Awash in contributions, campaigns offer tempting targets for thieves

But what none of his clients knew, investigators say, was that Ward may have had his hands a little too close their money. He is now the focus of a Federal Bureau of Investigation inquiry prompted by the disclosure of the National Republican Congressional Committee that hundreds of thousands of dollars was missing and presumed stolen by Ward, who was fired from the committee in January.

Investigators are examining what may have been a sophisticated embezzlement scheme involving forged audits and multiple wire transfers from political groups to Ward’s personal bank accounts.

The episode could not have come at a more inopportune time for the Republican Congressional committee. Earlier this month, Republicans were dealt another stinging setback by the defeat of a Republican candidate in what was considered a safe Congressional district in northern Mississippi—the party’s third straight loss in a special Congressional election this year. These defeats may complicate the challenges to the committee as it struggles with the financial losses and the blow to its image from the embezzlement scandal.

“The embezzlement raises doubts about the administration of the committee,” said Anthony J. Corrado, a campaign finance expert at Colby College. “It fuels the perception that this committee is not well organized. And we do know that every dollar that was taken is a dollar that will not be going to a candidate.”

Sometime within the next month, the full extent of Ward’s actions will be made public, the result of a $1 million forensic audit being conducted by PricewaterhouseCoopers. The NRCC sought the audit to get a fuller picture of any wrongdoing.

Whatever the findings, the Ward case pulls back the curtain on a dark and growing problem in campaign finance: embezzlement. It has become such a problem that the Federal Election Commission, which oversees how politicians and committees manage campaign contributions, issued a set of policies in April 2007 to address the issue and provide politicians with a set of internal financial controls to prevent and detect theft.

The election commission said it was doing so because it had “encountered a dramatic increase in the number of cases” of the theft of donors’ money by campaign insiders.

Recent victims of embezzlement involving more than $100,000 include: Senator Elizabeth Dole, Republican of North Carolina; Senator Joseph R. Biden Jr., Democrat of Delaware; Representative John A Boehner of Ohio, the Republican leader in the House; and former Representative Henry Bonilla, as well as the Democratic Senatorial Campaign Committee and the Lockheed Martin Corporation political action committee.

Political campaigns are ripe for the plucking. Committees like the National Republican Congressional Committee typically have high turnover among the politicians in their executive ranks. On top of that, politicians are more focused on winning elections and raising money than on meeting with auditors or putting into effect the accounting controls common in corporations.

“Auditing is about second to the bottom of the list of priorities in any political party,” said Robert K. Kelner, a lawyer with Covington & Burling, which has been hired by the NRCC to investigate the Ward case.