In a separate allegation, Fabian described the bank withdrawal. After the 2006 election, an aide transferred the funds that had been raised for Steele's lieutenant governor campaign -- more than $600,000 -- out of what had been the campaign's bank account.
Fabian characterized the transfer as improper because the aide lacked signatory authority over the account. Anderson said it was appropriate because Steele had authorization and the aide was acting on his behalf.
Either way, the transfer strained relations between Ehrlich and Steele.
The money had been raised for Steele in concert with Ehrlich. Much of it, in fact, had been brought in by Ehrlich's team, said a senior Republican fundraiser and as well as a former Steele aide, each speaking on condition of anonymity because of the sensitivity of the matter.
Because Steele had decided to run for Senate rather than state office, Ehrlich wanted to turn the money in Steele's state account over to the state party for distribution to legislators, the sources said.
But Steele, who was keeping open the option for a run for governor in 2010, wanted to keep the money in his own account, the sources said. After installing a new treasurer, he had the money transferred to solidify his control, the sources said.
"I think it's fair to say the Ehrlich folks weren't happy," Anderson said. "That's all internal political stuff, but there's no legal angle."