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Indictment May Mark End of PMA Scandal

The last shoe appears to have dropped in the PMA Group lobbying scandal.

After a two-year federal investigation into one of the most influential defense appropriations lobby shops, the inquiry seems to be ending where it began — with firm founder Paul Magliocchetti.

Magliocchetti was indicted last week in U.S. District Court in Alexandria on eight counts of coordinating hundreds of thousands of dollars in illegal campaign contributions and on three counts of making false statements. His son, Mark Magliocchetti, also pleaded guilty Thursday to making illegal corporate campaign contributions at his father’s behest.

In what had appeared to be a wide-ranging probe that could have ensnared several Democratic House lawmakers, the end result, an 18-page indictment, mentioned no Members of Congress or broader bribery charges. Several legal experts said it appears that no one else will be charged in the case.

Paul Magliocchetti is accused of orchestrating a scheme to use campaign contributions to help PMA “gain access to candidates for federal office, which in turn helped [PMA] maintain and accrue lobbying work and clients,” according to court documents.

Magliocchetti, who appeared in federal court Thursday, was released on a $2 million bond and surrendered his passport. He is staying at a mental health center in Baltimore.

According to the indictment, Magliocchetti used personal funds and PMA corporate money to reimburse his associates, family members and two Florida acquaintances for making hundreds of thousands of dollars’ worth of political contributions at his direction. Magliocchetti and his family made $1.5 million in political contributions from 2000 through 2008, according to a CQ MoneyLine study of campaign finance records.

His firm was raided by the FBI in November 2008 and shut its doors in March 2009. The now-defunct lobby shop was prolific in its ability to secure federal earmarks for clients, particularly from the Appropriations Subcommittee on Defense.

Magliocchetti’s attorney did not respond to a request for comment.

While the federal investigation into Magliocchetti appears to be over, there are still some unresolved issues regarding the scandal. Rep. Peter Visclosky, a senior member of the Appropriations panel, has been the target of a federal investigation. The Indiana Democrat confirmed last spring that he had been subpoenaed by a federal grand jury. Visclosky’s Congressional office did not return requests for comment, and it is not clear whether the Justice Department is still interested in his office.

So far Magliocchetti has declined to cooperate with federal officials. However, the once-prominent lobbyist could still limit his own legal liabilities if he were to aid authorities, which could also widen the inquiry to Members of Congress or staff.

The indictment also did not name any other PMA lobbyists who participated in Magliocchetti’s scheme to increase the firm’s profile and profitability by making illegal contributions.

Several former PMA lobbyists have since started their own lobby shops. Flagship Government Relations, headed by former PMA executives Kaylene Green and John Lynch, has been the most successful.

Green said in a statement that she did not think action would be taken against Flagship employees.

“Flagship employees have assisted the government in its investigation. After a lengthy and comprehensive investigation, Mr. Magliocchetti and his son were the only individuals charged with wrongdoing,” Green said. “We respect the judicial process and believe it speaks for itself in this case.”

Several ethics and white-collar lawyers said it was also unlikely that the Justice Department would pursue bribery charges against Members of Congress or Congressional staff in the case because the burden of proof is much higher.

“Violations of campaign finance laws are clear cut and lend themselves to easy proof beyond a reasonable doubt,” said Jan Baran, an ethics lawyer at Wiley Rein. “It sounds like this is both the beginning and possibly the end of the PMA matter in terms of prosecution.”

Ken Gross, an ethics lawyer at Skadden, Arps, Slate, Meagher & Flom, said: “When it comes to criminal prosecution, you need a red-hot smoking gun before you can bring a case.”

The investigation has also been deemed a closed matter on Capitol Hill. While the House ethics panel earlier this year wrote in a report that there was a widespread perception among lobbyists and contractors that making campaign donations helps secure earmarks from Members of Congress, the committee found “no evidence that Members or their official staff considered campaign contributions as a factor when requesting earmarks.”

The independent Office of Congressional Ethics also investigated PMA’s connection to seven Members, recommending in December that the Committee on Standards of Official Conduct dismiss inquiries into five appropriators — Reps. Marcy Kaptur (D-Ohio), Norm Dicks (D-Wash.), Bill Young (R-Fla.), Jim Moran (D-Va.) and John Murtha (D-Pa.), who died Feb. 8. — but conduct a further review of Reps. Todd Tiahrt (R-Kan.) and Visclosky. The committee declined any further investigation.

And unlike the Jack Abramoff pay-to-play lobbying scandal, which spurred massive lobbying reforms, watchdog groups said they didn’t think the PMA scandal would expedite transparency legislation.

“There probably needs to be another scandal” before further action is taken on Capitol Hill, said Steve Ellis of Taxpayers for Common Sense. “One of the challenges that undercuts PMA a little bit still is that it hasn’t really brought down any lawmakers yet.”

The Honest Leadership and Open Government Act followed the Abramoff scandal, the “Bridge to Nowhere” earmark by then-Sen. Ted Stevens (R-Alaska) and Rep. Duke Cunningham (R-Calif.) pleading guilty to taking $2 million in bribes.

Still the indictment was an important step forward, according to Ellis.

“Even if the indictment reads that these campaigns didn’t know they were getting funny money, the underlying purpose was giving more money gets me more access, gets me more earmarks, gets me more clients, builds my empire,” Ellis said.

Paul Singer contributed to this report.

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