Gold Standard Gate, an Update

Golly, I just remembered that people besides Eliot Spitzer are facing political troubles–the WaPo has a story that slightly advances the NRCC story, including the CYA that the Republicans considered Christopher Ward, the treasurer at the center of the scandal, the "gold standard" in campaign finance compliance.

In the tiny world of people who keep the books for Washington’s multitude of political committees, Christopher J. Ward was considered the Republican "gold standard," in the words of a former co-worker — one of the few people with so much expertise in election law that everyone wanted Ward’s services.

From a legal standpoint, I’m most interested in the detail that Ward’s submission of one of the audits he forged to Wachovia caused the NRCC to be concerned.

Officials told The Post that the NRCC’s problems may be more extensive. Republican lawmakers and former committee staff members now allege that Ward fabricated audits and other financial documents for 2003 to 2006, some of which were turned over to a Wachovia Bank branch in McLean in October 2006, when the NRCC borrowed $8 million in last-minute money for congressional campaigns.

This act would get the NRCC into legal trouble for fraud. Quick quiz: Can you think of any other Republican who acquired a million-dollar loan through fraudulent representations? Given that the "Straight Talk for Lobbyists" is willing to make deliberate misrepresentations to get loans for his campaign, I can see no reason to assume the even more corrupt Republicans weren’t doing the same.

Other than that, the story features the now-requisite efforts on the part of Peter King to paint himself as a victim in this scandal, claiming he got bilked into keeping the PAC open through 2007 after he believed it had closed in 2006.

"We were told he was the guy that handled all the campaign committees, he was the best," said Rep. Peter T. King (N.Y.).

But King said in an interview that he has discovered that Ward paid himself $6,000 in consulting fees from King’s political action committee in 2007 — though King believed that he had shuttered the committee early last year. Upon learning of the NRCC investigation, King said he found that his PAC remained open all of last year. Ward paid himself the fees from King’s PAC, which received just three contributions and dispensed one check in 2007, FEC records show.

Now let me explain why I find this extremely dubious.

First, take a look at Ken Silverstein’s review of what he has found in the FEC filings:

The man at the center of the scandal is Christopher Ward, a former NRCC treasurer who also founded a firm called Political Compliance Services. A review of FEC records finds that Ward frequently teamed up with a fundraising company called Aventum LLC, whose founder and president is Hetaf al-Kraydi, another former NRCC employee. For example, during the 2005-2006 election cycle, Congressman Jerry Weller paid Aventum over $111,000 and Political Compliance Services about $8,000. During the same period, Congressman Rodney Alexander paid Aventum some $46,000 and Political Compliance Services nearly $22,000.

The tag team of Ward and Aventum hasn’t always worked out so well for those who hired them. In 2006 a joint fundraising committee called Bowling for Our Majority Committee (BOMP), was created by former Congressman John Sweeney to save seven endangered House Republicans. It raised over $40,000, including $9,000 from the Wine and Spirit Wholesalers of America and $5,000 from the Pharmaceutical Research and Manufacturers of America. Aventum received about $28,000 of the money raised and Ward got paid $800. The seven House Republicans who were supposed to benefit, however, received $1,445.45 apiece.

This is precisely what I’ve found: For leadership PACs Ward worked on (as opposed to about 3 other different kinds of committees), Ward’s MO is to establish a PAC out of a PO Box in DC, show no overhead associated with the PAC, but instead show two kinds of costs: donations to Ward’s PCS, and donations to a fundraising consultant (or in some cases the RNCC lawyer); the consultant appears to often be an RNCC employee. Aventum is just one of many that show up in these scams, and most of them are set up in kind of dubious situations themselves, a storefront office set up in a building filled with bankruptcy lawyers. For the most part, the leadership PACs donate a relatively small percentage of their money to candidates. And truth be told, PCS actually gets a relatively small amount, compared to the fundraising consultant. So the funds–as Silverstein shows–seem to be funneling money from corporate PACs to the fundraising consultants who are really just RNCC employees.

Call me crazy, but if I wanted to turn corporate donations into a slush fund, this is the kind of scam I might pull. Though to prove it, you’d have to go to each of the fundraising consultants and figure out whether they pocketed this money or did something else with it.

Now, as I said, Peter King seems to show up in all of these stories, playing the victim card. He wants you to believe that he thought he shut down a legitimate PAC after the 2006 election cycle, only to be bilked by Ward, but now he’s got it on the straight and narrow. He also wants you to believe that he only asked Ward to be his treasurer because he came so highly recommended.

What I find really dubious about that, for starters, is that King is one of the only people who set up a leadership PAC, then turned it over to Ward for bookkeeping. The Know-how and Integrity for our National Government PAC (KINGPAC) was first set up on February 6, 2005, with Kevin Fogarty as his treasurer, with the account located at Astoria Federal Savings close to King’s home in Long Island. On April 24, 2005, just two and a half months later and at the same time as Ward was setting up a whole system of committees tied to the 2006 election, Ward took over the PAC and moved its banking to one of the Wachovia branches close to DC he was using.  On February 20, 2008, King somehow knew the PAC still existed, because he replaced Ward with the original treasurer, Kevin Fogarty, though the account remains at that Wachovia branch.

And here’s the really big reason I think King’s surprise that he still had a PAC is a bunch a baloney. King suggests that what happened after 2006 differed qualitatively from what happened between 2005 and 2006–that Ward simply left the PAC open and filtered money out of it. Except that is precisely what happened in the leadup to that period. From 2005 to 2006, King raised money from the following PACS:

  • Akerman, Senterfitt & Eidson
  • GE
  • GEO Group
  • International Association of Fire Fighters
  • McGuire Woods
  • National Association of Chemical Distributors
  • NY Life Insurance Company
  • United Airlines
  • Verisign
  • Verizon
  • WalMart

(Most of this appears to have been raised at one May 17, 2006 fundraiser.) There are also further donations from lobbyists giving individually. And from that money, King gave:

  • $6000 to Republican Congressional candidates from NY
  • $12,450 to local Republican clubs
  • $750 to an FDNY fund
  • $4000 to PCS, Ward’s firm
  • $28,675 to 3 Dog Consulting firm

In other words, more than half the activity of the PAC consisted in funneling PAC donations from lobbyists to the fundraising consulting firm and (to a lesser extent) Ward. And King appears to claim he was aware of what was happening with the PAC through the 2006 cycle.

Now, if King really missed all this–the fact that his PAC was really a vehicle to funnel money from corporate PACs to 3 Dog Consulting–then perhaps he is a victim. But it would take just a few minutes for King to discover this information and presumably he has reviewed what has happened with this PAC while Ward served as treasurer. So was this the intent?

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43 replies
  1. tejanarusa says:

    Marcy, I haven’t even heard of this one, and will come back to read your thoughtful post.
    But…”the Republican gold standard?” Hahahahahaha!
    Couldn’t stop laughing when I saw that. We know what the “Republican” gold standard is!
    Okay, now to read.
    (Is everyone else watching the FISA vote? I’m kinda afraid to..)

  2. Ishmael says:

    Seems to me that this is a larger and more important case of money laundering that using (as much as) $80,000 of your own money to hire hookers. Or that the political implications should be at least as large as a failed land deal in Arkansas in the late 1980s. The issue, of course, is whether GoldStandard Ward will be counted on to take one for the team, and make a guilty plea as the mastermind of all this, like a French bond trader with billions in “unauthorized” losses, or like the Watergate burglars who were told to plead guilty quickly when they got caught.

    • emptywheel says:

      I suspect that’s what they’re hoping. Though of course, then he’d have to plead guilty to theft, rather than money laundering.

      I’m not yet sure of the scale of all this. King’s PAC only amounts to about 20 visits to a high priced call girl, and PSC’s take would barely pay for one or two trips to see Kristen.

      • Ishmael says:

        A new contribution to the blogospheric lexicon, a “Kristen” could be shorthand for $5000 of slush/hush/crush/lush money, like six months is a Friedman Unit!

        • klynn says:

          I beg of you PLEASE not another “Kristen” lexicon. Who shot JR? WAS simply ENOUGH!

          Not again…

          • Ishmael says:

            Cheerfully withdrawn! But I wonder who will play her in the Fox movie that will undoubtedly be made of the whole Spitzer mess in time for endless runnings in October?

  3. zAmboni says:

    I’m sorry if I haven’t been keeping up with this RNCC scandal…

    But is the implication from the story above that Ward was not really embezzling money as the RNCC wants people to believe, but that Ward has been doing what he was basically told to do by leadership in creating various slush funds for the GOP to dip into? (or maybe Ward was doing his job in creating this slush funds, but skimming off more than usual to himself from said slush funds).

    The RNCC starts to have money problems (just general ones), the bank looks a bit closer to what is going on and then the jig is up…to cover the slush fund angle the RNCC decides to pin it all on Ward. That is what I am starting to read into this. Am I alone in my thinking?

      • zAmboni says:

        Cool…

        Sometimes I hate trying to read between the lines in some posts and even news stories. Mainly because when I try to read between the lines, I am horribly off the mark

    • emptywheel says:

      I don’t think anyone knows. But that is my suspicion. Some data points are:

      This all gets funny in 2003, in which, the corrupt Tom Reynolds takes over RNCC, he changes rules to make it easier for employees to moonlight and, at the same time, he consolidates all RNCC’s accounts into one (by way of comparison, the relatively primitive Washtenaw County party has 3 accounts to keep everything clean, and we’re not dealing with all these different campaigns).

      That’s when Ward took over not only RNCC but all these leadership PACs, big joint campaign PACs, and these committees focused on particular targeted races.

      And all this happens, of course, just when RNCC for the first time is told it can’t launder from soft money to hard.

      There are other reasons it is supicious–such as Ward’s use of many WAchovia banks for all the accounts he was working. That seems like money laundering, bu the question is, was it into Ward’s pocket or into slush funds?

      So I don’t know. But I’m suspicious of the stories getting told…

  4. bmaz says:

    There is no sex in this story! There’s sex over there in the Spitzer corner! Knowing that you are not likely to be posting on Ron Paul’s goofball theories, when I saw “Gold Standard” I thought you had found a new Gold Bars Luskin angle. But no, it is just bean counter Ward….

    KLynn – Hey! Now that you say that, this chick looks kind of like Kristen from Dallas! Great trivia reference!

  5. bmaz says:

    So, I suppose you all are not down with my thought of going back east in order to represent Kristen/Ashley pro bono (so to speak)?

        • scribe says:

          I’ve said it before and will say it again. The conversation Kristen had with her “office” post-date sounded quite suspiciously like the kind of conversations a guy doing a controlled buy would have, just to make sure the wire he was wearing caught the fact that there was, in fact, a deal going on.

          Like, “oh, you got it? One, two, three, four, five. Them’s heavy. Here’s my side of it.”

          When he’s going to come out and get picked up by the cops controlling him, carrying the 5 kilos he just bought.

          You get the point.

          And, for those of you looking to represent Kristen – she’s already got a lawyer and she’s also got a grand jury subpoena.

          • bmaz says:

            Well, I know my plan isn’t very well formulated yet, but you don’t have to kill it out of hand like that. I have taken over a lot of cases from PDs before…..

            EW – Here is a first, I go back to the topic! I was somewhat surprised that the amount that is reported unaccounted for, or out of order or whatever, wasn’t bigger than it is. I sure get the feeling that there is a conscious effort to have this train run over Ward and then stop well before the station where all the different GOP candidates and their respective accounts are dissected. This just doesn’t look right on the numbers alleged yet to me, but I am certainly no accountant.

            • emptywheel says:

              Can you clarify what you mean? That this is too small potatoes to involve the whole campaign?

              I’m not an accountant, and as a result I keep pulling a string and losing it (I need to get a little more orderly about my string-pulling, bu then that’s why I’m not an accountant, among other reasons).

              But this far the most interesting thing I’ve found is a huge chunk of money in the committee Ward had connected to Michelle Bachmann that Ward kept not reporting the source of, and then long after the fact reported that it came from a joint committee that looks like a big ball of wax.

              In other words, I’m not there yet. And I’m not understanding how this network of committees connect through to the hard money candidate committees, though I suspect it might be in funneling what otherwise would have to be soft money PAC donations into small enough sizes to turn them into hard money.

              Don’t know waht they do with the corporate money yet, aside from funelling it to these NRCC/fundraiser consultant companies.

              • bmaz says:

                No! I can’t clarify what I mean; I have no freaking clue. But, I, like I think you are, am convinced there is some serious political shenanigans going on here in terms of filtering money and laundering it; and I don’t see that yet in the few basic numbers that have been reported. And I think that is exactly how the Republicans want it to look too. It is being pitched as Ward skimmed and churned a few hundred thousand or something. While that may well be true, that isn’t the story I want to know about or think is really there. That is the best explanation I have for what I was saying; hopefully I can refine it a bit in the future…..

      • Ishmael says:

        And it won’t be pro bono – there must be lots of money being thrown at her in book and newspaper/National Enquirer offers, to provide as many humiliating details on Spitzer as humanly possible to make sure he never gets off the ground again.

        Apologies for OTing!

      • klynn says:

        You beat me to it!

        Although, I was going to say wife and daughter…

        Hey bmaz! WHAT were you thinking? Forget it…The question answered itself! Know your client? Geez pulling a bible reference on such a progressive blog! Tisk, tisk…Now you’ve got me thinking of using “bmaz” as an acronym…

        Ishmael, I’ll go for the “real” lexicon of “Ashley”.

        • bmaz says:

          Oh, all right. Seemed like a good idea at the time….. The picture of her on the boat made me think I needed a new client; but, alas, you are right.

          • klynn says:

            Well bmaz, it will shift the question of whether or not the client can afford the lawyer’s hourly fee about 180 degrees.-Mary

            Wow! I spewed beverage on that one!

            bmaz, good thing you recanted @ 29…

            on topic: EW, I’ll find the Ohio political blog that had copies of the FEC notices to King…they were interesting when I read them…

  6. scribe says:

    Smells an awful lot like, um, money laundering.

    Maybe not in the very precise way LHP explained it in her earlier post, but rather in the sense of moving money that might not be the proceeds of some illicit transaction to people or entities for which it was not intended to be a donation.

    I have to tell you – I can think of fewer wingnuts I’d like to see get trashed more than Peter King. He’s the Repug equivalent of, oh, say, Gerry Ferraro.

    I wonder where all the SARs on those KINGPAC accounts are, anyway.

  7. Mary says:

    Is there room for the story that the Carlyle Group’s Carlyle Capital had lenders seize their assets, too?

    A publicly traded affiliate of the Carlyle Group said yesterday that lenders were seizing its assets, sending the fund, Carlyle Capital, into insolvency.

    The lenders, headed by Deutsche Bank and J.P. Morgan Chase, began selling the securities last night, according to a report on the Wall Street Journal’s Web site.

    The problems at Carlyle Capital have preoccupied the top leaders at Carlyle Group. The firm’s founders, David M. Rubenstein, William E. Conway Jr. and Daniel D’Aniello, had been in meetings with lenders in an effort to resolve Carlyle Capital’s problems, not only to protect their own investment and that of employees who have put millions of dollars into the company, but also to preserve Carlyle’s Midas-touch reputation.

    So what do you think one of the topics of conversation between Cheney and the Saudi investors might have been?

  8. Mary says:

    Well bmaz, it will shift the question of whether or not the client can afford the lawyer’s hourly fee about 180 degrees.

    OT – but when in the hell is anyone going to get around to asking all the DOJ lawyers in all the detainee cases why the HELL they never sent out preservation notices? This story on tapes from today makes me think of the poor Kentucky soldier who got beaten into permanent disability during a “training exercise” at GITMO where he was dressed as a detainee and those were all supposed to be taped, but oddly enough, that one vanished.

    Mitch McConnell has never done one damn thing about it either.

  9. Citizen92 says:

    Maybe Ward was taking illegal corporate $ and just depositing it into his own bank account in effect (possibly) continuing something that the DeLay syndicate did before “Hot Tub Tom” and his fellows went bust?

    Ken Silverstein is right to ask about Aventum LLC. Something doesn’t look/smell right about them.

  10. whitewidow says:

    Oh please, for the love of science let Bat-shit-crazy Bachmann be connected to something that will get her out of office. I still can’t believe my neighbors elected her over Coleen Rowley.

    • bmaz says:

      Is she the one that was making google eyes at Bush and getting his autograph at the one State of the Union? If that is the one; jeebus, she does need to go.

    • Minnesotachuck says:

      I still can’t believe my neighbors elected her over Coleen Rowley.

      I trust you mean Patty Wetterling. Colleen Rowley ran against John Kline in MN-2. Wetterling is the woman who became a strong advocate for child safety after h er son was kidnapped off the street nearly 20 years ago. He’s never been found.

  11. Mary says:

    EW – I’m confused. Your link for “From 2005 to 2006, King raised money from the following PACS” doesn’t seem to have that info. The link takes to a page showing a few donors who coughed up 11,000, but none of the donors or PACS for the donors you listed below the link ( GE, Verizon, Walmart etc.) and are you listing those donors as entity donors or saying that those donors (a couple of which are law firms) had PACS that contributed to King’s PAC? I haven’t been following this story but the link lost me when I tried to go along.

    • emptywheel says:

      Sorry. Here’s the other link summarizing those donations. He had one more donation period in which Koch donated.

      So yes, these are corporate PACs donating into his leadership PAC. From a quick review, the only individuals who donated are either lobbyists themselves or bigtime Republican donors. (That is, there’s no REAL people giving money into this, just Republican insiders and corporate entities).

  12. Citizen92 says:

    What excactly is Aventum LLC?

    Is it a coincedence they on the same floor and a few doors down from Washington, DC election and PAC law powerhouse Williams & Jensen?

    Is it a coincedence that Williams & Jensen’s latest claim to fame was that ‘PAC-treasurer-to-all-things-GOP’ Barbara Bonfiglio resigned from that place under a Tom DeLay cloud?

    Is it unusual that Aventum LLC does not have a DC, Maryland, or Virginia incorporation record?

    Is Aventum LLC part of Williams & Jensen?

  13. Mary says:

    39 – ? When I follow that link to the FEC form, I don’t get the info in the post either.

    I did find this link:
    http://www.opensecrets.org/pac…..expand=D03

    Which seems to have some of the PAC info for who donated to King (although not necessarily who donated this the KING-Pac) and there’s some overlap. But on his actual PAC, the donations seem light for the info about it on the site and they don’t seem to overlap (donors are two 5,000 donors, a couple 1000 donors and a couple smaller, for a total of 13,000 -no GE, walmart etc.)

    ??

    Am I just making this too hard?

    • emptywheel says:

      Yup.

      Opensecrets will get you some stuff–though for some reason they’re behind on King (dunno if it didn’t get reported properly). The one I linked to is one of his most significant months–at least I thought I was linking to the June 2006 one, which had a chunk of big PAC donors. To get them all, since Opensecrets is not up to date, you’ve got to go through the filings one by one (or download using FTP).

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