Monday, June 25, 2007

Murtha's Earmarks Benefit Associates; Move Companies to PA

Roll Call ($) has an extensive report today on some of the earmarks obtained by John Murtha, and their beneficiaries:

INDIANA, Pa. — In April 2004, Rep. John Murtha (D-Pa.) celebrated the groundbreaking for a gleaming new office building here, designed around its anchor tenant, a Rockville, Md.-based technology company called Aeptec Microsystems.

Murtha pursued millions of dollars worth of legislative earmarks for the company, and Aeptec’s federal contracts blossomed after it opened a branch in his district in 2001, rising from about $13 million in 2000 to $45.6 million in 2003 and $33 million in 2004, according to, a database of federal contracts. The company had been represented by two lobbying firms with close ties to Murtha: KSA Consulting and the PMA Group.

But Aeptec never moved into the Indiana building, which was built mostly with state and local development funds and remains mostly empty after opening last month. The company, also known as 3eTI, instead moved its staff of about 15 people into a nondescript office park across town, where its name is not even posted on the outside door. It has since been bought by Texas-based EFJ Inc...

A good guide to the patterns of Murtha’s largesse is the client list of KSA Consulting, a lobbying firm that employs a former Murtha staffer and used to employ Murtha’s brother, Kit Murtha.

News stories have highlighted KSA’s success in getting earmarks for its clients, but there is more to the story than that. KSA’s client list consists largely of small businesses that are either based in Johnstown, Pa., or have opened offices in Johnstown, plus a significant smattering of companies that no longer exist and may never have existed at all.

The pattern that appears dominant is that the companies’ federal contract dollars expand shortly after they open an office in the 12th Congressional district — though it is not entirely clear how much of their work is actually conducted in the district...

Roll Call provides examples of three other firms that opened offices in Mr. Murtha's district and reaped significant federal contracts immediately afterwards. At least two of them retained KSA as their DC lobbyists. According to the article:

  • Applied Ordnance Technologies signed with KSA in 2001, opened an office in Johnstown, and doubled its government contracts in just two years;
  • ChemImage signed KSA in 2001, opened an office in Johnstown (which now employs just 3 people), and secured its first ever federal contracts in 2003; and,
  • KDH was created in 2003 to sew bulletproof vests and secured a Navy contract to do so in 2004 -- even though it had no facility in which to do so. KDH later opened two such locations in Murtha's district, and has seen significant increases in their federal sales.

It's also reported that KSA has filed disclosures of its clients past the legal deadline, and identified clients that seem not to exist, or that deny any association with KSA. The company's CEO acknowledges problems with the paperwork, saying 'that’s probably because we don’t know how to file them.'

It's unclear whether there's anything illegal in all this -- which is pretty depressing in itself. It's worth noting however, that the practice of giving special treatment to firms that locate in Johnstown, or Mr. Murtha's Congressional District more broadly, is reminiscent of something he told an undercover agent during Abscam:

I'll tell you exactly what I'd like. I'd like to be able to tell you that there's some places I'd like you to invest some money, in banks, on my district, uh and I'd say some, you know, some substantial deposits...

I think that in order to introduce legislation, you have to have a real tie to the district.

I'll give you maybe a list of businesses that I think would be the appropriate businesses that would be very helpful to me if you could see your way clear any one of those... you know, that you might -- this then would make a tie, which we'd have to make a little bit of a fuss about, maybe the guy doesn't wanna do this, but you have to remember this, you have to look down the road -- public relations.

More here. (Some obscenities)

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