As Michael Steele prepares to reinsert himself into state politics this week, with a visit to the Maryland Association of Counties summer conference and associated events, the former Republican National Committee chair faces an uncertain reception from Maryland GOP leaders and activists who are flocking to Ocean City for the annual gathering.
Like many candidates for statewide office, Steele, who announced last month that he is exploring a possible run for governor in 2022, plans to meet with local business leaders and hit some of the dozens of receptions that are taking place across the beach town this week. But the former lieutenant governor and onetime state GOP chief finds himself at odds with key elements of his party after his unrelenting criticism of former President Trump and Trump acolytes over the past half-decade, and some of the fissures are coming into plain view.
On Tuesday, Del. Lauren C. Arikan (R-Harford) said she was filing a formal complaint with the State Board of Elections over Steele’s decision to create a so-called 527 committee to raise money for his exploratory effort. And in Republican circles there remain persistent rumors that some state GOP leaders — though apparently not anyone directly tied to the Maryland Republican Party — may be preparing to release a video attacking Steele.
Arikan’s complaint concerns the 527 organization that Steele created to help fund his early political activities ahead of a possible run for governor. The 527 status comes from the IRS, which has oversight of certain entities that use the designation for political advocacy.
Steele, like Democratic gubernatorial contender Tom Perez, created the 527 for the exploratory phase of his campaign, because the State Board of Elections, unlike the Federal Election Commission for congressional and presidential candidates, does not allow candidates to create a state campaign committee unless they have formally entered a race.
In a statement, Arikan contends that Steele is using the 527 to violate Maryland campaign finance law — and noted that he has run afoul of state and federal campaign finance laws during his political career. These infractions, according to media reports, included sending a campaign contribution to the Maryland GOP from his state campaign account that exceeded legal limits and paying his sister’s company from his U.S. Senate campaign account for work that was never performed — a circumstance that Steele said he voluntarily brought to the attention of federal authorities.
Under state campaign finance law, Steele’s 527 can only transfer up to $6,000 to a state campaign committee, if he decides to run for governor.
“This entity is to raise and spend money, including for polling, in connection with Mr. Steele’s evaluation of a Maryland election,” Arikan said. “As Mr. Steele should know, given his past violations of Maryland campaign finance laws, any such non-Maryland 527 political committee would be limited to $6,000 of coordinated in-kind or other permitted activity.”
Arikan did not respond Wednesday to a request sent on social media to provide a copy of the complaint she sent to the state elections board. Jared DeMarinis, director of candidacy and campaign finance for the State Board of Elections, did not respond to requests for comment.
“As a Republican elected official who is required to follow Maryland’s campaign finance laws, I believe it is critically important that all who seek our party’s top nomination for Governor follow the same set of rules,” Arikan said.
Jim Dornan, the national Republican strategist who is heading Steele’s exploratory effort, said the campaign was well aware of the $6,000 transfer limit and said Arikan’s complaint “has absolutely no merit.”
“I got a thorough vetting from our attorneys about the do’s and don’ts regarding this,” Dornan said.
Perez, the former Democratic National Committee chair who announced his candidacy for governor in late June, also created a 527 ahead of entering the race. That entity went dormant when he created a state campaign account.
Tucker Cavanagh, a senior advisor to Perez’s campaign, said the 527 provided some in-kind services to Perez’s state committee that were far below the $6,000 legal limit in value. He said the rest of the money was disbursed to Democratic candidates and committees around the country, including a donation to Emerge Maryland, which recruits and trains Democratic women to run for office.
“After Tom left the DNC, he formed Every Zip Code Counts to continue fighting for an ideal that he championed as Chair,” Cavanagh said in a statement to Maryland Matters. “We need to invest in Democrats, not just in the blue states or big cities, but in every zip code across the county in order to achieve our goals. While, as part of this mission, EZCC did some normal exploratory activities in Maryland, it developed political strategies and has invested in 2021 elections around the country.”
Beyond Arikan’s complaint against Steele, some Republicans say they believe a video attacking Steele is being assembled that makes reference to the previous campaign finance issues and strings together a series of Steele’s criticisms of Trump and other prominent Republicans. But the video has yet to surface — and it isn’t being produced under the auspices of the state GOP.
Dornan, who was campaign manager to Ellen R. Sauerbrey during her 1998 run for governor, said Steele is anticipating these sort of attacks. Many party leaders have sought to promote Maryland Commerce Secretary Kelly M. Schulz for governor; Del. Daniel L. Cox (R-Frederick) is also running, under the Trump banner.
“The establishment of the Maryland Republican Party is absolutely terrified of Michael Steele,” Dornan said.
But the strategist said Steele, who has a long history in state GOP politics, is undeterred and is looking forward to connecting with old friends and making new contacts in Ocean City this week.
“He knows not everyone agrees with him, but he’s open to talking to anyone,” Dornan said. “We expect a very respectful reception.”