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RNC chief Michael Steele says he'll cooperate with FBI

Denying allegations of impropriety in his 2006 campaign spending, Steele says he will voluntarily hand over papers to the FBI, which had contacted his sister over payments her company received.

February 09, 2009|Paul West

WASHINGTON — Republican National Committee Chairman Michael S. Steele said Sunday that he would provide records from his 2006 U.S. Senate campaign to the FBI in an effort to speed an apparent investigation into allegations of improper campaign spending.

Steele confirmed that his sister was recently contacted by FBI agents looking into allegations that his campaign paid a company she owned more than $37,000 in 2007 for campaign work that was never performed. The allegations were made by Steele's former campaign finance chairman in an attempt to gain a more lenient prison sentence after he was convicted of fraud in an unrelated case.

In his first public comments on the issue, Steele said the transfer of records to the FBI was voluntary.

"I'm not going to wait for them to come to me. I'm going to take it to them and give them everything that they think they need. And if that's not enough, we'll give them more," Steele told ABC's "This Week" in an interview scheduled before the allegations became public.

Steele repeated denials issued by his spokesman in response to news reports after an article on the campaign manager's allegations appeared in the Washington Post.

"It's all false," Steele said. "We're being very proactive about this because I'm sick and tired of this 'gotcha' business that the Washington Post and others in the media attempt to engage in."

Steele expressed frustration that the allegations had surfaced barely a week after his election as the first African American chairman of the Republican National Committee. In that position, he is responsible for raising and spending hundreds of millions of dollars.

"I want to clear up my good name. This is not the way I intend to run the RNC, with this over my head. We're going to dispense with it immediately," he said.

The U.S. attorney's office in Baltimore has refused to say whether Steele or his sister, Monica Turner of Potomac, Md., are under investigation. However, a spokeswoman has confirmed that a document outlining the allegations against Steele was unintentionally provided to a Post reporter.

Alan B. Fabian, who had been finance chairman of Steele's Senate campaign in Maryland, made the allegations in March in an effort to get a reduced sentence for his part in a $40-million fraud scheme.

Steele said Fabian's inability to cut a deal with prosecutors showed there was "no credibility" to the allegations. But Fabian's defense lawyer, in the sentencing document, maintained that Fabian got no credit for cooperating with the prosecution "presumably because its investigation is ongoing."

Steele said that the $37,000 paid to a company owned by his sister was "a legitimate reimbursement of expenses." The payment, for "catering and Web services," was made in December 2007, more than 11 months after his sister folded the company.

"At the time when the checks were written back to her to reimburse her, she just said, 'Go ahead and write the checks to the company,' because the company had, you know, done the services that were provided," said Steele, an attorney who practiced corporate law during the 1990s. "There are many companies out there that dissolve and still receive payment for services that are rendered, and so forth."

Among the questions about the incident is why an investigation into Steele's finances appears to have become more active about the same time that his political career was getting a huge boost with his election to head the RNC.

The former lieutenant governor of Maryland said federal agents recently contacted his sister "for purposes of closing out this matter. . . . The FBI is now in the position of winding this thing" up.

Steele contended that "if there were any funny business" involved with his 2006 Senate campaign, it would have been caught by other federal agencies before now. He said he has not been contacted personally by the FBI.

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paul.west@baltsun.com

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