NRCC Treasurer Under Scrutiny Was Thought of as 'Gold Standard'

In 2007, for example, Ward's consulting firm collected $100,000 from the 19 PACs and committees for which he served as treasurer. Last October, Ward left the NRCC as treasurer but remained on the payroll as a $7,500-a-month consultant.

The first inkling of trouble came when Conaway took over the NRCC's auditing subcommittee in early 2007. A certified public accountant himself, Conaway said in interviews that he asked for something considered routine in the corporate world: an audit of NRCC books for the previous year by an outside firm and a meeting with the auditors.

"My expectation was that that frank meeting would take three minutes," Conaway said.

Instead, Ward kept putting him off, he said. "Okay, we'll get it for the next meeting, we'll get it for you," Ward said, according to Conaway, who became suspicious of what he described as Ward's "passive aggressive" behavior.

He said Ward avoided the issue for months, until January, when Ward told Conaway that he and GOP lawmakers would meet with auditors. But Ward canceled the meeting 30 minutes before it was scheduled to begin.

Republicans called the outside firm and found out that no audits had been done since 2003. After looking at the documents Ward had given them for each year, they determined that he had fabricated them, according to Davis and other officials with knowledge of the matter, who spoke on the condition of anonymity.

Davis, who now chairs an executive committee that serves as the NRCC board, said that for several years, Ward turned over documents to lawmakers that appeared to be legitimate reviews by an outside firm. They showed accurate balance sheets.

"This guy produced audits, and they looked fine," he said.

In retrospect, Conaway said he wishes he had pushed Ward harder, but added that Ward had become such a trusted presence that he never doubted him or thought to examine his background.

"Like a lot of folks, he had grown into the job, had grown into the trust," Conaway said. "It would have been pretty weird if we had said, 'Let's do a background check.' "

But now the committee is working with the FBI, which it called in as soon as officials realized that the audits may have been faked and that they may have violated bank fraud laws. The NRCC has hired an auditor to review its books and a law firm to oversee an internal investigation.

"Any material misstatement on a bank application is a federal crime," said Stanley Brand, a Washington defense lawyer. He said the committee probably contacted the FBI in an attempt to portray itself as the victim of a crime -- punishable by as much as $1 million in fines and 30 years in prison -- and to inoculate NRCC officials from prosecution.

"They blew the whistle on themselves, which is what you'd do to protect yourself," he said.

Research director Lucy Shackelford and staff researcher Madonna Lebling contributed to this report.