Firm With Close Ties to Murtha Moves Out

Posted April 30, 2010 at 9:56am

A Johnstown, Pa., body armor manufacturing firm launched with the aid of multiple earmarks from the late Rep. John Murtha (D-Pa.) is apparently pulling up stakes and moving to North Carolina less than three months after the death of the legendary appropriator.

The company, KDH Defense Systems, had announced last year that it had been awarded several contacts worth nearly half a billion dollars to provide bulletproof vests to the military, contracts that were not connected to Murtha earmarks.

But the firm had a long history with the Congressman. Founded by a former Lockheed Martin employee, KDH signed a $2 million contract with the Navy to sew the vests in April 2004, though the company did not yet have a manufacturing facility. The firm took over a closed textile mill in Johnstown and employed more than 100 people there, according to the Johnstown Tribune-Democrat.

Roll Call reported last summer that Murtha had provided $3 million in earmarks to the company to build a swimmer-detection sonar system for naval facilities, despite the fact that the company had no experience building sonar systems. KDH did provide and test a prototype but never went to production, and the system has become entangled in litigation among the various partners involved in developing it.

From the outset, KDH had been represented by the lobbying firm KSA Consulting, which had close ties to Murtha, employing both his brother and his former appropriations staffer. KDH CEO David Herbener has said that Murtha helped him come to Johnstown and that he was introduced to the Congressman by KSA Consulting.

Two defense contractors were convicted last year of skimming money from a Murtha earmark apparently arranged by KSA that benefited an array of KSA clients.

KSA Consulting has since disappeared. In March, Roll Call reported that the firm appeared to have gone dark, having closed its website, deactivated its e-mail addresses and not filed any lobbying disclosure reports since last summer. Last week, the lobbying firm filed forms terminating its lobbying relationships with its clients, including KDH.

The Tribune-Democrat reported Friday that most employees in KDH’s Johnstown facility have already been laid off and were recently notified that the Johnstown facility will be shutting down. KDH has opened a second location in Eden, N.C., just south of the Virginia border.

The newspaper reported that when KDH had received one of its body armor contracts last fall — worth up to $380 million — Herbener said he expected to create 50 to 100 new jobs at the Johnstown plant.

Herbener did not reply to a Roll Call e-mail requesting comment.