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PMA Client Seeks Restitution for Lost Earmark

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The PMA Group, the lobbying titan that closed its doors in March after an FBI raid, has filed more than a dozen lawsuits against former clients for failure to pay outstanding debts. Now, one company has responded with a $3 million countersuit that alleges PMA cheated it out of an earmark it was expecting to receive.

PMA’s lawyer called the complaint absurd and said the firm has filed a formal response with the court.

Badenoch, a Michigan-based defense engineering company with its sights set on developing an alternative to the military’s Humvee, received a $3 million earmark in last year’s budget for the advancement of its research.

In its complaint before the Arlington County Circuit Court in Virginia, Badenoch says the only thing standing between it and another earmark was its lobbying firm.

“Badenoch was advised from congressional officials that it should expect to receive approximately $3 million in earmarks for continued development of its projects to the United States Army” in the 2010 appropriations bill, the complaint alleges. But the earmark never came because PMA never filed the formal request required by Congress, Badenoch says.

The company alleges that the PMA Group not only missed the February deadline to submit the paperwork for Badenoch’s 2010 earmark eligibility, but it neglected to give Badenoch any indication that the deadline had been missed. Badenoch is demanding that PMA pay $3 million in damages.

PMA’s offices were raided in November by the FBI, reportedly as part of an investigation into improper campaign contributions. The lobbying firm and its clients have poured millions of dollars in campaign donations into the coffers of key Members of Congress, and clients have received millions of dollars in earmarks over the past two decades.

Badenoch says it had no idea PMA had been raided and that it did not know PMA failed to file the request for its earmark until at least three weeks after the spring deadline had passed — at which point the firm began pleading with members of the Michigan delegation.

“Folks from Badenoch did come to the office, but it was past the deadline for submitting appropriations requests, so we were unable to do that this year,” said Cullen Schwarz, spokesman for Rep. Gary Peters (D-Mich.), who represents Badenoch’s district.

Sen. Carl Levin’s (D-Mich.) office also confirmed that the company was scrambling for special assistance, noting that when Badenoch called, the request deadline was more than five weeks past.

In the prior year’s appropriations cycle, Badenoch’s earmark was supported by Levin, Sen. Debbie Stabenow (D-Mich.) and Peters’ predecessor, Rep. Joe Knollenberg (R).

While it is generally uncommon for lobbying firms to sue their clients, PMA has filed more than two dozen lawsuits in the past decade. A handful of them came late this spring after the FBI raid was first publicly reported. PMA first filed suit against Badenoch on April 24, claiming its client had failed to pay its monthly bill for lobbying services since July, thereby breaching a contract between the two firms in place since February 2007.

Badenoch argued in its June 5 countersuit that the FBI raid on PMA made the lobbyist unable to represent Badenoch and that PMA cost the company millions of dollars by failing to inform the company that the lobbyists had been hobbled by the raid.

“PMA concealed the fact that the FBI raided its offices and was under investigation,” the complaint says. “Because PMA had been raided by the FBI and was under investigation, it was unable to perform its services.”

Carmen Jacobs, PMA’s lawyer, asserted that Badenoch’s counterclaim is baseless because an earmark cannot be guaranteed by any Congressional official before it is formally granted.

“They can make any allegation they want, but they are out of their minds,” Jacobs said. “You don’t get guarantees from Congress on earmarks.”

Jacobs would not comment on the matter further, but he said PMA filed a response to the countersuit late last week and indicated that PMA wouldn’t be backing down.

“Anyone is allowed to say anything they want in a pleading,” he said. “But then they have to go into court and prove it.”

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