Spending and Strippers: RNC Spree Raises Questions

March 30, 2010— -- Republican National Committee Chairman Michael Steele is in the hot seat after reports of a spending spree on the organization's payroll, including a controversial fundraiser at a Hollywood strip club.

It's the sort of lavish spending that sounds as though it would have taken place in better economic times -- $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 what the RNC is probably taking criticism for the most is a nearly $2,000 fundraiser on RNC's dime at Voyeur West Hollywood, a risque nightclub in Los Angeles. The expenses were not racked up by Steele but by staffer Erik Brown in the name of entertaining young Republicans. The strip joint is modeled on the 1999 movie "Eyes Wide Shut" and includes women acting out voyeuristic scenes in live art installations. Brown, a Republican operative and president of California-based Dynamic Marketing Inc., said he would reimburse the RNC for the $1,946.25 bill he racked up.

The RNC says it is investigating the expense, and that Steele was never at the club. At the time, he was flying back from the RNC winter meeting.

Steele "had no knowledge of the expenditure, nor does he find the use of committee funds at such a location acceptable," RNC's communications director Doug Heye said in a statement Monday. "Upon finding out of the expenditure this morning, Chairman Steele demanded the committee get to the bottom of this matter immediately."

"The committee has taken appropriate steps to address the issues relating to the reimbursement of certain expenses," Heye added. "It is unfortunate that a loyal GOP donor who has recruited other donors became involved in this incident while merely trying to help what turned out to be the improper request of a staffer who is no longer with the committee."

It's not clear why the RNC reimbursed Brown for the charges or who else was with him at the club.

RNC Spending Raises Questions

Some say the party's other lavish spending is excessive at a time when funding is hard to come by.

"People are giving their hard-earned money to a party to help elect candidates, that's the goal, not to chauffeur the chairman of the party around in limousines," Neil Patel, publisher of the Daily Caller, which first reported the story.

The news comes at a time when donors have been grumbling about Steele's recent spending spree, ranging from a fancy holiday party at Washington's Newseum to the annual retreat being held in Hawaii instead of the nation's capital.

Steele also came under fire for a recent memo that called RNC's own wealthy donors ego driven, and a presentation that depicted images of President Obama as a joker.

"Well you don't defend it. It was unfortunate," Steele said in an interview with Fox News earlier this month. "I'm trying to figure out what the intent behind -- I mean, the words on paper don't sound appealing. And certainly we love our donors and we thank them for the support that they've given us over the past year, and continue to give us."

The Republican Party insists that it needs to spend money to raise more cash. The RNC is not alone in its spending spree. The Democratic National Committee spent $45,000 on two hotels alone in February.

The RNC has about $10 million on hand right now, about the same as it had a year ago, despite raising $96 million last year.

ABC News' Huma Khan and Teddy Davis contributed to this report.