By June 2009, the FBI had homed in on Murtha’s relationship with KSA Consulting, a lobbying firm where Murtha’s brother worked and whose clients won millions of dollars in Murtha-steered earmarks. The investigation suggested that several defense companies that used KSA were “suspicious” entities, sometimes sharing the same business address as KSA, the documents say.
It’s unclear whether the FBI dropped the Murtha investigation for lack of evidence or whether circumstances rendered the probe irrelevant. The lawmaker died in February 2010 from complications of gall bladder surgery. His office repeatedly insisted that he was not the subject of a criminal inquiry, and Murtha had denied any wrongdoing.
These documents from the FBI’s internal file on the investigation, just released in a public records lawsuit, show investigators’s concerns that Murtha could be guiding federal contracts to companies doing little tangible work. Investigators also explored numerous leads, some provided by news reports, about whether Murtha’s actions were improperly enriching his brother, a defense lobbyist, and his nephew, a defense contractor, the documents show.
The memos detail grand jury testimony, much of it redacted, and accounts from confidential informants and witnesses interviewed by federal agents.
The watchdog group Citizens for Responsibility and Ethics in Washington sought the records to learn about the Justice Department’s progress in investigating and prosecuting public officials.
“There is utter clarity now that Mr. Murtha was under criminal investigation,” said Melanie Sloan, executive director of CREW. “And given all the people the FBI was talking to, it seems he probably knew it.”
The Murtha case appears to have begun when a cooperating witness told the FBI that a lobbying firm, PMA Group — founded by a former defense appropriations staff member and friend of Murtha’s — could be providing Murtha with a paid driver at no cost to the lawmaker.
PMA, its founder Paul Magliocchetti, and his defense company clients together gave the largest portion of contributions to Murtha’s campaigns. They also were the greatest beneficiaries of earmarks that the lawmaker steered to defense contracting firms.
Magliocchetti pleaded guilty in September 2010 to illegally funneling $386,000 in campaign donations to lawmakers, including Murtha, by pretending that they were donations from his family members and associates. Once a sought-after power broker in the defense industry, he was sentenced earlier this year to 27 months in prison.
The FBI talked to a Red Top Cab driver who described how he drove Murtha around town regularly and later billed PMA.
A former defense contractor employee told agents in 2007 that contractors seeking federal defense work were advised “to hire lobbyists close to Murtha” and arrange to act as a subcontractor to a firm in Murtha’s district.
To “get an earmark from Murtha, they had to request it from a company or firm in Pittsburgh, which is in Murtha’s district,” according to FBI notes of a witness statement. “The earmark would be given to the company in Murtha’s district and subcontracted” to the firm seeking the work. “If you wanted Murtha, you had to do it this way.”
The records show that evidence was presented to a grand jury as early as 2007 and that federal agents focused much of their time in 2008 and 2009 looking at the links between Murtha and PMA.
“PMA had a 90 to 95 percent success rate in obtaining project earmarks for clients,” one witness told the FBI, adding that clients and lobbyists working in this field “understood the earmark game and Murtha’s position.”
From 1989 to 2009, Magliocchetti and his employees contributed $3.4 million to federal politicians and political interests. PMA had grown to become one of Washington’s 10 most lucrative lobbying firms.
In late 2009, federal agents searched the firm’s Arlington offices, signaling their investigation of Magliocchetti. PMA effectively folded, and its remaining lobbyists left for new jobs.
One of Murtha’s fellow appropriators, Peter J. Visclosky (D-Ind.), and his chief of staff, Charles Brimmer, also came under FBI scrutiny. That separate investigation, which made news when agents subpoenaed records from Visclosky’s office in June 2009, has been considered inactive for about a year, sources said.
The FBI also focused on KSA Consulting, which was formed in 2002 and within two years had obtained $20 million in Murtha-endorsed earmarks for seven clients. Over the years, analysts and agents reviewed companies that were hiring KSA to find out why some appeared to have no industrial presence or why they used KSA’s address.
In a June 2009 memo, agents said they had reason to believe that KSA officials “are engaging, or have engaged, in possible criminal activity so as to justify the opening of a full investigation.” The memo cited bribery, mail fraud, honest-services fraud and money laundering as possible crimes.
Few wanted to comment Tuesday on Murtha’s FBI file, including the Justice Department and the FBI. Rep. Mark S. Critz, Murtha’s successor and former staff member, did not respond to requests for comment. The phone number for KSA Consulting is no longer in service. Bob Murtha, the late lawmaker’s nephew, could not be reached to comment late Tuesday.