Michael Steele: Money for Sister a 'Legitimate Transaction'

During our exclusive "This Week" interview with Michael Steele, the newly elected Republican National Committee chairman, Steele lashed out at yesterday's Washington Post article.

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."

I asked Steele about records showing that the payment was made in December of 2007 and Steele's sister's company had been dissolved 11 months before that.

"That I don't know about," Steele said. "What I do know about is the fact as she understood it, the company was still in existence. Her lawyers were telling her they were in the process of dissolving the company. So at the time when the checks were written back to her to reimburse her, she just said, 'go ahead and write the checks to the company,' because the company had, you know, done the services that had been provided. But again, even in that instance, you can still, there are many companies that dissolve and still receive payments for services that are rendered. So that aspect for me is clarifying, again, cleared up with the lawyers, and was a legitimate transaction."

Steele said all the other allegations about financial transfers in the article were false.

"The thing about this George that is so frustrating to me, is that the Washington Post elevated this guy. And gave him credibility when no one else would. That's disturbing. The fact is we supplied all these documents on record with the state board of elections, with the FEC, and I think if there were any funny business there in two and a half years, 'cause they audit, and Lord knows I have enough Democrats pouring through my records to, in the last few years, they would have caught that."

Steele said that federal agents have contacted her sister in the last few days, "for the purposes of closing out, closing out  this matter," he said.

"I have not been contacted by the FBI at all. And what we said to the Washington Post is 'will you just wait? You're getting ahead of yourselves here. You're trying to make a story out of something that isn't a story. We'll provide you with the information.'"

Steele said his team faxed the Washington Post the receipts and other documentation and will take the information to the Federal Bureau of Investigations.

"We're being very proactive about this," he said, "because I'm sick and tired of this gotcha business that the Washington Post and others in the media tend to engage in. We're getting out in front, we're pulling all the data together. We're going to take it to the FBI. I'm not going to wait for them to come to me. I'm going to take it to them and give them everything they think they need. And if that's not enough we'll give them more because I want to clear up my good name. This is not the way I intend to run the RNC with this over my head." 

--George Stephanopoulos

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