And here you thought the IOKIYAR rule wouldn't be tested for awhile

Let's see what the media do with this:

Michael S. Steele, the newly elected chairman of the Republican National Committee, arranged for his 2006 Senate campaign to pay a defunct company run by his sister for services that were never performed, his finance chairman from that campaign has told federal prosecutors.

Fabian's claims emerge as Steele begins his new role at the RNC, where he oversees the raising and spending of hundreds of millions of dollars in party money. The former Maryland lieutenant governor has faced questions about his handling of campaign money in prior elections and was twice fined for missing filing deadlines.

The recent allegations outlined four specific transactions. In addition to the payment to Steele's sister, Fabian said that the candidate used money from his state campaign improperly; that Steele paid $75,000 from the state campaign to a law firm for work that was never performed; and that he or an aide transferred more than $500,000 in campaign cash from one bank to another without authorization.

The bank transfer was made against the explicit wishes of other Maryland Republicans, who had hoped to use it to support the campaigns of state legislators, said aides to Steele and former governor Robert L. Ehrlich Jr.

The U.S. attorney's office inadvertently sent the confidential document, a defense sentencing memorandum filed under seal, to The Washington Post after the newspaper requested the prosecution's sentencing memorandum.

U.S. Attorney Rod J. Rosenstein declined to comment. Fabian could not be reached, and his attorney, James Wyda, declined to comment.

According to the filing, Wyda gave prosecutors "documents supporting [the] allegations." Wyda wrote in the memorandum that the government declined to credit Fabian for cooperating "presumably because its investigation is ongoing."

The Post corroborated some details of Fabian's claims through public records and interviews with former staff workers. Other details were disputed by people involved in the transactions.

In one of his allegations, Fabian points to a February 2007 payment by Steele's Senate campaign of more than $37,000 to Brown Sugar Unlimited, the company run by Steele's sister, Monica Turner. Campaign finance records list the expense as having been for "catering/web services." Turner filed papers to dissolve the company 11 months before the payment was received.

[snip]

Over the years, money trouble has been a persistent problem for Steele. His first race for public office, a 1998 bid for the Republican nomination for state comptroller, ended nearly $35,000 in debt, much of it to his sister. He was fined twice by state officials for missing deadlines to file campaign finance reports and was in debt and had faced foreclosure in 2001, the year before he was selected as Ehrlich's running mate. The state party threw Steele a financial lifeline, awarding him an unusual $30,000 consulting contract.

So a guy who can't manage finances is the head of the RNC, which manages fundraising for political campaigns. And think about it: this was the BEST candidate for the job. So what does that tell you about the Republican Party?

In the larger sphere of things, this really doesn't matter any more than spending $180,000 on designer clothes for Sarah Palin matters. But the Republican Party is trying to position itself as the party of frugal restraint, and when the head of its party is funnelling campaign funds to a relative whose company was disbanded long before the now-nonexistent company was hired for "catering" services, it ought to raise a few eyebrows.