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Today's Must Read
On February 1st of this year, National Republican Campaign Committee Chairman Tom Cole (R-OK) abruptly released a statement about recently discovered "irregularities in our financial audit process." That was it: no details about whether money might have been stolen, just word that they'd seen fit to bring in the federal authorities.
The details, as they've come, have been embarrassing for the committee, which works to get Republicans elected to the House (which was already hurting in comparison to its Democratic counterpart before all this began).
According to The New York Times this morning, it all began to unravel when Rep. Mike Conaway (R-TX), a CPA, asked to meet with the audit firm that was supposedly checking the NRCC's books, an idea that apparently no one had had for several years. Christopher Ward, then the NRCC's treasurer, finally relented, but then chickened out 30 minutes before and fessed up that there actually hadn't been any audits.
It was ultimately discovered that Ward had been faking the audits since 2003. The Politico, which laid out this general outline of events early last month, reported that Ward had forged everything, including the letterhead. So when it came time to actually talk to the people who'd supposedly written those fake reports, it all unraveled.
The FBI is currently investigating, and it's not clear yet why Ward was so keen to hide the real numbers. But as the Times reports this morning, the signs are not good. NRCC internal audits since Ward's discovery show that "hundreds of thousands of dollars are missing and presumed stolen." And it gets worse: there are apparently indications that "the financial irregularities might extend beyond the national committee to the campaign funds of individual Republican lawmakers who also worked with Mr. Ward, a longtime party operative."
Ward had been with the NRCC since 1993 and worked for dozens of Republican campaign committees, political action committees, and other organizations. It'll be interesting to see what the FBI turns up.





Comments (39)
Repugs stealing from Repugs. There is a god.
March 6, 2008 10:36 AM | Reply | Permalink
Yep, the party of ideas alright.
March 6, 2008 10:39 AM | Reply | Permalink
"the financial irregularities might extend beyond the national committee to the campaign funds of individual Republican lawmakers"
Medals of Freedom for Everyone! I wonder who'll be on Bush's list of presidential pardons come December?
March 6, 2008 10:42 AM | Reply | Permalink
This is really funny. When most of the crooked corrupt politicians end up on one team, what do they do? They start stealing from eachother.. Now the republicans are getting a taste of what the American people have had to deal with for the past 7 years. This would be even funnier if this party was not still making most of the decisions for our country.
March 6, 2008 10:45 AM | Reply | Permalink
Nice to see Philip Shenon at the NYT hot on the trail. He did some first-rate stories on the Abramoff scandal.
But something sounds fishy. As a former auditor, I can't understand how Christopher J. Ward could have been acting alone. If the NRCC's auditors came in annually every year before 2003 and then they suddenly stopped coming, someone else in the office noticed.
In 10/06, I questioned a couple of Rep. Tom Reynolds'campaign expenditures in a TPM Cafe blog post. Between 9/05 and 7/06, Reynolds paid $65k to Potomac Company LLC, Miami, FL. The problem is that there is no Potomac Company LLC registered with the FL State Dept.
Maybe I should mention this to Jon Powers, Reynolds' Dem opponent this year. According to the NYT, Powers is already making hay about the NRCC scandal.
March 6, 2008 10:52 AM | Reply | Permalink
Clarification: The $65k Potomac Company LLC mentioned above was paid out of Reynolds' leadership PAC, Together For Our Majority. Ward was not the treasurer.
March 6, 2008 11:04 AM | Reply | Permalink
As an aside, Christopher J. Ward and Susan Arceneaux, former Dick Armey aide, were partners in Political Compliance Services until January.
Arceneaux, through PCS, handles the books for Swift Boat Vets. She also handles the books for the Admiral Roy F. Hoffmann Foundation. Roy Hoffman is a Swift Boat Vets co-founder and overall nasty person.
In February 2006, Swift Boat Vets ostensibly contributed $100k to the Admiral Hoffmann Foundation, according to its 8872 filed in the first quarter of 2006.
But in its 2006 990, the Admiral Roy F. Hoffmann Foundation failed to report a $100k contribution from Swift Boat Vets.
Maybe someone should ask Susan Arceneaux where the $100k went.
March 6, 2008 11:13 AM | Reply | Permalink
Nice work, Mrs Panstreppon, re: "Potomac Company LLC."
March 6, 2008 11:21 AM | Reply | Permalink
Dear Mrs. Panstreppon,
Haven't seen posts from you for a while & have missed them. Yes, indeed, I'd report these goodies to the FBI & the IRS CID. Doesn't it look like joint FBI-IRS CID task force investigation time here?
March 6, 2008 11:27 AM | Reply | Permalink
Simple question---maybe there's a simple answer?
"Are there and Republicans in politics who *aren't* criminals?"
March 6, 2008 11:30 AM | Reply | Permalink
I met a guy at the Mall yesterday and eventually asked him what he did for a living;
He said: "Corrupt stuff."
I said: "You should run for political office
in the Republican primary, you're a sure winner."
March 6, 2008 11:34 AM | Reply | Permalink
They'd have had a better chance of seeing that money again if they had just printed out a roster from a penitentiary, thrown a dart at random, sent an envelope with cash to that guy, and then asked him in a year for it back.
March 6, 2008 11:41 AM | Reply | Permalink
John McCain embraces the man whose Brain destroyed his chances to be a presidential candidate with the most scurrilous, racist lies in South Carolina during the 2000 primaries.
Theft does pay. Look at the last 7 years. One theft after another. And the GOP got away with it.
Bend over, John and assume the position. George W. Bush is your friend. Fortunately, McCain's association with the anti-Midas can only help whoever ends up running against him.
Plus, rumors of war with Iran, after Ms. Perino hinted that Admiral Fallon, the biggest obstacle to Bush's third war, well, his job may not be all that secure.
If you want to take Bush to the couch with the Jacob Weisberg analysis of the tragic oedipal dynamic that has motivated Junior all his life, Iran would one-up Poppy. Poppy had Panama and Gulf War 1. Never mind that they ended rather quickly.
Does Junior want three before he goes back to the ranch?
March 6, 2008 11:43 AM | Reply | Permalink
Three possible explanations:
1. Incompetence
2. Embezzlement
3. Campaign finance fraud (money laundering)
Republican party officials are spinning it as #2 (with a bit of #1 on the part of everyone who didn't notice that the audits weren't really being done).
I find it hard to believe that an accountant, of all people, would look at the risk/reward ratio in this scenario and attempt on his own to perpetuate a fraud for the amounts being floated in the NYT article. Of course, it's possible he or someone took advantage of the situation if the books were being cooked for other reasons.
So, I'm still willing to wager that the big prize is behind door number 3 above.
March 6, 2008 11:44 AM | Reply | Permalink
Nitpicker1, the one thing I've learned about Republicans is never to set up either/or explanations for wrongdoing and idiocy. There is nothing mutually exclusive about 1, 2, or 3 above! And in fact a combination of all three is most likely.
March 6, 2008 12:15 PM | Reply | Permalink
Schadenfreude
March 6, 2008 12:19 PM | Reply | Permalink
This is the "business" party?
March 6, 2008 12:26 PM | Reply | Permalink
Yes. They've been giving us the "business" for years and now they are giving the "business" to each other.
March 6, 2008 5:07 PM | Reply | Permalink
I checked NRCC expenditures by year at Open Secrets to see if any audit and tax preparation expenses were recorded. Checking the records is cumbersome because I had to check every expenditure that looked like it might be an accounting firm.
In the 2004 election cycle, the NRCC recorded audit and tax expense of $47,550 paid to Deloitte & Touche as follows:
1/30/03 - $2,000
3/23/03 - $1,550
6/19/03 - $42,000
2/19/04 - $2,000
The $42k was probably the fee for the 2002 audit. The $2k fees paid in 1/03 and 2/04 were probably for the tax returns.
Deloitte & Touche is a reputable Big Four CPA firm but D&T was certainly charging the NRCC a heavily discounted rate.
I didn't look through all of the 2004 election cycle expenditures but I did check all of the expenditures for the 2006 cycle and did not find any expenditures for audit and tax fees.
Did Christopher J. Ward fire Deloitte & Touche when Rep. Tom Reynolds appointed him as NRCC treasurer in 2003? I can't believe he acted on his own and that no one else noticed that the NRC was no longer being audited by an outside firm.
I'm leaning towards collusion in a big way.
Tee, hee. The forensic audit being conducted by Price Waterhouse is going to cost the NRCC big bucks.
When
2002 - Deloitte & Touche - $
March 6, 2008 12:38 PM | Reply | Permalink
Mrs,
thanks for the great posts.
anyhow,
"Deloitte & Touche is a reputable Big Four CPA firm but D&T was certainly charging the NRCC a heavily discounted rate."
Arthur Anderson was also a reputable Big Four CPA firm. In the words of that great statesman from Phila. PA, ex Congressman Ozzie Myers;
"Money talks and bullshit walks." :-)
March 7, 2008 8:13 AM | Reply | Permalink
It is probably the culture of corruption, the need for slipping certain money to certain acounts without notice, that actually ENABLED this guy to pull it off. It's not just crooks getting their just deserts. I'll bet this is a sign of more to come.
March 6, 2008 12:42 PM | Reply | Permalink
For JeffGee, above, actually Poppy had three invasions, the last being Somalia just before he left office so that CNN would have another invasion to report. I would expect W. to start a dust-up with Iran only if a Democrat is elected so that whoever it is gets stuck with either prosecuting the effort or withdrawing to the tune of "cowardly demon-crat appeaser of terrorists."
March 6, 2008 12:51 PM | Reply | Permalink
A lot of attention is being focused on Rep. Tom Reynolds but no one is asking about NRCC audit committee chairman, Rep. Greg Walden (Ore.).
"The National Republican Congressional Committee apparently stopped conducting independent audits of its finances five years ago, according to Republican sources and Federal Election Commission records.
Per Roll Call via the NY Daily News:
"The NRCC will not confirm its audit history, citing an ongoing investigation into financial irregularities apparently centering on former Treasurer Christopher Ward. But the indication is that the committee did not conduct an independent audit at all during the 2003-2006 tenure of former Chairman Tom Reynolds (N.Y.) and his audit committee chairman, Rep. Greg Walden (Ore.)."
Walden knew that there were no external audits. He never met with any auditors nor did he discuss audit fees or any other matters generally associated with an audit committee's responsibilities.
Who else served on the NRCC audit committee between 2003 and today? The members, at best, were negligent and, at worst, complicit.
March 6, 2008 1:41 PM | Reply | Permalink
Oregon is OR. We understand that it is also a word, but it hasn't been a 3 character abbreviation since zip codes were announced in the 1960's. Sorry, but we feel that is important. We don't understand why the associated press (sorry for the sad attempt at humor using such as a reference as though legitimate) continues to use ORe as an abbreviation. We don't mind being different, but the miners took all the ore and left cyanide.
I have contacted a reporter in Southern Oregon that is on it.
March 13, 2008 6:21 PM | Reply | Permalink
Hang on a minute. All of the news stories attribute the discovery of the NRCC forged audit reports to Rep. K. Michael "Mike Conaway (TX), a CPA who is chairman of the NRCC audit committee.
Mike Conaway is no ordinary GOP congressman. According to Wiki, he represents Midland TX and is a long time friend of George Bush. In fact, Conaway was CFO of Arbusto Energy. Conaway is indebted to Tom DeLay because he won his seat in 2004 as a result of DeLay's redistricting scheme.
When did Conaway become chairman of the NRCC audit committee? Based on other appointments, it seems that these NRCC assignments take place at the beginning of each election cycle. E.g. Reynolds and Walden took over their spots in the spring of 2003.
March 6, 2008 2:17 PM | Reply | Permalink
G O P Gang of Pirates.
March 6, 2008 2:21 PM | Reply | Permalink
Cole and Conaway came in after the 2006 elections (can't find the date right now) and it was Conaway's questions that opened the can of worms.
My question is, how did Greg Walden get the chairmanship of the audit committee in the first place? He has no financial background. He has a BS in journalism and owns a few small radio stations.
Conaway is a CPA, so his appointment makes sense. Is Walden that easy to fool? Or was he part of the plan to make money disappear?
March 6, 2008 3:50 PM | Reply | Permalink
I didn't mean to imply that Conaway was involved in the fraud. What I meant was that he would be the guy the GOP wants in place if the fraud extends further than theft by Ward. This is the same committee that was fined $280k for illegally transferring $500k to the DeLay-controlled Family Network in 1999.
I don't see anything all that unusual about Walden getting the audit committee chairman spot. I imagine there was not a lot of people who would want it. What is unusual is what Reynolds and Walden did once they got in.
Spring 2003:
1. Reynolds becomes NRCC chairman
2. Walden becomes NRCC audit committee chairman
3. Reynolds and Walden fire long time treasurer, Donna M. Andersen and replace her with Christopher J. Ward
January 2004 or earlier:
1. Walden and/or Ward fire Deloitte & Touche, NRCC outside auditors. They do not hire a replacement.
October 2006:
1. The NRCC borrows $9 million from Wachovia Bank, Presumably, Walden and/or Ward provide forged audit reports to the bank to secure the loan.
Spring 2007:
1. Mike Conaway is appointed NRCC audit committee chairman.
August 2007:
1. Christopher T. Parana, a long time associate of Christopher J. Ward, replaces Ward as NRCC treasurer. Ward continues to bill NRCC through his consulting firm.
January 2008:
1. Ward confesses that he forged audit reports.
2. Mike Conaway notifies FBI about possible fraud.
3. Conaway brings in his former employer, Price Waterhouse to conduct forensic audit.
February 2008:
1. Parana is transferred from NRCC treasurer spot to another assignment within the NRCC.
The behavior of Reynolds and Walden is pretty damned suspicious.
March 6, 2008 4:41 PM | Reply | Permalink
I didn't think you were linking Conaway to the fraud. But you're right, he could be the fixer/firewall to keep this from taking down too many people.
Reynolds and Walden's behavior does look very odd. If the FBI hasn't interviewed them yet, they will very soon. Oh to be a fly on the wall during those conversations...
March 6, 2008 4:53 PM | Reply | Permalink
Small price to pay, since we have been a nation for over 200 years and neither the Republicans nor the Democrats have seen fit to have a standardized accounting system or auditing system in place for the federal government and its agencies...
Just take this little amount and multiply it by a few hundred thousand times to see just how much money has been ripped off from "We the People" because they have been doing the same creative actions with OUR money...
CROOKS...ALL of them!
March 6, 2008 6:11 PM | Reply | Permalink
No one could have possibly foreseen that putting crooks in charge of money would lead to illegal behavior.
March 6, 2008 9:02 PM | Reply | Permalink
Apparently, Rep. Greg Walden did talk to a reporter at The Oregonian:
"And Rep. Greg Walden -- Oregon's lone Republican in the U.S. House -- took a hit last week when Roll Call reported the National Republican Congressional Committee failed to conduct audits for the past five years. From 2003 through 2006, Walden chaired the NRCC's audit committee.
(On Monday, Walden said he tried several times to meet with the outside auditors and was stiff-armed by committee staff. "We just got spun, frankly," he said. On reports that the committee chairman, Rep. Tom Cole, R-Okla., has called for an investigation into potential fraud, Walden noted, "Were the audits real? Was money misappropriated? Or was it sloppy bookkeeping? Those are the questions that are being asked.")"
Walden was the NRCC audit committee chairman for four effin' years. The lying rat bastard knew there were no audits.
I hope the good people of Oregon throw this bum out on his ear in November.
March 6, 2008 11:10 PM | Reply | Permalink
Fine work as always, Mrs. P,
In addition to teaming up with Arceneaux and Political Compliance Services, Chris Ward also claimes to have had his own consulting company CJ Ward & Company.
Maryland Corporation records do show registration for CJ Ward & Company, but its business incorporation was revoked in 2002.
So how was Mr. Ward cashing his NRCC service payments to CJ Ward & Company if he didn't have a corporate registration?
Were they made out to "cash"?
March 7, 2008 6:48 AM | Reply | Permalink
C92,
Once Ward opened a bank account with a legit business registration, the bank wasn't going to check if the reg remained current.
Today's WaPo story about the NRCC manages to not mention Rep Greg Walden (R-OR) once even though he was the NRCC audit committe chairman for four years.
The WaPo is sticking with Ward as a lone ranger which is a somewhat premature conclusion, imho. I find it mindboggling that the NRCC raised and spent $630 million in the last six years with absolutely no oversight.
CQ Politics has a good rundown on the PACS that Ward was running.
March 7, 2008 11:54 AM | Reply | Permalink
C92,
I did an NRCC scandal timeline at Kos.
March 7, 2008 1:05 PM | Reply | Permalink
stealing from the mafia/gop and it has been going on since 2002?
that really doesn't pass the smell test.
deepthroat told Woodward to follow the money. He seemed to know that someone was collecting a slush fund for criminal activity.
or perhaps Woodie was deaf and it was "fool and his money".
March 13, 2008 5:58 PM | Reply | Permalink
Excellent research per usual, Mrs Panstreppon. This failure to adhere to GAAP for such an extended period of time raises several red flags. Man, I miss Sam Ervin!
March 14, 2008 12:36 AM | Reply | Permalink
Wait a minute...why is Mitt Romney starting another PAC NOW?
March 14, 2008 12:42 AM | Reply | Permalink
In light of what we've learned about SAR's and PEP's required reports from banks on transfers of money as little as $3000. Why weren't the irregularities at NRCC identified and investigated through wiretaps and surveillance, the way Spitzer's activities were?
In fact, will all the bank, IRS, Treasury Dept, and FBI scrutiny of money transactions, how is it possible there is so much missing money from government contractors who are transfering funds into and out of Iraq, a terrorist area.
Isn't that why the Patriot Act was established and the banks and federal government got so much authority to surveil American citizens financial transactions? Perhaps media scrutiny on these oversights is overdue.
March 15, 2008 1:54 AM | Reply | Permalink