Democrat Dirty Laundry: Murtha’s Earmarked Funds Bring Charges and Expected Guilty Pleas

July 15, 2009

Murtha’s Earmarked Funds Bring Charges and Expected Guilty Pleas
Allegations of Criminal Activity Surround Leading Dem’s ‘Money-Skimming Operation’ 

Speaker Pelosi Vowed that Democrats Would Lead the “Most Honest, Most Open, and Most Ethical Congress in History”

“Our goal is to restore accountability, honesty and openness at all levels of government. To do so, we will create and enforce rules that demand the highest ethics from every public servant, sever unethical ties between lawmakers and lobbyists, and establish clear standards that prevent the trading of official business for gifts.” (Nancy Pelosi’s “A New Direction for America, Page 21)

Murtha Under Investigation for “Money-Skimming Operation” to Unethically Pay Defense Contractors for Bogus Projects

When an Air Force command in north Florida was looking for cutting-edge communication for troops in Iraq, Rep. Jack Murtha steered millions in federal dollars its way to hire defense contractors to develop new battlefield technologies.

The taxpayer-funded research effort at the Pensacola Air Force base fell apart, however, when investigators found evidence that it was used as a money-skimming operation to improperly pay a series of companies linked to Murtha. A handful of defense firms were paid for work that was never done or not called for in the contracts. Some of the companies involved, which were based in Wyoming, Florida and Murtha’s home district in Pennsylvania, had hidden owners, prosecutors allege; one was secretly owned by the Air Force official who helped approve the payments.

As prosecutors reveal new details of their criminal probe into the $8 million earmark that Murtha arranged for the Air Force battlefield communications project, one familiar player is never mentioned by authorities. Many of the companies had hired the lobbying firm of the lawmaker’s brother, Robert C. “Kit” Murtha.

Today, one of Kit Murtha’s earliest clients has agreed in court filings to tell the government what he did and the crimes he said he saw committed as the lead contractor on the Murtha-orchestrated project. Richard “Rick” Ianieri, former former chief executive of Coherent Systems International, pleaded guilty to taking kickbacks and preparing fraudulent invoices. Ianieri, a Pennsylvania entrepreneur, saw his business explode after hiring Kit Murtha’s firm, KSA Consulting.

But the charges and expected guilty pleas have brought the allegations of criminal activity the closest yet to Murtha’s controversial practice of steering “earmarked” funds to favored defense firms.

“We had no knowledge of these disturbing transactions, and if they are true then the individuals and companies in question should be held accountable under the law,” Murtha spokesman Matthew Mazonkey said in an e-mailed statement this morning.
Over the years, Murtha arranged tens of millions of dollars in earmarks for two Pennsylvania firms that are central to the investigation, Coherent Systems International and Kuchera Defense Systems.

“It really puts a fine point on the murky, unaccountable web that exists around earmarks,” Steve Ellis, of the government watchdog group Taxpayers for Common Sense, said of the charges. “It further demonstrates that when you play with matches, you can get burned.”

Several years ago, Ianieri told the press he had selected Kit Murtha’s lobbying firm on the advice of Murtha’s chief of staff. Federal prosecutors in Florida charge that Ianieri helped an Air Force contract manager, Mark O’Hair, pay five companies nearly $2 million that they should not have received, including Coherent’s fellow KSA clients Gensym and VidiaFusion.

Prosecutors charge that Gensym and VidiaFusion each collected $300,000 and $274,000, respectively, for invoices that said they produced software for the mobile battlefield communications system, also known as the “Ground Mobile Gateway System.” But authorities assert the work by the companies consisted of several compact discs that stayed locked in a Coherent Systems closet after delivery. (Carol Leonnig, “Airforce Project Being Probed is Linked to Murtha,” Washington Post, 7/14/09)

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