Inquiry affects firm in Sparks
By Martha Bellisle • mbellisle@rgj.com • August 15, 2010

Sierra Nevada Corp., a fast-growing high-tech Sparks company that receives millions of dollars in defense contracts each year, was involved in a congressional ethics investigation into whether certain lawmakers sought campaign contributions in exchange for special favors.

In its report, the federal Office of Congressional Ethics said U.S. Rep. Peter Visclosky, D-Ind., solicited contributions from clients, including SNC, of the now-defunct lobbying firm PMA Group. He then provided them with special access to him and his staff while securing lucrative contracts, the report said.

The Office of Congressional Ethics has sent its investigation to the U.S. Department of Justice, asking the agency to investigate whether Visclosky, a member of the defense appropriations subcommittee, violated the law or U.S. House rules by soliciting or accepting contributions in exchange for securing contracts.

Laura Sweeney of the justice department's Office of Public Affairs declined to comment on whether the department is looking into the case.

"We don't confirm or deny the existence of investigations," she said.

SNC officials declined to comment about the case. The company cooperated with investigators for the report, ethics officials said, and is not being targeted for wrongdoing.

Several messages left with Visclosky's spokeswoman were not returned.

At the time of the investigation, Visclosky oversaw earmarks issued to SNC and other companies. Documents "show that PMA clients perceived a connection between appropriations requests and campaign contributions to Representative Visclosky," the report said.

In a Jan. 23, 2007, e-mail, Dave Klingler, a SNC vice president, told co-worker Renee Velasco, "Tis' the fundraiser season again," and outlined the company's plan for "supporting our FY08 pursuits."

"Note we have Visclosky and (U.S. Rep. John) Murtha events coming up quickly," he said.

He told her that SNC's political action committee planned to give $20,000 to Visclosky and $10,000 to Murtha, D-Pa., who chaired the defense appropriations subcommittee but died last February.

In an e-mail the following month, SNC lobbyist John Campbell asked Klingler if he could provide justification for giving that much money to Visclosky.

Klingler responded: "That's what each of the companies working with PMA and Visclosky have been asked to contribute. He has been a good supporter of SNC. We have gotten over $10 million in adds from him."

Growing business

Sierra Nevada Corp. is an engineering and manufacturing company that specializes in electronics, aerospace, surveillance and reconnaissance systems -- many used in the wars in Iraq and Afghanistan.

It was one of a list of companies that grew dramatically when the government expanded its counterterrorism and intelligence spending following the Sept. 11, 2001, terrorist attacks.

In 2000, the company had secured about $13 million in government contracts. By 2009, it had almost $800 million in obligated federal revenues, according to USASpending.gov, a government-sponsored site that monitors spending. That's an increase in revenues of more than 6,000 percent in nine years. By April 2010, it had already secured $280 million in contracts, the group said.

SNC also acquired eight companies during that period. They include surveillance specialists, a real-time video communications company, and a military computer and handheld electronics manufacturing company. They also bought Space Dev Inc., a space technology and aerospace company.

SNC was among the private contractors named in a recent Washington Post investigation titled "Top Secret America," which tracked the dramatic growth in defense contracting since Sept. 11.

According to the Post report, "The government has built a national security and intelligence system so big, so complex and so hard to manage, no one really knows if it's fulfilling its most important purpose: keeping its citizens safe."

SNC has generally avoided the public eye, but it drew some attention in 2007 amid accusations that Republican Gov. Jim Gibbons had helped several Nevada companies secure lucrative defense contracts in exchange for gifts, trips and money.

While the U.S. Department of Justice was investigating his relationship with Reno software company eTreppid Technologies, it came to light that first lady Dawn Gibbons had worked as a consultant for SNC while Jim Gibbons was a U.S. representative, steering defense contracts to SNC.

SNC owners Fatih and Eren Ozmen organized a trip to Turkey for the Gibbons couple, the governor'slawyer has said, but they paid their own expenses.

Gibbons was later cleared of any wrongdoing.

Ethics investigation

The Office of Congressional Ethics, established in 2008, is an independent watchdog committee tasked with investigating ethics allegations against lawmakers. It is co-chaired by former U.S. Rep. David Skaggs, D-Colo., and former CIA director Porter Goss.

Its investigation looked at Visclosky's dealings in 2008 and 2009 with the PMA Group and other lobbyists who were seeking defense contracts.

According to the report, Visclosky sent e-mails to PMA and companies seeking defense appropriations in February 2008 calling for their requests during the same time period when his campaign manager sent a solicitation for a March 12, 2008, fundraising dinner held in Visclosky's honor.

In March 2008, Visclosky received $35,300 in campaign contributions from PMA clients, including Sierra Nevada Corp.

On March 19, 2008, he requested $14.4 million earmarks for six PMA clients, the report said.

He had held a similar dinner in March 2007, and a PMA client who attended said a defense contractor who had made campaign contributions to Visclosky "was given the honorary seat at the head of the table," the report said.

The PMA client told others in company that he was able to spend several hours talking to Visclosky about their projects, and said the connection "would not have been possible without your generous contributions to the member and the company's PAC."

The report also cited e-mails between SNC officials and one of its lobbyists as they planned their contributions to congressmen.

"I am trying to assist Renee, Eren and Fatih to get our arms around what we think the requirement will be for contributions for the rest of the CY (2007)," Campbell told Klingler.

"I support the amounts you have recommended in your e-mail of 2/14, but could you put together what you believe that SNC (PAC and other contributions combined) should contribute for the rest of the year with an eye toward supporting PMA."

The report said the communications were "instructive as to the state of mind of the PMA client" as it planned its contributions to Visclosky in the hopes of securing federal earmarks for projects.


Sierra Nevada CORP.
Location: 444 Salomon Circle , Sparks
Owners: Fatih and Eren Ozmen, privately held corporation
Operations: A high-tech electronics, engineering and manufacturing company
Employees: 2,000 people, 35 locations in 20 states
Revenues: $1 billion

PMA Group
PMA Group is a high-powered Washington D.C. lobbying firm that was shut down by the FBI last year amid allegations of violating campaign finance laws.
Its founder and president, Paul Magiocchetti, was indicted Aug. 5 on charges of making illegal campaign contributions and making false statements to a federal agency. Before starting PMA, Magliochetti was a staff member of the U.S. House defense appropriations subcommittee, led by the late U.S. Rep. John Murtha, D-Pa.

SNC payments TO LOBBYISTS
Sierra Nevada Corp. has paid the PMA Group and other lobbyists millions in pursuit of defense electronics contracts:
2001: $0
2002: $60,000 to PMA; $10,000 to lobbyist John Campbell
2003: $140,000 to PMA; $13,000 to Campbell
2004: $220,000 to PMA; $26,000 to Campbell
2005: $280,000 to PMA; $86,000 to Campbell
2006: $280,000 to PMA; $162,000 to Campbell
2007: $260,000 to PMA; $242,000 to lobbying group Federal Initiatives
2008: $160,000 to PMA; $130,000 to Hurt, Norton & Associates
2009: $20,000 to PMA; $130,000 to Hurt, Norton
Source: OpenSecrets.org

SNC AND PMA CONTRIBUTIONS TO VISCLOSKY
Since 2002, the PMA Group has been Illinois Democratic U.S. Rep. Peter Visclosky's top contributor, and Sierra Nevada Corp. has been one of the leading companies giving to his campaigns.

2003-04: PMA gave $57,000; SNC was the sixth-leading contributor at $15,000
2005-06: PMA gave $58,000; SNC was sixth, giving $18,300
2007-08: PMA gave $61,200; SNC was 20th, giving $11,400
SOURCE: OpenSecrets.org

ETHICS
The report by the Office of Congressional Ethics was released Dec. 2, 2009. The panel referred the investigation to the U.S. Department of Justice on May 27, 2010.
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