- The Washington Times - Monday, June 21, 2010

Defense contractors who openly discussed a suspected pay-to-play scheme in e-mails released by congressional ethics investigators had ties to a powerful lobbying firm and won millions of dollars in federal earmarks after contributing to the campaign of an Indiana congressman.

Democratic Rep. Peter J. Visclosky requested a $2.5 million federal earmark for Nevada-based defense contractor Sierra Nevada Corp. (SNC) five days after a March 2007 fundraiser for which the company’s owners and its political action committee contributed $18,800 to the congressman’s campaign.

Similarly, Mr. Visclosky requested $2.5 million for defense firm 21st Century Systems — five days after its employees ponied up $17,050 for the same fundraiser. The firm’s chief executive was awarded an “honorary seat” next to Mr. Visclosky at that fundraiser.

In both cases, company executives wrote e-mails linking campaign donations to earmarks Mr. Visclosky secured or special access to the congressman, a congressional ethics board concluded.

At the time, SNC and 21st Century, along with other defense contractors, had secured the services of the then-high-flying Washington area lobbying firm, the PMA Group — now the target of a federal grand jury investigation.

Government watchdog groups have long questioned the ties between PMA and its three key allies on the House Appropriations defense subcommittee — Rep. John P. Murtha, Pennsylvania Democrat, who died in February; Rep. James P. Moran, Virginia Democrat; and Mr. Visclosky.

All three members of the powerful subcommittee that doles out millions of dollars annually in Pentagon appropriations received hundreds of thousands of dollars in donations from PMA employees and the firm’s clients who wanted earmarks — often within mere days of each other.

PMA, which earned more than $16.4 million in 2007 specializing in defense earmarks for clients, was one of the 10 top-grossing lobbying firms in Washington before it imploded. Federal agents raided it and owner Paul Magliocchetti’s home in November 2008.

Late last year, the Office of Congressional Ethics (OCE) accused Mr. Visclosky of soliciting PMA clients for campaign donations in 2008 and then giving them special access to him and his staff one week before authoring their defense earmarks.

The eight-member OCE Board of Directors referred the findings on Mr. Visclosky to the House ethics committee, saying they found “probable cause” to believe he solicited or received contributions in exchange for earmarks.

The OCE, which does not have jurisdiction over events prior to March 2008, included in its report the SNC e-mails from 2007 as “evidence that PMA clients seeking earmarks from Representative Visclosky linked contributions to his campaign to specific legislative acts.”

But in February, the ethics committee cleared Mr. Visclosky, Mr. Murtha, Mr. Moran and four other members of the House Appropriations defense subcommittee, saying it “found no evidence” they or their staffs were “directly or indirectly engaged in seeking contributions in return for earmarks.”

The committee was critical of PMA, however, saying its lobbyists “pushed or directed” company executives to maximize their donations and “to attend specific fundraisers while pursuing earmarks.”

In a strong rebuke to the ethics committee, the OCE board last month unanimously referred to the Justice Department what it described as “evidence collected in the course of its investigation,” saying it showed that some PMA clients thought there was a connection between making campaign donations and getting earmarks.

The board cited e-mails from SNC as an example in their Visclosky report.

Among the e-mails, a vice president at the company was asked on Feb. 23, 2007, to justify a request that the firm’s owners raise $20,000 in campaign contributions for Mr. Visclosky. “Can you give me some justification for giving $20K to Visclosky?” asked John Campbell, an independent SNC lobbyist who was working for owners Fatih and Eren Ozmen.

That was what the company and others working with Mr. Visclosky and the PMA Group “have been asked to contribute,” company vice president Dave Klingler wrote back that day.

“He has been a good supporter of SNC,” he said. “We have gotten over 10M in adds from him” — a reference to the more than $10 million in earmarks from Mr. Visclosky, funds he set aside specifically for SNC projects in defense-spending bills as a senior member of the House Appropriations defense subcommittee.

The day after Mr. Klingler’s justification e-mail, federal records show Mr. Visclosky’s political committees received $18,800 in donations from the Ozmens and the company’s political action committee for a March 28, 2007 fundraiser.

On April 2, 2007, five days after the fundraiser, Mr. Visclosky requested a $2.5 million earmark for SNC in the 2008 defense appropriations bill. The Sparks, Nev.-based company ultimately got $2 million to develop sensors to help U.S. military forces.

Records show that in past years, SNC received more than $11 million in earmarks for various projects. Although headquartered in Nevada, the company maintains an office in Mr. Visclosky’s northwestern Indiana district.

Neither Mr. Klingler nor the company responded to e-mailed questions from The Washington Times.

SNC was not the only big donor to get Mr. Visclosky to submit earmark requests after the fundraiser. He obtained earmarks for at least six other firms who used PMA as their lobbyist and whose employees and PACs gave more than $9,000 to his March 2007 fundraiser.

According to campaign records, the donations were tied to the fundraiser that occurred five days before Mr. Visclosky turned in earmark-request letters to the House Appropriations Committee.

In addition, the records show, the single biggest group of donors were PMA lobbyists, their relatives and associates, who gave $42,500, much of it the day of the fundraiser. One of the PMA lobbyists, Richard Kaelin, had been Mr. Visclosky’s chief of staff a few years earlier.

According to the OCE report, a review of documents from Taxpayers for Common Sense, a watchdog group that tracks earmarks; information on campaign donations from a database by the Center for Responsive Politics, a nonpartisan research group that tracks money in politics; and an examination by The Times of House records, other PMA clients whose employees made substantial donations to, and received earmarks from, Mr. Visclosky were:

• Advanced Concepts and Technologies International (ACT-I), a Waco, Texas, firm with an office in the congressman’s district, whose employees and their relatives gave $23,000 at two Visclosky fundraisers in 2007 and 2008. The company got two earmarks worth $4.4 million.

• Planning Systems Inc. of Reston, Va., which received a $1.6 million earmark for fiscal 2008 after its employees and its political action committee gave $22,400 for a March 2007 fundraiser. In 2008, the company’s employees gave $7,800, and the firm obtained a $2.4 million earmark for fiscal 2009.

• Samueli Institute, a nonprofit research organization in Alexandria, Va., which obtained a $1.6 million earmark for fiscal 2008. Institute founders Henry and Susan Samueli and their daughter, Jillian, gave $18,800 in early April 2007 as Mr. Visclosky was submitting his earmark requests.

• Prologic Inc, a West Virginia firm with an office in Mr. Visclosky’s district, obtained a $2 million earmark for fiscal 2008 after its employees and its political action committee gave $16,750 for the 2007 fundraiser.

• NuVant Systems, headquartered in Mr. Visclosky’s Indiana district, obtained a $1.6 million earmark for fiscal 2008 after the firm’s executives gave $9,600 for the March 2007 fundraiser less than a week before Mr. Visclosky submitted his earmark requests. The next year, executives gave $2,300 and obtained a $2.4 million earmark.

The firms that received earmarks either declined to comment or did not respond to messages seeking comment.

Mr. Visclosky has denied trading earmarks for campaign donations. A letter his attorneys, Reid Weingarten and Brian Heberlig, sent the House ethics committee in December said the earmarks he sponsored “funded important and consequential projects.”

Mr. Heberlig declined to comment for this story, referring The Times to the December letter.

The PMA Group is under investigation by the FBI, and in May 2009, Mr. Visclosky’s congressional office and his campaign office were subpoenaed by a federal grand jury looking into the activities and associations of the now-defunct Arlington-based lobbying firm. Documents also were subpoenaed from Mr. Visclosky’s then-chief of staff, Charles Brimmer.

Mr. Visclosky, Mr. Brimmer and Shari Davenport, the congressman’s former appropriations aide, all declined to be interviewed for the OCE report.

That report also included evidence to suggest that some big campaign donors were provided special access to the congressman.

One e-mail details how Jeffrey Hicks, CEO of 21st Century Systems, who along with his employees donated $17,050 to Mr. Visclosky in late March 2007, was given the “honorary seat” at the head table adjacent to Mr. Visclosky.

According to an e-mail sent by Bill Berl, 21st Century’s then-executive vice president, to the dozen executives who donated, the seating gave Mr. Hicks “the opportunity to talk about a variety of our ongoing and proposed projects….” Mr. Berl is a former PMA lobbyist and ex-treasurer of 21st Century’s political action committee.

Like others, 21st Century had an earmark request pending for fiscal 2008 with Mr. Visclosky at the time of the March 2007 fundraiser.

Five days after the fundraiser, Mr. Visclosky submitted earmark requests for fiscal 2008 to the appropriations committee including $2.5 million for 21st Century. The Omaha-based company, which also has an office in Mr. Visclosky’s district, ultimately got $2 million for a software program.

The next year, Mr. Hicks, Mr. Berl and other employees donated a total of $18,500 to Mr. Visclosky for a March 12, 2008, fundraiser in Washington, D.C., for what PMA officials called a “defense event.” At the time, like several other firms whose employees donated, 21st Century had an earmark request pending before Mr. Visclosky.

A week after the fundraiser, Mr. Visclosky submitted his fiscal 2009 earmark requests to the appropriations committee, including the $2.4 million for 21st Century.

The OCE cited a document prepared by 21st Century showing proposed congressional campaign contributions for 2008 as evidence that PMA clients perceived a link between campaign donations and earmarks. The document listed the congressman’s name, the amount of the donation and the specific earmark sought.

Mr. Hicks did not respond to phone calls or e-mailed questions. Mr. Berl did not return a phone message, but an e-mail he authored after the 2007 event suggests that he linked campaign contributions with access to Mr. Visclosky.

“This opportunity to spend more than 2 hours with the congressman and his staff (both chief of staff and defense aide) would not have been possible without your generous contributions to the member and the company’s PAC,” he wrote.

• Chuck Neubauer can be reached at cneubauer@washingtontimes.com.

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