WASHINGTON (Reuters) - The Republican National Committee has been spending big to win key elections and regain momentum under chairman Michael Steele — maybe too big, according to political analysts and federal records.
Aggressive spending helped bring stunning victories in off-year gubernatorial races in New Jersey and Virginia last November, and in the Massachusetts special election that broke the Democratic Party’s filibuster-proof majority in the U.S. Senate in January.
Those were important wins for the Republican Party, which needed to show signs of a comeback after losing Congress in 2006 and the White House in 2008.
But the RNC wound up outspending its own revenues by about the same margin as it has outspent the Democratic National Committee since last summer, according to financial disclosure documents filed with the Federal Election Commission.
Analysts say that fact, combined with new revelations this week about lavish spending, could hobble the RNC as an engine of Republican fund-raising in this year’s battle for Congress.
“Ordinarily, you could say the cost of those elections was money well spent. They gave Republicans new momentum and put the wind at their backs. But the other stuff puts them right back in the hole,” said Norman Ornstein of the American Enterprise Institute.
RNC spokesman Doug Heye acknowledged Steele spent big to secure Republican victories. But he added that the RNC has now begun to rebuild cash reserves for November and has out raised the DNC for four months straight.
“We could have not spent the $9 million in Virginia, the $3 million in New Jersey and the $2 million for each (national) congressional committee, which would give us another $17 million in the bank. But the chairman decided he wanted to put points on the board,” Heye said.
RNC finances fell under new scrutiny this week after the conservative Web site DailyCaller.com reported tens of thousands of dollars being spent on luxury hotels, private jets and limousines during the month of February.
Most scandalous was a $2,000 tab for entertaining young Republicans at a bondage-themed night club in West Hollywood. The revelation cost an RNC staffer her job.
“It’s all a huge blow to the Republican Party and it’s going to put an enormous crimp into RNC fund-raising,” Ornstein said. “I can’t imagine any well-heeled, or not well-heeled, donor saying: ‘I’m going to give my money to the RNC’.”
Analysts said the uproar also further discredited Steele as the national face of the Republican Party, which has few spokespeople who can effectively articulate its message.
“Steele may not have known about the night club. But at this point, he’s like Velcro. Everything sticks to him,” said Larry Sabato of the University of Virginia’s Center for Politics.
Heye declined to talk about February’s expenses and the bad press they engendered.
But experts noted media reports of some big Republican donors moving away from the RNC because of disaffection for Steele’s flamboyant style and public gaffes.
A drop in fund-raising would strike the RNC at a time when it has aggressively ramped up spending, despite a fall-off in donations compared with earlier election cycles.
The RNC spent $78 million between July and February. That is 21 percent more than its revenues of $63 million and 20 percent more than the DNC spent for the same period.
FEC records show RNC average monthly expenditures climbing to $9.8 million during the eight-month period — $1.8 million a month more than its receipts.
Over the same period, RNC cash on hand shrank from $23.7 million on July 1 to $9.5 million at the end of February.
Spending outstripped revenues slightly in February. But Heye said that was because heavy snow disrupted donations via the U.S. Postal Service.
Editing by David Alexander and Philip Barbara