One of RNC Chairman Michael Steele's closest advisers has also cut ties to the committee -- an indication that a full-scale bloodletting is under way. Shakeup: RNC chief of staff resigns

Republican National Committee chief of staff Ken McKay resigned Monday, becoming the highest-ranking official to depart the committee after revelations that the national party spent nearly $2,000 at California sex club.

McKay’s departure in turn prompted one of RNC Chairman Michael Steele’s closest advisers to cut ties to the party — an indication that a full-scale bloodletting is under way at the troubled committee.


Doug Heye, communications director for the RNC, declined to say if McKay was forced out but indicated the move was directly related to the money spent at the now-infamous Voyeur Club and broader concerns about the party’s fundraising and the performance of Steele.

"This is about ensuring that we have the tightest financial controls in place and to ensure that every nickel we spend is done with the goal of winning in November,” said Heye.

Steele was more explicit in an e-mail message sent Monday night to committee members and donors, many of whom were caught by surprise about the decision.

“Leadership requires that I can safely assure you, our donors, and the American people that our mission is what drives every dollar we spend, every phone call we make, every e-mail we send and every event we organize,” Steele wrote in the e-mail, obtained by POLITICO. “Recent events have called that assurance into question and the buck stops with me. That is why I have made this change in my management team and why I am confident about going forward to November with renewed focus and energy.”

McKay didn’t immediately respond to an e-mail requesting comment.

But his apparent firing has roiled the close-knit world of GOP operatives, and Monday night, longtime Republican strategist and Steele adviser Curt Anderson said his consulting firm would no longer be working with the RNC.

“Ken McKay’s departure is a huge loss for the Republican Party,” Anderson said in a statement to POLITICO. “Ken steered the party through very successful elections last fall that have given us tremendous momentum. He’s a great talent. Given our firm’s commitments to campaigns all over the country, we have concluded it is best for us to step away from our advisory role at the RNC. We have high personal regard for the chairman and always have; we wish him well.”

Anderson, who brought McKay in to run the committee’s day-to-day operations last year, said he was not consulted on the decision to replace the chief of staff.

The departure of the duo suggests Monday’s moves represent the culmination of a power struggle within the committee.

Steele is “circling the wagons,” said a GOP operative close to the committee.

“He’s putting loyalists in to run things,” the operative said, noting that both Leavitt and Heye, who joined the committee earlier this year, both worked on Steele’s Senate campaign.

McKay was Rhode Island Gov. Don Carcieri's campaign manager in 2002 and 2006 and previously served as the governor's chief of staff.

Starting immediately, Mike Leavitt will become the new RNC chief of staff. Leavitt worked at the committee with Virginia Gov. Bob McDonnell’s campaign last year, and in February became deputy chief of staff.

“Mike played a critical role in Gov. McDonnell’s victory in 2009, where he directed the most successful grass-roots operation in Virginia history,” said Phil Cox, McDonnell’s campaign manager. “He’s talented, dedicated and experienced.”

Leavitt ran Steele’s unsuccessful U.S. Senate campaign in 2006 and has also held posts on Sen. John McCain’s 2008 presidential bid and the now-defunct conservative third-party group Freedom’s Watch.

“As chief of staff, Mike will be able to make sure such problems don’t occur in the future,” said a party official.

Having just suffered through the most difficult week of his controversy-marked tenure, Steele is plainly hoping to reassure unhappy party officials, operatives and activists that he is instituting more accountability. The decision to replace the chief of staff comes just days after a former counsel to the party and veteran Republican campaign finance attorney was brought on to oversee spending.

But many senior Republicans have deep worries about Steele himself.

There is no appetite among committee members to push him out, but the sex club expenditure has amplified complaints about the chairman’s fundraising and spending.

And after remaining quiet in the immediate wake of last week’s report, the chairman used an interview Monday morning on ABC’s “Good Morning America” to argue that, as an African-American, he’s being held to a higher standard.

Those comments brought forth a new wave of grumbling among GOP professionals about Steele.

Aside from embarrassing headlines, the most practical consequence of Steele’s travails may be on just how many races Republicans can fund this fall.

Fewer major donors are giving to the committee, in part because they have little faith in Steele.

Former Ambassador Sam Fox, a top bundler for President George W. Bush who was one of the co-chairmen of the Republican Regents — the RNC's top-level fundraising board — left his post, GOP sources told POLITICO on Monday.

And social conservative donors are being urged directly to not contribute by the Family Research Council’s Tony Perkins.

Steele has, though, increased the number of small-dollar donors to the committee since he took over. And, despite not having a Republican president in the White House, he has kept pace with the DNC’s fundraising.

Still, Steele’s intraparty critics show no sign of letting up.

“A firing squad will not solve the current mistakes that have embarrassed the activists on the ground, who are very busy in their respective states, trying to field candidates, referee primaries, fund their parties, build victory programs and win elections,” said former South Carolina GOP Chairman Katon Dawson, who lost to Steele in the RNC chairman’s race. “The RNC leadership and staff should get off the front page of the papers and focus on November. The sooner the better.”

Andy Barr contributed to this story. Debate this story in The Arena.