RNC chief: Payments to sister's firm appropriate

WASHINGTON (AP) - Michael Steele, the new chairman of the Republican National Committee, said Sunday that claims he made inappropriate payments to his sister's company for work never performed were untrue and made by a felon trying to get a reduced sentence.

Steele paid more than $37,000 to a Maryland company run by his sister, Monica Turner, for work related to his unsuccessful 2006 Senate campaign. If she was not reimbursed, both he and his sister would be violating campaign finance laws, said Steele.

"It was a legitimate reimbursement of expenses," Steele said on ABC's "This Week."

Steele became the first black national chairman in the RNC's history last month. He was the first black candidate elected to statewide office in Maryland in 2002, when he became lieutenant governor, and was chairman of the Maryland Republican Party and then chairman of GOPAC, an organization that recruits and trains Republican political candidates.

Steele's former finance chairman, Alan B. Fabian, claimed to federal prosecutors that Steele made the payment to the company, which was then out of business, as Fabian was seeking leniency on unrelated fraud charges, The Washington Post reported Saturday. Prosecutors gave Fabian no credit for cooperation when he was sentenced in October, the newspaper said.

The charges were made in a confidential sentencing memorandum sent by the U.S. Attorney's office in Maryland inadvertently along with other documents requested by the Post.

In addition to the payment to Steele's sister, Fabian alleged 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.

Requests for comment Sunday from the Justice Department in Washington, the U.S. attorney's office in Baltimore and Fabian's attorney, James Wyda, were not immediately returned.

"All the allegations from this convicted felon are completely false," Steele spokesman Curt Anderson told The Associated Press on Sunday. Asked whether Steele was being investigated, Anderson said: "Some fed agents had a brief conversation with his sister. That's all there is."

As for claims that his sister's company was out of business when the payment was made, Steele told ABC: "What I do know about is the fact that, as she understood it, the company was still in existence. Her lawyers were - were telling her they were in the process of dissolving the company."

Anderson said the questioned transactions were fully disclosed, completely proper and in full compliance with all state and federal laws.

"It's going to take a lot more than this foolishness to slow Chairman Steele down as he begins the hard work of reviving the Republican Party," Anderson said.

(Copyright 2009 by The Associated Press. All Rights Reserved.)


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