Ex-Pittsburgher in middle of earmark scandal

Prosecutors investigating Paul Magliocchetti's contributions through his lobbying firm, ties to congressmen

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WASHINGTON -- Those who know him say Paul Magliocchetti cracked the code of the defense earmark: understand the system so well the people in charge turn to you for clarity.

Described as bright, blunt and ambitious, Mr. Magliocchetti left a post as a staff member for the House Defense Appropriations subcommittee more than 20 years ago and set up shop as PMA Group, which became the premier lobbyist for defense firms seeking billions in federal dollars. Last year alone, PMA's clients paid the firm $13.5 million to help them secure hundreds of millions in federal contracts.

"He was a guy who knew how to put the pieces together," says one congressman, a close friend who spoke only on condition of anonymity, worried at the consequences of being tied publicly to a man now at the center of the newest lobbying scandal.


Those pieces fell apart with frightening speed amid a federal investigation that ended Mr. Magliocchetti's career and turned a harsh light on the long-standing practice of steering federal dollars to pet projects, a practice known as earmarks.

Now, with prosecutors investigating Mr. Magliocchetti's political giving, as well as about his connections to various members of Congress, the controversy over earmarks has gathered renewed momentum with Mr. Magliocchetti, a Pittsburgh native, as its focus.

"It seems to me in our system, even Magliocchetti is innocent until he's proven guilty," said Rep. John P. Murtha, D-Johnstown. "I don't know the broadness of his contributions. I have no idea. I don't even follow most of the stories. To me the Justice Department will either investigate and convict him or they'll investigate and drop the investigation."

Mr. Murtha, chairman of the powerful defense appropriations subcommittee, has worked closely with Mr. Magliocchetti and others from PMA. They represented roughly a dozen firms doing business in Mr. Murtha's Western Pennsylvania district -- a district to which Mr. Murtha has steered billions in federal dollars to build a defense and high-tech economy.

"We weren't organized to be defense people in 1980. In fact some of the old guard thought it couldn't be done and so on," said Mark Pasquerilla, a board member for Concurrent Technologies Corp., one of the firms PMA represented.

"Things changed and I think Paul representing some firms helped because he knew the business, he knew how these people had to perform and so on and so on. He helped us build the expertise in the area."

That expertise in defense spread across the industry.

In Fiscal Year 2009 alone, PMA represented firms that obtained or sought 84 separate earmarks all the while steering tens of thousands of dollars in contributions to individual members of Congress. Members of the current Congress have received $40.3 million in contributions from PMA and its clients since 1998, according to the Center for Responsive Politics. PMA alone has put $3.4 million into the campaign coffers of current members of Congress in the past 20 years. The Center said 79 percent of the recipients were Democrats.

It should be noted that in many cases, larger PMA clients such as Lockheed and defense giant DRS also contract with other lobbying firms and maintain in-house lobbyists as well.

Federal investigators are attempting to determine whether Mr. Magliocchetti passed money to friends and family to, in turn, pass it along to the re-election campaigns of various House members, a violation of the campaign finance laws.

Two sources close to Mr. Magliocchetti and with access to details of the investigation said federal investigators also are taking a broader look at how contributions to appropriators were bundled, a practice that allows groups or businesses to assemble donors whose combined contributions allow them to give as a bloc while not exceeding the individual limit on campaign donations.

Bundling, while not illegal, has come under growing criticism by reform groups who say it allows special interests to effectively negate the purpose of campaign donation limits.

The sources also say investigators have asked general, unfocused questions about both Mr. Murtha, a longtime Magliocchetti friend, as well as U.S. Rep. Peter J. Visclosky, D-Indiana. Both Mr. Murtha and Mr. Visclosky were among the top three recipients of PMA-connected campaign dollars.

No agency has said Mr. Murtha is a subject of the PMA investigation. That has not stopped observers here from pointing out the long-standing connection.

"I know basically from over the years, his background, what he's built as far as the firm, the fact that he's been perceived to be extremely close to Rep. Murtha and something of a gatekeeper, a go-to guy for getting earmarks from Rep. Murtha," said Steve Ellis of Taxpayers for Common Sense, a government reform group that has been highly critical of the earmark process.

Mr. Magliocchetti, who left Pittsburgh more than 30 years ago, was unique among Beltway lobbyists, say his acquaintances. He shunned publicity and planned to quit the business to open his own Italian restaurant in Florida.

Today, those who know him say he is a man in pain -- sometimes rambling in conversations, calmed by medication and stunned at how a multimillion dollar business he built has vanished amid public speculation that he might have broken the law. His personal wine locker at the Capital Grille, a Congressional hangout on Pennsylvania Avenue, sits unattended, bottles showing dust, its brass name-tag, "Mags," harkening to a time when he was known as a gregarious dinner host.

Partners to whom he planned to sell PMA bolted when the investigation became public. Several have started their own firm. None will talk about him.

"I have to take another call. I really have to go. Goodbye," said Kevin Miller, a former Navy pilot who was among the PMA employees Mr. Magliocchetti brought on board, leasing each one a Lexus luxury auto and setting them to round up defense clients.

While Mr. Magliocchetti has mentioned his Pittsburgh connection to members of Congress and their staffs, he gave few other details. The precise neighborhood in which he was raised is unknown, as are the schools he attended.

Patrick Dorton, a public relations agent hired by Mr. Magliocchetti and PMA, requested a written list of questions to pass along to his client and, almost a week later, called to say his client would not answer any of them.

Just a year ago, Mr. Magliocchetti and his partners were visible, almost omnipresent, in the halls of the Capitol.

"He had an area of expertise that many members don't," said Ron Klink, a Democratic lobbyist who previously represented the 4th District in Western Pennsylvania. "Most members of Congress are not veterans. He had a lot of very strong former military people that worked for him over the years."

With knowledge of the labyrinthine defense budget process gleaned over years as a staff member of the defense appropriations subcommittee, Mr. Magliocchetti recruited from the Pentagon as well as staffs of key appropriations members such as Mr. Visclosky and Rep. Jim Moran, D-Va.

Mr. Murtha and his staff worked closely with Mr. Magliocchetti, a connection not missed by political enemies keen to tie the ongoing investigation into PMA to Mr. Murtha.

Rep. Jeff Flake, R-Arizona, has made a practice of introducing a motion calling for a congressional investigation into PMA and the possible abuse of earmarks, a motion that has been consistently tossed aside by the Democratic majority.

One congressman who has spoken with him as the investigation unfolded said Mr. Magliocchetti told him he had planned to sell PMA to five of his partners, allowing them to pay for the business over a period of 15 years. As he prepared to retire, Mr. Magliocchetti received a call from the FBI saying it wanted some of his records. The congressman did not describe what was in those records, but said Mr. Magliocchetti and his attorney negotiated an agreement for agents to come to the PMA offices after hours in early November.

"It wasn't like a smash-the-door-down search warrant," said another source close to Mr. Magliocchetti.

Nothing more was heard about the matter until January, when news reports described a "raid" at the PMA offices and word leaked out that agents were curious about whether Mr. Magliocchetti might have used friends and relatives as straw men in various campaign contributions to House members.

If he had funneled contributions through third parties to skirt the donor limits, "that's illegal," Rep. Murtha said. But he said his own campaign has been careful to monitor donations.

"We have never been audited in 34 years that I've been here. We do everything we can to follow the guidelines set up by this Congress," he said.

Although the two worked together on an array of projects for businesses in the 12th District, Mr. Murtha described his association with Mr. Magliocchetti as nothing out of the ordinary.

"Paul was just like all the lobbyists. They come in. I listen to them. I appreciate visiting with them. They know their business. And so, you know, I try to treat them all the same. There's a lot of guys in this town that I've known for years. I listen to them but they know that I may or may not be able to work something out and I've got to agree with it in the first place," he said.

Well before he took over chairmanship of defense appropriations, Mr. Murtha often worked in tandem with Mr. Magliocchetti to push through billions of dollars in earmarks to bolster a nascent defense industry in Johnstown, Mr. Murtha's hometown.

At the annual Showcase for Commerce, a trade event set up for local businesses to connect with major defense contractors, Mr. Magliocchetti was a regular, as were other PMA lobbyists who represented many of the firms in Mr. Murtha's hometown.

There was, in the case of Mr. Murtha and PMA, frequent agreement on what projects deserved funding.

Part of the reason could be found in Mr. Murtha's candid admission that he and other members rely heavily on lobbyists to get the committee's work done when, annually, it dispenses a budget of $533 billion.

"We can't do it. I have a small staff of 15 people. I depend on somebody else to be able to recommend to that community, to that hospital, to that university how to present it to the committee," Mr. Murtha said.

"They're absolutely necessary because of the size of our staff," he said of the lobbyists. "A lobbyist is part of the business. That's all there is to it."

Correction/Clarification: (Published Apr. 7, 2009) Kuchera Industries, a Somerset County firm, was represented by lobbying group Ervin Technical Associates. This article as originally published Apr. 5, 2009 about an investigation into lobbyist Paul Magliocchetti incorrectly stated that a different firm represented Kuchera.

Dennis B. Roddy can be reached at droddy@post-gazette.com or 412-263-1965.


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