A drip-drip of revelations about internal management practices at the Republican National Committee turned into an open faucet this morning, as the Daily Caller revealed a highly questionable and apparently secret quid-pro-quo fundraising agreement between the RNC and Michigan Republican Party. Major question: did the RNC break the law? Is Michael Steele is in legal jeopardy?
The Caller reported that "[f]ifteen donors from Michigan maxed out their donations to the committee on a single day --Dec. 31 -- the last day of 2009 -- giving $456,000 to the committee. Over the next two months, $500,000 was disbursed back from the RNC's coffers to those of the Michigan Republican Party, with $250,000 given in January and another $250,000 disbursed in February."
The question: what was the precise nature of the agreement? Was it: if YOU write large checks to the RNC, they'll transfer the money BACK to Michigan, allowing Michigan to get MORE money from its state donors (who are limited to $10,000 in direct donations to the state) than they ordinarily would? A donor can give up to $62,000 to the RNC, and the RNC can pool the money and transfer it out as it sees fit.
Under federal election law, each contribution was permissible, and the RNC's subsequent transfers to Michigan are permissible.
Doug Heye, the RNC's communications director, said that "an inference of wrong-doing from an unnamed source is ridiculous and we stand by our commitment to fund out victory program."
However, if the collections for Michigan's Victory Program were bundled and a scheme was hatched to circumvent laws on contribution limits, then there's a problem. State parties need federal "hard dollars" for congressional and senatorial elections. Regular transfers are common, but ear-marking donations for specific races (and candidates) is not legal. That's why the pattern of disbursements matters.
Based on what the Caller reported, the matter appears to be one of sloppiness, rather than deceit. It forces Steele to account for the arrangement, and other state parties will wonder why Michigan suddenly got a cash infusion that wasn't linked to a particular RNC initiative or program.
Another problem area is optical: the RNC might be accused of inflating their fundraising totals through this "pass-through" mechanism.
Legally, so long as no one admits to a pass-through deal, or there's nothing on paper, the RNC should be OK.