At least Republicans are consistent with their accounting standards

When it comes to the nation’s finances, Republicans in Washington have shown, shall we say, a certain lackadaisical attitude. Deficits, debts, expensive tax giveaways, lax regulations on the financial industry, Enron-omics — when it comes to looking after our money, GOP officials don’t exactly inspire confidence.

But what about when they’re tasked with looking after their own money? Well, it’s a funny story, actually.

It’s a story that probably hasn’t generated the attention it deserves, but the National Republican Congressional Committee really has been rocked by a fairly dramatic scandal. We learned a few weeks ago, “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.” Shortly thereafter, we learned that Rep. Mike Conaway (R-Texas), a CPA, had pushed for months for an internal NRCC audit, until the committee’s treasurer apparently fabricated an entire audit out of whole cloth. (Even the letterhead of the audit was a forgery.)

As of now, the FBI is in the midst of a criminal investigation of the NRCC’s finances, but the obvious question is, how could this have happened? We’re starting to get a better sense of this, too.

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.

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

A pivotal moment for the NRCC occurred in spring 2003, shortly after Reynolds took over the panel, when he ousted Donna Anderson, a longtime committee staffer who oversaw the NRCC’s accounting.

Ward then moved up to the top accounting position within the committee, making him responsible for tracking tens of millions of dollars in political contributions and expenditures each cycle.

“Clearly, after the transition from Anderson to Ward, it was a different regime for what followed,” said one GOP insider with strong ties to the NRCC.

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.

As Josh Patashnik 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.”

Hoisted by their own stupid petard.

  • Coming soon, in a breaking broadcast on Fox Business News channel….wait – no, it won’t.

    Why, oh WHY – does the Repuklican party seem to hold a fiscally responsible mantle? Sheesh.

  • I view this as expected evolution. Here’s my take:

    The Republican Party set out To Win. Probably, despite some of the sleaziness of decades ago, with some actual belief they had the best interests of America at heart.

    Of course setting out To Win means winning is your first goal. It means taking any ally, any donation, any help, doing anything. Winning is first, and soon whatever actual intentions, winning is everything.

    Thus the Republicans of course became the party for monied interests, for powermongerers, for people without ethics or principal. When winning is your only goal, you don’t care about your allies.

    Eventually the party ends up as nothing more than a club of people advancing their own interests, and their affiliated groups: the wingnut welfare writers, Fox news, think tanks with no connection to reality, etc.

    So now of course the Republican party is filled with unethical opportunists.

    And this is no surprise.

  • This is a great GOP scandal! Christopher J. Ward was treasurer of the RNCC during the height of Tom DeLay’s power and he was treasurer of more than 30 GOP PACs and leadership committees.

    One point that is not clear to me is the forged audit report. Initially, Politico reported that it was an internal report requested by Rep. Mike Conaway but as reported in another Politico report, the audit report was furnished to Wachovia Bank which had loaned the RNCC several million dollars. My understanding is the the RCC called in the FBI because the forged audit report constituted a federal offense.

    Minor point. Christopher J. Ward and Susan Arceneaux, former Dick Armey aide, were partners in Political Compliance Services. 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 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.

    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.

  • OK, so let’s see. Davis and three of Ward’s clients have recently announced they would not seek re-election to Congress. Reynolds was involved in the Foley coverup. Anderson was investigated by the FBI for money laundering, allegedly converting soft money to hard money within the NRCC. Conaway, longtime friend and business partner of GWB, was CFO of the bank that loaned a half million dollars to Bush so he could buy the Texas Rangers. This is too easy.

    Rules don’t apply to Republicans, so why should Republicans have rules?

    P.S. And I hadn’t even read palmbeachmaven’s post yet.

  • The Campaign Slogan writes itself:

    “Republicans; they can’t even handle their own money. Why would you trust them with yours?”

    (Boy, I really should quit my job and go become a consultant somewhere… lol)

  • Me@#4

    Oops! The link to the 2006 Admiral Roy F. Hoffmann Foundation 990 is here.

    Again, the $100k accounting discrepancy is relatively minor in the scheme of things but $100k here and $100k there and soon you are talking real money.

  • “Coming soon, in a breaking broadcast on Fox Business News channel….wait – no, it won’t. ”
    -sduffys

    No, it’ll make Fox News. But the headline will “accidentlly” read “National DEMOCRAT Congressional Committee”.

    Then Fox will run their redaction, oh, sometime around 3:00 a.m.

  • My theory is that even though this embarrassing they bit the bullet and let this go forward now while G-Dub is still in charge.

    That way they can have a few designated fall-guys cut good deals with the DOJ and sweep some of it under the rug.

  • The point about the Republicans wanting to win reminds me that they wanted to run this country in the worst way, and succeeded.

    Ed

  • Meanwhile, here in Minnesota, the Legislature made Governor Tim Pawlenty (GOP/Club 4 Growth) his own worst crybaby in overriding his veto of all-the-more-essential transportation-funding legislation as increases gas taxes for the first time in 25 years.

    The excuse Governor Pawlenty gave? “Protecting the good families of Minnesota from high taxes.”

    Not to mention being a hard-wired Zealot and True Believer of the C4G’s belief that low taxes=jobs=socioeconomic stability.

  • During the last 10 years or so (dates uncertain) the City of San Diego and Orange County, both run by Repubs – Both went bankrupt. Real good money managers, the Repubs…

  • “Republicans; they can’t even handle their own money. Why would you trust them with yours?”

    Geewizzicle! Thanks for the reminder. I’m just splitting with one those things. He couldn’t handle his money, but he sure as hell “handled” everyone else’s.

    Soon to come: my book documenting the Republican mind. Needless to say, it’s all blank pages. Very nicely bound though!

  • But they do have their strengths…

    “Republicans, hiring the best attorneys someone else’s money can buy.”

  • “Republicans; they can’t even handle their own money. Why would you trust them with yours?”

    To which they counter spin:
    “Republicans: Proving Again You Can Handle Your Money Better Than The Government”

  • Steve-O@14:

    There is a curious postscript to this story. In response to an accusation that the Swift Boat Vets $100k contribution went into Roy Hoffmann’s pocket, a right wing blogger at the Democracy Project, Bruce Kesler, posted a purported email response from the Swift Boat Vets treasurer on 7/17/06:

    “Despite great personal expense Admiral Hoffmann only received just over $1,000 in travel reimbursements in the nearly two years of SBVFT existence.

    SBVFT made two donations to the Admiral Roy F. Hoffmann Foundation. A $10,000 donation was made, as was a $100,000 donation, which was later reimbursed back to SBVFT by the Foundation. In the interim the Foundation used the money for payments to soldiers and Marines who had suffered grievous wounds during the fighting in Iraq and Afghanistan. To think that those funds were used by any individuals is a despicable distortion slandering honorable men.”

    The $10k Swift Boat Vets contribution was indeed reported by the Admiral Roy F. Hoffmann Foundation in its 2005 990 (see p. 17).

    But as I pointed out previously, the Swift Boat Vets $100k was not recorded in the foundation’s 2006 990 (see p. 15).

    I checked subsequent Swift Boat Vets IRS filings and SBV did not record a refund of $100k from the foundation.

    So where did the $100k go? Susan Arceneaux knows.

  • Why, oh WHY – does the Repuklican party seem to hold a fiscally responsible mantle?

    (wingnut)Because we don’t want to take your hard-earned money and give it to a bunch of lazy good-for-nuthin’ heathens. (/wingnut)

  • I am certainly glad I have never tried in all my years as a scereenwriter to write a Republican character. My creative imagination isn’t creative enough or imaginative enough to get halfway to the actual truth of these bozos.

  • I’ve always thought the Saudis financed Shrub’s campaigns and I’m wondering: it really is so Rovian to fabricate an accounting statement out of thin air. Could they have done this with W’s statements to the FEC, to hide the fact that the Saudis bought themselves an American president? That would so explain why this administration has put the needs of the Saudis and the oil companies above those of the American people.

  • I guess for Republicans even the old law that there is honor among thieves doesn’t apply to them. Couldn’t happen to a nicer bunch of idiots.

  • Tom-

    It’s everything a decent mind won’t allow itself to ponder. Stooping to understand will only provide you a dire need for antiseptics.

    Ok. Got snacks & ready for the smackdown!

    Go ‘Bama Go!

    (I hate seeming psychic but is anyone else jonesing to go to his inauguration? It may be just me but this sounds like a righteous party – maybe we can exorcise The White House before he moves on up)

  • 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 […] — politico

    Well, of course, they relaxed internal controls… Controls suggest lack of trust and, of course they could trust one another. Aren’t they the fiscally responsible party? And fiscally honorable individuals?

    I love this story… It shows what happens when you “buy” your own spin 🙂

  • Our local paper had an article on this today, as The Bulletin interviewed Greg Walden (R) from Oregon. He tried to explain how, as a former chairman he tried to warn the Republican leaders. He said that none of his requests to talk with the auditors were returned. The auditors never seemed to be available, according to him.

    The reporter also contacted the counterpart of the NRCC on the Democratic side, as well as both of them in the Senate. The Democrats talked with the reported and told the newspaper that they have external auditors. the audits are performed on a yearly basis.

    Guess what should come as not surprise: The Republican Senatorial Committee did not return calls. – Makes you wonder what they have to hide…

    This story certainly has legs to do some damage later this year.

  • “Hoisted by their own stupid petard.”

    Or to coin a phrase – Hoisted by their own stupard.

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