Indictment: Magliocchetti Reimbursed Family, Staff for Contributions

Posted August 5, 2010 at 1:54pm

Updated: 4:55 p.m.

A former House Appropriations Committee staffer who founded one of the top lobbying firms in Washington, D.C., was arrested Thursday and charged with making hundreds of thousands of dollars’ worth of fraudulent campaign contributions to Members of Congress.

Paul Magliocchetti, the founder of the PMA Group lobbying firm, was indicted on eight counts of making illegal campaign contributions and three counts of making false statements. The firm was raided by the FBI in November 2008 and shut its doors in March 2009.

According to the indictment, Magliocchetti used his own funds and PMA corporate money to reimburse PMA staff, family members and two Florida acquaintances for making donations to political committees at his direction. Magliocchetti and his family made $1.5 million in political contributions from 2000 through 2008, according to a CQ MoneyLine study of campaign finance records.

Magliocchetti’s attorney was not immediately available for comment.

Magliocchetti, who made an initial appearance in Alexandria federal court Thursday, was released on a $2 million bond and surrendered his passport, according to Peter Carr, a Justice Department spokesman. He was released to stay at a mental health center in Baltimore and may receive treatment for alcoholism.

He must remain in the Washington metro area except to travel to his home in Florida and is not to have contact with any potential witnesses, with the exception of his son Mark Magliocchetti, with whom he isn’t to discuss the case. Mark Magliocchetti pleaded guilty Thursday to making illegal corporate campaign contributions at the direction of his father.

Roll Call reported in February 2009 that Magliocchetti had added to the PMA board two men from Florida who had no apparent connection to politics or lobbying who became prodigious donors to candidates favored by the firm.

John Pugliese, one of the board members the company added, was described in campaign finance records as a sommelier at the Ritz-Carlton hotel on Amelia Island, a beach resort area in northeastern Florida. The other, Jon Walker, was the marketing director for the Golf Club of Amelia Island, a luxury golf course.

From June 2005 to the end of 2008, the two men donated more than $160,000 to Congressional campaigns that were receiving support from other PMA employees and clients.

The indictment does not name the men but alleges that “Magliocchetti used two acquaintances to make federal campaign contributions.” The government alleges that Magliocchetti “directly and indirectly instructed these two acquaintances to write checks out of their personal checking accounts to specific candidates for federal office. At various times, for the purpose of making these contributions, Magliocchetti advanced funds to or reimbursed these two acquaintances through personal checks, checks from PMA, and by designating them as members of PMA’s Board of Directors even though the acquaintances lived in Florida, never worked as lobbyists and never attended PMA board meetings.”

The indictment also alleges that Magliocchetti used other PMA employees and several family members — some of whom he also put on the PMA payroll — to funnel donations to federal campaigns.

The Justice Department announced that Mark Magliocchetti, Paul Magliocchetti’s son, pleaded guilty Thursday to making illegal corporate campaign contributions.

“According to court documents, Mark Magliocchetti admitted to receiving payments from an individual and a company with the understanding that those monies were to be used for federal campaign contributions. According to court documents, the amount of contributions made by Mark Magliocchetti and his wife, and funded by the individual and the company, exceeded $120,000 but was less than $200,000,” the Justice Department said.

The government alleges that Paul Magliocchetti engaged in the scheme “to enrich both PMA and himself by increasing the firm’s influence, power and prestige — both among the firm’s base of current and potential clients as well as among the elected public officials to whom PMA and its lobbyists sought access. Political contributions to campaign committees and political action committees of various candidates for federal office … were a key part of Magliocchetti’s plan to increase PMA’s profile and its profitability.”

The House ethics committee in February closed an investigation of PMA’s connections to House Members, concluding that while there is a widespread perception among lobbyists and contractors that making campaign donations helps them secure earmarks from Members of Congress, the committee found “no evidence that Members or their official staff considered campaign contributions as a factor when requesting earmarks.”

The report did find that PMA “employed ‘strong-arm’ tactics,” threatening retaliation against Members who did not support their earmarks, and “pushed or directed company executives to maximize personal or Political Action Committee campaign contributions and to attend specific fundraisers while pursuing earmarks.” But the committee concluded that Members were unaware of the pressure PMA was putting on clients and were unresponsive to threats from the lobbyists.

The independent Office of Congressional Ethics also probed PMA’s connection to seven Members, recommending in December that the ethics committee dismiss inquiries into five appropriators — Reps. Marcy Kaptur (D-Ohio), Norm Dicks (D-Wash.), Bill Young (R-Fla.), Jim Moran (D-Va.) and John Murtha (D-Pa.), who died Feb. 8. — but conduct a further review of Reps. Todd Tiahrt (R-Kan.) and Peter Visclosky (D-Ind.). The committee declined any further investigation.

Anna Palmer contributed to this report.