GOP operative with deep connections into the world of Republican finance claimed the RNC was “basically broke.” Another operative called the RNC’s “cash on hand” figure — $12.6 million in its June 20 filing – “pure fiction” and said the discrepancy is a “badly kept secret” in Republican circles.

Sources who spoke with The Daily Caller did so on the condition of anonymity for fear of retaliation from Steele and allies.

As in other stories, The Daily Caller made extensive attempts to obtain comment from RNC spokesman Doug Heye regarding the allegations. Specifically, The Daily Caller sent a detailed inquiry by e-mail June 23 as well as a follow-up July 7. Heye did not answer the questions, but did defend the RNC’s finances in general.

“This is the first time the committee has not had the White House, either chamber of Congress or soft money. Even with that, despite the obvious structural advantages the Democrats have we’ve outraised them in 10 separate months and when you factor in debt we have more money to spend than the DNC,” Heye said.

Tiernan, Steele’s most outspoken advocate among RNC members, strongly denied the RNC’s finances were in worse shape than what has been represented.

“I sit on the budget committee. All our filings are up to date … somebody may not know what they’re talking about,” Tiernan said, “I am not aware of any debts that are past due.”

Tiernan attributed the widespread skepticism of the RNC’s financial numbers to rumors designed to hurt Steele. “I run into this all the time,” he said, “people without the numbers who want to start rumors that aren’t true.”

Jensen said “we’re honest” and claimed it would be impossible for Steele and the RNC to hide debt without her knowledge. “I don’t see any way anybody could have pulled that … that cannot be true.” However, Jensen conceded she was not engaged at a day-to-day level with the RNC finances and was unaware the committee had posted $760,141 in debt in its June filing.

Republican insiders point to what they say are highly unusual payments in the RNC’s filings, including payments to a hotel the RNC stayed at for a February event.

In May, the RNC paid nearly $120,000 to the Gasparilla Inn and Club in Boca Grande, Fla., the same hotel where the RNC held a retreat in February. RNC spokesman Heye declined to explain the expense, and it’s possible the RNC paid for another stay at the hotel in May.

But if the expense was incurred during the February trip, two campaign law experts said the RNC would have needed to disclose the pending debt in its previous filings.

Additionally, RNC sources said a new budget blueprint – which calls for large reductions in the budgets for “get out the vote” efforts and other areas – included a “cash on hand” figure that was about $8 million, roughly $4 million lower than the RNC’s reported cash on hand figure through May.

Tiernan said the difference in the two figures is because of large expenses from opening around 200 “victory” campaign offices in past weeks.

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