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RNC finances suffer from loss of major donors

"The hardest money to raise in politics is money for debt," he said.

The midterms saw a powerful shift of influence from the RNC to interest groups such as American Crossroads, which raised $70 million, more than any other advocacy organization. It was among a number of groups that formed after Supreme Court decisions lifted restrictions on spending. At least some of the new interest groups can shield the identities of donors while fielding hard-hitting campaign ads.

Dowd, a lawyer at Akin Gump, gave $15,000 to American Crossroads this fall, records show. He had given $50,000 to the RNC in recent years but made no contribution for the midterms.

He said no one at the RNC asked him to donate during the past election cycle. "I didn't get any calls," he said. "It is crazy."

The RNC's current debt far exceeds any in its past. In 1996, the year with the second-largest debt on record, the committee carried $5 million in loans, a quarter of the current level. The committee reported not quite $2 million in its bank accounts in November.

The DNC reported owing $15.5 million in November, and it had nearly $10 million in the bank.

Each of the candidates to chair the RNC, including Steele, has said the finances would become the top priority.

"We need money, and we need a lot of money," said Reince Priebus, chairman of the Wisconsin GOP, in a debate last week. "We need a chairman that's going to put his or her head down and spend literally five, six hours every day making major donor calls, major donor visits, literally working like an absolute dog for the next two years to get our fiscal house in order."

Priebus is slightly favored to win the contest when the committee's 168 members vote in an election that will continue for as many ballots as it takes for one candidate to get a majority.

Steele's two-year chairmanship has been controversial, marked by questions about party expenditures, including chartered jets, a retreat to Hawaii and a large bill rung up by staff at a California bondage-themed nightclub.

In defending his tenure, Steele has pointed to the party's success in the November elections, when Republicans captured the House by picking up 63 seats. Steele notes that the victory came after a party low point in 2008, when Obama won the White House and Democrats increased their congressional majorities.

"When I began on the job in 2009, we couldn't find anyone to say they were a Republican," Steele said at the debate. "We put together a small team and got busy at the task of winning elections, reaffirming the value of this party to the American people."

Steele has vowed to stay in the race until the last ballot, even if it is clear that he cannot win. Priebus has collected 40 public endorsements, nearly half the number needed to win.

Other candidates in the race include Maria Cino, a former Bush administration official who ran the party's 2008 convention and has been endorsed by House Speaker John A. Boehner (Ohio); Ann Wagner, a former ambassador to Luxembourg and former head of the Missouri GOP; and Saul Anuzis, a former Michigan party chairman who lost to Steele in 2009.

Staff writer Chris Cillizza contributed to this report.

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