Visclosky’s Offices and Employees Subpoenaed in Federal Probe

Posted May 29, 2009 at 11:56am

Updated: 6:06 p.m.

Federal investigators have subpoenaed Rep. Peter Visclosky’s (D-Ind.) offices and certain employees as part of a grand jury probe of the lawmaker’s ties to a now-defunct lobbying firm, the lawmaker said in a statement Friday.

“It is my intention to fully cooperate with the investigation consistent with my constitutional obligations to Congress and my duties and responsibilities to my constituents,— Visclosky said.

The development is the first to tie the investigation of the PMA Group to a Member of Congress. Visclosky told the Chesterton Tribune that subpoenas were served in the first week of May to his campaign committee and his leadership political action committee, Calumet PAC, and that his offices in Washington, D.C., and Merrillville, Ind., were served this week.

And while several staffers were served, Visclosky told the paper he has not been contacted by the Justice Department “in any way, shape, or form.—

He said his lawyers at Steptoe & Johnson will review the document requests to determine which should be handed over and which are protected by the constitutional Speech or Debate Clause.

To date, the probe appeared focused on the PMA Group and questions about whether the firm used “straw man— contributions to funnel campaign contributions to favored defense appropriators. The firm had leveraged close ties to those lawmakers to secure earmarks for a sprawling client list and vault into the top ranks of the city’s lobbying firms, pulling in more than $100 million in the past decade. But it collapsed earlier this year following the revelation that federal agents raided its offices in November.

Visclosky, a low-key ally of Appropriations Subcommittee on Defense Chairman John Murtha (D-Pa.), maintained close ties to the shop, which hired his chief of staff in 2004. PMA employees have given Visclosky about $270,000 in campaign contributions since 1989, according to the Center for Responsive Politics. Over the past two years, PMA and its clients gave Visclosky about $370,000, and during the same time period, the Indiana Democrat steered about $33 million in taxpayer-funded projects to clients of the firm, according to Taxpayers for Common Sense.

Visclosky has been bracing for the probe since at least late March, when he asked the Federal Election Commission for permission to tap his campaign accounts to mount a legal defense. He described the investigation as at an “early stage— in his Friday statement.

He has taken steps to distance himself from the wreckage of the firm, declining to request earmarks in this year’s defense spending bill for its former clients and pledging to return $18,000 in campaign donations its employees contributed over this year. Visclosky has also joined a handful of Democrats breaking party ranks to support a Republican-led attempt to force an ethics committee investigation into PMA and its ties to lawmakers.

“I will continue to work hard to represent the people of Indiana’s First Congressional District as I have done since being elected to Congress,— Visclosky said in his statement. “I am confident that at the end of this process, no one will conclude that I have done anything wrong or harmed my constituents in any way.—

While most of the PMA clients benefiting from Visclosky’s earmarks were scattered outside his depressed Northwest Indiana district, a handful set up shop there in 2005 in an ultramodern technology incubator the lawmaker bankrolled with $7 million in federal funds. Five of the center’s seven charter tenants were clients of the firm. And though 14 businesses had offices there by 2007, Visclosky only directed earmarks — totaling $12.9 million — to the PMA clients, Roll Call reported at the time.

The incubator, officially the Purdue Technology Center of Northwest Indiana, was pitched by Visclosky and its directors as a place for startup companies to get the support they needed to develop into bigger outfits. But of the five PMA clients at the center, only NuVant Systems had its headquarters there. The other four were well-established by the time they moved in. And two of them — West Virginia-based ProLogic and Nevada-based Sierra Nevada — have reportedly been involved in investigations related to earmarks.