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Posted at 3:11 PM ET, 12/ 1/2010

RNC official admits to a "cashflow challenge"

By Chris Cillizza

In a memo sent to vendors Tuesday, the Republican National Committee's chief administrative officer acknowledged that the committee is facing a "cashflow challenge" and that many of those who provided political services to it during the 2010 election would not be paid this week as originally planned.

"We will not be able to pay off the vendors this week," wrote RNC Chief Administrative Officer Boyd Rutherford to Derek Flowers, a member of the RNC's political team, in an email obtained by the Fix. "We will be slow in paying as we are having a cashflow challenge. Everyone will be slow paid until after the first of the year."

Flowers, in another email to the RNC's vendors, wrote that while his original intention was to stay on at the committee until all bills were paid, he would in fact be leaving the RNC today.

"All invoices received by the RNC are accounted for and paid in a timely manner," said an RNC spokeswoman in response to the emails.

Neither Flowers nor Rutherford responded to emails seeking comment on the exchange.

The news of cash problems at the RNC comes on the eve of the committee's final -- and much anticipated -- fundraising report with the Federal Election Commission, which is due by tomorrow.

In its most recent filing with the FEC -- detailing fundraising and disbursements through Oct. 13 -- showed the RNC with $4.5 million in debt and $3.8 million on hand. It is not unusual, however, for national party committees to go into debt in the final weeks of a campaign as they do anything and everything they can to maximize their gains (or minimize their losses) at the ballot box.

RNC Chairman Michael Steele has come under withering criticism in the weeks since the election for the financial performance of the committee during the 2010 cycle.

The most pointed of that criticism came from Gentry Collins, the committee's political director, who penned a four-page resignation letter detailing the problems with the RNC.

Collins' main point of criticism was the RNC's fundraising operation and, in particular, Steele's alleged inability to attract major donors. "During the 2010 cycle, the RNC allowed its major donor base to wither," wrote Collins -- adding that the committee had raised $284 million in the 2002 cycle and $243 million in the 2006 cycle as compared to just $170 million in 2010. (One note: Republicans controlled the White House in 2002 and 2006, a major fundraising boon for the national party committees.)

Steele allies on the committee note that Collins had already begun the process of weighing a run of his own for the RNC chairmanship before he resigned, which, they insist, raise real questions about his motivations in writing the letter.

But, the admission by Rutherford that the committee was faced with a cash flow problem will almost certainly re-ignite the debate over Steele's financial stewardship of the RNC.

That debate couldn't come at a worse time for Steele who continues to mull whether or not to run for a second term early next year. Already two challengers -- former Michigan Republican party chairman Saul Anuzis and former Ambassador Ann Wagner -- are in the race with several others including Collins, former RNC official Maria Cino and Wisconsin Republican party chairman Reince Priebus pondering candidacies.

By Chris Cillizza  | December 1, 2010; 3:11 PM ET
Categories:  Republican Party  
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Next: Little mention of Michael Steele at RNC candidate forum

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