February 27, 2008 09:28 PM UTC

NRCC Troubles a Concern for Musgrave

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• by: Colorado Pols

Politico reports on the financial mess that continues to plague the NRCC:

The accounting scandal now haunting the National Republican Congressional Committee was preceded by a series of decisions over the past decade to relax internal financial controls at the committee, according to numerous Republican sources familiar with the NRCC’s operations during those years.

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.

But the actions also may have contributed to a perceived lack of oversight within the NRCC, especially over financial records, a failure that outside observers blame for an accounting scandal that could go much deeper than the allegedly forged audit a former treasurer sent to the committee’s principal lender in January. NRCC officials contacted the FBI soon after discovering that the former employee, Christopher J. Ward, had submitted what they believe to be a fake internal audit to Wachovia as part of a loan application by the committee.

The Colorado angle to all of this is how the NRCC’s financial woes end up hurting Republican Rep. Marilyn Musgrave. Musgrave’s re-election bids were bailed out in 2006 and 2004 by an infusion of NRCC cash, but the longer this scandal goes and the more it impacts fundraising, the more that Musgrave will be forced to rely on her own money means. The NRCC currently has about $6.4 million, compared to $35.5 million for the DCCC.

Fortunately for her, Musgrave is raising plenty of coin on her own. But if challenger Betsy Markey can close the fundraising gap, Musgrave may be on her own while Markey will likely have support from the DCCC. All of this bodes well for Markey…provided that she can raise enough money on her own in order to make the target list.