RNC chair denies fraud charges: 'It's all false'
John Byrne and David Edwards
Published: Sunday February 8, 2009

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UPDATE WITH VIDEO BELOW: Steele denies charges

A U.S. Attorney's office "erroneously" sent a confidential court document to The Washington Post after the Post requested a different file, exposing that the newly-elected chairman of the Republican National Committee had his 2006 Senate campaign pay his sister's defunct company for services that were potentially never performed -- including $37,000 for "catering/web services" paid to her company 11 months after she filed to have it dissolved.

Federal agents have contacted Steele's sister, the chairman's spokesman told the paper. Former Steele campaign finance director Alan Fabian offered the information to the US Attorney's office as part of attempt to seek leniency for himself in another case.

"It is unclear how extensively his claims have been pursued. Prosecutors gave him no credit for cooperation when he was sentenced in October," the Post said.

Steele's spokesman, Curt Anderson, dismissed the charges.

'"It's from, what, a convicted felon? And it has no substantiation in fact," he said.

But Fabian's claims surfaced just as Steele begins his new role at the RNC, where he's responsible for stewarding hundreds of millions of party dollars. And they were apparently at least in part substantiated by documents Fabian produced to investigators. The Post also corroborated some of the claims.

In one allegation, Fabian says Steele's Senate campaign paid more than $37,000 to Brown Sugar Unlimited, a company run by Steele's sister, Monica Turner. Records show the expense being for "catering/web services," but Turner filed to dissolve her company 11 months before the payment was received.

The former Maryland lieutenant governor mounted an unsuccessful bid for Senate in 2006. He was the first African American elected to statewide office in Maryland.

"The recent allegations outlined four specific transactions," Cauvin wrote. "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," he added, according to Steele aides and aides to former Maryland governor Robert Ehrlich Jr.

More on the story is available here.

UPDATE: Appearing on ABC's This Week Sunday, Feb. 8, Steele denied the charges. "It's all false," he argued. "This is not the way I intend to run the RNC with this over my head," he said.

This video is from ABC's This Week, broadcast Feb 8, 2009.

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