Spokesman defends Steele's '06 campaign spending

The Baltimore Sun

A spokesman for Michael S. Steele defended the new Republican National Committee chairman yesterday against claims by a convicted felon that Steele misused campaign funds from his 2006 Senate bid.

Curt Anderson, a political consultant and Steele spokesman, said the allegations had been "fabricated" by Steele's former campaign finance chairman, who was seeking a more lenient sentence in an unrelated criminal case.

The Washington Post outlined the accusations in yesterday's editions, including a claim that Steele's campaign paid money to a company owned by his sister for services never performed, and the improper use of tens of thousands more in campaign money.

The accusations come from Alan B. Fabian, a former finance committee chairman for Steele's Senate bid, as he was trying to cut a deal with Baltimore-based federal prosecutors. Fabian, of Hunt Valley, was indicted in August 2007 on fraud charges.

Steele denied the allegations through a spokesman. But attorneys said the confidential charges, which appear to have been mistakenly disclosed to a reporter, would dog Steele and endanger Fabian by branding him as a snitch.

"There's the problem of putting the toothpaste back in the tube," said Barry J. Pollack, a criminal defense attorney in Washington. "The government now can't ignore the allegations because the world's watching."

The assertions against Steele were included in a sealed sentencing memorandum filed by Fabian's attorney and erroneously sent by the Maryland U.S. attorney's office to a reporter requesting other documents in the case.

"There is a process here to weigh and evaluate this information before it is made public. That process was violated here," said Maryland Federal Public Defender James Wyda, who represented Fabian. He called the disclosure "devastating" for his client and damaging to the criminal justice system, which he said has a responsibility to protect confidential informants.

"It undermines the system," Wyda said in an e-mail to The Baltimore Sun, adding that the leak has made Fabian vulnerable to an "ugly, dangerous subculture" within federal prison that retaliates against cooperators. Last month, Fabian reported to Pennsylvania federal prison to begin serving a nine-year term for running $40 million worth of scams.

Marcia Murphy, a spokeswoman for Maryland U.S. Attorney Rod Rosenstein, said her office is "not commenting" on the situation or saying how the apparent document mix-up might have happened. She declined to say if an investigation into Steele's finances is under way.

Steele, Maryland's former lieutenant governor, was elected national party chairman on Jan. 30, becoming the first African-American in the position. The Post described four instances of alleged wrongdoing raised by Fabian, who claimed Steele paid a law firm $75,000 for work never done, which the firm denied; improperly transferred more than a half-million dollars from a state campaign account to another account; used state campaign funds to pay for federal campaign expenses; and gave $37,262 in Senate campaign funds to Brown Sugar Limited, a defunct business run by his sister, Monica Turner.

The transactions are recorded in publicly available campaign finance documents. Turner, a doctor and former wife of boxer Mike Tyson, said that the claim that she was paid for phantom services "is bogus."

"Any check written to me was for legitimate services that I provided," she said, adding that Fabian, the accuser, "would probably throw his mother under the bus if he thought it would help him."

Anderson confirmed that federal agents recently contacted Steele's sister but said he didn't know the reason or whether she was questioned.

Anderson acknowledged that the transfer of funds raised for Steele's lieutenant governor campaign to another account under his control created tensions with former Gov. Robert L. Ehrlich Jr. because it was money raised when they ran on the same ticket. But, Anderson said, the transfer was "legal and proper."

Richard E. Hug, Ehrlich's former chief campaign fundraiser, also said he remembered the transfer. "But that's history," he said, declining to comment further.

Bill Brock, a former RNC chairman who also served in the U.S. Senate, said he considered the allegations "pretty suspect, given the source." Pollack said the U.S. attorney's office will have to react now that the allegations have been made public.

"Certainly the publicity that is now going to flow from the recent revelations is also going to increase the profile of this investigation," Pollack said. "[These] may be the kind of allegations the government feels like it has to pursue."

Baltimore Sun reporter Paul West contributed to this article.

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