NRCC probe scares GOP re financial fraud

NRCC probe scares GOP
By: Patrick O'Connor and John Bresnahan
The Politico
February 6, 2008 07:49 AM EST

Top House Republicans were told in recent days that a former employee of their campaign committee may have forged an official audit during the contentious 2006 election cycle and that they should brace for the possibility that an unfolding investigation could uncover financial improprieties stretching back several years, according to GOP sources briefed on the members-only discussions.

The National Republican Congressional Committee has retained a forensic auditor to review its accounting for the last several election cycles, the sources said.

The NRCC's accounting problems were discussed during two high-level conference calls between senior GOP lawmakers on Friday and Monday night, according to Republicans briefed on the calls.

"There is a sense that this could be very damaging to the committee," said a Republican insider close to the GOP leadership.

The precise details of the suspected accounting irregularities and their possible fallout are not entirely clear. NRCC officials and top GOP leaders are being tight-lipped in large part because the FBI is investigating the matter. An outside lawyer advising members and staff has warned everyone at the committee to keep quiet.

Despite questions swirling around the investigation, Republican leaders and the campaign chairman have shared few details with their colleagues. Members return to Washington on Wednesday, and Republicans are set to hold their first closed-door meeting Thursday, almost a week from when news of the NRCC problems broke.

But those briefed on the matter shared several new details about the focus and extent of the scandal.

The NRCC internal investigation centers on Christopher J. Ward, a former NRCC treasurer who worked at the committee until mid-August of last year, according to those briefed on the matter. From that time until late December, Ward was an outside contractor for the NRCC, according to Federal Election Commission records.

The FBI, which was informed about the matter last week, did not respond to calls for comment.

As treasurer, Ward was in charge of NRCC bookkeeping, tracking tens of millions of dollars in political contributions and expenditures. He has been at the center of NRCC bookkeeping for more than a decade.

Ward also served as treasurer for numerous other Republican campaigns and leadership political action committees, according to FEC records.

Repeated attempts to reach Ward for comment have been unsuccessful. A Politico reporter who went to Ward's home in Bethesda, Md., on Tuesday morning spoke to a woman who said Ward was not there. It is unclear whether he has been contacted directly by the bureau.

Several sources familiar with the investigation suspect the reporting irregularities could go back many years.

Ward has been with the committee in some capacity since 1993, according to FEC records. He was listed as the committee's treasurer between 1993 and 2003, according to the same campaign finance data.

He was on the committee's official payroll the entire time, earning roughly $6,500 per month during his last year at the NRCC. In August, his last month as an official member of the staff, the committee paid him $8,758.

That same month, the NRCC began recording regular monthly payments of $7,500 to C.J. Ward & Company LLC, signaling his transition as an outside contractor for the committee. That venture is listed under the same address as Ward's Bethesda home, according to FEC records.

Over the years, Ward has also served as the official treasurer for numerous congressional Republicans, their PACs and other GOP candidates running for Congress.

They include retiring Reps. Jim Saxton of New Jersey, James T. Walsh of New York and Jerry Weller of Illinois, as well as Reps. Steve Buyer of Indiana, Phil English of Pennsylvania and Bob Goodlatte of Virginia, among many others.

He was also listed as the treasurer for incarcerated former Ohio Rep. Bob Ney's American Liberty PAC.

Many lobbyists and former aides who know Ward characterize him as an understated, dependable person. A former NRCC official said he was "a very reliable guy."

"He was the go-to guy if anybody needed a Republican treasurer" for a campaign committee or a leadership PAC, the former official said.

In a statement released Friday by NRCC Chairman Tom Cole (R-Okla.), still the only official NRCC comment on the matter, Cole said there were "accounting irregularities" at the committee that "may include fraud." The statement did not mention Ward by name.

Cole added that the committee has "notified the appropriate law enforcement authorities," later determined to be the FBI.

Texas Rep. Mike Conaway, the committee's audit chairman, acknowledged Friday that members of the committee knew about the irregularities at least a day before releasing the statement and immediately agreed to notify federal authorities. It all seemed done in a rush. Cole and his top aides, for instance, sought to notify GOP leaders as quickly as possible, but his official statement was sent to the press before some were alerted. For example, aides to Rep. Thomas Reynolds received the chairman's statement shortly after an NRCC aide tried to get in touch with the New York Republican, who was chairman of the committee during the year in question.

The NRCC has already suffered at least one casualty from the scandal: As the news broke, one senior GOP aide was confirming details for an upcoming fundraiser, but the potential donors balked when they read Cole's statement.