House Republicans show how to lose $1 million without really trying

March 14, 2008

The National Republican Congressional Committee’s accounting scandal has been percolating for a couple of weeks, but given the scope of the controversy, it’s now front-page news. What started as an embarrassing criminal controversy involving one staffer has become something of an election-year crisis for the GOP’s House campaign committee.

The former treasurer for the National Republican Congressional Committee diverted hundreds of thousands of dollars — and possibly as much as $1 million — of the organization’s funds into his personal accounts, GOP officials said yesterday, describing an alleged scheme that could become one of the largest political frauds in recent history.

For at least four years, Christopher J. Ward, who is under investigation by the FBI, allegedly used wire transfers to funnel money out of NRCC coffers and into other political committee accounts he controlled as treasurer, NRCC leaders and lawyers said in their first public statement since they turned the matter over to the FBI six weeks ago. […]

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.

The reason this is especially significant right now, is that before yesterday, the NRCC had only acknowledged “irregularities” and announced that Ward was the subject of an FBI probe. Now, however, we know that the NRCC may have lost as much as $1 million. (At the time, the NRCC’s cash on hand was about $1.4 million — meaning that the NRCC treasurer made off with most of the committee’s money.)

And it may yet get worse for the party: “The magnitude of the alleged fraud staggered Republicans, who are bracing for the final accounting from the forensic audit in six to eight weeks. Many said they expect a total far greater than the minimum cited yesterday.”

Ironically, all week, the NRCC has argued that Democratic House candidates shouldn’t have anything to do with contributions from Eliot Spitzer, because he was involved with a sex scandal. By this logic, should Republican House candidates reject NRCC funds in light of the committee’s massive fraud scandal?

On a related note, Eve Fairbanks asked an excellent question:

I guess it must have to do with the suspicious way in which Eliot Spitzer structured his money transfers, but you just have to wonder, how is it possible that a ten-thousand-dollar Spitzer transfer to a prostitution ring tripped up authorities while the NRCC’s treasurer stole one million dollars and nobody noticed anything?

Actually, I sort of know the answer to that. The reason nobody noticed the outrageous financial irregularities is because the Republicans applied the same standards to their own money that they apply to the government’s money.

The accounting scandal now haunting the National Republican Congressional Committee was preceded by a series of decisions over the past decade to relax internal financial controls at the committee, according to numerous Republican sources familiar with the NRCC’s operations during those years.

Under Virginia Rep. Tom Davis and New York Rep. Thomas Reynolds, who chaired the committee from 1999 until the end of 2006, the NRCC waived rules requiring the executive committee — made up of elected leaders and rank-and-file Republican lawmakers — to sign off on expenditures exceeding $10,000, merged the various department budgets into a single account and rolled back a prohibition on committee staff earning an income from outside companies. […]

Vendors who have done business with the NRCC, former committee aides and Republicans on Capitol Hill have argued that lax committee operations paved the way for the current trouble.

And wouldn’t you know it, the lack of oversight led to abuse — and apparent felonies.

As Josh Patashnik recently concluded, “House Republicans can be accused of many things, but at least inconsistency isn’t one of them: They adhere to the same low standards of ethics and competence in their own affairs that they expect of the federal government as a whole.”

(Republi)Can’t run a country,

(Republi)Can’t run a party,

It’s almost a pity that we allowed the Florida Republican’ts to screw us over the Primary date for Florida, otherwise we could actually exploit this.

  • Lance said:
    (Republi)Can’t run a country,

    (Republi)Can’t run a party,

    It’s painful to recognize what this says about the Democrats — that this jolly band of f*uckups can get whatever they want from the Dems in Congress, run rings around them in each and every news cycle and steal elections from under their noses.

    This, more than any other reason, is why the Democrats need a standard bearer who’s not part of the party establishment.,

  • I think this would be a really good news article to send out to all the Republican donors, and while you’re at it ask them to send more money. After all, looting the government can’t be done by amateurs who have never looted anything, right?

    Seriously, if the Republican donors got a letter asking them to send money to the RNC (or whoever) to replace the money that was stolen, you could see their funding dry up for at least one cycle. Even if they knew it was a spoof, they would always remember it when the real Republican letters came later on.

  • I thought the GOP was the moral party and was the party better able to run things (business and government) because they were better at managing money. Well. What is moral about stealing and what is good managing when someone steal over a million dollars.

  • Gee, the Republicans lost a million dollars. So I guess Scaiffe will have to write a check to cover it;>

  • The “gold standard” for the Republicrooks.

    Gotta love it.

    In the tiny world of people who keep the books for Washington’s multitude of political committees, Christopher J. Ward was considered the Republican “gold standard,” in the words of a former co-worker — one of the few people with so much expertise in election law that everyone wanted Ward’s services.

    http://www.washingtonpost.com/wp-dyn/content/article/2008/03/12/AR2008031204051.html

  • Betcha when the RNCC places an add for their next treasurer they’ll stipulate they’re only going to hire a Democrat.

    “The magnitude of the alleged fraud staggered Republicans.”

    That says something, though I’m not sure exactly what. For the party of Bush to be staggered by fraud is to impress people that aren’t easily impressed by massive fraud, but are they staggered because they’re used to defrauding others and not being the victims themselves?

  • Oh, the irony!!

    Methinks somewhere there will be a new gooper 12th commandment: Thou shalt not steal from another gooper. Of course for anyone else, all bets are off.

    (rolling eyes)

    Couldn’t have happened to a better group of clowns. Let’s hope all goopers do the same thing to each of its respective branches and they all go down in a lovely fireball of slime, greed, corruption and all those other icky things the goop represents.

    Buh bye a$$holes. Don’t let the door hit ya and all.

  • Looks like Politico gave itself another black eye:

    Vendors who have done business with the NRCC, former committee aides and Republicans on Capitol Hill have argued that lax committee operations paved the way for the current trouble. For instance, the committee has failed to conduct an independent internal audit since 2003. Rep. Mike Conaway (D-Texas) and other committee members have now called for a forensic audit to appraise the books, a call that came after Conaway discovered that a planned independent audit he thought had happened during the 2006 election cycle hadn’t happened at all.

    http://www.politico.com/news/stories/0208/8691.html

    Idiots.

  • Is there any truth to the soon to be prevalent rumor that some of this money was used by house republicans to fund the activities that Larry Flynt has threatend to expose? Could it be that a baker’s dozen or so have been dipping into these funds to pay for “off the books” partying? Is there money laundering and tax fraud too? Is this why no one looked?

  • –> “They adhere to the same low standards of ethics and competence in their own affairs that they expect of the federal government as a whole.”

    Why not consider the obvious, that it is the other way around: They (republicans) run their very own affairs with low standards of ethics and no competence, and expect to do the same when it comes to the federal government.

    That’s why they don’t understand why Democrats would want to do oversight…. they don’t do it in their personal life, and don’t see any reason why they should do it any different when becoming politician. Besides, when being a politician it’s a lot more fun, because it is with someone else’s money.

    On another note…. I wonder if Ward really took that money; or is it more that he agreed to be the fall guy, with a pardon in the wings, for covering up the real misappropriation of the money. By going that route, there won’t be a need to figure out ‘where’ the money was actually used. It would not surprise me that the NRCC was used to launder the money with financial tricks. Hence the waiving of oversight.

    It’s the Republican ‘three monkeys’ mantra: If I don’t see it, and I don’t hear it, and I don’t say a thing, then…. by (republican) reasoning, it didn’t happen, and isn’t true.

  • Dollars to donuts; Bu$h cuts this guy a pardon. A lot of money looks like it went through middleman accounts to get to this guy, but no one’s saying if it “ALL went into his personal accounts—or if the money-trail ends with him. This has “multi-layered skimming” written all over it.

  • Willie Sutton said that the reason he robbed banks is because that is were the money was. Well, now a days, local, county, state and federal government is where the money is. They are the biggest corporations and employers in any political area. So, naturally they attract thieves, pilferers, minions, coat-holders and legions of money eating little mice of people that think using their govey gas card like mice eating grain in an Egyptian granary, doesn’ t cause much loss.

    Frankly, I rather like this straight out taking of the money. It is kind of old fashion and I await the pictures of island vacations and nice cars. They are always pretty. But the real stealing goes on like a bad Amtrack coach rock and rolling in what is legal stealing. Farm subsidies, for just one example. Food eaters are taxed and made poorer to support investors in Beverly Hills and Manhattan. Because people are taxed and food is more expensive, more people need food stamps to pay for the inflated food prices. Now more taxes must be raised, squeezing more people that need more food stamp. As if that is not enough, a nice mafia of environmentalist, Beverly Hills and Manhattan investors and farmers are doing Ethanol, which is done by imposing more taxes and yet causing more to get food stamps, and reducing mileage casing more people to buy more gas with more federal, state and local taxes on the gas.

    I could go on with unions, defense contractors, the NEA………..

    Ah, the beauties of special interest, dreamer doo-gooders and government, both Republican and Democrats, in its own growth and power.

    Yes, Sir Please may I have another!

  • Bush might not get a chance to pardon these crooks. This story may have a lot of ties that may takes some time to investigate. In the end, someone will squeal.

  • Paul from Florida with his “a pox on both houses, government can’t work” idiocy demonstrates why the Republican’ts are still in control in Florida.
    “Idiocy” is the operant word here, Paul, in case you can’t figure out what another Floridian has to say.

  • Business school bozos. Fancy MBAs. Same folks who took over too many corporations in the 80’s.

    Anybody else notice the mortgage industry bail out:

    “Our liquidity position in the last 24 hours had significantly deteriorated,” Bare Sterns Chief Executive Alan Schwartz said in a statement. JPMorgan Chase will provide secured funding to Bear Stearns for an initial period of 28 days, and those loans will be effectively insured by the Fed.

    They need the 28 days to separate the perforing assets from the scams so they can sell the performing assets and leave us holding the bag with the scams.

    Schwartz is one of those guys who makes a billion (with a b) a year in “capital gains” and pays 15% taxes. This is because he’s a free market entrapreneur and a risk taker. Now we will bail him out and he will get another bonus. This is the way republicans run their private businesses and the way they run the government. No competence, no ethics, just personal greed and entitlement.

    Why are they so surprised when one of their own does it to them? Now they will need rich benefactor to bail them out. Repayment in kind to be arranged later. Just like bush using his daddy’s friends’ money to bail him out of the messes he created. What kind of repayment in kind did they get?

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