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Target Rich, Cash Poor At The RNC

GOP strategists fret that RNC Chairman Michael Steele's unorthodox management style will mean missed opportunities in November.

Every time Republican National Committee Chairman Michael Steele gets into trouble, a burst of good news for the GOP bails him out. But Republican strategists fret that his unorthodox approach to his job could leave the party short of cash -- and short of the electoral gains that it might otherwise achieve.

Republicans, even those who have never been fans of the outspoken Steele, have concluded that trying to oust him would cause the party more pain than it's worth. Still, the RNC's freewheeling spending in the year since Steele's appointment worries many GOP officials.


As of January 1, the RNC had just $8.4 million in the bank, down from $22.8 million when Steele was elected on January 30, 2009. That means the RNC is not in a strong position to help its House and Senate candidates, even though that's one of its traditional roles. "Normally, in the off year, the RNC transfers heavily" to the National Republican Senatorial Committee and the National Republican Congressional Committee, said Rep. Tom Cole of Oklahoma, a former chairman of the NRCC and a former RNC chief of staff. "We clearly have more opportunities than cash right now."

Every month since July, the RNC has spent more than it has raised. Steele's spending was very low over the first several months of his tenure because he fired an estimated 75 to 100 staffers after many were deemed more loyal to the previous chairman than to him. But new hires, along with Steele's reliance on outside consultants, have boosted the RNC's burn rate, the pace at which the party spends money, to unsustainable levels.

RNC officials "need to be raising and keeping more than they're raising and keeping," conservative activist Grover Norquist said. Steele "needs to be focused on raising money for the candidates. And if you're going to spend money helping to protect the brand, you need to be doing it in consultation with elected officials and the party chairs and the RNC."


RNC spokeswoman Gail Gitcho responded to criticism of Steele's stewardship by saying, "As was the case in '92 when Republicans lost the White House and had control of nothing, it takes time to get the activists and donors engaged. Under Chairman Steele, it has happened much quicker than anyone imagined. We wouldn't trade our wins in New Jersey and Virginia, and now Massachusetts. Those were critical investments that yielded significant dividends."

Steele has already given the NRSC and the NRCC $2 million each, but party sources say that both groups had expected more heading into the midterm elections. Gitcho says, "The RNC will assist candidates at every level -- Senate, House, governors, state legislature, on down. Republicans won in New Jersey and Massachusetts. No blue-state Democrat is safe."

The NRCC badly needs more money, though. As of January 1, it had less than $2.7 million in the bank, according to an NRCC source. Fundraising has been sluggish, despite the party's improved prospects. Democrats still have a huge financial advantage. Key House Republicans and operatives within the NRCC privately worry that the RNC will not be able to provide enough financial assistance.

"They are going to leave seats behind, meaning Democrats will be saved because of their fundraising advantage when they otherwise shouldn't," a former top RNC official complained. Much of the outside sniping mentions that Steele has paid hundreds of thousands of dollars to firms owned by the two consultants who managed his campaign for national party chairman. Federal Election Commission reports show that the RNC has given at least $330,000 to OnMessage, a nationally known media and polling firm run by Steele adviser Curt Anderson. The company, which is highly regarded in the consulting world and which worked for Steele's unsuccessful 2006 Senate campaign in Maryland, received an additional $32,000 from a Virginia political action committee funded jointly by the RNC and the Republican Governors Association. Another firm, run by Steele adviser Blaise Hazelwood, received at least $141,000 from the RNC this year.


Although Anderson is not an RNC official, he exerts an exceptional amount of control over the organization. When Communications Director Trevor Francis was forced out in late November, after just eight months on the job, Anderson interviewed candidates vying to take over the communications shop. One former communications staffer said that Anderson was involved to such an extent that his approval was required before some press releases went out. "Curt's running the RNC," said a source with intimate knowledge of the party committee's operations.

On Steele's watch, the RNC has spent $11 million to cultivate new donors, an effort that RNC Chief of Staff Ken McKay says will yield $100 million over the next decade. But critics say that the committee is ignoring longtime, top-dollar contributors. One major donor, RNC member Christine Toretti of Pennsylvania, told The Washington Times earlier this month that because Steele had not called her, she would not be writing a check to the RNC this year and would instead give to the Republican Governors Association. Sources say that Steele privately fumed over the comment and threatened to retaliate by cutting off financial aid to Pennsylvania candidates, even though the GOP has a chance to pick up the governorship, a Senate seat, and several House seats there. Steele eventually backed off.

The chairman's critics, meanwhile, are keeping an eye on other spending decisions. On Election Night in November, Steele attended Virginia Gov.-elect Bob McDonnell's victory party. Steele kept a private plane waiting just in case Chris Christie won New Jersey's governorship. When Christie pulled ahead of his Democratic rival, Steele flew to the Garden State for the photo opportunity. He arrived too late to appear on stage, however.

Steele's detractors also complain about the lavish Christmas party that the RNC held for its employees at the expensive Newseum in downtown Washington. The event cost the committee thousands of dollars, sources say, although exact figures won't be public until campaign finance reports are filed on February 1. RNC members are in Hawaii this week for their semi-annual meeting. (House Republicans, by contrast, are holding their annual retreat in Baltimore.)

Much of the criticism about Steele, who declined to be interviewed for this article, emphasizes his efforts to put himself front and center as the face of the GOP. During the course of a multimillion-dollar campaign to derail the Democrats' health care legislation, the RNC ran a national radio advertising campaign that featured Steele urging listeners to call their members of Congress. The ad buy, according to Gitcho, was more than six figures. Longtime party-watchers could not recall another time when a chairman was featured in a party-sponsored ad.

Steele's testy dealings with fellow Republicans have included confrontations with RNC members. When several longtime members wanted to take away much of his authority over RNC spending, he threatened to quit, a threat made public when e-mails between him and RNC members were leaked to the media. More recently, as Steele embarked on a tour to hawk his book, Right Now: A 12-Step Program for Defeating the Obama Agenda, New Jersey Republican National Committee member David Norcross lobbed a shot across the chairman's bow, suggesting that he and others were considering measures to curb Steele's outside income. The fact that Steele had written a book took fellow Republicans by surprise. Some GOP lawmakers were upset that they were not given the chance to review his policy proposals, considering that they are the ones who run for public office. Steele has also come under fire because he earns $12,000 to $20,000 to speak to outside organizations, making him the first party chairman to charge for public appearances, according to longtime RNC-watchers and members.

The overarching problem, many Republicans believe, is that Steele is using the RNC for personal gain. For Steele to succeed, critics say, he needs to view himself more as the party's chief fundraiser and less as its national voice. After all, his job is to get Republicans elected.

"He has many bosses," Norquist said. "He needs to understand he works for the RNC."

But in Gitcho's view, "The RNC is completely focused on winning elections. There will always be critics.... That's the way it works in Washington."

The author is editor of Hotline On Call.

This article appears in the January 30, 2010 edition of National Journal Magazine Contents.

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