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RNC expense report renews criticism about Steele's spending

By Dan Eggen
Washington Post Staff Writer
Tuesday, March 30, 2010; A01

The Republican National Committee and its chairman, Michael S. Steele, were engulfed in controversy again Monday after new financial reports showed that the party used tens of thousands of donor dollars for luxe hotels, private jets and other questionable expenditures.

The disclosures, some of which stem from Steele's travels to California in January and a subsequent RNC retreat to Hawaii, reignited criticism from fellow Republicans who are troubled by the chairman's financial stewardship of the GOP's main committee since he took over more than a year ago.

Although it is not unusual for either party to spend money in tony settings to cater to wealthy donors, the RNC's latest filings captured widespread attention for one expenditure at a risque nightclub: $1,946.25 for "meals" at Voyeur in West Hollywood, which features topless dancers wearing horse bridles and other bondage gear while mimicking sex acts.

The committee fired an unidentified staff member as a result of the disbursement and emphasized Monday that Steele had not visited the club and was not aware of the expenditure. The reimbursement went to Erik Brown, a Southern California GOP donor who has spent time with Steele in the past and whose marketing firm has earned more than $160,000 from the RNC and other Republican committees, according to campaign disclosure records.

The RNC's expenses, first highlighted by the Daily Caller, set off another round of GOP infighting over Steele, whose combative style and frequent pratfalls have earned him friends and enemies. The chairman angered many party insiders by releasing a book this year without notifying Republican leaders; he stumbled into another controversy this month after the leak of an RNC fundraising document featuring crude caricatures of President Obama and other Democratic leaders.

Steele also has come under fire for his management of the organization's finances. The RNC had more than $22 million on hand when he arrived last year, but is down to less than $10 million, despite raising a record $96 million during that time, records show.

The February report to the Federal Election Commission lists $17,000 for private jet service; more than $35,000 for upscale hotels; and more than $43,000 in expenses, not including airfare, for the committee's winter meeting in Hawaii. Such reports include a range of spending, including Steele's airfare as well as expenses incurred by staff members and outsiders.

"The RNC's role, and thus the chairman's role, is to raise money, fund candidates, recruit candidates and voters into our cause," said John Weaver, a GOP strategist and former adviser to Sen. John McCain (R-Ariz.). "Setting policy, choosing sides and crazy spending does not fall under his job description."

Mark DeMoss, a major RNC donor during George W. Bush's presidency who heads a Christian public-relations firm in Atlanta, said that spending so lavishly during an economic downturn is "mind-boggling." "Virtually the entire country -- from big businesses to small business -- had to make cutbacks," he said. "To think the Republican Party wouldn't do the same thing, I think, suggests either a tone-deafness or just that they don't care, which would maybe be worse."

But others defended Steele and his financial record and pointed to GOP success in recent elections in Massachusetts, New Jersey and Virginia. "You do have to spend money to raise money," said Dick Wadhams, chairman of the Colorado GOP. "I'll give Chairman Steele the benefit of the doubt on spending on major donors."

An RNC investigation of the incident found that the Voyeur party was attended by a group of young Republicans who had been at an official party "Young Eagles" event at the Beverly Hills Hotel the same night, according to an internal memo obtained by The Washington Post. The Young Eagles is an RNC program to cultivate 30-to-40-year-olds as major future donors.

The request for reimbursement was then submitted on behalf of Brown by an unidentified RNC staffer who "was aware that this activity was not eligible for reimbursement and had been previously counseled on this very subject," according to the memo, which was written by the committee chief of staff, Ken McKay. The staffer was fired because of the incident, the memo said.

RNC spokesman Doug Heye said Monday night that "appropriate personnel actions have been taken, and accounting and reimbursement processes are being revised to ensure that such an action cannot reoccur." He also said Brown would return the payment. "We recognize the difficulty this incident has caused and assure our members and supporters that any necessary and proper remediation is being implemented immediately," Heye said.

The Democratic National Committee said that its chairman, Timothy M. Kaine, usually travels on commercial flights and does not generally use limousine or town-car services.

"We think their extravagant spending and their high burn rate speaks for itself," spokesman Brad Woodhouse said.

But Heye noted that paying for high-end hotels and other accoutrements is standard practice for both political parties when wooing wealthy donors. He said most of the expenses for the private jets and car services for Steele detailed in the February reports were related to the start of television advertisements in the South and Midwest.

Brown, the chief executive of Dynamic Marketing, which has offices in California and the District, did not respond Monday to telephone and e-mail messages. He has contributed $10,000 to GOP candidates and committees since 2007, and wrote on Twitter last Oct. 26 about attending a Monday-night football game at FedEx Field with Steele.

Voyeur attracted celebrities such as Lindsay Lohan and Leonardo DiCaprio to its fall opening. Club managers did not respond to telephone messages left Monday.

Staff writers Philip Rucker and Chris Cillizza, research director Lucy Shackelford, and research editor Alice Crites contributed to this report.

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