Apparent fraud costs GOP group heavily

By CHARLES BABINGTON | Thursday, Mar 13 2008 2:07 PM

Last Updated: Thursday, Mar 13 2008 6:52 PM

The committee in charge of running House Republican campaigns said Thursday that a former treasurer "deceived and betrayed" the group, which is missing hundreds of thousands of dollars - and possibly more - due to fraudulent acts conducted over the past several years.

The National Republican Congressional Committee told federal authorities that it overstated the amount of cash it held at the end of 2006 by nearly $1 million. A year later, the committee's annual report to the Federal Election Commission - which again was handled by the ex-treasurer - overstated the actual funds on hand by $740,000.

Republican officials said the former employee, Chris Ward, apparently "made several hundred thousand dollars in unauthorized transfers of NRCC funds to outside committees whose bank accounts he had access to" over several years. Most, if not all, of the smaller accounts were associated with GOP candidates or groups.

Ward, 39, "also appears to have made subsequent transfers of several hundred thousand dollars in funds from those outside committees to what appear to be his personal and business bank accounts," the NRCC said in a statement, which accompanied a briefing to reporters.

The statement said Ward covered his actions in part by submitting "bogus audit reports" to the NRCC's banks and/or leadership for five consecutive years starting in 2002. The fabricated audits looked authentic, and appeared to be signed by legitimate accounting firms, party spokesmen said.

The activities were discovered in late January, after Ward repeatedly made excuses to avoid showing audit information to an NRCC oversight panel. The committee ended its relationship with him on Jan. 28, when it alerted the FBI, which is investigating.

Ward's lawyer did not return a phone call seeking comment Thursday.

Rob Kelner, a lawyer for the NRCC, said that for years, starting around 2002, Ward had sole authority to transfer committee funds to associated GOP groups for whom he also served as treasurer. Kelner would not comment on a Washington Post report that Ward worked for more than 80 such smaller committees, some of which supposedly had been closed when Ward apparently continued to use them as conduits for NRCC money.

The Post said that in the last five years, Ward oversaw the accounting for Republican committees that raised more than $400 million, $368 million of it at the NRCC.

Kelner said that in hindsight, NRCC officials wish they had been suspicious about the fact that outside auditors never visited the Capitol Hill headquarters or received payment for their supposed work. He also agreed "it's a best practice not to have any significant money-handling authority vested entirely in one person."

Rep. Tom Cole of Oklahoma, the NRCC chairman, said in a statement that he wants to assure supporters "that every effort is being made to prevent such a fraudulent act from happening again."

Kelner said a forensic audit of NRCC funds may take several more weeks, and the amount of missing money could go considerably higher. He said he did not know whether any of the money could be recovered.

Cole said Ward had been "a highly respected and trusted individual" who handled NRCC finance matters for many years before becoming the group's treasurer in 2003. He left the post last October, but remained a paid consultant.

The disclosures come during an already challenging time for House Republicans. The weak economy and poor approval ratings for President Bush could help Democrats add to their majority in the November elections. More than two dozen House Republicans are retiring rather than seeking re-election.