Some congressional Republicans have long criticized the Employee Retention Credit program — a COVID-era initiative designed to keep Americans employed during the pandemic — saying that it is rife with fraud and abuse.
For the Republican Party of Texas, federal regulators are questioning whether committee officials have properly accounted for $600,000 worth of Employee Retention Credit funds the committee itself received.
In a letter on Jan. 19, the Federal Election Commission asked the Republican Party of Texas’ federal committee to explain why it appeared to improperly disclose a $600,000 payment in September to the U.S. Treasury to “reverse emp. retention credits to state acct upon audit.”
In its federal disclosure, the Republican Party of Texas reported receiving a -$600,000 contribution from the U.S. Treasury — something that runs contrary to standard campaign-finance accounting practices for federal political committees.
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It is unclear why the Republican Party of Texas accounted for its Employee Retention Credit funds in this way and appeared to make a large payment to the Treasury Department.
Jordan Leighty, communications director for the Republican Party of Texas, acknowledged NOTUS’ inquiry in a brief phone call but did not respond to multiple follow-up calls and emails. A woman who answered the phone at the party’s headquarters said the organization had no comment. Treasury officials also did not answer multiple requests for comment.
The FEC gave the Republican Party of Texas until Feb. 23 to respond to its letter and clarify the money mystery, noting that the committee’s response would “be taken into consideration in determining whether audit action will be initiated.” Failure to reply may “result in an enforcement action against the committee.”
FEC spokesperson Myles Martin declined to comment on the situation but referred NOTUS to the agency’s Campaign Guide for Political Party Committees guidance on negative campaign-finance entries. The guidance says that a negative entry should only be used in instances when a check is void and isn’t deposited in the committee’s account, rather than as an itemized expense, such as in the case of the Republican Party of Texas.
Separate disclosures the Republican Party of Texas filed with the Texas Ethics Commission shed additional light — and confusion — on its Employee Retention Credit accounting.
In a Texas Ethics Commission filing from Jan. 15, the Republican Party of Texas reported receiving money from the program as recently as September, when the party received $600,000 from the Treasury Department. On the same day, the party reported its -$600,000 receipt from the Treasury on its FEC report. Both were tied to employee retention credits.
The Texas GOP listed five payments in 2025 from the Treasury, including the “negative” payment of $600,000 to its federal account, beginning in April. The party also received three payments from the Treasury to its state account, beginning in August. The amount the party received from the Treasury for employee-retention credits totaled over $1 million, per NOTUS’ review of the state and federal campaign-finance filings.
It is not unusual for the FEC, which enforces and regulates the nation’s campaign-finance laws, to send political committees letters asking for more clarification about their finances.
The FEC has sent recent letters to Texas Attorney General Ken Paxton, Sen. Ted Cruz, Rep. Eugene Vindman and former presidential candidate Andrew Yang, asking for them to return or explain donations or cash balances that could potentially violate federal law or agency regulations.
The severity and results of these letters vary in part because of the commission’s long-standing lack of resources and current shortage of commissioners.
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