Could RNC Resignations and New PAC Signal More Trouble for Steele?

Two RNC officials resign following Steele's race remarks.

April 4, 2010, 6:03 PM

April 5, 2010— -- Embattled Republican National Committee ChairmanMichael Steele released a defiant statement following an interview he gave on "Good Morning America" where he said his African-American race played a role in calls for him to step down.

"The members of the Republican National Committee entrusted myself and every staffer to lead the loyal opposition against the destructive Obama agenda, build a stronger Republican party and win elections. This is a role I take with the utmost seriousness," the statement read.

The statement also came after two GOP officials stepped down today -- top GOP donor Sam Fox stepped down from his position on an RNC fundraising committee, and Ken McKay stepped down as RNC Chief of Staff.

In his statement, Steele announced he was appointing McKay's deputy, Mike Leavitt, to take his spot.

According to a Republican close to the RNC, the elevation of Mike Leavitt -- who managed Steele's unsuccessful Senate campaign -- could spell more trouble for the RNC.

Leavitt has been overseeing communications for the past two months, and during that time, four communications staffers have left the RNC, fed up with Leavitt's "bluster" and leadership style, said the Republican who spoke on condition that his name not be used.

But former RNC chair Ed Gillespie told ABC News in an e-mail that "Chairman Steele's decision to put Mike Leavitt in charge of the building will be reassuring to a lot of Republicans."

"Mike is a very smart political operative and effective manager of people and resources. He knows the chairman well and how best to maximize his strengths. He also has very good relations with the other committees and Republican strategists," Gillespie wrote.

Meanwhile, several GOP powerhouses -- including former RNC chairman Mike Duncan, former RNC communications director Jim Dyke and former RNC co-chair Jo Ann Davidson -- have formed a new group to raise $50 million for Republican candidates.

Gillespie and Karl Rove, adviser to President George W. Bush, are serving as informal advisers.

The new conservative PAC called "American Crossroads" will target wealthy donors and corporations. It has already raised $30 million in commitments from contributors, according to the National Journal, and its goal is to raise $52 million.

The new group gives donors who are upset with Steele another outlet to donate, but the group's organizers insist their goal is to counter similar efforts by Democrats and complement the RNC, not bypass it.

Under Steele's leadership, the RNC has spent more money than it raised this election cycle. According to campaign finance reports released in late March, the RNC raised $7.69 million, but spent $7.71 million.

The embattled Steele, in the view of many, played the race card today when asked on "Good Morning America" if he is allowed fewer errors because he is African American.

"The honest answer is, 'yes,'" he said. "Barack Obama has a slimmer margin. A lot of folks do. It's a different role for me to play and others to play and that's just the reality of it. But you take that as part of the nature of it."

"My view on politics is much more grassroots-oriented, it's not old-boy-network oriented, so I tend to, you know, come at it a little bit stronger, a little bit more street-wise, if you will. That's rubbed some feathers the wrong way," Steele told "Good Morning America's" George Stephanopoulos.

Ken Blackwell, who lost to Steele in the race to be RNC Chairman, called Steele's race remarks "nonsense."

"There is a pattern of missteps, miscues, and misstatements and as a consequence we now can't fall back on the issue of race," he told ABC News.

Steele's comment on "Good Morning America" today that he and President Obama have a slimmer margin of error because of their race was dismissed by the White House.

"Well, I think that is a fairly silly comment to make," White House Press Secretary Robert Gibbs told reporters today. "I think Michael Steele's problem isn't the race card, it's the credit card."

Steele is under fire by his own party members for what some people consider lavish spending -- $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 revelation was that RNC staffers spent nearly $2,000 at Voyeur West Hollywood, a sex-themed nightclub in Los Angeles. The employee who authorized the expense was fired, but then the RNC shot itself in the foot again later, sending a fundraising letter that mistakenly directed donors to call a phone-sex number.

Steele today said he won't resign despite calls for him to step down amid reports of excessive spending, and he said the spending issue is being blown up "larger than it needs to be."

"The reality of it is, when I first heard about this behavior going on, I was very angry, and we dealt with it. We got to the bottom of it," Steele said. "We have been putting great controls in place for the last few months, as a matter of fact, on some of our financing."

Steele defended himself against criticism that the RNC is spending more money that it's taking in, saying that it has outraised the Democratic National Committee in seven of the past 12 months.

"A lot of these -- our donors, our major donors, are used to a particular type of an event. We've been scaling those back. So, you know, I think a lot of this is really kind of taking it a lot further down the road and blowing it up larger than it needs to be," he said.

"At the end of the day, I've raised more money than the Democrats in seven out of 12 months. I carry over the same amount of money as the DNC in 2010," Steele added. "The bottom line is, I hear my donors, I hear our base out there, I hear the leadership. And we're taking steps to make sure that we're even more -- how shall we say it -- fiscally conservative in our spending and certainly making sure the dollars are there when it's time to run our campaigns."

Michael Steele At Center of Controversy

Even before the spending controversy, some Republicans thought Steele was a burden to the party. A poll of Republican insiders by the conservative National Journal last month found that 71 percent of them thought Steele was a liability to the party, while only 20 percent said he was an asset. One GOP operative quoted in the magazine even declared Steele is "an anchor around the neck of the future of the Republican Party."

But the criticism hasn't fazed the RNC chairman. "They've been saying that since the day I got the job," Steele said.

For Republicans, Steele's troubles come at an inopportune time, putting the party on the defensive just as it is gearing up for the mid-term elections.

It's clear that questions about Steele's leadership have become an uncomfortable issue for Republicans.

While most GOP lawmakers are sidestepping the question of whether it's time for Steele to step down, they are crying foul over freewheeling spending at the RNC and demanding a shakeup.

"I'm not in the position of the people who elect Michael Steele to either say he should step down or not. But this kind of thing has got to stop or they won't get any contributions," Sen. Jon Kyl, R-Ariz., said on "Fox News Sunday." "The people that contribute to the committees, both Democrat and Republican, want to know that their money is well spent for the cause, and it needs to be that way."

Others say the RNC needs to show it is accountable for the money it is being given.

"I think Michael Steele has worked very hard. ... The RNC does have some challenges that they need to correct. Not only does the American people request it but the Republicans requested it as well," said Rep. Kevin McCarthy, R-Calif., who is heading up GOP House recruiting efforts. "If we are going to show that -- the American public, that we believe in accountability and bringing it back to Washington, we have to make sure that the RNC has the accountability just the same."

Others are less forgiving. Former Bush adviser Karl Rove criticized RNC's spending and Tony Perkins of the Family Research Council have called for Republican supporters to stop giving money to the RNC.

"What appears to be excessive spending at a time of economic hardship for most of the country, at a time when the Republicans are complaining about the spending in Washington by Democrats, look, if you can't run a party, you certainly can't run a country," Perkins said on MSNB last week.

Political pundits are also unsympathetic.

"I think the problem is hypocrisy," ABC News contributor and former adviser to President George W. Bush Matthew Dowd said on "This Week" Sunday. "It's not the strip club and all that. It's Republicans go out there and talk about fiscal responsibility and they talk about family values, and they have a party leader and party officials who go to a strip club."

Conservative columnist George Will had even harsher words for Steele.

"He has fundamentally misconstrued his job, which is to be the face and the ideological spokesman for the Republican Party," Will said on "This Week."

Despite the controversy, some Republican leaders such as Virginia Gov. Bob McDonnell are standing behind the embattled chairman.

"I think he's a good leader," McDonnell said last week. "You know, people always like to focus on the controversy and not on the good news."

Steele's supporters say that when it comes to what really matters, which is winning elections, Republicans under Steele are doing just fine, recently winning major races in Virginia, New Jersey and Massachusetts.

ABC News' Teddy Davis and Rick Klein contributed to this report.