The PMA Group, the lobbying firm with close ties to key House Democrats that was raided by the FBI last fall, has deep financial ties with many of the firms that it was lobbying for, according to a Roll Call review of financial records.
Ethics experts say there is no prohibition on a lobby shop having a direct financial interest in its client firms, but the relationships underscore PMA’s ability to bundle tens of thousands of dollars in campaign contributions for favored lawmakers.
The PMA Group was one of Washington, D.C.’s top 10 lobbying firms, but it has disintegrated in the wake of an FBI raid last fall. The government is apparently investigating whether some of the campaign donations made by people affiliated with the firm were improper.
But top PMA officials also had financial stakes in several of the companies that PMA was helping to obtain earmarks. Those companies were prolific donors to Members of Congress supported by PMA, with employees of the various firms producing tens of thousands of dollars in contributions to a handful of Members, frequently making their donations to the same campaign on the same day.
PMA spokesman Patrick Dorton said there is nothing unusual about PMA executives showing up as part-owners of their clients. “Like anyone, PMA employees were free to make individual choices to purchase stock and invest in whatever companies they wanted,— Dorton said. “These were individual decisions.—
Likewise, Dorton said the pattern of donations is easily explained. “Contributions from different individuals on the same day likely indicate a fundraiser was held on that day, a pretty common occurrence in Washington and not at all unusual,— he said.
One of PMA’s clients is an Alexandria, Va., fiber optic company called FiberGate. According to Virginia corporate records, one of three directors of the firm is Louis M. Brown Jr. Brown has also been a director at PMA since 2005. Mark Magliocchetti, son of PMA founder Paul Magliocchetti, was also once employed at FiberGate.
Until 2008, Brown was also listed as a director of Planning Systems Inc., an information technology firm that was a PMA client and received millions of dollars worth of earmarks. PSI is now a subsidiary of QinetiQ North America.
Brown is also repeatedly listed in Federal Election Commission records as an executive with the West Virginia IT company ProLogic Inc., a PMA client headquartered in a building named after Rep. Alan Mollohan (D-W.Va.). Brown does not appear on ProLogic’s corporate records and is mentioned only once in the press releases archived on the corporate Web site, with no title before his name.
Brown did not respond to messages left at several firms where he is listed as an executive.
Beyond the clients that Brown is connected to, PMA also has deep ties to a network security company called Cryptek Inc.
In bankruptcy filings submitted in a Virginia court in November, Cryptek listed three PMA directors among its “equity security holders— — Paul Magliocchetti, Mark Magliocchetti and John Lynch.
Employees of Cryptek, FiberGate, Planning Systems and ProLogic have tended over the years to generate campaign donations to Members of Congress in bunches, suggesting that the check writing was an organized activity, not random donations.
For instance, on March 2, 2004, employees of the four firms made $29,500 worth of campaign donations, according to FEC records. All but $500 of that amount went to Rep. John Murtha (D-Pa.).
Twenty-one days later, people reporting Cryptek, ProLogic and PSI as their employer contributed $20,000 to Rep. Peter Visclosky (D-Ind.). No one from these companies gave money to any other candidate that day, and Visclosky received only one other donation from an employee of those firms the rest of the year.
Rep. Jim Moran (D-Va.) received cash infusions from this same group regularly. In June 2003, Moran’s campaign banked $22,685 from employees of the four companies. Over a week in June 2004, he received $19,250. On one day in June 2005, he received $18,750 from members of this group.
Moran’s total take for June 6, 2006, shows how PMA’s bundling increased its presence. On that day, Moran’s campaign took in $57,000, according to FEC records. Of that total, $19,650 came from employees of Planning Systems, ProLogic and FiberGate. But another $15,500 came from PMA employees and another $7,750 from other PMA clients. Counting donations of spouses and other relatives of PMA clients, the lobbying firm was connected to $53,100 of the $57,000 total that Moran collected that day.
In the 2008 appropriations bills — the first requiring Members to publicly reveal which earmarks they requested — Moran secured a $1.6 million earmark for ProLogic and another of the same amount for Planning Systems. Visclosky and Murtha have also secured earmarks for these firms.
Moran’s office did not respond to requests for comment.
Other lobbyists refused to discuss PMA on the record. But on background, several sources agreed that it is unusual but not unheard of for lobbying firms to have ownership stake in clients that they represent. Some firms take an equity stake as part of their payment for representing the client, sources said, and there is no conflict of interest because what is good for the client is then also good for the lobbyist.
These sources suggested that the people most affected might be other clients of the lobbying firm, who may feel that that the firm has more interest in advancing the clients that they partly own than the clients that they do not have that financial relationship with.