View Full Version : Contractor with ties to Murtha suspended

05-29-2009, 09:05 PM
Contractor with ties to Murtha suspended

By Dan Nephin - The Associated Press
Posted : Friday May 29, 2009 17:21:44 EDT

WASHINGTON — A Pennsylvania defense contractor who got millions of dollars in congressional earmarks from Rep. John Murtha has been blocked from doing business with the Navy amid allegations of fraud.

Details of the suspension surfaced Friday as another Democrat who serves on the Murtha-chaired House Appropriations Subcommittee on Defense, Rep. Pete Visclosky of Indiana, was subpoenaed in a Justice Department criminal investigation involving a Washington-area lobbying firm with strong links to both Murtha and Visclosky.

A federal grand jury subpoenaed records relating to a firm known as PMA Group from Visclosky’s congressional office, his campaign committees and from some of Visclosky’s employees. In recent months, FBI agents raided PMA and the suspended Pennsylvania firm, Kuchera Defense Systems.

During a brief news conference Friday at a Johnstown, Pa., trade show for defense contractors, Murtha turned aside questions about the suspension of Kuchera, a family-run business that has supported him with $60,000 to his campaign and to his political action committee since 2002.

Over the past two years, Murtha has secured $14.7 million in congressionally directed funds known as “earmarks” for Kuchera to perform work for the military, a tiny slice of Murtha’s earmarks overall.

Asked about Kuchera’s troubles, Murtha said, “What’s that got to do with me? What do you think, I’m supposed to oversee these companies? That’s not my job. That’s the Defense Department’s job.”

Murtha is chairman of one of the most powerful panels in Congress, the House Appropriations Subcommittee on Defense, where he has been a member for more than two decades. Visclosky is the third-ranking Democrat.

In remarks to defense contractors before the news conference, Murtha defended the much-maligned practice of congressional earmarking, saying that the money he directs pays for road and sewer improvements and improving water quality in the western Pennsylvania region. Murtha said the annual trade show helps promote economic development there.

At the Pentagon, Navy spokesman Lt. Clay Doss said the Navy suspended Kuchera Defense Systems on April 23 for “alleged fraud,” including “multiple incidents” of incorrect charges, along with allegations of defective pricing and ethical violations.

In a story May 17, the Pittsburgh Post-Gazette quoted a former Kuchera director of human resources as saying that the firm had moved employees to Kuchera Defense from another Kuchera entity, Kuchera Industries, in a personnel move that would have effectively raised the amount of overhead costs on Kuchera Defense’s government contracts, allowing the company to claim a higher reimbursement for its costs.

Regarding Murtha and PMA, in the past two years alone, the congressman has directed $78 million in earmarks to clients of PMA. A former staffer on Murtha’s subcommittee, Paul Magliocchetti, left Capitol Hill to start the lobbying firm in 1989, the same year Murtha became chairman of the subcommittee. A former chief of staff to Visclosky also went to work for PMA.

Campaign contributions
From 2005 through 2007, more than 1 out of every 5 dollars Murtha collected in campaign contributions came from PMA lobbyists or their clients — more than $1 million in all, according to Federal Election Commission records.

The annual defense contractors’ trade show in Johnstown, Pa., is in the heart of Murtha’s congressional district. This year, seven of the world’s largest defense contractors, who have been among the veteran Pennsylvania Democrat’s biggest campaign contributors over the years, helped bankroll the “Showcase for Commerce.”

In a 15-month span ending March 31, employees of the seven defense contractors sponsoring the Johnstown show this week put more than $200,000 into Murtha’s campaign account. The seven are Lockheed Martin Corp., the Boeing Co., BAE Systems PLC, Northrop Grumman Corp., General Dynamics Corp., Raytheon Co. and DRS Technologies Inc.

Next Wednesday, Murtha has scheduled a fundraiser in a Washington, D.C., town house next door to Democratic Party headquarters.

Murtha hasn’t had a close re-election race in decades, routinely getting nearly 70 percent of the vote.

Last year, he stumbled and had to publicly apologize for saying his home base of western Pennsylvania is racist in talking about Barack Obama’s prospects for winning the state, which Obama was able to do. A deluge of campaign contributions from defense contractors and congressional Democrats rescued Murtha in time for election day.

The “Showcase for Commerce” has helped cement a partnership of major defense contractors and Johnstown-area firms, including Kuchera.

For example, in 2007 Murtha announced that Kuchera Defense Systems had been awarded a $100 million, 10-year contract by Raytheon Missile Systems to build circuit boards for the U.S. Air Force.

On Thursday, Anne Marie Squeo, a spokeswoman for Raytheon, said the company is complying with federal acquisition regulations, which allow a suspended firm to complete work on an existing project but bar it from being awarded new government work or any expansions of existing projects.

Appealing suspension
On Thursday night, Dennis McGlynn, an attorney representing Kuchera, said that the company was appealing the Navy suspension and that “we hope to have it lifted after we have an opportunity to present our reply.”

In the wake of the suspension, the government placed the company and its two owners, Ron and Bill Kuchera, on the General Services Administration’s Excluded Parties List System, a step that can be a virtual death sentence for a federal contractor in terms of continuing to do business with the government.

The Navy has awarded Kuchera Defense Systems over $30 million in contracts since 2003, according to databases compiling government contract data. The Army has awarded nearly $15 million in contracts to Kuchera since 1995, and the Air Force nearly $5 million since 2005. The Air Force contracts are in addition to the subcontracting work that Kuchera is doing for Raytheon.