House GOP Confronts 'Irregularities'

Rep. Tom Cole (Okla.) heads the House GOP's campaign organization.
Rep. Tom Cole (Okla.) heads the House GOP's campaign organization. (Jay Mallin - Bloomberg News)
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By Ben Pershing Staff Writer
Friday, February 22, 2008

As if their list of disadvantages in the November elections is not long enough, House Republicans have spent this month worrying whether some of their crucial campaign cash has disappeared.

It is far from clear at this point. But House Republican leaders have been working to calm the frayed nerves of GOP lawmakers after the party's campaign arm called in the FBI to investigate "irregularities" in the committee's finances.

National Republican Congressional Committee Chairman Tom Cole (Okla.) announced on Feb. 1 that the campaign organization had "notified the appropriate law enforcement authorities" after discovering "irregularities in our financial audit process." Sources have confirmed that the FBI has been asked to investigate.

Cole also said at the time that the NRCC had "terminated our relationship with a former employee who was engaged as an outside vendor." That employee has been identified by several Republican sources as Christopher J. Ward, who worked for the committee for several years and was treasurer from 2003 until September 2007. He subsequently worked for the committee as a contractor and was paid through his own firm, C.J. Ward & Co.

Ward has served as treasurer for dozens of other campaigns and political action committees. He has either resigned or been fired from several of those positions, according to news reports.

The NRCC has asked the accounting firm PricewaterhouseCoopers to conduct a forensic audit of its books, and the committee's leaders have taken steps to assure Republican members -- all of whom pay annual dues to the committee from their own campaign accounts -- that new controls will be put in place.

"There are things that are going on in a management sense, reviewing procedures for how books are kept," said Rep. John Kline (Minn.), who chairs the NRCC's management subcommittee.

He acknowledged that lawmakers were initially unsettled when the news broke.

"Clearly, members were surprised, as were we all," he said. "It's disconcerting to learn that there are 'irregularities' -- I think that is the word we're using."

The week after Cole made his initial statement, he briefed the full House Republican Conference at a private meeting. Rep. K. Michael Conaway (R-Tex.), a certified public accountant whose concerns about the committee's books helped spark the review, spoke as well. Lawmakers have also been invited to the NRCC's offices to receive individual briefings from Cole and the committee's lawyers.

At this point, GOP sources said, there is no specific evidence that any money is missing from NRCC accounts, and members will have to wait for the completion of the forensic audit before they will know.

The NRCC's decision to contact the FBI comes while the House GOP already faces a steep climb to Election Day. The party has significantly less cash than the Democrats and will have to defend dozens of costly open seats.

New fundraising reports filed on Wednesday with the Federal Election Commission showed that, in January, the NRCC narrowly outdid the Democratic Congressional Campaign Committee for the first time in this election cycle.

But, overall, the NRCC still trails its rival badly. The GOP committee had raised $53.4 million for the cycle and had $6.4 million in the bank as of Jan. 31, while the DCCC had raised $71.3 million and had $35.5 million on hand. That disparity has prompted grumbling in the Republican ranks about Cole's performance as chairman, though the committee has worked to boost its fundraising and communication with other leadership offices.

The NRCC will have to do more with less. Twenty-one Republican lawmakers have announced plans to retire, and three more are running for other offices. Democrats so far have just two retirees and three candidates for other jobs.

Ward has not spoken to the media since Cole's initial announcement, and he did not return a call seeking comment Thursday. In addition to halting his work for the NRCC, he has resigned from a firm he co-founded, Political Compliance Services, according to a news release from the company.

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