Reports: GOP campaign treasurer embezzled up to $1 million
NRCC treasurer 'deceived and betrayed' committee to funnel funds to personal accounts
The National Republican Congressional Committee, already lagging behind its Democratic counterpart in fundraising this year, has nearly $1 million less in the bank than it thought because of an alleged embezzlement scheme from its former treasurer.
The FBI began an investigation in February to determine how much former treasurer Christopher J. Ward, who previously did work for the Swift Boat Veterans for Truth, embezzled from the NRCC. On Thursday the committee released more details on the investigation, indicating he may have moved as much as $1 million from campaigns he ran into his own account.
"The evidence we have today indicated we have been deceived and betrayed for a number of years by a highly respected and trusted individual," said Rep. Tom Cole (R-Okla.), the NRCC chairman.
Over the last five years, Ward served as treasurer for 83 Republican committees that raised more than $400 million over the last 10 years, the Washington Post reported. Rep. Peter T. King (R-NY) told the paper that Ward paid himself $6,000 from King's political action committee last year. The congressman thought he had already closed down the committee.
Thursday was the first time the NRCC acknowledged money was missing from its accounts. The Post reports:
The committee also announced that it has submitted to banks five years' worth of audits and financial documents allegedly faked by Ward, some of which were used to secure multimillion-dollar loans. It is a violation of federal laws to obtain loans through false statements; the crime is punishable by up to $1 million in fines and 30 years in prison.
Before yesterday, the committee, which raised $49 million in 2007, had not acknowledged that any money was missing. It announced on Feb. 1 that it had discovered "irregularities" that might involve fraud, dismissed Ward and called in federal investigators.
Robert K. Kelner, a lawyer with Covington & Burling, which has been hired to oversee an internal forensic audit, told reporters he is certain only that Ward had made "several hundred thousand dollars" in unauthorized money transfers since 2004. However, he said, the year-end report filed with the Federal Election Commission (FEC) in 2006 overstated the NRCC's cash on hand by $990,000.
That may be the upper level of what Ward allegedly skimmed from NRCC coffers, Kelner said. But the total will not be known until forensic auditors finish "drilling down" to determine how much money might have been misappropriated and how much may be missing as a result of sloppy bookkeeping, he said.
According to Politico:
A GOP source said that, in some cases, Ward cut checks, in small amounts, from a lawmaker’s campaign or leadership PAC directly to his own bank account. At other times, the sources said, Ward used a dummy company as a go-between, but the money finally ended up in his account.
The source said that Ward issued a $4,208 check to himself in December from Rep. Jeb Hensarling’s (R-Texas) PAC, although he returned that money in early February, after the NRCC accounting scandal became public.
Ward's attorney declined requests for comment from several news outlets.
The Hill reports Ward apparently "went to great lengths" to conceal his alleged embezzlement.
At a Thursday afternoon briefing for reporters at NRCC headquarters, committee staff said Ward operated alone and unchecked for years as he allegedly falsified committee audits.
“As treasurer, Ward was in charge of coordinating the audit…he was …able to authorize transfers without anyone else’s signature,” said Robert Kelner, a partner at Covington & Burling who is outside legal counsel for the NRCC. “In hindsight, it would have been better to have internal controls but it’s not terribly unusual to have less rigorous controls than you see at larger corporations.”
Kelner said Ward went through great lengths to conceal his activities, transferring sums into other committees he had access to and then shifting the funds into his personal accounts.
“We see hundreds of thousands of dollars leaving the NRCC to go to outside committees. We see hundreds of thousands of dollars leaving the outside committees to go to Chris Ward’s accounts. The numbers don’t necessarily match-up perfectly.”
The investigation into Ward's apparently shady dealings is expected to continue for months, and it will create precisely the kinds of headaches Congressional Republicans don't need heading into what's widely expected to be a tough election year. About two dozen GOP members of Congress are planning to resign after their term ends this year, significantly adding to the number of seats the party will have to commit resources to in November.