McCain Investigating Defense Earmarks

Posted December 18, 2009 at 6:14pm

Sen. John McCain (R-Ariz.), who led the Senate’s investigation of disgraced former lobbyist Jack Abramoff, is gearing up to tackle defense earmarks next — with a particular focus on the PMA Group, the now-defunct lobbying powerhouse.

McCain confirmed Thursday that he has launched an investigation into earmarks and sole-source defense contracts through the Homeland Security and Governmental Affairs subcommittee on which he serves as ranking member. He said he has also engaged some staff on the Armed Services Committee to work on the investigation.

McCain said he was not yet ready to discuss the substance of the investigation but said: “It’s not specifically PMA — it’s broader. … [But] as you know I have been deeply concerned about PMA and all of their activities. It has been well-known for some time we’ve been looking at the PMA earmarks.—

A McCain staffer said the earmarks investigation began in August, though it is still in its preliminary stages.

A spokeswoman for Sen. Tom Carper (D-Del.), chairman of the Homeland Security and Governmental Affairs Subcommittee on Financial Management, confirmed that the subcommittee is working on a bipartisan investigation of earmarks but said: “I’m not aware that it is anything in anywhere near final form. It is a work in progress.—

Staff members have apparently reached out to collect information from firms that have been publicly linked to PMA and earmarks, and they have conducted informational interviews.

The subcommittee investigators have not yet issued any subpoenas, and Carper and McCain have not decided whether it will be necessary to do so, said sources familiar with the investigation.

PMA was one of the top 20 firms in lobbying revenue when it was raided by the FBI at the end of 2008, apparently as part of a Justice Department investigation of improper campaign donations and earmarks.

PMA and its clients for years had been major donors to Members of the House Appropriations Committee, and its clients reaped hundreds of millions of dollars worth of earmarks, particularly in Defense appropriations bills.

Some of the campaign donations linked to the firm appear particularly suspicious; in February, Roll Call reported that PMA in 2006 added to its board of directors a sommelier and a golf course manager from Florida, who had no previous connection to politics.

But they immediately became major campaign donors to Members supported by the firm and its clients.

In July, McCain made an impassioned speech on the Senate floor about the dangers of earmarks, noting that an Air Force official had recently pleaded guilty to skimming money from an $8.2 million earmark inserted in a tsunami relief bill along with a contractor who was represented by PMA. Roll Call reported that Rep. John Murtha (D-Pa.) sponsored that earmark.

McCain said at the time: “This is outrageous and, I believe, only the tip of the iceberg. We will undoubtedly see the continued march of news reports about further indictments and guilty pleas.—

McCain’s earmark investigation is not the only one likely to pick up steam early in the new year.

The 2010 Defense authorization bill passed by Congress in October required the secretary of Defense to produce a report by February on earmark projects that have been awarded under sole-source contracts and the reasons why these contracts were not subject to competition.

In addition, the bill requires the Defense Department inspector general to conduct an audit of Congressionally directed earmarks “to determine whether or not the recipients of such earmarks are complying with requirements of federal law on the use of appropriated funds to influence, whether directly or indirectly, congressional action on any legislation or appropriation matter pending before Congress.—

One allegation made in prior earmark investigations is that small companies may be paying their lobbyists out of the proceeds of the earmarks they obtain, which would violate rules against using federal dollars for lobbying.

One of PMA’s former clients alleged that this was the deal she had arranged with the lobbying firm; PMA vigorously denied the charge and noted that the client had no evidence to prove there was such a deal.

A spokesman for the IG’s office said that audit has not yet been formally launched, but it is likely to begin in January and be completed by the end of the year.

The House ethics committee is also investigating earmarks related to PMA, though it has provided no details of its investigation and apparently has not yet interviewed any Members.

A leaked document from the ethics committee this summer indicated that the independent Office of Congressional Ethics was looking into seven appropriators in connection with PMA earmarks.

But Roll Call reported Friday that the OCE has closed its investigations of Murtha and Reps. Norm Dicks (D-Wash.) and Jim Moran (D-Va.), and recommended that the ethics committee not pursue those cases further.