Murtha Apparently Moved Earmark Between Brother’s Clients

Posted June 2, 2009 at 6:33pm

In early 2005, Rep. John Murtha (D-Pa.) apparently added language to a tsunami relief bill shifting $8.2 million from a former client of his brother’s lobbying firm to a new client of the same firm.

That earmark is now tangled up in a federal indictment alleging that some of the money was skimmed by contractors and a Defense Department employee for their personal use.

Murtha’s spokesman said that no one in his office has any recollection of the transaction, and the House Appropriations Committee was unable to provide any information about how the language appeared in the tsunami relief bill.

But sources familiar with the appropriations process agreed it was impossible that a provision removing earmarks from one company in Murtha’s district and transferring the money to another company in his district could have been added to the bill without Murtha’s involvement, since he was at the time the ranking member on the subcommittee with jurisdiction over the language.

The provision appears in the House committee report of a March 2005 bill providing billions of dollars worth of military spending and aid to the Asian countries that were devastated by the December 2004 tsunami that killed more than 250,000 people.

The bill included a “technical corrections— section, which transferred $8.2 million to “other procurement, Air Force— for a project called the “mobile common data link gateway.— This project — later called the “ground mobile gateway— — was an effort to build a unified battlefield communications platform for the Air Force by a Pennsylvania company called Coherent Systems.

[IMGCAP(1)]Six months earlier, Murtha’s brother Kit Murtha and his firm KSA Consulting had registered to lobby for Coherent systems.

The tsunami bill specified that the money for the Air Force gateway project be transferred from two Navy research and development projects, one called the “all-in-one wireless access points,— the other called “wireless network capable application processors.— Both of these projects, totaling $8.2 million, were being carried out by a company with offices in Murtha’s district called AEPTEC or 3e Technologies Inc.

Maryland-based AEPTEC had been a client of both KSA Consulting and the PMA Group — another lobbying firm with close ties to Murtha until it was raided by the FBI last year and dissolved at the end of March. In April 2004, Murtha issued a press release hailing the opening of a new building in Indiana, Pa., that AEPTEC planned to occupy.

Murtha had secured several earmarks for the company in previous years, and in 2001, he announced that AEPTEC would be an initial supporter of a nonprofit Murtha was creating called the Pennsylvania Association for Individuals With Disabilities.

But something went awry in Murtha’s relationship with AEPTEC.

Murtha spokesman Matt Mazonkey said “the only recollection we have is that there was an import/export issue that had involved AEPTEC, and when this was brought to light, they disappeared as a company.—

At the time, Murtha was the ranking member on the Appropriations Subcommittee on Defense, which he now chairs.

AEPTEC never moved into the new building, instead holing up with a handful of staff at an existing office park down the road.

Early in 2005, KSA filed documents terminating its lobbying relationship with AEPTEC, effective Dec. 31, 2004. PMA had ceased representing AEPTEC in the middle of 2003, and a third lobbyist on the AEPTEC payroll, a lawyer named Zel Lipsen, also terminated his relationship with the firm on Dec. 31, 2004 — though he did not file the paperwork until 15 months later.

Kit Murtha told Roll Call that his memory of AEPTEC is fuzzy, but “I did know that there was some kind of thing happening about work going out of the country rather than staying here. It seems to me that somehow, some way they were taking money and then … they were taking the work to China or someplace.—

Kit Murtha said, “I can’t speak for Jack, and I can’t speak for anybody else, but that certainly would have pissed Jack off.—

According to a federal indictment filed in Florida, Coherent used $200,000 of the money that was provided in the tsunami bill to purchase tracking devices from a Florida company called Schaller Engineering.

The government alleges that those tracking devices were never delivered and that the money was distributed for the personal use of the owners of Schaller and the Defense Department program manager who was overseeing the project. The men all deny the allegations, and the case is scheduled to go to trial later this month.

Coherent and its then-President Richard Ianieri have not been charged with any crime in the case, and Ianieri’s lawyer said he cannot comment on the case while litigation is ongoing.

In August 2007, a company called Argon ST — which had previously received earmarks from Murtha and opened an office in his district — bought the assets of Coherent and, at the end of the year, hired Murtha staffer Gabrielle Carruth as vice president of government relations.

Carruth had been on Murtha’s staff since 2002 and was listed in a 2007 Congressional directory as his “Appropriations associate staff.— She has since left the firm and did not return calls requesting comment.

Argon acknowledged to Roll Call last month that it has provided government investigators with documents and access to employees with information about Coherent.

In April 2006, AEPTEC paid $1.6 million to settle a dispute with the Justice Department, which alleged that the firm was overcharging the Navy. Under the settlement agreement, the company did not admit guilt, and the government did not declare its charges to be unfounded.

In July 2006, AEPTEC was purchased by a Texas company called EF Johnson, which terminated the lobbyist AEPTEC had been using and hired the PMA Group as its lobbyist in January 2007.

Rep. Bill Shuster (R-Pa.) from the neighboring 9th Congressional district, secured $1 million earmarks for the company in 2006 and 2007, but the firm’s suite in the Indiana office park appears to be abandoned and neighbors in the building said EF Johnson has moved out.

EF Johnson no longer has a Pennsylvania office listed on its Web site, and a spokesman did not return a call requesting information about the Indiana, Pa., office.

Kit Murtha has retired, and KSA Consulting President Ken Stalder declined to comment for this story.