NRCC Says Ex-Treasurer Diverted Up to $1 Million

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.