RNC fails to report $7M in debt to FEC

The Republican National Committee failed to report more than $7 million in debt to the Federal Election Commission in recent months - a move that made its bottom line appear healthier than it is heading into the midterm elections and that also raises the prospect of a hefty fine.

In a memo to RNC budget committee members, RNC Treasurer Randy Pullen on Tuesday accused Chairman Michael S. Steele and his chief of staff, Michael Leavitt, of trying to conceal the information from him by ordering staff not to communicate with the treasurer - a charge RNC officials deny.

Mr. Pullen told the members that he had discovered $3.3 million in debt from April and $3.8 million from May, which he said had led him to file erroneous reports with the FEC. He amended the FEC filings Tuesday.

Campaign-finance analysts said that simply misreporting fundraising numbers to the FEC can lead to millions of dollars in fines and that criminal charges can be levied if the actions are suspected to be intentional.

“This is significant because the civil penalties could mean big fines that take a significant bite out of the RNC’s finances close to the November congressional elections, when state parties need the RNC’s financial help for their ‘victory’ programs,” said former FEC Commissioner Hans A. von Spakovsky.

RNC Communications Director Doug Heye said that it was “standard practice” for party committees to file amended reports on their financial activities to comply with extensive FEC disclosure requirements.

“We have always followed the guidelines of our legal counsel and treasurer and have put in place additional oversight to ensure that all invoices are handled in a proper, open and transparent manner,” Mr. Heye said in an e-mail statement.

The Washington Times also has learned that former Federal Election Commission Chairman Michael E. Toner has been retained as outside counsel to the RNC, a move Mr. von Spakovsky called unusual and significant.

“The RNC normally uses its own inside counsel to deal with the FEC,” said Mr. von Spakovsky, a Heritage Foundation legal scholar. “But if I had a really serious problem with the FEC, Michael Toner is one of the first guys I would turn to help me out.”

Considered one of the hottest campaign-finance legal talents the GOP has in town, Mr. Toner joins an RNC legal team headed by RNC General Counsel Reince Priebus, who is also the Wisconsin GOP chairman, and augmented by former FEC Chairman Thomas J. Josefiak, also a former RNC chief counsel.

Mr. Heye did not immediately comment on the amount of debt Mr. Pullen discovered for his amended filings.

But Mr. Heye did deny specifically that Mr. Leavitt had barred staff from answering Mr. Pullen’s questions.

“No, the staff has always been free to engage with the treasurer or any other member of the national committee,” he said.

Mr. Heye added that Mr. Steele has been the moving force behind the internal policies review.

“That review has been conducted by Tom Josefiak and Michael Toner, both former FEC commissioners held in high esteem and whose expertise is unquestioned, and their recommendations are being implemented,” Mr. Heye said.

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