EXCLUSIVE: Murtha, Moran steer millions to software firm

When software firm MobilVox wanted to break into the lucrative world of defense contracting, it pursued an unmistakable strategy: It expanded operations from its Northern Virginia base in Rep. James P. Moran’s congressional district to the southwestern Pennsylvania district of Rep. John P. Murtha.

Working with two of the most powerful members of a House subcommittee that controls Pentagon spending, the company also hired lobbying firms that employed former top aides of both the Democratic lawmakers and Mr. Murtha’s brother. Company executives and their lobbyists donated thousands of dollars to the two congressmen.

Soon, money flowed the other way.

Between 2003 and 2009, Mr. Murtha and Mr. Moran helped deliver $12 million to MobilVox in earmarks — money that is set aside by lawmakers for pet projects in the government’s annual spending bills. The latest House defense spending bill introduced and pushed through by Mr. Murtha includes an additional $2 million earmark for MobilVox requested by Mr. Moran. The bill is currently pending in conference committee.

MobilVox, the two lawmakers and the lobbyists hired by the company insist they followed all congressional rules and campaign fundraising laws, and that all earmark decisions were made on their merit. None has been accused of any wrongdoing.

But MobilVox’s success fits a pattern of doing business in Washington that ethics watchdogs deride as a “pay-to-play” system — one that became infamous during Republican years and continues to operate under a Democratic leadership that had promised to change a “culture of corruption” in Washington.

Mr. Moran’s and Mr. Murtha’s relationship with MobilVox “raises red flags. It is not subtle. It looks bad,” said Joel Hefley, a retired Republican congressman from Colorado who chaired the House ethics committee when that panel admonished then-Majority leader Tom DeLay for ethical lapses earlier this decade.

Mr. Hefley, who retired in 2006, said he was particularly troubled by MobilVox’s opening of an office in Mr. Murtha’s district, saying that while there may have been a good reason, “It looks like it was done to curry favor with a person who has power to benefit them.”

Mr. Murtha, chairman of the House defense appropriations subcommittee, is under siege as multiple grand juries investigate defense contractors close to him. The contractors built their businesses on Murtha earmarks at the same time they donated to him, hired lobbying companies that employed his former aides, associates and brother, and opened offices in his home district.

Mr. Moran has escaped the public scrutiny that Mr. Murtha has faced, but Federal Election Commission (FEC) and congressional lobbying records show his relationship with MobilVox fits a substantially similar pattern that benefited his campaign coffers and delivered lobbying work to one of his closest former top aides, Melissa Koloszar, the congressman’s longtime chief of staff and appropriations aide.

A federal grand jury in Washington is investigating one of MobilVox’s key lobbyists, Paul Magliocchetti, and his defunct firm, The PMA Group, which was highly successful in getting earmarks for dozens of clients.

Prosecutors have signaled that what began as a probe into questions of whether Mr. Magliocchetti illegally reimbursed associates for their campaign donations may end up targeting members of Congress and their aides. Although federal agents searched PMA’s offices and Mr. Magliocchetti’s home in November, the investigation did not become public until February, three months before Rep. Peter J. Visclosky, Indiana Democrat, announced that a grand jury had subpoenaed records from his congressional and campaign offices.

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