NRCC Catalogs the Damage

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The NRCC says that the FBI investigation has reached a point where it can reveal how much, it claims, it was bilked out of by Christopher Ward. Before I get into the details, though, what do you suppose it means that the investigation now allows them to go public about the damage? I ask because the NRCC makes clear that the FBI has never entered the premises of the NRCC. Curious.

We refrained from making extensive public comments until now so as not to compromise the investigation being conducted by the FBI. We understand that the FBI’s investigation has now progressed to a point where such public comment would no longer interfere with the investigation. Accordingly, the NRCC is providing this update on the status of its own internal investigation.

[snip]

Contrary to media reports, the FBI has not been to the NRCC office during the course of this investigation nor have they operated out of the NRCC offices.

First, it appears that the NRCC has not done a real audit of its finances since BCRA went into effect.

It appears that after becoming treasurer in 2003, Ward submitted to the NRCC’s bank and to NRCC leadership bogus audit reports for 2002, 2003, 2004 and 2005. An additional bogus audit was submitted to the NRCC’s bank for 2006.

So remarkably, just as campaign finance put new restrictions on soft money contributions, the NRCC stopped auditing what happened with its money.

Also note how squeamish the NRCC is about naming their bank, Wachovia. Odd, not least because the damn thing is listed everywhere on FEC reports.

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Gold Standard Gate, an Update

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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.

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Spitzer Resigns

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Not a big surprise. Here’s the bit I hope gets the most traction:

Over the course of my public life, I have insisted, I believe correctly, that people, regardless of their position or power, take responsibility for their conduct. I can and will ask no less of myself. For this reason, I am resigning from the office of governor.

I think it likely we’ll find, over time, that those investigating Spitzer felt obliged to pursue what otherwise would not have merited a continued investigation. I suspect we’ll learn that public people, like Spitzer, are going to be exposed to a lot more scrutiny–and otherwise unusual investigations–because of these new post-9/11 money laundering laws.

Still. Spitzer was a crusader about law and order. And, according to his own standards, that requires taking responsibility for his conduct. And that, at least, is how he’s pitching his resignation.

Update:  Via David Kurtz.

In response to press speculation, MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, said: "There is no agreement between this Office and Governor Eliot Spitzer, relating to his resignation or any other matter."

Does it sound to you like they still want to charge him? 

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Republicans Uncork A Fine Whine Spitzer

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And just guess what is being served with the fine whine at Casa de GOP? Thats right, impeachment is on the table! Yep, the news of the foibles of Elliot Spitzer had been public less than 24 hours and the Republicans are seriously threatening impeachment.

State Republicans threatened on Tuesday to impeach New York Gov. Eliot Spitzer if he does not quit over a sex scandal that has raised questions over whether he could face criminal charges.

The threat added to pressure on Spitzer, a Democrat and former state chief prosecutor who made his name fighting white-collar crime on Wall Street, to step down after a report that he hired a high-priced prostitute.

Wow. That was fast. Those Republicans are serious about maintaining the integrity of government. So, what is it that has caused the righteous defenders of honesty, integrity and the rights of the public to throw down impeachment onto the table so quickly?

"If he does not resign within the next 24 to 48 hours, we will prepare articles of impeachment to remove him," said Assembly Republican Minority Leader James Tedisco.

"We need a leader in place that has the support of people on both sides of the aisle," Tedisco told Reuters.

The NYT story indicates that the basis for such an impeachment is found in their, and the Wall Street Journal’s, editorials:

"He betrayed the public and it is hard to see how he will recover from this mess and go on to lead the reformist agenda on which he was elected to office."

The Wall Street Journal said Spitzer had shown his lack of restraint in overly aggressive tactics as attorney general, making "extraordinary threats" to entire firms and to those who criticized his pursuit of high-profile Wall Street figures.

"The stupendously deluded belief that the sitting Governor of New York could purchase the services of prostitutes was merely the last act of a man unable to admit either the existence of, or need for, limits," it said in an editorial.

Almost all who read here have been wondering for a long time "just exactly what in the world does it take to get impeachment on the table"? Well, now we know. If you don’t have "support of people on both sides of the aisle", impeachment is on the table. If you "betray the public", impeachment is on the table. "Overly aggressive tactics as attorney general" place impeachment Read more →

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Truck-Sized Loophole for Theft

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Howie’s right. The media ought to be paying more attention to Congressman Peter Welch’s call for an investigation into how a giant loophole got stuck into rules aiming to force companies to report contracting fraud.

House Democrats targeted a multibillion-dollar overseas contracting loophole Friday by vowing to investigate why — and how — it was slipped into plans to crack down on fraud in taxpayer-funded projects.

The inquiry will look at whether the exemption was added at the request of private firms, or their lobbyists, to escape having to report abuse in U.S. contracts performed abroad.

"Granting this safe harbor for overseas contractors flies in the face of reason," Rep. Peter Welch, D-Vt., wrote Friday asking the House Oversight and Government Reform Committee to investigate. The panel monitors government procurement policy.

"By taking this action, the Bush administration is sending an unambiguous message: If you are a U.S. government contractor in Iraq, Afghanistan or elsewhere overseas, you have a green light to defraud our government and waste taxpayer dollars," Welch wrote to Democratic leaders of the committee.

Basically, under voluntary reporting requirements, government contractors have been reporting less and less of the fraud that they’re committing. Go figure. So DOJ decided to make reporting of fraud mandatory. But someone–it looks like someone in Bush’s Office of Management and Budget (and Fraud Support, apparently)–snuck in a waiver of mandatory requirements for contractors working outside of the United States.

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SIS has “filled in” the blanks

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fill-in-the-blanks.jpg

I gotta say, Steven McNevitt and his colleagues appear pretty skeptical that all of the OVP emails responsive to Fitzgerald’s subpoenas were actually recovered.

I noted yesterday that there had been two parallel attempts to recover the OVP email missing from the period when Libby and Cheney invented their cover story for having leaked Valerie Plame’s identity. Page 43-46 of the Additional Materials is the documentation from McDevitt’s attempt to reconstruct the emails. It consists of a plan developed on November 28, 2005 to reconstruct the emails, with updates from January 20, 2006 describing the results of that attempt.

The environment information gathering activities were successfully completed. As a result, it was determined that the Exchange server used to support the OVP mailboxes was [redacted] and the Journal Mailbox server that was used durring the target period was OVP_JOURNAL.

[snip]

Analysis of the files contained on the file server that were used to store .PST files during the target period was performed and no messages were found that filled the gap of missing messages for the target period.

[snip]

The server that contained the journal mailboxes for the target period was successfully restored, This was from a backup that was performed on 10/21/2003. The journal mailboxes were examined and no messages for the target period were present in the joumal mailbox.

[snip]

The Exchange server that contained the OVP mailboxes for the target period was restored from a backup that was performed on 10/21/2003. OA Human Resources produced a list of active OVP staff for the target period. This list was reviewed and confirmed by OVP.

The Exchange server that contained the OVP mailboxes was restored. This was from a backup that was performed on 10/21/2003. The email from the target period was extracted from each of the 70 OVP mailboxes and copied to a .PST file. [my emphasis]

In response to this report, on January 23, 2006 McDevitt writes a group of people who had worked on the restoration attempt and the larger missing email problem.

Someone needs to fill in some of the blanks.

Susan Crippen responds just two hours later.

SIS has "filled in" the blanks.

We know from the Committee report that a White House team wrote a document one day later–on January 24–claiming to have recovered 17,956 emails from the email backup tapes.

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Enron Accounting at the NRCC

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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 →

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No Wonder Fitzgerald Never Officially Closed His Investigation

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There were actually a number of notable revelations in today’s oversight hearing on the missing emails, supplemented by the report released by the committee. For example, the hearing made it clear that the National Archives has been trying to get some answers about where the missing emails went since May 2007, to no avail. And that even as late as fall 2006–a year after the White House had discovered the missing emails–the White House did not reveal the missing emails to the National Archives.

Similarly, the hearing revealed that as of yesterday, the White House has done nothing to start retrieving the missing RNC emails.

Most alarming, though, are two details that may explain why Fitzgerald never formally closed his investigation. It’s still not clear he has all the missing emails.

First, the hearing and the report revealed that until 2005, the email "archives" were available to anyone within EOP.

Until mid-2005, the system that the White House used for preserving e-mails had serious security flaws. According to Mr. McDevitt, "ln mid-2005 … a critical security issue was identified and corrected. During this period it was discovered that the file servers and the file directories used to store the retained email … were accessible by everyone on the EOP network." Mr. McDevitt informed the Committee that the "potential impact" of this security flaw was that there was "[n]o verification that data retained has not been modified."

To understand why this is important, consider the famous Rove-Hadley email recording Matt Cooper’s call. The email said,

Matt Cooper called to give me a heads-up that he’s got a welfare reform story coming, When he finished his brief heads-up he immediately launched into Niger. Isn’t this damaging? Hasn’t the president been hurt? I didn’t take the bait, but I said if I were him I wouldn’t get Time far out in front on this.

The email has been puzzling on two levels. First, why wasn’t it discovered? Since the trial, there are some potential explanations for this, not least that the White House may have searched on "Matthew Cooper" and "Joe Wilson" but not "Matt Cooper." Read more →

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Waxman Hearing on White House Emails

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Available here.

We’re having a fight already. Waxman moved to enter the report of Steven McDevitt into the record. This is the guy who reported that all the emails were missing. Apparently, from 2002-2006, he was responsible for managing White House system.

Waxman says we’re going to vote to put McDevitt’s testimony into the record.

Waxman: If it ain’t broke, don’t fix it. But that’s what WH did. Dismantled a functioning system and replaced it with something inadequate. Initiated its own study of missing emails in 2005, but now dismisses its own work as incompetent.

Davis: Committee is entitled to getting the emails. It’s the characterizations which we differ in opinion. 2002-2006 he was responsible for managing system. In his opinion 400 days of emails went missing. We learned that many of these were misfiled. McDevitt responded to interrogatories, he replied with 25 pages of answers. We spoke with McDevitt on Sunday afternoon. Reluctant to give testimony on the record. Our staff made it clear we want to examine him on the record. Personal investment in various technologies. We remain skeptical of the content of his interrogatories. White House says technical flaws in the 2005 search. 473 day gap reduced to 202. WH restoration effort continues and should continue.

Waxman: Jan 30, McDevitt, scheduled interview, WH contacted him, told him not to discuss with the committee. McDevitt emailed, based on WH, there’s practically nothing I’m authorized to discuss. Given limitations placed by WH Counsel, he said it didn’t make sense to come in for interview. Majority and Minority sent him questions. He responded in writing. WH had chance to review those answers, cleared them without redactions. AFTER they got the answers, minority wanted to speak with him in person. Majority went to some length to accommodate them. Sunday night, Minority and Majority called to see whether he would come in for deposition. Answered 1.5 hours of questions from Minority. Minority now says it’s unfair to use any information bc they didn’t get oppty to question him. If Minority has a beef with anyone, it should be WH Counsel’s office.

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Rick Renzi Indicted

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From the AP: 

A 26-page federal indictment unsealed in Arizona accuses Renzi and two former business partners of conspiring to promote the sale of land that buyers could swap for property owned by the federal government. The sale netted one of Renzi’s former partners $4.5 million.

Here’s a post describing the deal from last year.

A big time mining venture, Resolution Copper Company, wants a parcel of land an hour east of Phoenix so it can mine the vein of copper that lies beneath it. Renzi offered to help them gain Congressional approval for a land swap that would give them that parcel of land, in exchange for some other pieces of land that would be preserved or used to decrease water consumption in the area. Only, Renzi wanted to throw in a little goodie for himself–he asked Resolution to buy an alfalfa field he owned to include it in the swap. The field was later purchased by another group (with ties to Bruce Babbitt) for $4 million dollars, just two years after it was purchased for $1 million.

Not a surprise, really. I’m just hoping the indictment finally reveals more about why Paul Charlton was fired to stave off precisely this indictment. From last year’s post:

And, lurking behind the scam, is the firing of Paul Charlton as US Attorney. In the Senate hearing the other day, Alberto Gonzales offered no good answer for why Charlton was fired. He claimed only that Charlton resisted Gonzales’ judgement on a death penalty case and that he used poor judgment in his efforts to implement taped confessions for investigations in his district. News of the Renzi investigation first got leaked in October, just before the election. And this scam involves a significant Native American interest (one of the commonalities among several of the fired USAs)–the San Carlos Apache Tribe opposes the mining project because it endangers some of their cultural heritage areas.

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