Murtha Intervenes for Company That Broke Export Law
Congressman Urges State Dept. to Meet With Pennsylvania Firm, Saying Sanctions Could Sink It

By Christopher Lee
Washington Post Staff Writer
Friday, August 15, 2008

Rep. John P. Murtha, the Pennsylvania Democrat known for delivering federal money to defense contractors in his district, is now going to bat for a constituent's company that was convicted last year of illegally exporting components of military equipment.

Murtha, chairman of the House Appropriations defense subcommittee, wrote State Department officials in late June urging them to meet with the president of Electro-Glass Products, a 50-employee company that was convicted in April 2007 of illegally exporting components of night-vision goggles to a company in India. The Mammoth, Pa., firm has been sanctioned by the State Department, and Murtha argues that the action threatens to put the firm out of business.

"Electro-Glass is a highly respected company known for its honesty," Murtha wrote. He said the company, which manufactures small glass rings called "preforms," would not have made the shipments "if they truly believed the shipments were in violation of the law." He added: "It will be genuinely unfortunate if they are forced to close their doors."

But Mary Beth Buchanan, the U.S. attorney for the Western District of Pennsylvania, called the company's violation "a serious offense." The company had no license to export the items, and the government requires one to ensure "that products for military use aren't being sold to countries that might have an improper and criminal use for the product," Buchanan said.

The administrative penalty is a "significant remedy," she said, "because companies that violate federal law are the type of company that the government does not want to continue in that particular business."

Electro-Glass was convicted April 19, 2007, in Pittsburgh of a felony violation of the Arms Export Control Act for its 2004 export of 23,000 rings to B.E. Delft, a manufacturer of night-vision goggles in India.

The court fined the company $20,000. The State Department automatically put the company on its list of debarred companies, prohibiting it from participating in the export of defense goods and services for three years.

Buchanan said her office pushed for conviction because Electro-Glass had been counseled before, in 1994, that it needed certification to make future shipments.

"The history of this company is very telling," she said. " In 2004 . . . they were charged with a criminal offense because they knowingly, willfully violated the federal statute."

In his June 30 letter to David C. Trimble, director of the Office of Defense Trade Controls Compliance, Murtha wrote that the company, which relies on exports for about 25 percent of its business, deserved another chance.

Murtha has drawn criticism for securing millions of dollars in earmarks for contractors in his district and for clients of a lobbying firm run by one of his former aides. Many recipients, through employees or political action committees, donate to Murtha's political campaigns.

Electro-Glass has no federal contracts or grants and its officials have not met with Murtha or his staff, said Margaret M. Gatti, an attorney for the company. It has not received an earmark from the congressman, and its executives' names are not listed among Murtha's contributors.

"They are just a constituent," Gatti said. ". . . It's just a little company that's just trying to survive."

Murtha spokesman Matthew Mazonkey said the congressman has no personal or financial ties to Electro-Glass.

"It is Congressman Murtha's policy to inquire into federal problems that constituents bring to his attention, regardless of the circumstances," Mazonkey said in an e-mail.

The 35-year-old company has laid off 16 employees and, if the penalty stands, "will likely be put out of business," James K. Schmidt, Electro-Glass's president, told Murtha in a June 26 memo.

The company is appealing its conviction and plans to formally apply for reinstatement to the State Department next month, he said.

"We want to stay legal, we want to stay aboveboard. It was an accident what happened in the first place," Schmidt said in a telephone interview.

Schmidt said he called the FBI and "they told me that India was a democracy and they should not be denied." The company later consulted U.S. customs officials and got the impression that it should not stop the shipments, he said.

But officials from both the FBI and U.S. Customs and Border Protection have denied that they gave approval.

Schmidt said his company sought Murtha's help on the recommendation of Tom Balya, chairman of the Board of Commissioners in Westmoreland County, Pa., and a political ally of the congressman.

"As a county commissioner I don't have that kind of ability to intervene with federal agencies," Balya said. "But certainly Congressman Murtha, particularly in light of it being defense-related -- he's one of the national leaders on the issue."

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, which put Murtha on its list of the "most corrupt" members of Congress, said the congressman's entreaty to the State Department is unusual in one respect.

"They were convicted in a jury trial," she said. "You know, you are a member of Congress and you are upholding the law of the United States. A conviction is a conviction."

Still, Sloan said, writing a single letter in support of a local company that is losing jobs does not seem excessive. "It seems to me there could be some legitimate reasons he did it," she said.

In his letter to Trimble, Murtha contended that the company's trouble resulted from a "miscommunication."

"I respectfully request that you give every consideration to lifting the debarments placed against this company," Murtha wrote. He asked the agency to meet with Schmidt and his attorney so that they could "present Electro-Glass's case and to show their sincere efforts to ensure compliance."

Trimble, reached by telephone, said the State Department does not comment on specific cases.

Companies can seek reinstatement after one year and must show they have taken steps to prevent a problem from recurring. At least 239 companies and individuals have been automatically penalized for violating the export-control law since 1998, according to the State Department's Web site.

Staff researcher Madonna Lebling contributed to this report.

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