Steele paid more than $37,000 to a Maryland company run by his sister, Monica Turner, for work related to his unsuccessful 2006 Senate campaign. If she was not reimbursed, both he and his sister would be violating campaign finance laws, said Steele.

"It was a legitimate reimbursement of expenses," Steele said on ABC's "This Week."

Steele became the first black national chairman in the RNC's history last month. He was the first black candidate elected to statewide office in Maryland in 2002, when he became lieutenant governor, and was chairman of the Maryland Republican Party and then chairman of GOPAC, an organization that recruits and trains Republican political candidates.

Steele's former finance chairman, Alan B. Fabian, claimed to federal prosecutors that Steele made the payment to the company, which was then out of business, as Fabian was seeking leniency on unrelated fraud charges, The Washington Post reported Saturday. Prosecutors gave Fabian no credit for cooperation when he was sentenced in October, the newspaper said.

The charges were made in a confidential sentencing memorandum sent by the U.S. Attorney's office in Maryland inadvertently along with other documents requested by the Post.