At issue in the ongoing probe by the House inspector general is the role of a former assistant to Rep. Loretta Sanchez (D-Calif.), said the sources, who spoke on the condition of anonymity because the investigation is not yet complete. The aide, whom Sanchez says was dismissed, reimbursed the lawmaker by nearly $10,000 around the same time that her work for Sanchez ended, according to congressional records.  Caroline Valdez made a series of four unusual payments to her boss's office at the end of 2006, according to disbursement books maintained by the clerk of the House. Two of those transactions were labeled "reimb: payment error." Valdez did not respond to several cellphone messages seeking comment.  The reimbursements to Sanchez came during a financial quarter when the lawmaker placed three staffers -- including her scheduler and legislative director -- temporarily on the House payroll of her sister, fellow California Rep. Linda T. Sanchez (D), records show.  The reason for that decision remains unclear. During the period in question, the lawmakers shared the same bookkeeper, according to congressional records. The bookkeeper is not under investigation by the inspector general.  Loretta Sanchez, elected to the House in 1996, declined to explain why Valdez returned the money to her. On Capitol Hill on Thursday, Sanchez said of the Valdez incident: "It's a personnel issue. Unfortunately, I'm not at liberty to discuss it. It's not for me to decide. It's to the House counsel, because all employees are really employees of the entire House."  Paula Negrete, her communications director, said she could not comment on the shift of personnel to Linda Sanchez's staff.  Michael Torra, the chief of staff for Linda Sanchez, also cited personnel factors in declining to comment, but said that the office is cooperating with House authorities.  In testimony this week, Inspector General James J. Cornell told the House Administration Committee that he is investigating financial irregularities involving a former staffer who had control over an unnamed lawmaker's books. At the close of his inquiry, Cornell could forward his findings to the House counsel and to federal prosecutors.  This week's hearing closely followed the sentencing earlier this month of Laura I. Flores, who worked as a bookkeeper for four different House offices. Flores pleaded guilty to embezzling nearly $170,000 through false expense reports and other means. She is now cooperating with federal prosecutors investigating allegations that some congressional staff members were compelled to work on political campaigns and perform personal errands for lawmakers on official time.  The Flores case underscores what some officials and lawmakers describe as the historically loose oversight of congressional office funds, known on Capitol Hill as a "member's representational allowance." Cornell, the inspector general, is urging lawmakers to require employees who work for several House members to file financial disclosure reports and to submit to background checks. He says the moves could help expose conflicts of interest and reduce the risk of fraud.  Rep. Robert A. Brady (D-Pa.), chairman of the Administration Committee, said the Flores case amounts to a wake-up call to lawmakers to begin closely monitoring their accounts. "It's a pretty hairy situation, but we're working to make sure it doesn't happen again," Brady said. "It was almost open season out there."  In the Loretta Sanchez case, Valdez had been earning more than $40,000 a year as executive assistant, House records show. She earned $9,000 per quarter for most of 2005 and $10,000 per quarter for most of 2006, according to the records. But in the last three months of 2005, she received a $6,000 bonus -- more than 17 percent of her base salary. She collected another $6,000 bonus midyear in 2006, records show.  In addition, the amounts she paid back for "payment error" -- $465 and $430 -- match expense reimbursements paid to her earlier that year. Around the 2006 Memorial Day recess, Valdez received $465 for "airfare" from Sanchez's office, records show, and she received $430 for "local transportation" expenses accrued over a 3 1/2 -month period.  In late 2006, the three staffers were detailed for a time to Linda Sanchez's office, according to House records that listed two of them as "part-time" employees there. They did not return phone messages or referred calls to a spokeswoman for Loretta Sanchez.  Researcher Julie Tate contributed to this report.
Authorities are investigating whether a former executive assistant in the U.S. House misappropriated thousands of dollars to finance a vacation and personal items, as part of a widening effort to determine whether congressional accounts are inadequately monitored, according to two sources familiar...