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Lobbyist’s Brother Guided House Bill

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Times Staff Writers

When Congress passed the $417-billion Pentagon spending bill last year, Rep. John P. Murtha, the top Democrat on the House defense appropriations subcommittee, boasted about the money he secured to create jobs in his Pennsylvania district.

But the bill Murtha helped write also benefited at least 10 companies represented by a lobbying firm where his brother, Robert “Kit” Murtha, is a senior partner, according to disclosure records, interviews and an analysis of the bill by The Times.

For the record:

12:00 a.m. June 15, 2005 For The Record
Los Angeles Times Wednesday June 15, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 39 words Type of Material: Correction
Lobbying chart -- A chart in Monday’s Section A that showed defense appropriations and annual sales for 10 companies that received funding from the Pentagon labeled a column “annual sales in millions.” The label should have said “annual sales.”

Clients of the lobbying firm KSA Consulting -- whose top officials also include former congressional aide Carmen V. Scialabba, who worked for Rep. Murtha for 27 years -- received a total of $20.8 million from the bill.

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One of the clients, a small Arkansas maker of military vehicles, received $1.7 million, triple its total sales for 2004. Several other clients received money that represented more than half of their annual sales from last year.

KSA directly lobbied the congressman’s office on behalf of seven companies that received money from the bill, records and interviews show. Among those clients, a firm based in Maryland received one of the larger individual awards, $4.2 million.

And a defense contractor based in Pennsylvania said he hired KSA on the recommendation of a top aide of the congressman.

Disclosure of Kit Murtha’s ties to the lobbying firm prompted criticism from Keith Ashdown of Taxpayers for Common Sense, a nonpartisan Washington watchdog group that tracks government spending.

“Family members lobbying family members is becoming an all-too-common phenomenon on Capitol Hill,” he said. “What’s even more troubling is that decisions about defense dollars are being made at family reunions rather than the halls of Congress.”

Kit Murtha said in a phone interview that he did not lobby his brother’s office and that he saw no problem working for a firm that did.

“Let’s be honest, the name certainly creates some kind of impression, but I can’t help that,” he said. “We’re not doing anything improper or underhanded. I’m entitled to make a living like the next guy.”

Rep. Murtha and his staff declined to answer questions for this report. In public statements, the congressman has said money he inserted into the defense bill has helped make his district a center for national defense programs and has benefited the local economy.

Murtha is the latest lawmaker to face questions about lobbying activities by family members. Political leaders from both parties have drawn criticism over similar ties to special interest groups.

The appropriations to KSA clients were made through a series of itemized awards attached to the massive Pentagon budget bill. The awards are called “earmarks” and must be sponsored by at least one member of Congress.

Requests for defense earmarks from House Democrats are sent to Rep. Murtha’s subcommittee staff, which vets the submissions and decides which ones should be included in the final defense budget.

The congressman’s powerful role as the ranking minority member on the subcommittee makes him a natural target of lobbying efforts by defense contractors. Most of KSA’s approximately two dozen clients are small- and medium-sized defense firms, records show.

Earmarks in appropriation bills routinely list only an amount of money awarded and a description of the project to be funded -- without disclosing the name of the recipient firm.

Taxpayers for Common Sense produced a study of the defense bill this year, concluding that it contained thousands of “parochial and politically motivated” items inserted by lawmakers.

The Times identified KSA clients who received earmark money with the help of the study and through interviews with KSA officials, who confirmed details on all of its clients’ appropriations.

Ken Stalder, a former Lockheed Martin executive and KSA’s founder, chief executive and lead lobbyist, downplayed Kit Murtha’s role at the firm. He said Murtha focused on lobbying at the state level in Pennsylvania, and although he had occasionally visited Senate offices in Washington “to give informational briefings,” Kit Murtha had never lobbied his brother or any other House members.

“Having him on staff doesn’t help me with Congressman Murtha’s office,” he said in an interview in his office. “I don’t [accept some business propositions] because of Kit, because it might look funny. We never try to recruit clients by saying, ‘Hey, we’ve got Kit Murtha.’ ”

Stalder said he had directly lobbied Rep. Murtha once but had worked with his aides on a number of occasions.

Most of KSA’s defense contractor clients hired the firm in hopes of securing funding from Rep. Murtha’s subcommittee, according to lobbying records and interviews. And most retained the firm after Kit Murtha became a senior partner in 2002.

Kit Murtha said he saw the congressman infrequently but acknowledged that his brother knew he worked for KSA.

“I don’t think that influences him,” he said. “I certainly would hope not.”

He said he spoke to his brother only once about a client, soon after joining KSA, but said the congressman quickly broke off the conversation.

“He said, ‘Hey, that’s your client. You can’t come to me on that,’ ” the lobbyist recalled.

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The brothers Murtha were raised in Westmoreland County in southwestern Pennsylvania.

Born June 17, 1932, John Murtha volunteered for Vietnam in the mid-1960s, and in 1974 became the first combat veteran from the war to be elected to Congress. He lives in Johnstown, the largest city in his district.

Murtha won a seat on the House Appropriations Committee in 1975. Since then, he has delivered so much federal money to his district that the local airport and a major highway were named after him.

Between 1989 and 2004, defense companies donated $1.5 million to Murtha’s political campaigns, according to a study by the Center for Responsive Politics.

Kit Murtha, who at 70 is three years younger than his brother, is a former Westinghouse lobbyist who retired in 1996 as the company’s director of state and local government in Harrisburg, Pa.

“I’m sure I talked to Jack about Westinghouse, but I never asked him to do anything specifically for the company,” Kit Murtha said. He said his brother had “helped out Westinghouse the same way he has helped out Boeing and other [defense] companies -- he helped get them funding.”

Kit Murtha moved to North Carolina after retiring from Westinghouse, but said that after six years he was bored. He joined KSA at the invitation of Scialabba, his brother’s former top aide on the House Appropriations Committee.

Stalder described Scialabba as a close friend he met while working at Lockheed. He said he didn’t hire the former aide or Kit Murtha because of their ties to Rep. Murtha. Neither associate accompanies him when he lobbies the congressman’s office, Stalder said.

“I do have ties to Rep. Murtha’s office, but it is not through Kit or Carmen; it is through my own work and contacts,” he said. “It never crossed my mind that this might look like a conflict.”

Kit Murtha’s first KSA client was AEPTEC Microsystems Inc., a wireless networking company based in Maryland. It was seeking a grant from the state of Pennsylvania to fund construction of a new business complex in Rep. Murtha’s district.

The lobbyist’s client also was a supporter of the lobbyist’s brother. Executives of the firm or its parent company donated more than $12,000 to Rep. Murtha’s 2002 reelection campaign, records show.

Kit Murtha successfully lobbied the state for a $1.5-million grant to build the complex, according to his biography on the KSA website.

The lobbyist said his brother played no role in helping secure the money from the state.

However, Rep. Murtha took credit for “introducing AEPTEC to the opportunities” in Pennsylvania, according to a news release issued by his office in April 2004. Several of the congressman’s staffers attended groundbreaking ceremonies for construction of the business complex and Murtha, in the news release, called AEPTEC “a great example of the way we’re reinventing the region’s economy.”

In June, two months after the groundbreaking, Rep. Murtha’s subcommittee approved the $4.2-million appropriation for an AEPTEC wireless network that supported the Aegis cruiser program.

Stalder said he lobbied Rep. Murtha’s office on behalf of AEPTEC.

The company, with sales last year of $22.1 million, paid KSA $20,000 during the first half of 2004 to lobby for the appropriation.

*

KSA trumpets its relationship with Rep. Murtha in the firm’s fourth-floor suite of a Rockville, Md., office building about 25 miles northwest of Capitol Hill.

A framed copy of the Congressional Record displays Rep. Murtha’s 2000 tribute to Scialabba.

A photograph hanging on a conference room wall shows the congressman sitting in a military vehicle built by KSA client Cal-Zark of Arkansas.

Stalder accompanied Cal-Zark officials on a lobbying trip to Murtha’s office, he said. The company won $1.7 million for development of its Zeus medical evacuation vehicle, an award that was more than triple the firm’s 2004 sales of about $530,000.

Stalder said KSA also lobbied Murtha’s office on behalf of client KDH Defense Systems, once speaking directly to the congressman about the firm.

KDH was awarded $2.6 million to produce body armor. The company opened a body-armor plant in Johnstown and moved its headquarters into Murtha’s district as well.

Another KSA client, Mobilvox Inc., received $1.7 million to develop a “knowledge management” system for the Navy called “cognitive warrior.” It represented a huge financial boost for a company with 2004 sales of $2.5 million.

Shortly before getting its earmark appropriation, the Virginia-based company announced at a news conference with Rep. Murtha that it was opening a Pennsylvania office to develop counter-terrorism software.

Kit Murtha and Jack Frank, a district aide to Rep. Murtha, attended an open house three months ago at the new Mobilvox office near Rep. Murtha’s district.

Rick Ianieri, president of another KSA client, Coherent Systems of Warrington, Pa., said his company hired KSA on the advice of John Hugya, the congressman’s chief of staff.

His firm, which hired KSA two months after Congress passed the 2005 defense bill, did not seek earmarked funds in the legislation.

“I told [Hugya] we were a new company and needed representation,” Ianieri said. “He threw out a few names but said Ken [Stalder of KSA] was the guy to talk to, that he represented smaller firms. He said there were other people out there but Ken understood the type of things we were working on.”

Ianieri said the congressman’s aide didn’t mention that Kit Murtha or Scialabba worked at KSA, a fact the company president said he didn’t discover until after he had retained the lobbying firm. He said neither man had worked on his account at KSA.

Hugya did not reply to a request for comment.

Other KSA clients that also gained earmark awards in the 2005 defense bill included:

* Gensym Corp., based in Massachusetts, received $1.7 million for a battlefield planning tool. Stalder said he lobbied Murtha’s office on behalf of the firm. Its 2004 sales were $17.6 million.

* Applied Technology, based in Johnstown and with 2004 sales of $110,000, is a subcontractor on Gensym’s battlefield planning tool contract and will receive a share of funding from the company’s $1.7-million award, Stalder said. He said he did not know how much money the firm would receive. Stalder said he lobbied Murtha’s office on the company’s behalf.

* Applied Ordnance Technology Inc., a firm based in Maryland with 2004 sales of $13.4 million, received $3.4 million for the Advanced XLR medium caliber gun demonstrator. KSA, which lobbied Murtha’s office for the appropriation, received $20,000 from the company during the first half of 2004.

* ChemImage Corp. of Pittsburgh, with 2004 sales of $4.7 million, landed an appropriation of $3.5 million for “chemical imaging for food and water safety.” ChemImage paid KSA $20,000 through the first half of 2004. Stalder said he did not lobby Murtha’s office on the request.

* Mountaintop Technologies Inc., based in Johnstown, received $1 million for an aviation ground navigation system. Stalder said KSA advised Mountaintop on developing a legislative strategy for lobbying but did not seek the earmark funds. Lobbying disclosure records show Mountaintop retained a second lobbying firm to press for the appropriation.

Stalder said he did not know if Rep. Murtha sponsored the earmarks won by KSA clients.

“We brief members of Congress on projects we are supporting, but we don’t know for certain who the sponsors are,” he said.

Though Rep. Murtha would not respond to questions about which firms he sponsored for earmark funds, his office released a statement after House passage announcing the awards made to four KSA clients -- KDH Defense Systems, AEPTEC, Mobilvox and Mountaintop.

*

Staff researcher Janet Lundblad in Los Angeles contributed to this report.

*

(BEGIN TEXT OF INFOBOX)

Cozy connection?

At least 10 clients of KSA Consulting received funding from the Pentagon’s spending bill passed last year. Robert “Kit” Murtha is a senior partner at KSA; his brother, John, is the top Democrat on the House defense appropriations subcommittee.

*--* Defense Date Annual appropriations hired sales Company in millions KSA in millions

AEPCO* $1.0 March ’01 $45,658,305 AEPTEC Microsystems Inc. 4.2 April ’01 22,118,109 Applied Ordnance Technology Inc. 3.4 April ’01 13,456,522 Applied Technology n/a July ’03 110,000 Cal-Zark 1.7 Dec. ’02 530,000 ChemImage Corp. 3.5 Aug. ’01 4,700,000 Gensym Corp. 1.7 July ’02 17,621,000 KDH Defense Systems 2.6 July ’03 1,700,000 Mobilvox Inc. 1.7 July ’03 2,500,000 Mountaintop Tech- nologies Inc. 1.0 Nov. ’02 15,678,000 *--*

*Parent of AEPTEC **Estimate

Sources: Dun & Bradstreet, 2005 defense bill


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