Posted on 01/05/2010 5:06:58 PM PST by jazusamo
A Pennsylvania defense contractor that received earmarks from Rep. John Murtha (D-Pa.) has been barred from receiving further government contracts after allegedly offering kickbacks to another federal contractor.
The Navy suspended Kuchera Defense Systems Inc., and its two owners, brothers Bill and Ronald Kuchera, from entering into new contracts with the federal government, a Navy spokesman confirmed.
The suspension took effect on Dec. 22, and it marks the second time in less than a year that the firm was barred from new business with the government. Kuchera, based in Windber, Pa, has relied heavily on support from Murtha, who chairs the powerful Defense Appropriations Subcommittee.
Kuchera Defense Systems is being blacklisted by the the Navy for allegedly engaging in fraud and offering kickbacks to Coherent International Systems to “obtain favorable treatments in the awarding of a sub-contract,” Cmdr. Victor Chen, a Navy spokesman, told POLITICO.
The suspension follows a case last year in which two former Air Force officers were sentenced to federal prison after being found guilty of engaging in a fraudulent scheme related to an $8 million earmark obtained by Murtha. A government witness, Richard Ianieri, testified at the trial for one of the ex-Air Force officers that he received $200,000 in kickbacks from Kuchera Defense Systems for helping to steer part of that earmark to KDS.
Ianieri has pleaded guilty to defrauding the Air Force and is now cooperating with Justice Department prosecutors investigating the defense contracting industry and congressional earmarks.
Suspension or debarment of firms from receiving government contracts is a rare and dramatic step. Fewer than 300 individuals and corporations in the world have been forbidden by the Navy from entering into new deals with government agencies. This move by the Navy once again puts a spotlight on Murtha's relationship with companies in his district that have received earmarks.
Murtha has steered more than $50 million in earmarks to several Kuchera-owned companies. Employees at those companies have donated about $65,000 to Murtha’s campaigns, and the brothers hosted a fundraiser for Murtha at their Pennsylvania ranch.
Murtha has denied any link between the campaign donations and the spending earmarks, and his office declined to comment for this article.
The Navy has its own ongoing investigation into Kuchera and its two owners, Chen said. Kuchera executives have provided information to the Navy in opposition to the suspension.
Separately, several sources in Washington and Johnstown, Pa., say that the Kucheras are attempting to sell all or part of their defense contracting business. Kuchera Defense Systems laid off one-fifth of its roughly 300 employees following the earlier contract suspension, one source estimated.
Neither Kuchera Defense Systems nor its attorney responded to request for comment on this article.
While a Navy source said Murtha’s name did not surface in the course of this investigation, this is hardly good news for the beleaguered Defense appropriations subcommittee. The panel that appropriates funds for the military has long been plagued by allegations of ethical misdeeds. About half of its members have been under scrutiny due to donations from lobbyists and earmarks steered to their clients.
“Did they get the contracts on the up and up in the first place?” asked Steve Ellis, vice president of Taxpayers for Common Sense, a government watchdog group. “If they’re a bad apple, it’s not likely that they just went rotten recently.”
This is not the first time, however, that Kuchera has been out of favor with Pentagon contracting authorities. In April 2009, Kuchera landed on the excluded parties list for “cost mischarging, defective pricing and other ethical violations.”
KDS came off that list in Aug. 2009 and entered into an administrative agreement with the Navy that included compliance reviews to establish that the company is responsible enough to contract with the government. They re-entered the list on Dec. 22.
While the Office of Congressional Ethics recently announced that it was no longer investigating Murtha, the House ethics committee is conducting its own investigation into the relationship between the the now-defunct PMA Group and senior members of the Appropriations Committee, including Murtha.
PMA, once a high-flying lobbying firm, collapsed last year after being raided by federal agents. The Justice Department is looking into allegations that PMA used “straw donors” to help steer tens of thousands of dollars in campaign contributions to favored lawmakers like Murtha and Rep. Peter Visclosky (D-Ind.).
Neither lawmaker has been charged with any wrongdoing in that case.
WOW! WIDESCREEN! I’d forgotten about that! :-)
ROTFLOL!
Good one, Smooth. Now that’s a keeper!
LOLOLOLOL!!! That certainly is a keeper, jaz. Good job smooth. I’m sooooooooooo sick of this guy and his “unindicted” corruption.
Good catch, Smooth. From the chart it looks like Ervin, Kuchera, Tara O’Toole and Murtha are one big happy family, or at least well aquainted by the flow of large amounts of money.
Murtha kinda brings a new meaning to the saying “follow the money.” Where it’s at, he’s at.
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