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Cole: Second Term Up in Air

Elections Will Decide Future

National Republican Congressional Committee Chairman Tom Cole (Okla.) acknowledged last week that he might not seek a second term as head of the House GOP’s political arm, as has been the tradition of his immediate predecessors.

Cole suggested he won’t make a final decision about another term until around midnight of election night, conceding that his future will be heavily influenced by how well Republicans fare in the fall.

Republican leaders are already moving to remake the NRCC in the wake of revelations of an accounting scandal that might have cost the party thousands of dollars, according to officials close to the committee. Cole announced Feb. 1 that the committee had asked the FBI to step in and investigate “financial irregularities” at the NRCC, and sources have since said that the investigation has focused on allegations that former Treasurer Christopher Ward falsified audits. While the NRCC and FBI have not completed their investigations, the committee is beginning to institute reforms, including a new software systems to give party leaders better oversight of the books.

But Cole’s comments raised for the first time the possibility that change at the NRCC could begin at the top.

“I may not have the option” of another term, Cole said Thursday, citing the fact that the Republican Conference “has the right to decide who they want to have there.”

Cole said it would be premature to make any decisions about chairing the NRCC in the 2010 cycle because “we don’t know how the story’s going to end” in 2008.

At the same time, he suggested that there are many well-qualified Members in the GOP Conference who are up to doing the NRCC job.

“I don’t take it for granted,” he said, referring to the fact that he is elected to the job and serves at the will of his peers.

When House Republicans were in the majority from 1994 through 2006, three out of the four NRCC chairmen served two consecutive terms at the committee: Reps. Tom Reynolds (N.Y.), Tom Davis (Va.) and former Rep. Bill Paxon (N.Y.). At the time, that continuity at the committee was credited with helping House Republicans build and maintain a strong national campaign apparatus. The exception was Rep. John Linder (Ga.), who served one term.

There is nothing written in GOP Conference rules dictating the length of tenure for NRCC chairmen, but during those years, being elected to the position generally came with the understanding that it was a two-cycle job.

Now in the minority for the first time in a dozen years, House Republicans face a difficult political terrain — depressed morale among the Republican base has hampered the party’s fundraising; the committee’s financial problems; and the decision of two dozen GOP Members to retire or run for other office, many of them in politically vulnerable districts that are expensive to defend.

The New York Times, citing party officials, reported last week that emergency internal audits after the irregularities were discovered found that hundreds of thousands of dollars are missing and presumed stolen from the NRCC coffers. Cole would neither confirm nor deny that report because of an ongoing forensic audit and said it was too early to know the extent of the problems.

Other NRCC leaders also refused to comment on the reports, though party sources say there is a growing consensus that money is probably missing from the NRCC and other campaigns that had hired Ward to manage their books. But until the audits are complete, there is no way to know how much, these sources said.

“I wouldn’t have taken the action I took if the situation wasn’t serious,” Cole said of bringing law-enforcement authorities in to look at the matter.

Cole said he receives regular updates from the audit firm, PricewaterhouseCoopers, as well as from attorneys involved in the matter. There is no timetable for completion of the audit, though Cole said the committee is being told it will be months, not weeks. The NRCC has also launched an internal investigation into the financial matter, which Cole said is being conducted by Covington & Burling.

Rep. John Kline (Minn.), chairman of the NRCC management committee, told Roll Call last week that the party is moving ahead with management reforms in advance of whatever the investigative audits might find.

The NRCC “needs to be modernized,” Kline said, and the committee is embarking on “an ongoing effort to make sure that we are properly organized and staffed and have the right tools.”

One of the most immediate changes will likely be a new software system that allows broader access to the committee’s financial data. Several sources described this system as offering a window for senior officials to be able to check the balance sheets themselves, rather than limiting all financial information to the committee’s financial department.

Rep. Mike Conaway (Texas), chairman of the NRCC audit committee, said that even before the investigations are complete, it is clear that “we had one person with too much concentration of duties.” The reforms the committee is implementing are intended to address that problem and can’t wait until the investigations are complete because “we’ve still got transactions going on and reports to the FEC, so you just can’t wait.”

Conaway acknowledged that the forensic audit and legal fees involved in the scandal might cost the committee hundreds of thousands of dollars. Federal Election Commission records indicate that a routine financial audit for the NRCC would cost about $40,000. And once the forensic audits and investigations are complete, the committee will still have to pay for a routine audit, which it apparently hasn’t had since 2003.

But the forensic audit, which requires reviewing expenditures in detail over several years, might cost many times that, experts said. Conaway would not estimate the cost to the NRCC, but asked whether the scandal could end up costing the committee $1 million, he replied, “We certainly hope not.”

Despite the hurdles the NRCC faces, Cole was optimistic about the overall health of the committee operations and boasted about those reforms that will bolster the NRCC’s management and financial footing.

He said he plans to “turn over a much stronger institution than we had two years ago” whenever he leaves.

“I intend for this to be fixed,” Cole said.

Cole specifically praised the administrative skills of NRCC Executive Director Pete Kirkham, who had been Cole’s personal office chief of staff before coming to the committee.

A dust-up between Cole and Minority Leader John Boehner (R-Ohio) last fall focused on Boehner’s desire to see the top aides at the committee replaced, including Kirkham.

But last week, Cole had nothing but praise for the support he said he’s received from the GOP leadership team as a whole, asserting that they have been “more engaged in the committee than any leadership team” before, in part a product of being in the minority.

According to an NRCC memo obtained by Roll Call, the NRCC is planning to target 23 Democratic incumbents — many of them freshmen — and one Democratic-held open seat in November. The committee also must defend 24 open seats, a political landscape made even more difficult by the party’s limited resources.

As of the end of January, the NRCC faced more than a $29 million cash-on-hand deficit compared to their Democratic counterparts.

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