EXCLUSIVE: Steele may lose purse strings

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By Ralph Z. Hallow

Steele backers accuse Mr. Pullen and his allies of trying to undermine the chairman and strip him of his rightful authority to spend donors' money as he sees fit.

"This resolution is an attempt to usurp the chairman's authority in a completely unprecedented and historic manner," Mr. Priebus wrote to the other party chairmen and national committee members from the 50 states and five U.S. territories.

Mr. Priebus, who heads the transition team for the newly elected chairman, also urged the resolution's sponsors "to stop playing political games and begin thinking about what they can do to help our party move forward as we face the elections of 2009 and 2010."

Mr. Pullen gave Mr. Steele the proposed resolution in a private meeting last week. The sponsors argued that it would help Mr. Pullen and other RNC officers identify and head off questionable financial actions and, thus, insulate party officials from any possible federal prosecution for financial misdeeds done under the aegis of the RNC.

Raising and spending huge sums of money - and doing it in accordance with complex federal campaign and disclosure laws - are central to the mission of the Democratic and Republican national party committees. The $300 million raised by the RNC went to Republican presidential, Senate, House and gubernatorial candidates and to state parties last year.

The spark for the clash came when Mr. Steele replaced longtime RNC Chief Financial Officer Jay Banning, trusted by successive national chairmen and RNC treasurers for nearly 40 years.

The Pullen resolution would make it a written rule that contracts of $100,000 or more be open to competitive bidding; that all checks be signed by two RNC officers; that party staff be prohibited from signing on behalf of an officer; and that all contracts be reviewed and approved by the members of the RNC executive committee.

There were signs that Mr. Steele's defenders were rising to the challenge.

"I have confidence in our new chairman and his judgment," said Holly J. Hughes, an RNC member from Michigan, in an e-mail to Mr. Pullen. "I want to give him a chance before second-guessing him. I am sorry, but I cannot support this."

Ginny Haines, an RNC member from New Jersey, wrote, "Were the policies and procedures which you are asking for in this resolution in place before Chairman Steele, if not, why are they necessary now?"

The discord comes as the Republican Party, already on the ropes after defeats in the 2008 elections, was hit with two more blows in recent days - the loss of a close House special election in upstate New York on Friday and the defection of Pennsylvania Sen. Arlen Specter to the Democrats on Tuesday.

Mr. Steele has been hammered recently for criticizing conservative icon Rush Limbaugh's radio show as "incendiary" and "ugly."

He then apologized to Mr. Limbaugh, saying his words came out wrong, but later said such apparent mistakes were actually part of a strategy to get his enemies to unmask themselves.

Mr. Steele also has had to defend himself for having belonged to two centrist Republican groups - the Republican Main Street Partnership and the Republican Leadership Council - before running for RNC chairman as a conservative and a reformer.