The Washington Times reports that Michael Steele has been forced to backtrack on his ambitious reorganization of the RNC.  Steele had tried cleaning house to remake the RNC into a leaner, younger, and less traditional unit, but the GOP establishment had pushed back hard.  They forced Steele to reinstate a series of checks and balances on power within the RNC, including the return of one of the key people Steele booted in the transition:

Capitulating to critics on the Republican National Committee, embattled Republican Party Chairman Michael S. Steele has signed a secret pact agreeing to controls and restraints on how he spends hundreds of millions of dollars in party funds and contracts, The Washington Times has learned.

The “good governance” agreement revives checks and balances Mr. Steele resisted implementing for RNC contracts, fees for legal work and other expenditures that were not renewed after the 2008 presidential nominating contest.

The agreement, proposed by several current and former RNC officials, goes further, making 33-year RNC veteran Jay Banning, who was fired by Mr. Steele along with his deputy last month, an on-call adviser to the RNC treasurer. Mr. Banning was seen as a trusted liaison to RNC members critical of Mr. Steele’s tenure and financial management.

“I regard them – the Steele administration – bound by it,” former Republican National Committee General Counsel David Norcross told The Times on Tuesday.

The battle comes at a curious time.  Steele got off to a rough start, engaging in a series of dramatic fumbles in his first few days as RNC chair by allowing a Nazi comparison to pass on the DL Hughley show and engaging in a brief and superfluous snit with Rush Limbaugh.  After getting the clear message to focus on his RNC tasks, though, Steele managed to generate very respectable fundraising figures, outpacing his opponent at the DNC, Governor Tim Kaine, by a wide margin.

Given that Steele quickly righted the ship and performed well at his main task — getting cash into the coffers — why rock the boat now?  Ralph Hallow’s report makes it sound as though RNC members became concerned over Steele’s dismantling of key oversight processes.  They made a point of forcing Steele to accept Banning, a definite walkback for the new RNC chair.  There seems to be a significant level of mistrust over the handling of the money Steele’s raising, or at least enough caution to keep him from jettisoning their ability to control the funds.  Hallow says that this is unprecedented in the RNC’s history, but to be fair, these controls got imposed in 2004 in response to concerns at the time, too.

This is a step back for Steele, but perhaps a healthy one, and early enough in the cycle to heal.  It shows that Steele’s opponents still don’t have the support to remove him, but have enough influence to matter.  If Steele keeps outpacing the DNC in fundraising and revamps its communications and activist infrastructure in time to gain significant seats in the midterms, all of this will be nothing more than a footnote to Steele’s career.