Retired Air Force Officer Convicted in Contracting Case

Associated Press
Saturday, August 1, 2009

PENSACOLA, Fla., July 31 -- A retired Air Force lieutenant colonel was convicted Friday of destroying records and lying to a grand jury in connection with defense contracts awarded by a military research lab in Florida.

Richard Schaller was accused in a 31-count indictment of helping another retired Air Force lieutenant colonel, who worked at the Air Force Research Laboratory on Eglin Air Force Base, steer contracts to Schaller's company. That man, Mark O'Hair, had previously pleaded guilty to federal charges of false statements and engaging in a conflict of interest.

Schaller and O'Hair are among those accused by federal prosecutors looking into alleged wrongdoing by defense contractors with ties to Rep. John P. Murtha (D-Pa.), chairman of the House Appropriations defense subcommittee. Murtha has not been accused of criminal wrongdoing.

Among those who testified at Schaller's week-long trial was Richard Ianieri, the former chief executive of a defense contractor with ties to Murtha. Ianieri pleaded guilty in federal court July 20 to a kickback scheme and defrauding the Air Force.

Ianieri testified that his company, Coherent Systems International, received an $8.5 million congressional earmark to build the Ground Mobile Gateway, a system to improve communications on the battlefield. O'Hair had the responsibility of approving the project for the Air Force.

Instead of approving the project for Ianieri's company alone, as the Air Force had intended, O'Hair flew to Coherent's Pennsylvania offices on a plane rented by Schaller's company, Schaller Engineering, and visited a lobbying firm connected with the company. He then approved numerous invoices dividing the $8.5 million among Ianieri's company and four smaller companies, including Schaller Engineering, Ianieri testified.

Executives at Coherent and two other companies named in court papers in Ianieri's Florida case have donated more than $95,000 to Murtha's reelection campaigns and his political action committee since 2002, according to Federal Election Commission records.

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