GOP brushes off allegations in Steele probe

Wednesday, Feb. 25, 2009

Supporters of Michael S. Steele say the allegations of impropriety made by the finance chairman of his U.S. Senate campaign are much ado about nothing.

The FBI continues to investigate, but has no further comment, said Agent Jennifer Houser.

It was reported that Steele's 2006 Senate campaign allegedly made payments to a company owned by the candidate's sister.

"They're investigating because a convicted felon gave them information," said Maryland GOP spokesman Justin Ready.

Steele, recently elected chairman of the Republican National Committee, lost to Benjamin L. Cardin (D) in his bid for the Senate seat. He previously served as lieutenant governor under Gov. Robert L. Ehrlich and was chairman of the Maryland GOP.

Steele's election as national party chairman was seen as a boost to the state party, and the allegations against him have not changed that, Ready said.

"We don't see any long-term damaging effects coming from this," Ready said. "The allegations are without merit."

Calls to Steele's spokesman were not returned.

In a court document obtained by The Washington Post, Steele's former finance chairman offered to provide information about Steele to federal prosecutors in return for a more lenient sentence on unrelated fraud charges.

Among Alan B. Fabian's allegations was that Steele paid $37,000 to Brown Sugar Unlimited LLC, a now-defunct business operated by Steele's sister for "catering and web services" that were never performed.

The Post reported the confidential document was sent to the newspaper inadvertently after the Post asked for Fabian's sentencing memorandum.

The court document also alleges that either Steele or a campaign official transferred $600,000 of state campaign funds out of an account at Bay National Bank without authorization from the Maryland Republican Party.

Fabian, 44, received a nine-year prison sentence for fraud in a case involving nearly $40 million.

The allegations were especially disappointing because they came from a fellow Republican, Ready said.

"People do strange things when they're facing a lot of prison time," Ready said. "He misled a lot of people."

cford@gazette.net