You are currently viewing the printable version of this article, to return to the normal page, please click here.

EXCLUSIVE: Murtha, Moran steer millions to software firm

- The Washington Times - Friday, October 23, 2009

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.

PMA employees were the top campaign contributors to Mr. Visclosky, and one of his former chiefs of staff was a PMA lobbyist.

Mr. Visclosky, a member of the defense appropriations subcommittee, has denied any wrongdoing, but has stepped down as chairman of the energy and water appropriations subcommittee.

A spokesman for Mr. Magliocchetti, who worked as a defense subcommittee staffer with Mr. Murtha and other members for nine years before becoming a lobbyist, declined comment on the probe.

Mrs. Koloszar, who worked for PMA after leaving Mr. Moran's office, now works with her own lobbying firm. In an e-mail to The Washington Times, she said she did not lobby Mr. Moran's office during a one-year House-imposed "cooling off period" aimed at preventing top staffers from seeking legislative favors from their old bosses. She also said she did not lobby Mr. Murtha's office during the cooling-off period.

Bill Allison of the D.C.-based Sunlight Foundation, a nonpartisan watchdog group, said the system that firms like MobilVox use to get earmarks amounts to "an influence tax on defense contracts.

"It raises the question of whether taxpayers are getting the most bang for our buck," Mr. Allison said. "Companies wouldn't be hiring lobbyists or making campaign contributions if they didn't think it was effective, but if it is effective, does that mean that the best company gets the contract or the one with the best or best-connected lobbyist gets it?"

Reston-based MobilVox, founded in 1998, develops software to help the U.S. military reduce the threat of improvised explosive devices (IEDs) — roadside and car bombs. The software is designed to make it easier to locate, identify and defuse the weapons.

According to databases maintained by the Defense Department and the Office of Management and Budget, MobilVox had not received any Defense contracts before it began working with Mr. Moran and Mr. Murtha.

But MobilVox has received or shared in nine earmarks sponsored by the two lawmakers since 2003 totaling $12.35 million, according to records and interviews.

During that same period, MobilVox officers and employees donated $39,000 to Mr. Murtha and his various political committees and $21,000 to Mr. Moran, records show.

Most of the donations came from Enrique Lenz, the company's owner and chief executive officer.

Mr. Lenz, in a written statement answering some but not all of the questions asked by The Times, said MobilVox has developed technologies useful in preventing terrorist attacks and saving lives, and it has "complied with all applicable U.S. laws and regulations." He also said the firm had delivered all of its U.S. contracts "on time and within budget."

Lobbying disclosure records show that MobilVox paid at least $510,000 to politically-connected lobbyists, including $350,000 to Mr. Magliocchetti's PMA Group over a three-year period beginning in February 2006 through this past March, when the firm closed in the fallout of the federal probe.

Both Mr. Murtha and Mr. Moran said through spokesmen that the MobilVox earmarks were based on the quality of the firm's technology and not on who lobbied or gave donations.

"Our office complies with all the rules of the House and we do not keep records regarding who represented firms in our district and at what time," Mr. Moran's spokesman, Austin Durrer, said in a written statement. Mr. Murtha's spokesman, Matthew Mazonkey, said the MobilVox earmark requests were thoroughly vetted.

Since 1989, PMA's lobbyists and employees have donated $271,500 to Mr. Visclosky, $171,200 to Mr. Moran and $167,400 to Mr. Murtha, according to the Center for Responsive Politics (CRP), a nonpartisan watchdog that monitors campaign finances. When coupled with donations from the firm's clients, the PMA-related political gifts for each of the three lawmakers jump to $1 million or more, CRP said.

Watchdog groups such as Common Cause asked the House ethics committee to investigate Mr. Murtha, Mr. Moran and Mr. Visclosky to determine whether they traded earmarks for campaign gifts from PMA and its clients. In June, after pressure from House Republicans and various watchdog agencies, the committee announced it had already begun to look into any misconduct of members and employees of the House in connection with activities of the PMA Group.

Mr. Murtha, chairman or ranking member of the House defense appropriations subcommittee for the past 20 years, has said he has done nothing wrong and the investigations don't concern him. A staunch defender of earmarks, Mr. Murtha says on his Web site that "elected representatives of the people understand their constituents and districts best."

Records show that in 2003, MobilVox hired two lobbying firms — one with ties to Mr. Murtha and the Democrats and another with ties to now-disgraced former Rep. Randy "Duke" Cunningham, a California Republican then on the defense appropriations subcommittee.

MobilVox hired Timothy Charters, former aide to Mr. Cunningham, paying his lobbying firm, Charters and Co., $80,000 between July 2003 and June 2005. During that period, Republicans controlled the House and Mr. Cunningham had not yet been accused by the Justice Department of taking bribes.

Mr. Charters said MobilVox needed help in getting the Defense Department interested in a new handheld device it had developed for military ordinance disposal teams, and Mr. Cunningham played no role in his work for the firm. He said he introduced company officials to Mr. Moran to persuade the lawmaker to sponsor an earmark for the device.

"In order to educate the congressman about this product, we invited him to visit the MobilVox facility and meet with experts in the bomb disposal community and MobilVox employees," Mr. Charters said in a written statement.

He said Mr. Moran agreed to help and, according to federal records, a $1 million earmark later was inserted into the defense appropriations bill for 2005, which had passed in July 2004.

At the time, Mrs. Koloszar still worked as Mr. Moran's chief of staff and his appropriations aide, but she left in November 2005 to join PMA. A few months later, she became a lobbyist for MobilVox.

The second lobbying firm hired in 2003, KSA Consulting, employed Robert "Kit" Murtha, the congressman's younger brother, and Carmen Scialabba, who worked as a Murtha appropriations committee staffer for 27 years. In a 2000 tribute in the Congressional Record, Mr. Murtha described Mr. Scialabba as "indispensable."

Listed on KSA disclosure reports as a MobilVox lobbyist, Kit Murtha said he never used his brother to further his career. He said he told clients, "I don't know if I can do anything. Jack can be kind of unreasonable." He described his KSA role as more of "a glad hander," who introduced MobilVox executives to defense contractors.

In its disclosure forms, KSA said MobilVox paid it less than $10,000 in fees for each six-month reporting period between 2003 and 2006, and it stopped working for the Virginia firm at the end of 2006.

In a brief telephone call, Mr. Scialabba, who brought Kit Murtha into KSA, said he knew nothing about MobilVox and hung up.

In 2004, a year after MobilVox hired the two lobbying companies, Mr. Lenz and Mr. Murtha jointly announced that the company was opening an office in Indiana, Pa., in the congressman's financially struggling district. The announcement came at Mr. Murtha's annual "Showcase for Commerce," a trade show in his hometown of Johnstown, Pa.

The show brings the nation's top defense contractors together for what Mr. Murtha has called "one of the largest government-procurement expositions in the country." Mr. Mazonkey, the Murtha spokesman, said the congressman was "happy to welcome MobilVox to the district in 2004 to work on important NASA and defense programs."

Over a three-year period, MobilVox — with Mr. Murtha's help — shared in three separate $1.7 million earmarks for a U.S. Navy project that included a mobile field kit to help train sailors about advanced IEDs. The earmarks were in the 2004, 2005 and 2006 appropriations bills.

Federal lobbying records show that by the time Kit Murtha retired at the end of 2006, MobilVox had hired a new set of lobbyists with ties to his brother — the PMA Group.

At the time, Mr. Magliocchetti was turning PMA into one of the 10 top-grossing lobbying firms on Capitol Hill, based in large part on its ability to get defense earmarks from Mr. Murtha and his colleagues on the subcommittee. The firm's Web site bragged that "no one understands the inner workings of our nation's capital better than the PMA Group."

MobilVox became a PMA client on Feb. 1, 2006, with Mrs. Koloszar and Mr. Magliocchetti listed as two of the four lobbyists on its registration form.

Mr. Moran went to bat for MobilVox shortly after it hired PMA and Mrs. Koloszar, helping the company obtain a $1.8 million earmark for a portable computer system for Navy divers in the 2007 defense appropriation bill, which passed the House in June 2006.

While Mrs. Koloszar could not lobby Mr. Moran and Mr. Murtha during most of 2006 because of the "cooling off" rules, other members of PMA could and she was allowed to lobby other congressmen. In her statement to The Times, she said she was "very proud" of the work she had done and she had "carefully complied" with Congress' post-employment restrictions. She has since lobbied both offices.

Records show Mr. Moran has continued to secure earmarks for MobilVox's diver project; $800,000 in 2008 and $1.2 million in 2009. For 2010, he requested $2 million for the project in the defense appropriations bill, which was approved by the full House on July 30. The bill is currently in a conference committee between House and Senate appropriators.

Federal campaign records show that in November 2008, Mrs. Koloszar gave $5,000 - the maximum allowed - to Mr. Moran's Virginia Leadership PAC, while Mr. Magliocchetti and other PMA employees gave an additional $7,000. Mrs. Koloszar also donated $8,400 to Mr. Moran's congressional campaign committee since she became a lobbyist, the records show. Overall, PMA employees have been Mr. Moran's biggest career donors, according to the Center for Responsive Politics.

Virginia state campaign records show that Mrs. Koloszar, Mr. Lenz, his wife, Darlene, who is the company's chief operations officer, and MobilVox also gave $7,000 to Mr. Moran's younger brother, Brian, in his unsuccessful campaign in June for the Virginia Democratic gubernatorial nomination.

In their written statements to The Times, neither Mrs. Koloszar nor Mr. Lenz answered specific questions about their campaign donations. Mr. Lenz said he complied with all federal laws and regulations regarding interactions with Congress. Mrs. Lenz did not return calls to her office seeking comment.

Federal records also show that Mr. Magliocchetti, Mrs. Koloszar and three other PMA lobbyists each donated the maximum of $5,000 to Mr. Murtha's leadership fund on July 31, 2006, a month after the House approved the 2007 defense appropriations bill, which included two MobilVox earmarks.

Since PMA closed in March, MobilVox has continued to use Mrs. Koloszar as a lobbyist, paying her new firm, MKG Consulting LLC, $40,000 through June 30.

Mr. Durrer, Mr. Moran's spokesman, defended the MobilVox earmarks, describing the firm as a small, minority-owned business headquartered in the congressmans district. He said Mr. Moran "strongly supports their efforts to develop cutting-edge technology that assists the military in combating improvised explosive devices on land and underwater."

The spokesman said projects are selected based on whether they create jobs in Northern Virginia and if the military believes the technology is critical in protecting U.S. troops.

"The congressman determines which projects best fit this criteria and those are the ones we request. Period. End of story," he said, adding there was no connection between campaign donations and earmarks.

Meanwhile, Mr. Mazonkey acknowledged that Mr. Murtha has continued to get earmarks for MobilVox:

— A $1.45 million earmark in the 2007 appropriations bill for a database to make it easier for the Navy to analyze its information on IEDs.

— An earmark in Homeland Security's 2009 budget requiring it to spend $1 million to purchase a MobilVox geospatial tool to help law enforcement respond to terrorist attacks. It was his only earmark in the Department of Homeland Security budget for that year.

— An additional $2 million for the MobilVox geospatial tool in the 2010 Homeland Security budget, although the request did not appear in the version of the Homeland Security bill that passed the House Appropriations Committee.

Mr. Mazonkey said every earmark request "is properly vetted and, in the end, we recommend funding only those that are cost effective and have value to the government and community."

Click here to read statements from MobilVox participants.