After FBI raid, top defense lobbying firm falling apart

A top defense-lobbying firm in Washington that was recently raided by the FBI is disintegrating.

Several high-profile lobbyists with The PMA Group have privately informed clients and K Street colleagues this week that they are starting a new firm.

{mosads}The lobbyists resigned from PMA last Friday after they were unable to strike a buyout deal with Paul Magliocchetti, the founder of PMA, who has indicated for a few months that he wanted to retire.

The new group is called Flagship Government Relations and is being billed as a business development and lobbying firm, The Hill has learned.

The announcement comes as news broke on Monday that the FBI raided PMA’s offices in November.

Magliocchetti was a longtime House Appropriations Defense subcommittee staffer who worked with Rep. John Murtha (D-Pa.). PMA specializes in obtaining earmarks in the defense budget for a long list of clients.

PMA also has strong ties with several other Democrats, particularly Reps. Pete Visclosky (Ind.) and Jim Moran (Va.). Richard Kaelin, one of the firm’s top lobbyists, was Visclosky’s chief of staff, and Melissa Koloszar served as Moran’s chief of staff.

Most of PMA’s lobbyists worked on Capitol Hill, in the Pentagon or both.

Among those who are starting the new consultancy are Kaylene Green, a former Senate Armed Services Committee staffer and congressional Navy liaison; Sean Fogarty, a former Senate Navy liaison; Rich Efford, a longtime appropriations staffer who worked for ex-Rep. Ernest Istook (R-Okla.); and Dan Cunningham, who served as the director for the Army’s congressional liaison team and has a close relationship with Murtha, according to multiple K Street sources.

Magliocchetti invited members of senior management to negotiate an agreement to take over much of the client work. “We were unable to reach agreement and resigned from PMA last Friday,” said Green, who is now president and CEO of Flagship.

The chief operating officer of the group will be John Lynch, while Cunningham, Efford and Fogarty will be principals in the new firm, Green said.

Green said that since Friday other former PMA employees have joined Flagship, but did not release their names.

“We are looking forward to providing excellent service to clients,” she said in a statement.

At press time, it was unclear whether Kaelin or Koloszar were also part of Flagship Government Relations, and whether PMA would continue as a business. But sources told The Hill that several employees have remained at the old firm.

All the staff bios from PMA’s website were taken off a couple months ago.

Rumors of Magliocchetti’s desire to leave PMA recently surfaced in K Street circles. It is unclear whether the November FBI raid had any influence on the longtime lobbyist’s decision to retire.
National Journal reported in January that at least three other lobbyists set up a separate healthcare practice at the PMA office in Arlington, Va., and another lobbyist with the firm accepted a job with one of PMA’s clients.

It’s not uncommon on K Street for controversial firms to splinter. For example, the firm formerly known as Copeland Lowery Jacquez Denton & White, which reportedly fell under government scrutiny for its ties to Rep. Jerry Lewis (R-Calif.), dissolved soon after the media reported on the federal probe. The firm is now known as Innovative Federal Strategies.

Over the years, PMA has benefited from its ties to Murtha and the other defense appropriators who have helped the firm secure millions of dollars in federal earmarks. A large portion of PMA’s business comes from companies headquartered in and around Murtha’s district in Johnstown, Pa.

PMA also lobbies for defense giants like Lockheed Martin and General Dynamics, both of which have facilities in Johnstown. Boeing and Science Applications International Corp. (SAIC) are also on its client list.

PMA represents a Johnstown-based firm, Concurrent Technologies, which employed an Air Force acquisition official, Charles Riechers, while he was awaiting Senate confirmation for his position.

The FBI confirmed last year it was investigating the relationship between the Air Force and Commonwealth Research Institute, a research arm of Concurrent, which was paying Riechers.

Riechers committed suicide last year.

In 2008, PMA earned more than $14 million in lobbying revenue.

PMA has attracted the attention of government watchdogs, not only because of its ability to secure earmarks, but also for the large campaign donations the firm and its clients have given to lawmakers.

The Center for Responsive Politics ranks PMA’s political action committee (PAC) and PMA employees the leading contributors to at least 40 Democrats, including Murtha, Visclosky, Moran, Rep. Norm Dicks (Wash.), and Sens. Ben Nelson (Neb.) and Bill Nelson (Fla.).

While PMA donated primarily to Democrats, several Republicans also received contributions, including Sen. Judd Gregg (N.H.), nominated for Commerce Secretary in the Obama administration, former Sen. John Sununu (N.H.), and Reps. Ander Crenshaw (Fla.) and John McHugh (N.Y.).

When Murtha was struggling with an unexpected challenge in his reelection campaign after remarking that voters in his district were racist, PMA lobbyists donated thousands of dollars to his campaign.

According to the Federal Election Commission data, employees of PMA gave the lawmaker $14,000 just a few days before the election. The PMA PAC donated $5,000 to him at the end of October. PMA clients made up the rest of the $110,000 the lawmaker raised in his last-minute fundraising efforts.

In the 2008 election cycle, PMA’s PAC donated $237,500 to Democrats and $141,000 to Republicans.

“For a long time they have been prolific donors mainly to Democratic members of Congress,” said Keith Ashdown with the non-partisan watchdog group Taxpayers for Common Sense. “When Democrats came into power they became one of the most well-positioned lobby firms.”