Enron Accounting at the NRCC
While I was buried in the White House’s amazing email fraud yesterday, the Politico posted an article further developing the NRCC accounting story. The Politico describes three roots to the accounting fraud. The NRCC no longer required executive committee approval for certain expenditures, it consolidated all its accounts, and it permitted people to work outside the NRCC.
Under Virginia Rep. Tom Davis and New York Rep. Thomas Reynolds, who chaired the committee from 1999 until the end of 2006, the NRCC waived rules requiring the executive committee — made up of elected leaders and rank-and-file Republican lawmakers — to sign off on expenditures exceeding $10,000, merged the various department budgets into a single account and rolled back a prohibition on committee staff earning an income from outside companies.
These changes gave committee staffers more freedom to spend money quickly and react to a shifting political landscape during heated campaign battles, and House Republicans were able to claim larger majorities after the 2000, 2002 and 2004 elections.
The article goes on to provide a few details that–along with an admittedly amateur review of the FEC filings involved I did–sheds further light on what’s going on.
In another decision that has become controversial, the NRCC began, during Davis’ chairmanship, to allow its staffers to earn outside income. Taking advantage of that change, Ward founded Political Compliance Services in 2001 with Susan Arceneaux, helping dozens of lawmakers and congressional candidates comply with Federal Election Commission laws. The two severed their ties earlier this year, a lawyer for Arceneaux said.
Ward wasn’t alone in seeking outside income. Don McGahn, the NRCC’s longtime counsel, was retained by numerous Republican campaigns and leadership PACs, helping those organizations comply with FEC disclosure requirements.
What appears to have happened after the changes is that Christoper Ward assumed the job of treasurer for the RNCC as well as a bunch of leadership PACs (and helped other start new ones). Read more →