Embezzlement Scandal Also Ensnares Senate Committee
The National Republican Congressional Committee said today that a forensic investigation of its books showed that a former treasurer, Christopher Ward, took an estimated $725,000 from the committee and its affiliated accounts from 2001 to 2007, and that the National Republican Senatorial Committee was also a victim in the scandal.
In stealing money from the accounts of the President's Dinner, an annual fundraiser run jointly by the House and Senate campaign committees, Ward appears to have taken roughly $28,000 that belonged to the NRSC in addition to several times that amount from the NRCC, according to Robert Kelner, the lawyer from Covington & Burling who briefed reporters today on the investigation. With the $725,000 taken from the NRCC, $28,000 from the NRSC and at least $64,000 from other committees Ward controlled, the total known toll of his alleged thefts stands at $817,000.
The NRSC did not immediately respond to a request for comment on the alleged theft of its cash, which had not been previously revealed.
The release of the final audit report today marks one of the last chapters of a saga that has embarrassed and distracted the NRCC during an already difficult election cycle. The committee has spent between $500,000 and $600,000 on the investigation so far, according to Kelner and NRCC Chairman Tom Cole (R-Okla.), and another $250,000 to $300,000 to boost the committee's accounting staff and internal controls to prevent future malfeasance.
The total cost of the investigation included hiring Covington & Burling, which in turn hired PricewaterhouseCoopers to conduct a forensic audit. The law firm also hired a public relations firm to help the NRCC with crisis communications, a fact that was not publicly known until today. A source identified the firm as The Wade Group, run by longtime GOP operative and PR guru Terry Wade.
Both the total amount spent on the investigation and the total amount Ward allegedly stole are lower than some previous estimates. The NRCC said in March that it had found more than a million dollars worth of discrepancies in its books, though it cautioned that was a preliminary number, and Cole has said publicly the investigative costs could also top a million dollars. The idea that the scandal could have been worse, and that there were no real surprises in the final accounting, has made lawmakers take today's news in stride -- particularly the embattled Cole.
"Clearly it's damaging in terms of the amount of time it's taken and the betrayal of colleagues, successive chairmen. Yeah, it's really a hard thing," Cole said after the briefing. "On the other hand, we're the ones that found it, we're the ones that reported it and we're the ones that fixed it, and I'm very proud of my committee today."
Kelner outlined today an embezzlement scheme that goes back at least as far as 2001, when Ward served as assistant treasurer of the NRCC. Ward was on staff for years before that, but investigators were not able to go back any further because there were insufficient financial records from previous years. Kelner said the theft "was relatively low-level in 2001 and escalated over time."
The Washington Post has reported that Ward allegedly embezzled more than $500,000 from the NRCC in order to pay for renovations and mortgage bills on his Bethesda home, according to documents filed in federal court by government prosecutors seeking to seize the house. Those payments began in 2003, the same year Ward was promoted from assistant treasurer to treasurer.
Kelner cautioned that the $725,000 was simply investigators' "best estimate" of what money was taken, especially since they were not able to interview Ward or examine his personal and business bank accounts. Significantly, investigators were also not able to say with certainty whether Ward stole money from the NRCC's Independent Expenditure program, which spends millions of dollars each cycle on advertisements, direct mail and other services to boost individual candidates.
"Because of the lack of documentation contained within the NRCC's files related to the independent expenditures, PwC was unable to conduct a comprehensive investigation of NRCC independent expenditures," said the final audit report.
The NRCC has an insurance policy with The Hartford company, which the committee hopes will cover all or part of what Ward stole. The committee could also receive money from Ward in restitution payments if he is convicted or pleads guilty to federal charges.
Since the revelation of the scandal, the NRCC has hired a new treasurer and added a chief financial officer, while also putting beefed-up controls and accounting standards in place. While those additions have been expensive, Cole said, "I don't consider that a cost. If anything, that's something that's going to help us going forward."
House Minority Leader John Boehner (R-Ohio), whose own campaign was a past victim of embezzlement, agreed that the costs of the probe were necessary and appropriate.
"I've been through this ... and frankly getting to the bottom of it and understanding how it happened and how to correct it will be well worth the investment," Boehner said.
In addition to the NRCC and NRSC, Ward is also suspected of taking cash from at least six other committees for which he served as treasurer. That total includes five previously known committees as well as cash allegedly taken from the political action committee of Rep. Phil English (R-Pa.), which filed amended FEC reports in May showing "misappropriated funds" from 2007.
June 12, 2008; 4:46 PM ET
Categories: 2008 Campaign , Ethics and Rules , GOP Leaders
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