The communications director added that the RNC’s ethics committee had recommended a similar independent review, which is being performed by the accounting firm Clifton Gunderson.
In the memo, Mr. Pullen reiterated his concern that “fundraising has been falling well short of budgeted numbers,” and that he began reviewing the committee’s finances when he noticed increases in cash on hand each month despite the drop-off.
“The explanation for this was the RNC was doing a great job of controlling expenses. This on the surface seemed reasonable; however, I reviewed April and May check registers in May and noted what seemed to be an increasing number of invoices with dates from prior months,” he wrote.
Mr. Pullen said that Mr. Leavitt, acting on orders from Mr. Steele, tried to limit his access to the unreported past-due bills that the RNC owes for goods and services by barring staff members from providing him any information unless approved by the chairman.
Mr. Pullen said Mr. Leavitt also told him that past-due bills were not to be officially included in the RNC’s financial statements and specifically could not be reported as RNC debt until Mr. Leavitt was able to personally assess each bill in order to judge whether it was legitimate and past due.
But at a meeting of top RNC officials, Mr. Josefiak, a campaign-finance lawyer, was shown some of the invoices and told Mr. Leavitt that they needed to be reported immediately if they had not been formally challenged.
The RNC came under fire for some of its spending in late March when the RNC reimbursed a staffer for almost $2,000 in entertainment expenses involving donors at a West Hollywood sex-themed club. The staffer was fired.
Mr. Pullen said he was then surprised to discover $3.3 million more in unreported debt for the report he had filed in May, along with $3.8 million in unacknowledged debt for the report he had filed on June 20.
The report for June, which was filed Tuesday, shows outstanding debts of more than $2 million.
“One of the purposes of the campaign-finance laws is let donors to political committees know a committee’s indebtedness as a way of judging the party’s leaders,” said Paul S. Ryan, an attorney for the nonpartisan Campaign Legal Center in Washington. “That way, donors can decide whether a change in leadership is needed or that the leadership is doing a good job and so is worthy of contributions.”
A faction of committee members has been critical of Mr. Steele’s fundraising operation.
Back on May 31, 2006, for example, the RNC had $43.1 million in cash on hand compared with the DNC’s $10.3 million. Part of the RNC’s edge over the DNC stemmed from Republicans holding the presidency, though they were about to lose control of Congress that year.View Entire Story
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Chief political writer Ralph Z. Hallow served on the Chicago Tribune, Pittsburgh Post-Gazette, Washington Times editorial boards, was Ford Foundation Fellow in Urban Journalism at Northwestern University, resident at Columbia University Editorial-Page Editors Seminar and has filed from Berlin, Bonn, London, Paris, Geneva, Vienna, Amman, Beirut, Cairo, Damascus, Jerusalem, Tel Aviv, Belgrade, Bucharest, Panama and Guatemala.
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