By Paul Kane
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 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.
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.
Kelner said Ward was the only NRCC official empowered to use wire transfers to shift money into any account without a second approval. After transferring the money into accounts he controlled, often for dormant fundraising committees associated with the NRCC, Ward allegedly moved it into accounts for his political consulting business or his personal bank accounts, Kelner said.
Kelner said the NRCC has had no contact with Ward since he was fired on Jan. 28. Ronald Machen, Ward’s attorney, declined to comment on the investigation yesterday, as did the FBI.
The Washington Post reported Thursday that Ward had served as treasurer for 83 GOP committees this decade. In the past five years, the committees took in more than $400 million in contributions.
Rep. Peter T. King (R-N.Y.) told The Post this week that Ward paid himself $6,000 from King’s PAC in 2007 after the congressman thought he had closed down the committee.
Politico.com reported last night that Ward lent himself more than $4,200 from the political action committee of Rep. Jeb Hensarling (R-Tex.), an unusual expenditure for a campaign treasurer to make. Ward repaid the money early last month, after the FBI was called in to investigate his work at the NRCC, Politico.com reported.
According to a source familiar with the investigation, some of those committees were closed down in filings to the FEC but their accounts were left open at banks. That would have allowed Ward to divert money into their coffers and then to his political consulting firm or his personal bank accounts.
Kelner said the NRCC had not met with its outside auditors for nearly five years, describing that as unusual. Rep. Greg Walden (Ore.), who previously served as chairman of the NRCC’s audit committee, said he had asked to meet with the outside auditing firm, Deloitte & Touche, and that the fake audits were almost perfect forgeries.
"I sought for several years to meet with the outside auditors," Walden said. "There was always some seemingly legitimate reason why that didn’t happen." The scheme began to unravel this year, when Rep. K. Michael Conaway (Tex.), the new head of the audit committee, insisted on meeting the auditors.
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.
The largest confirmed political fraud in the modern campaign finance era, after a 1974 law set strict contribution limits, is believed to be the embezzlement of $1 million from the 1992 presidential campaign of the late Sen. Paul Tsongas (D-Mass.).
Cole told reporters yesterday evening that the NRCC has spent about $370,000 on the audit being conducted by Kelner’s firm and accountants from PricewaterhouseCoopers, draining precious dollars from a campaign committee that has badly trailed its Democratic counterpart in fundraising for more than a year.
Kelner said federal election and banking laws, which require proof that such frauds were done "knowingly," are likely to put the legal burden on Ward and not the NRCC. He said the internal probe so far has turned up no signs of "anybody else colluding with" Ward.
Washingtonpost.com staff writer Ben Pershing and Washington Post staff researcher Madonna Lebling contributed to this report.
No comments:
Post a Comment