With Republicans on track for a potential tidal wave of success in the upcoming midterms, the party should be organized for maximum efficiency.  Instead, the RNC may find itself in serious trouble with the FEC for failing to disclose millions of dollars in debt — a burden about which the treasurer of the GOP says he knew nothing.  Randy Pullen sent a memo to the budget committee accusing RNC chair Michael Steele and his chief of staff of deliberately hiding the debt:

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 RNCofficials 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.

How serious is the problem?  The RNC quickly retained former FEC chair Michael Toner as their attorney, a high-priced move that Hans von Spakowsky — another former FEC commissioner — called “unusual and significant,” according to the Washington Times.  The fines for failing to report debt on time can run into seven figures and could seriously impact the ability of the GOP to support candidates in the waning days of the midterm elections, if immediately imposed.

Perhaps even more disturbing is what prompted Pullen to double-check the books.  The fundraising numbers have fallen well below goals set by the RNC, but the cash on hand figures kept increasing past expectations.  Supposedly this came from better efficiency in operations and cost-cutting, but last month Pullen got suspicious and rechecked invoices, payment for which had slipped significantly.  Pullen claims that Steele attempted to block his access to the data and that Leavitt locked the invoices in his office; Steele denies that charge.

If Pullen’s claims turn out to be true, it’s a potential disaster for the RNC and Republican candidates, and not just because of the restricted cash flow.  The GOP has been arguing that they are the party of fiscal responsibility and reform.  The DNC will have a field day with this story.

Tags: Republicans