- The Washington Times - Friday, September 24, 2010

Superlobbyist Paul Magliocchetti, who specialized in getting defense earmarks for his clients, pleaded guilty Friday to federal charges of making hundreds of thousands of dollars in illegal campaign contributions to members of Congress.

Magliocchetti admitted using straw donors — friends, lobbyists and family members, including his aged in-laws — to funnel $386,250 in illegal contributions to favored members of Congress including key members of the House appropriations defense subcommittee who provided hundreds of millions of dollars in earmarks for the clients of his now defunct Arlington lobbying firm, The PMA Group.

And while watchdog groups had hoped Magliocchetti would use his insider’s knowledge to help federal prosecutors investigate Congress and earmarks, his plea agreement makes no mention of him cooperating in other probes.

“For years, Mr. Magliocchetti, by using conduit contributors, hid the fact that he and his company were donating significant funds to campaigns in violation of the federal election laws,” said Assistant Attorney General Lanny A. Breuer. “Mr. Magliocchetti, in an effort to cover his tracks, used family, friends and business associates to secretly funnel hundreds of thousands of dollars to political campaigns, all in an effort to enrich himself and increase his power and prestige.

“This case is an important reminder to all who seek to evade the federal campaign finance laws that they will be prosecuted to the full extent of the law,” he said.

Magliocchetti was a major fundraiser for three powerful Democratic members of the defense subcommittee — the late John P. Murtha of Pennsylvania, James P. Moran of Virginia and Peter J. Visclosky of Indiana — who had repeatedly helped him and his clients.

The Justice Department said Friday the federal campaigns that received the Magliocchetti funds were unaware of the scheme. But federal prosecutors have been trying to determine whether members of Congress or their staffs engaged in a “pay to play” scheme with Magliocchetti and his firm in which they exchanged earmarks for donations.

In May 2009, a federal grand jury subpoenaed records from the congressional and campaign offices of Mr. Visclosky and from his then chief of staff, Charles Brimmer. Mr. Visclosky obtained dozens of earmarks for PMA clients and PMA employees were his largest group of campaign donors. Mr. Visclosky has denied any wrongdoing.

Earmarks are taxpayer funds that lawmakers specifically set aside for favored contractors and projects in annual spending bills. For 2008, PMA obtained $300 million in defense appropriations earmarks for its clients, according to an analysis by Congressional Quarterly and Taxpayers for Common Sense, a watchdog group.

There was no mention of specific congressmen by name at Friday’s hearing.

Magliocchetti, 64, dressed in a dark suit, told U.S. District Court Judge T. S. Ellis III he would give money to family, friends and others and then have them write personal checks to his candidates. Prosecutors said the scheme was designed to evade the federal legal limits on individual contributions and the outright ban on corporate donations.

Magliocchetti told the judge he knew it was illegal to reimburse the donors. In a statement of facts, he said he sought to “increase PMA’s influence, power and prestige  both among the firm’s base of current and potential clients, as well as among the elected public officials to whom PMA and its lobbyists sought access.”

Sentencing is scheduled Dec. 17.

A one-time congressional staffer who worked with Mr. Murtha on the powerful House Appropriations defense subcommittee in the 1980s, Magliocchetti built PMA into one of the 10 top-grossing lobbying firms in Washington before it imploded after a federal raid on it and his home in November 2008.

The firm made more than $16.4 million in lobbying income in 2007, according to Senate records, and was the go-to lobbyist for contractors who wanted earmarks — especially from the defense appropriations subcommittee which Mr. Murtha headed until his death in February.

Magliocchetti changed his plea after initially pleading not guilty last month. His son, Mark, who had worked for him at PMA, has been cooperating with federal prosecutors and was a potential witness against him. The son pleaded guilty in August to making illegal corporate campaign contributions at his father’s direction. He is to be sentenced on Nov. 16.

Originally charged with 11 counts, Magliocchetti pleaded guilty to three counts of making false statements, making illegal conduit contributions and making illegal corporate contributions. Facing up to 15 years in prison, prosecutors have agreed to recommend a sentence of 63 to 78 months — which will be decided by the judge.

The Washington Times reported in December on a number of unlikely campaign contributors associated with Magliocchetti, who did not appear to have the financial means to make the donations or who gave to candidates to whom they normally would not be expected to contribute.

For example, his first wife’s parents, a retired couple in their 80s, were listed as giving $83,000 even though they rarely voted and lived in $118,000 house in Florida that Magliocchetti and his family owned.

Lobbying clearly paid off for Magliocchetti, according to public records. He took a $1 million PMA salary, lived in a $2 million Florida home, and bought several other Florida condos. He also had a $975,000 condo in Arlington and a home in Fairfax County.

In their divorce, his first wife, Nancy Magliocchetti, said the contents of their wine cellar was worth $350,000, although Magliocchetti put the value at $73,968.

Despite all his campaign donations, The Times reported last December that Magliocchetti voted only once in the last eight years — in the November 2008 general election, according to records in Nassau County.