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Lobbyist with ties to Visclosky charged with making illegal campaign donations

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An Arlington, Va., lobbyist long associated with U.S. Rep. Pete Visclosky, D-1st, has been indicted in federal court on charges of violating the Federal Election Campaign Act of 1971, the U.S. Attorney’s Office for the Eastern District of Virginia said.

Paul J. Magliocchetti, president of the now defunct PMA Group—which specialized in representing high-tech businesses, many in the defense industry, and obtaining for them federal earmarks—was taken into custody on Wednesday by the FBI on an 11-count indictment:

•Four counts of making illegal campaign contributions in the name of another.

•Four counts of making illegal campaign contributions from a corporation.

•Three counts of causing federal campaigns to unwittingly make false statements.

The indictment generally alleges that Magliocchetti, from “at least January 2003 through November 2008,” pursued a “scheme” of making an end-run around federal law by funneling donations to congressional campaign committees, actually funded by himself or his firm, through straw-man donors, or otherwise by reimbursing those donors after they had made a donation.

“As the founder and president of the company that bore his name, Magliocchetti sought to enrich both PMA and himself by increasing the firm’s influence, power, and prestige—both among the firm’s base of current and potential clients as well as among the elected officials to whom PMA and its lobbyists sought access,” the indictment states.

“In an effort to achieve his twin goals of increasing PMA’s influence and enriching himself, Magliocchetti make hundreds of thousands of dollars in illegal conduit and corporate federal campaign contributions,” the indictment states. “Aware of the strict limits on individual federal campaign contributions—and the outright ban on corporate contributions—Magliocchetti, unbeknownst to the federal campaigns, funneled personal and corporate money to friends, family members, and PMA lobbyists in order to make these unlawful contributions.”

“At the same time, Magliocchetti ensured that he and PMA received credit for these contributions from the federal campaigns and candidates by, among other things, using PMA lobbyists and others associated with Magliocchetti as the conduits, and by hosting fund-raising events in which he or his associates delivered the contributions.”

The indictment does not specifically mention any candidate for federal office, although the indictment alleges that illegal contributions were made to “scores of federal campaign committees.”

According to data compiled by the Center for Responsive Politics (CRP), one of those campaign committees was Visclosky’s. Over Visclosky’s career—since the 1997-98 election cycle—the PMA Group contributed a total of $212,200 to his campaign committee, making the PMA group by far the most generous of all donors to that committee, CRP data show. Tied for the second most generous donor—each contributing a total of $105,000 to Visclosky’s committee over his career—are the United Auto Workers and the United Steelworkers.

The indictment emphasizes that candidates whose campaign committees received donations from PMA “associates” had no knowledge that those donations were allegedly made illegally, and indeed three of the counts filed against Magliocchetti are based on the candidates’ ignorance: namely, that Magliocchetti allegedly caused unnamed campaign committees “unwittingly” to file with the Federal Election Commission (FEC) “a materially false quarterly report,” indicating that donations purportedly made by “individuals” were actually made by Magliocchetti or by the PMA Group.

Earlier this year the House Committee on Standards of Official Conduct officially cleared Visclosky and six other U.S. House members of any wrong-doing in connection with the PMA Group. The committee’s determination: “No House member or employee violated any law, regulation, rule, or other applicable standard of conduct.”

The indictment does cite one case in which Magliocchetti prevailed on two “acquaintances” who lived near his Florida vacation home—“Acquaintance A” and “Acquaintance B”—to “write checks out of their personal checking accounts to specific candidates for federal office,” then “advanced funds to or reimbursed” them “through personal checks, checks from PMA, and by designating them as members of PMA’s Board of Directors even though the acquaintances lived in Florida, never worked as lobbyists, and never attended PMA board meetings.”

In February 2009, Visclosky announced that his campaign committee would return $16,000 in donations made between 2006 and 2008 by two Fernandina, Fla., residents—each having donated a total of $8,000, each being listed in FEC records as PMA associates—when it was reported that neither one of them has any genuine affiliation with the PMA Group.

It is unclear whether the two Fernandina, Fla., residents are the ones cited by the indictment.

“In order to perpetuate the scheme, among other things, Magliocchetti disguised the payments from PMA to the conduits by causing them to be falsely characterized in the books and records of the company as salary or bonus payments,” the indictment states. “Magliocchetti also tracked the campaign contributions to the straw donors using spreadsheets which were updated and maintained by Magliocchetti’s assistant. Magliocchetti further pressured PMA employees to individually contribute, leading them to believe that their failure to make the required political contributions would adversely impact their employment at PMA.”

“The laws governing our campaign finance system are precise and must be obeyed by those who run for public office and those who donate to their campaigns,” Visclosky said in a statement released today to the Chesterton Tribune. “I know that I and my campaign have always observed both the letter and the spirit of the law on these issues.”



Posted 8/2/2010




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