Federal prosecutors are investigating whether two Democratic Party researchers in Washington illegally obtained the credit report of Maryland Lt. Gov. Michael S. Steele as they conducted opposition research on the likely Republican Senate candidate.
Phil Singer, a spokesman for the Democratic Senatorial Campaign Committee, acknowledged yesterday that two of his organization's employees had resigned as a result of the episode, which he said was subsequently referred to the U.S. attorney's office by the Democratic committee.
Under federal law, it is illegal to knowingly and willfully obtain a credit report under false pretenses. A spokeswoman for the U.S. attorney's office for the District of Columbia confirmed last night that an investigation by its fraud and public corruption section is proceeding with the assistance of the FBI.
The July episode came as both parties started digging into the backgrounds of opposing candidates for Maryland's two marquee races next year, for governor and an open U.S. Senate seat.
Steele's chief of staff, Paul Ellington, said FBI agents interviewed the lieutenant governor about the matter last week.
Ellington said Steele learned of the possible impropriety when agents approached him. "He didn't have any idea this was going on," Ellington said. Personal finances could be fertile territory for researchers looking into Steele, who acknowledged financial difficulties when he ran for statewide office three years ago.
The DSCC, the arm of the Democratic Party tasked with promoting Senate candidates, declined to disclose the names of the employees involved. But sources with knowledge of the episode identified them as Katie Barge, the committee's former research director, and Lauren Weiner, an employee who had been researching Steele even before he formed an exploratory committee for Senate in June.
Bill Lawler, an attorney representing Barge, said she had brought the matter to her superiors' attention. "She resigned because she didn't want this episode to negatively reflect on the committee," Lawler said.
An attorney said to be representing Weiner did not return a phone call yesterday.
Singer said the two employees acted without the committee's authorization but later told their superiors, who "immediately ensured that Mr. Steele's credit report was not used or disseminated to anyone."
Singer added that the former employees were cooperating with authorities and that the DSCC had launched an internal review of the matter. He said the DSCC is not a target of the federal inquiry.
Sources familiar with the episode said Steele's credit report was obtained with the use of his Social Security number, which was found on a public court document.
Shortly after being named by Robert L. Ehrlich Jr. (R) as his running mate in 2002, Steele disclosed to reporters that he owed more than $35,000 in personal debts and had an unpaid political loan of $25,000 from a previous race.
Steele, a former corporate lawyer who started his own consulting firm in 1998, said at the time that his "tight" financial situation should not detract from his political message. "At least my report reflects a blue-collar man, an entrepreneur out there trying to start a business in Maryland," Steele said in July 2002. "I don't have trusts that are going to cover me."
Steele is paid $120,833 a year as lieutenant governor. According to the most recent financial disclosure he submitted to the Maryland State Ethics Commission, which covers 2004, he has paid off some of his debts.
Steele has been heavily courted to run for Senate by national GOP leaders and is expected to give the party its best shot at a Senate seat in years.