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Steele's Campaign Spending Questioned

Agents Contact Sister After Ex-Aide's Claims

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)
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By Henri E. Cauvin
Washington Post Staff Writer
Saturday, February 7, 2009

Michael S. Steele, the newly elected chairman of the Republican National Committee, arranged for his 2006 Senate campaign to pay a defunct company run by his sister for services that were never performed, his finance chairman from that campaign has told federal prosecutors.

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Federal agents in recent days contacted Steele's sister, a spokesman for Steele said yesterday.

The claim about the payment, one of several allegations by Alan B. Fabian, is outlined in a confidential court document. Fabian offered the information last March as he was seeking leniency for himself during plea negotiations on unrelated fraud charges. It is unclear how extensively his claims have been pursued. Prosecutors gave him no credit for cooperation when he was sentenced in October.

Steele spokesman Curt Anderson said he did not know what information the federal agents were seeking, but he dismissed Fabian's allegations as patently false. "It's from, what, a convicted felon? And it has no substantiation in fact," he said.

Fabian's claims emerge as Steele begins his new role at the RNC, where he oversees the raising and spending of hundreds of millions of dollars in party money. The former Maryland lieutenant governor has faced questions about his handling of campaign money in prior elections and was twice fined for missing filing deadlines.

The recent allegations outlined four specific transactions. In addition to the payment to Steele's sister, Fabian said that the candidate used money from his state campaign improperly; that Steele paid $75,000 from the state campaign to a law firm for work that was never performed; and that he or an aide transferred more than $500,000 in campaign cash from one bank to another without authorization.

The bank transfer was made against the explicit wishes of other Maryland Republicans, who had hoped to use it to support the campaigns of state legislators, said aides to Steele and former governor Robert L. Ehrlich Jr.

The U.S. attorney's office inadvertently sent the confidential document, a defense sentencing memorandum filed under seal, to The Washington Post after the newspaper requested the prosecution's sentencing memorandum.

U.S. Attorney Rod J. Rosenstein declined to comment. Fabian could not be reached, and his attorney, James Wyda, declined to comment.

According to the filing, Wyda gave prosecutors "documents supporting [the] allegations." Wyda wrote in the memorandum that the government declined to credit Fabian for cooperating "presumably because its investigation is ongoing."

The Post corroborated some details of Fabian's claims through public records and interviews with former staff workers. Other details were disputed by people involved in the transactions.

In one of his allegations, Fabian points to a February 2007 payment by Steele's Senate campaign of more than $37,000 to Brown Sugar Unlimited, the company run by Steele's sister, Monica Turner. Campaign finance records list the expense as having been for "catering/web services." Turner filed papers to dissolve the company 11 months before the payment was received.


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