Argon Talks to Feds

Murtha-Tied Firm Queried on Florida Case

Posted May 13, 2009 at 6:32pm

At the request of the federal government, a Virginia-based defense contractor with close ties to Rep. John Murtha (D-Pa.) is providing information for a criminal investigation in Florida surrounding allegations that three men skimmed money from earmarks, according to sources familiar with the case.

Federal investigators pursuing the Florida case have interviewed employees and reviewed documents from Argon ST, a Fairfax, Va., defense contractor, according to sources with knowledge of the case.

A spokesman for the company told Roll Call, “We can’t comment on an ongoing criminal investigation,— though apparently Argon has been told that it is not the target of the investigation and has not been accused of wrongdoing.

Argon bought one of the companies that was named in the Florida indictment, and investigators are apparently interested in information now in Argon’s possession about that company.

A federal judge in February unsealed an indictment in Florida charging three men with a scheme to pocket some of the proceeds of contracts from an Air Force research program that was driven by Congressional earmarks. The men deny the charges, and the case is scheduled to go to trial in June.

Part of the allegation in the Florida case is that in September 2005, Mark O’Hair, an Air Force program manager, approved an $8.1 million contract to a Pennsylvania company called Coherent Systems for an integrated battlefield communications system called the “Ground Mobile Gateway System.—

The government alleges that Coherent paid Schaller Engineering Inc. $200,000 for a component of the system that Schaller never provided, and that O’Hair and two directors of Schaller Engineering — Richard Schaller and Theodore Sumrall — each pocketed about $60,000 from the transaction.

The money for Coherent’s Ground Mobile Gateway System was inserted into the March 2005 tsunami relief supplemental appropriations bill, but there is no indication which Congressional office added that language. At the time, Murtha was the ranking member on the Appropriations Subcommittee on Defense. He is now the chairman of that subcommittee.

[IMGCAP(1)]Murtha’s spokesman said the Congressman provided a $1.4 million earmark for the Ground Mobile Gateway System in fiscal 2007, but the office had no information about funding for the program in other years, or the language in the tsunami relief bill.

In August 2007, Argon bought the assets of Coherent and, at the end of the year, hired Murtha staffer Gabrielle Carruth as vice president of government relations.

Carruth had been on Murtha’s staff since 2002 and was listed in a 2007 Congressional directory as his “Appropriations associate staff.— She registered as Argon’s lobbyist in January 2008, apparently the first person to serve as an in-house lobbyist for the firm.

Carruth terminated her registration with Argon on March 6 and left the company. She is now a lobbyist at the defense giant Lockheed Martin, where she first appeared on a lobbying registration form dated April 17.

Argon has not registered another in-house lobbyist since her departure.

Argon has some history with Murtha.

In May 2002, Murtha announced in a press release that a Virginia company called SenSyTech Inc. would be opening a local office in his district. In August 2003, the Congressman attended the ribbon cutting for the company, and in July 2004, Murtha announced that SenSyTech was among the local companies getting earmarks in the Defense appropriations bill. Argon Engineering Associates bought SenSyTech later that year, and the company became Argon ST.

The company hired the PMA Group as its lobbying firm in January 2007, and Argon paid PMA at least $360,000 for lobbying through March 2009, according to Senate records.

Argon has been a sponsor of Murtha’s charity for high school students called the Challenge Program, and the Pennsylvania Congressman has announced earmarks and contracts for the company worth millions of dollars.

Argon has also at various times had contracts with other lobbying firms with close ties to Murtha, including KSA Consulting, which formerly employed Murtha’s brother. KSA was the lobbying firm for Coherent, and Argon inherited that contract with the purchase.

In 2005, Argon bought Radix Technologies, another defense contractor represented by PMA, and took over the Radix political action committee. When Carruth moved over to Argon from Murtha’s office in 2008, she became the treasurer of the Radix PAC, which has since changed its name to the Argon ST PAC.

In the 2008 election cycle, the PAC made $55,600 in campaign donations, according to Federal Election Commission data. Of that total, Murtha received $23,000 for his campaign committee and his leadership PAC.

Apart from Argon’s cooperation with investigators, several companies with connections to Murtha are involved in federal investigations.

Last fall, FBI agents raided the offices of the PMA Group, reportedly as part of an investigation of questionable campaign contributions, and the firm closed its doors in March. PMA was run by a former Appropriations Committee staffer who was close to Murtha.

In January, federal agents raided a Pennsylvania company called Kuchera Defense Systems, which also received millions of dollars worth of earmarks from Murtha and which, according to a Murtha press release, essentially operated jointly with Coherent. Coherent was named in the Florida indictment but has not been charged with any wrongdoing.

To date, the only allegations made by the government are those laid out in the indictment against O’Hair, Schaller and Sumrall.

Timeline: Murtha, Argon, PMA and a Florida Court Case

Jan. 5, 2005
Richard Schaller incorporates Schaller Engineering in Florida.

Feb. 1, 2005
PMA Group registers to lobby for Schaller Engineering.

May 10, 2005
Tsunami relief act approved, including an $8.1 million for earmark for Coherent Systems’ “Ground Mobile Gateway System.—

Sept. 13, 2005
Argon ST announces the purchase of Radix Technologies Inc., a PMA client.

Oct. 1, 2005
Coherent receives an $8.15 million Air Force contract for Ground Mobile Gateway. The contract’s program manager is Mark O’Hair.

Dec. 20, 2005
Coherent pays Schaller Engineering $200,000 for a component of Ground Mobile Gateway, which the government alleges was never built.

Sept. 29, 2006
Congress passes Defense spending bill with a $1.4 million earmark from Rep. John Murtha (D-Pa.) for the Mobile Gateway.

Jan. 1, 2007
PMA Group registers to lobby for Argon.

July 17, 2007
The Argon PAC gives $8,000 to Murtha’s leadership PAC.

Aug. 16, 2007
Argon announces the purchase of the assets of Coherent.

Sept. 26, 2007
The Argon PAC donates $10,000 to the Murtha re-election campaign.

Jan. 31, 2008
Former Murtha staffer Gabrielle Carruth registers as in-house lobbyist for Argon.

Feb. 26, 2008
The Argon PAC donates $5,000 to Murtha’s leadership PAC.

April 14, 2008
Carruth registers with the Federal Election Commission as treasurer of the Argon PAC.

Feb. 5, 2009
Florida court unseals indictment alleging collusion between O’Hair and Richard Schaller.

March 6, 2009
Carruth terminates registration as Argon’s lobbyist.

March 31, 2009
PMA Group dissolves after an FBI raid of its offices.

April 2, 2009
Murtha requests an $8 million earmark for the Argon facility in Pennsylvania to “upgrade the current naval torpedo defense capabilities.—

April 17, 2009
Carruth registers as in-house lobbyist for Lockheed Martin.

Sources: Public records