Murtha Ally Indicted in Kickback Scheme

Murtha photoPaula Reed Ward and Dennis B. Roddy reported today in the Pittsburgh Post-Gazette:

Federal prosecutors filed corruption charges yesterday against a onetime defense contractor who has ties to both John Murtha and a suburban Johnstown defense contractor currently under criminal investigation.

Richard S. Ianieri, former president and CEO of Coherent Systems International Corp., was accused of accepting $200,000 in kickbacks. He is charged through a criminal information and is expected to plead guilty.

The indictment of Ianieri represents the first charges leveled as a result of investigations into firms receiving defense earmarks – many of which benefited former aides and associates of Rep. John Murtha (D-PA).

Ianieri’s ties to Murtha go back to his role as the former president and CEO of Coherent Systems International Corporation. When Coherent decided to get involved in defense contracts in 2006, it hired KSA Consulting, a Washington, D.C.-based firm that once employed Murtha’s brother Kit, and is currently headed by partners that include Carmen Scialabba, a onetime Murtha aide.

Coherent worked closely with Kuchera Defense Systems on a series of contracts worth $30 million to develop and manufacture high-tech tools for the military. Coherent served as the prime contractor which designed and tested the products. As subcontractor, Kuchera did the manufacturing.

In April 2006, Murtha publicly touted the relationship between the two companies. A Murtha press release announced that Coherent and Kuchera were “working virtually as one company.” Murtha stated, “Coherent is a small business with high growth potential, and pairing its engineering expertise with Kuchera’s widely recognized manufacturing skills is a natural fit.”

Bill Kuchera, CEO of the Kuchera companies, said, “The partnership with Coherent has reaped many benefits for Kuchera, and the relationship is growing every day.”

Kuchera has since become the target of a major corruption probe by the FBI and IRS. In January 2009, the FBI raided its offices. Carol D. Leonnig and Paul Kane reported in the Washington Post on February 11:

In the January raid at the offices of Kuchera Industries, sources said, investigators requested a broad range of documents from the company and its sister firms, and are examining the possible improper use of federal money at a hunting club owned by the company’s co-founder.

The story went on to say:

Former prosecutors said the fact that the FBI raided the offices and homes – rather than issuing subpoenas for documents – indicates that authorities may be building a case around evidence they already have. Raids also often indicate that authorities are concerned about the destruction of evidence.

In the case involving Coherent, court filings charge that Ianieri “solicited and accepted kickbacks from” a subcontractor identified as “K.” Ianieri is accused of taking the kickbacks from an unknown date through January 2006. The government alleges that Ianieri took checks – one for $102,832.29 and another for $97,153. 56 – “which…were provided for the purpose of improperly obtaining and rewarding favorable treatment in connection with ‘K’s’ subcontract relating to a government prime contract.”

Since 2003, Ianieri and his colleagues at Coherent have directed $72,950 in political donations to congressmen with ties to the defense industry.

Of that amount, $14,000 were given to Murtha’s re-election campaigns or to his political action committee.

Coherent became a subsidiary of Argon ST in August 2007 and Ianieri left the company in the summer of 2008.

The indictment of Ianieri may only be the first of what will be several indictments of individuals with ties to Murtha and who benefited financially from those ties through lucrative defense earmarks.

Last week, I detailed a lawsuit filed by the Badenoch company against the once-powerful PMA Group, the defense lobbying group founded by longtime Murtha ally Paul Magliocchetti. Badenoch sued because PMA didn’t deliver a $3 million defense earmark it had promised. The case showed that there was a clear understanding that retaining PMA meant access to earmarks. PMA shut down after federal authorities raided it in November 2008. Magliocchetti is under investigation for arranging political contributions to Murtha and other House Democrats that may have violated federal election laws.

In a sign that Murtha may be getting uncomfortable with so many of his associates and favored companies under investigation, Matt Mazonkey, the communications director for Murtha, complained in an email that I mischaracterized Magliocchetti as a former aide to the congressman. He focused on the trivial technicality that while working as a staff analyst for the Defense Subcommittee, he didn’t actually work for Murtha.

The distinction is irrelevant since it is well-known that Murtha and Magliocchetti are longtime allies who have worked closely together.

How will Murtha’s office respond to the indictment of Richard Ianieri, whose company Murtha once boasted about for receiving tens of millions of dollars in defense contracts?

photo” AP/Wide World