Michael Steele appeared on This Week with George Stephanopoulos to refute charges leveled yesterday by the Washington Post that he had misdirected campaign funds to his sister. The Post received the information through the mistaken release of sealed documents to their reporter, but Steele told the ABC audience that the allegations were unsubstantiated and intended to give prosecutors a reason to lower the sentence of a corrupt former aide:

The Post reported Steele’s 2006 Senate campaign finance chairman has told federal prosecutors that Steele arranged for his 2006 Senate campaign to pay a defunct company run by his sister for services that were never rendered.

“It’s not true,” Steele told me on “This Week” Sunday.

“Those allegations were leveled by a convicted felon who was trying to get a reduced sentence on his conviction,” Steele said. “The reality of it is that the US attorney, as well as the judge, looked at what he presented and it did not apply. He said there was no credibility to it.”

Steele said, “the Washington Post ought to be ashamed of itself for getting out in front of something without all of the facts.”

Steele said he gave the Washington Post documentation showing the receipts that were used and applied toward the $37,000 reimbursement.

“It was a legitimate reimbursement of expenses,” Steele said. “If my sister had not been reimbursed, I and she would have been in violation of McCain-Feingold finance law.”

He’s right about paying defunct companies, especially those that go bankrupt. Just because a company closes its doors does not mean that its assets and liabilities disappear. Anyone owing money to the business would still have to pay, and the money would get disbursed according to its dissolution plan. In a bankruptcy, that money would go to creditors, who would understandably demand to have all bills paid in full.

Steele makes another good point about McCain-Feingold. Had the campaign not reimbursed Monica Turner for her work, it would have become an illegal in-kind contribution. As long as the work his sister did was legitimate — and the Post noted the invoices supplied by Steele to them as comprising most of the money in question — then Steele had no choice but to reimburse Turner through either the defunct business or directly.

Did the Post ask whether the federal investigators have, as Steele claimed, determined that the allegations have no credibility? Or did they just run with the information leaked to them in that highly unusual manner? If they didn’t ask or got no answer, the Post should have held off putting the allegations on their front page, or on any page at all.