March 13, 2008

The National Republican Congressional Committee’s accounting scandal has been percolating for a couple of weeks, but given the scope of the controversy, it’s now front-page news. What started as an embarrassing criminal controversy involving one staffer has become something of an election-year crisis for the GOP’s House campaign committee.

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 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.

The reason this is especially significant right now, is that before yesterday, the NRCC had only acknowledged “irregularities” and announced that Ward was the subject of an FBI probe. Now, however, we know that the NRCC may have lost as much as $1 million.

And it may yet get worse for the party: “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.”

Ironically, all week, the NRCC has argued that Democratic House candidates shouldn’t have anything to do with contributions from Eliot Spitzer, because he was involved with a sex scandal. By this logic, should Republican House candidates reject NRCC funds in light of the committee’s massive fraud scandal?

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