Powerhouse Republican Group Snared In Money Scheme

Published On August 4, 2014 | By Jeff Stevens |

Politico reports that the powerhouse GOP Group, The Republican State Leadership Committee, has been linked to a risky campaign finance scheme that could lead to criminal charges.

The Republican State Leadership Committee (RSLC) describes themselves as “the largest caucus of Republican state leaders in the country and the only national organization whose mission is to elect down-ballot, state-level Republican officeholders.”

This group, founded in 2002, focuses on electing conservative Republicans to state offices, from lieutenant governor to state legislators. According to the RSLC, they have “more than 100,000 donors in all 50 states.”

To get an idea of the power behind this organization, one can look at their fundraising and political spending.

According to their own website,

In the 2011-2012 election cycle, the RSLC invested in 42 states, breaking previous fundraising and political spending records, set in 2009-2010, with an increase in fundraising by 28 percent to $39 million and an increase in direct political spending by 35 percent to $27 million.
This cycle’s effort picked up six new legislative chambers, saw a net gain in over 30 chambers, created or expanded 16 Republican supermajorities and picked up two new attorneys general. Additionally, the RSLC successfully launched the Future Majority Project, spending more than $5.5 million in direct support of Republican candidates of Hispanic descent and women, and investing to expand digital outreach efforts to millennial voters.

However, as reported by Politico,

“The group’s swift ascent has not come without controversy — or lingering legal hazard. At the height of its political emergence, the RSLC was implicated in a risky campaign finance scheme that an internal report warned could trigger ‘possible criminal penalties’ and ‘ultimately threaten the organization’s continued existence,’ according to a confidential document POLITICO obtained from a source.”

This report, prepared in September 2011 but only now disclosed, was prepared by the prominent Washington law firm BakerHostetler, was presented to an RSLC board then helmed by former Republican Party Chairman Ed Gillespie — RSLC’s chief financial rainmaker starting in 2010 and now a candidate for the U.S. Senate,” as reported by Politico.

Never disclosed until now, the document detailed an investigation into alleged misconduct by multiple RSLC officials during the crucial 2010 election cycle: It charged that national RSLC leaders conspired improperly with the leader of the Alabama Republican Party to use the RSLC as a pass-through for controversial Indian tribe donations, essentially laundering “toxic” money from the gaming industry by routing it out of state and then back into Alabama.

“If these events are made public, the resulting media frenzy will be a political disaster for Alabama Republicans, a disaster with which RSLC will forever be associated,” the report concluded of the alleged plot in Alabama.

Although the RSLC never faced any legal consequences of their activities in Alabama, the report kicked off what Politico describes as “an explosive internal confrontation at the organization,” one that resulted in the departure of two senior advisers, “who have denounced the RSLC probe as a calculated power grab by internal competitors. RSLC leaders approved a severance deal for the group’s former chairman, Tim Barnes, who resigned and inked a confidentiality agreement to keep the arrangement private.”

As Politico reports, this confidential report “offers a rare window into the Wild West of unrestricted campaign spending. That sector of the political world has aroused widespread suspicion among campaign finance watchdogs even as powerfully funded outside groups and their leaders have become increasingly part of the political mainstream.”

The RSLC is a prime example of the rise of free-spending and largely opaque groups that have taken center stage in national politics over the last few election cycles. Though more than a decade old, the state-oriented political committee broke out in a major way during the conservative wave of 2010 as it helped Republicans seize control of legislatures long held by Democrats, including Alabama’s.

Matt Walter, president of RSLC, declined Politico’s request for a comment on the report, describing it as a “stolen” document. However, Walter did note:

“That is an internal report that is now a couple administrations old at the RSLC and was designed to be an internal report. It appears that a thorough review was done and, again, this is several administrations ago. All of the decision-makers cited in it are no longer employed by the RSLC.”

Walter added that the RSLC no longer has a relationship with Hubbard, who remains one of the most powerful Republicans in Alabama. “We have not talked to Mike Hubbard in some time.”

Walter also declined to comment on whether he believed any wrongdoing occurred or to specify what new procedures may have been implemented in the aftermath of the RSLC’s internal investigation.

Be sure to go to Politico to read all the specific details from the report.

Jeff Stevens

Jeff Stevens

Jeff is a social activist and part-time blogger.
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Jeff Stevens