March 31, 2010— -- Michael Steele, the embattled Republican National Committee chairman, is keeping a low profile amid questions about his leadership after controversial reports of a spending spree and a scandalous fundraiser at a risque Hollywood nightclub.
So far, no major Republican leader is calling for Steele's resignation, fearing that it could generate even more turmoil that the party doesn't need right now.
But that's hardly put a dent in the public chatter as pundits and politicos question the RNC chairman's leadership.
The target of criticism is lavish spending by Steele -- $17,000 for private jet travel, $13,000 for limousines and car services and $9,000 for a trip to the Beverly Hills hotel. But the most controversial charge is Steele approval of a nearly $2,000 fundraiser at Voyeur West Hollywood, a sex-themed nightclub in Los Angeles. The expenses were not racked up by Steele but by a staffer, in the name of entertaining young Republicans.
In the line of fire, Steele is moving fast to put the controversy behind him. He has fired Allison Meyers, the staffer who took a group of donors to Voyeur last January, and Steele maintains that he knew nothing of that outing.
The RNC said it would be reimbursed for the $1,946.25 bill that was racked up at the strip joint, which is modeled on the 1999 movie "Eyes Wide Shut" and features women acting out voyeuristic scenes in live art installations.
Insiders worry that the controversy is distracting from the Republican Party's primary goal -- seizing majority control of Congress in November's midterm elections.
"This is a really bad distraction at a time when we have the Obama administration on the ropes and we are making great gains out. Among the rank and file, we now have attention diverted to this fiscal irregularity and this controversy," said Ken Blackwell, a former candidate for RNC chairman (he's currently vice chairman of the RNC's platform committee).
"At the end of the day, Chairman Steele knows that the buck stops at his desk, and so that's why it is incumbent among him to take quick action to right the ship, to make sure that appropriate heads roll, to build confidence among our donor base," Blackwell said.
RNC Chairman Michael Steele on the Hot Seat?
The Daily Caller, which first reported on RNC's spending, is now reporting that since Steele became chairman, top GOP donors -- at least eight of them -- have stopped contributing to the RNC. Those donors include Home Depot co-founder Bernard Marcus and real estate mogul Harlan Crow, according to the Daily Caller.
Some of Steele's counterparts say he does a good job of getting candidates elected, but are critical of how he spends RNC money.
Steele's supporters, however, are standing by him. The RNC chairman got some warmth from Virginia Gov. Bob McDonnell, who the RNC helped in his 2009 bid for governor.
"I think he's a good leader," McDonnell said. "People always like to focus on the controversy and not on the good news."
Steele, for now, is letting his actions talk and is avoiding questions. He was in Tampa, Fla., Tuesday with other RNC members checking out the city as a 2012 convention site, and he skipped a planned press conference and so far, has turned down interview requests.
ABC News' Huma Khan contributed to this report.