GOP Hush Money? Former Aide to Michael Steele Gets $100K

The Republican National Committee has doled out more than $100,000 to the top staffer let go after the embarrassing discovery that the party spent nearly $2,000 to entertain young donors at a sex-themed Hollywood night club.

One GOP insider described the six-figure payment to outgoing RNC Chief of Staff Kenneth K. McKay IV – negotiated even though McKay had scarcely a year on the job -- as "hush money" to keep a former employee from divulging details of Michael Steele's controversial tenure as RNC chair.

Party insiders told ABC News the six-figure payout represented McKay's severance package, and came in exchange for him signing a strict confidentiality agreement. Two RNC sources, both of whom spoke on the condition they not be identified, said similar deals were struck with others who had been forced out in the last few months. Both sources have been critical of Steele's leadership. They said in separate interviews that, while they were not alleging that anything illegal took place, they believe the McKay agreement and others like it are aimed at preventing the departing cast of employees from disparaging Steele. McKay, who had received $163,000 in salary payments, did not respond to messages left at his home in Rhode Island.

Doug Heye, an RNC spokesman, called the assertion "laughable."

"It would be laughable to think a confidentiality agreement is anything other than standard operating procedure for a political organization," Heye said. "It's in our employee handbook."

Heye would not comment on the two large payments to McKay, which appeared on newly filed campaign finance reports Monday. On April 30, three weeks after McKay's resignation, the RNC wrote him a $62,949 check that it classified as "payroll." A week after that, McKay received another payment, this one for "housing reimbursements," totaling $40,967. The payments were first reported by Politico.

Highest-Ranking Staffer to Resign over Spending Scandal

RNC Chairman Michael Steele had hired McKay, a former top aide to the Rhode Island governor, in early 2009 to help oversee Steele's stewardship of the party. Steele told party officials in 2009 that he believed McKay's anti-abortion and pro-gun positions, and his past work in a traditionally Democratic state, would help Steele tailor appeals to the party's base. A year later, McKay was the highest-ranking staffer to resign over the spending scandal.

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Steele has made efforts to put the issue behind him. Top RNC finance officials, a key researcher, and a party spokeswoman have all left in recent weeks. Heye told ABC News last week that "we've had to address internally problems that we've had and we have taken immediate action to fix those problems." He said he could not comment on payments to McKay.

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