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Steele's Campaign Spending Questioned

Former Maryland lieutenant governor Michael Steele, with the Republican National Committee's Linda Ackerman, was elected RNC chairman Jan. 30.
Former Maryland lieutenant governor Michael Steele, with the Republican National Committee's Linda Ackerman, was elected RNC chairman Jan. 30. (By Pablo Martinez Monsivais -- Associated Press)

Campaign finance reports show that printers billed the Senate campaign late in 2006. The state campaign paid the bills early the next year -- nearly $30,000 to GOP Shoppe and almost $8,000 to Form Masters. The Senate campaign reported several months later that it had been billed in error.

Anderson said any payments from the state campaign were for services related to his state office. Brian Harlin, owner of GOP Shoppe, said it is common for candidates to move invoices from one campaign committee to another after discovering billing errors.

It is a violation of federal campaign finance regulations for a candidate to use funds raised for a state campaign to pay for expenses associated with a federal campaign.

Fabian also alleged that Steele paid the law firm Baker & Hostetler $75,000 for services that were not provided. The expenditure is listed in campaign finance records as an in-kind contribution to the state Republican Party.

Baker & Hostetler attorney Michael Braden, a former chief counsel for the RNC, said the payment was for services he and other attorneys at the firm provided in challenging legislative redistricting in Maryland in 2002.

The state party paid Braden's firm more than $60,000 between June 2002 and December 2003 to cover "redistricting legal fees," and Braden said the subsequent $75,000 was to cover the balance for the firm's work. Such late payments are not unusual, he said.

None of the people interviewed by The Post said they had been contacted by federal agents, and it is difficult to evaluate the extent of the government's inquiry.

In addition, the allegations came from a person who hoped to benefit by trading on the information. Fabian, 44, was sentenced to nine years in prison for swindling millions of dollars from businesses and banks. Prosecutors alleged that a series of frauds totaled almost $40 million.

In the memorandum, Wyda asked the court sentencing his client to "consider Mr. Fabian's willingness to assist the government and, if necessary, to testify against a prominent Maryland Republican and rising star on the national stage as evidence of his good character and efforts to redeem himself."

Over the years, money trouble has been a persistent problem for Steele. His first race for public office, a 1998 bid for the Republican nomination for state comptroller, ended nearly $35,000 in debt, much of it to his sister. He was fined twice by state officials for missing deadlines to file campaign finance reports and was in debt and had faced foreclosure in 2001, the year before he was selected as Ehrlich's running mate. The state party threw Steele a financial lifeline, awarding him an unusual $30,000 consulting contract.

Staff writers Aaron C. Davis, Matthew Mosk, Katherine Shaver and John Wagner and staff researcher Meg Smith contributed to this report.

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