FBI Eyes Charity Linked To Rep. Murtha

FBI Investigating Multi-Million-Dollar Defense Contractor With Tax-Exempt Status In Congressman's Hometown

(CBS)  This story was written by CBS News investigative correspondent Sharyl Attkisson and investigative producer Laura Strickler.

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CBS News has learned the FBI is investigating a little-known not-for-profit organization called Commonwealth Research Institute. It's located, like a lot of Rep. John Murtha's, D-Pa., pet projects, in his hometown, Johnstown, Pa.

Commonwealth gets the same benefits as the Salvation Army or any other charity: It doesn't have to pay taxes. But its line of work may be surprising. It's a defense contractor.

"It certainly raises a question," says Dean Zerbe, a former top Senate investigator. He questions Commonwealth's tax exempt status, saying it seems to do business just like any for-profit defense contractor.

"There’s a lot of tests to being a charity, and just saying, ‘Well I’m doing research paid for by the government," said Zerbe, " - if that were the case, I would have 10,000 companies that would tomorrow be a charity."

If Commonwealth were not a charity, it could owe roughly one-third of its profits in taxes. That could add up to millions, on more than $45 million dollars in government contracts. But it pays nothing.

Documents show when Commonwealth was formed, company officials touted their connections to "the local Congressman" Murtha.

According to a letter from the IRS to Commonwealth dated August 1, 2000, the agency questioned the officials on their application for charitable status. "(M)erely because an organization conducts research does not mean it will qualify for exempt status," wrote the IRS official.

The IRS also noted, "Research results must be made available to the interested public within a reasonably short time after completion of the project." The IRS concluded, "We do not believe the information provided thus far clearly distinguishes you from a commercial research company which makes its services available to the general marketplace."

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Click here to read correspondence between the IRS and Commonwealth Research Institute

Extra Video: Murtha Gets Annoyed With Reporter Asking About Connections to Kuchera Defense Systems (Courtesy of CBS affiliate WTAJ in Altoona, Pa.)

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Commonwealth officials responded in a Dec. 3, 2000 letter saying they anticipated their research would be for the "Department of Defense, Justice Department, National Science Foundation or the National Institute of Health (sic)." Commonwealth officials told the IRS that they may have some classified work but that only, "some small portion (10-20 percent) of the work completed will be restricted [from publication] for good reason."

It was partly on that basis that the IRS ultimately granted Commonwealth charitable status.

But nine years later, Commonwealth has apparently not published a single word of its government-backed research.

Murtha's hometown, far from Washington, is an unlikely hub for defense contractors like Commonwealth. But they're in western Pennsylvania because it's Murtha's town, and as chairman of the Defense Appropriations Subcommittee, he has influence over which companies receive billions of tax dollars.

Commonwealth Research gets all of its funding from government contracts. As for what taxpayers get in return, that’s hard to say. Commonwealth doesn’t have a website and wouldn’t tell CBS News how many employees work there or how they have spent millions of tax dollars.

CBS News went to the address listed on Commonwealth’s tax records looking for the offices. But a security guard stopped us and our camera crew, saying, "Don’t, don’t photograph, I’m gonna ask you to get in your car and leave."

A Commonwealth spokesman declined an interview and told CBS News they have "a track record of providing significant value" to the military and that "all" of their work, including a government contract under investigation worth up to $45 million dollars ... is "classified." The Pentagon wouldn't confirm that. A government-run federal spending database notes that at least $14.3 million of the contracts were no-bid.

Tax records show that Commonwealth’s top five most highly paid employees make six figure salaries and live all over the country. None were made available to speak with us when we visited Commonwealth’s headquarters.

For the biggest hint as to what Commonwealth is all about, it may help to know something about its parent company, Concurrent Technologies. Concurrent is another defense contractor in Johnstown, also registered as a charity at the same address. And, with the help of Murtha and The PMA Group, a lobby firm that's also under FBI investigation, Concurrent has gotten a billion dollars-plus in defense contracts and earmarks.

Concurrent employees have also given Murtha’s campaign over $95,000 in donations since 2002.

This isn't the first time Commonwealth has been involved in controversy. Back in 2007, the charity mysteriously paid $26,000 to a Pentagon official who was in between positions at the Pentagon and waiting to be confirmed for a top Air Force procurement position. The official admitted to a Washington Post reporter that he hadn’t done any work to earn the Commonwealth payment. Less than three weeks after The Post published an article on the controversy, the official committed suicide.

The incident kicked off an investigation at the Pentagon's Inspector General’s office. CBS News has learned that review has been put on hold in light of other active federal investigations into entities connected to John Murtha. Last spring Commonwealth was subpoenaed in a federal investigation into a government defense contract it received that is worth up to $45 million.

One former Commonwealth employee who is now a high-ranking official at the Pentagon declined to answer our questions about what he did for Commonwealth.

In the high-stakes world of defense contracts, it helps to have connections in Congress. Apparently, Commonwealth has one of the best: John Murtha.

At last week's annual defense trade show in Johnstown, Pennsylvania, an Associated Press reporter asked Murtha about another local defense contractor also under investigation, Kuchera Industries. Kuchera was just suspended from getting any new contracts with the U.S. Navy. A Navy spokesperson cited the reason for the suspension as "alleged fraud." CBS News affiliate WTAJ in Altoona captured the exchange.

The reporter asked if Murtha thought his support for Kuchera had been too strong over the years.

"What do you think I’m supposed to oversee these companies? That’s the Defense Department’s job. It’s not my job," Murtha replied.

The reporter followed up asking Murtha if he has hired a lawyer. Murtha replied, "Why have I-what kind of a question is that?"

Watch Extra Video: Murtha Gets Annoyed With Reporter Asking About Connections to Kuchera Defense Systems (Courtesy of CBS affiliate WTAJ in Altoona, Pa.)

[strmrnnr]

He's playing ya. You can see he wants to laugh when he says, "you don't have a clue...." He thinks he got the upperhand there.

You young reporters are going to have to harden up as these old dogs have been hinding things for years and years. Think of all the bull that went on for the last 9 years. Good you are on to at least one anyway. Good luck.

[EndEarMarks]

End ALL Ear Marks NOW.

[number1GI]

The name Murtha strikes revulsion in my mind. What that man is getting away with is criminal. And that is the part that is as bad as what he is doing , He"s getting away with it. Everybody sees it Everybody knows it and yet no one stops it
The sight of his face is repulsive. He knows what he is doing and the look on his face says "Try to stop me ."
He is a perfect reason for term limits

[mswolfestock]

Murtha is a total *s*l*e*a*z*e*b*a*g* - He's every bit as corrupt as Bernie Madoff - he just hasn't been caught yet.

Murtha is why we REALLY need term limitations. He buys his votes with all that money the bogus "charities" are supposed to paying in taxes.

Oh yeah, don't forget that Murtha's the one who called Marines in Iraq "cold blooded murderers." Somebody needs to shut him up - he's gone totally crazy from all of the corruption and kick-backs.

To the IRS - c'mon you guys, get off your backsides and nail this guy!!!!!!

[gunnyh1]

Agreed! A perfect example of why Congress needs to be reformed. If they refuse to set term limits then Congress needs to be dissolved. If they are an incumbent they need to be barred from running for federal office and stripped of their immense retirements....they need to remember that they are not gods but simply elected servants to the people not the banks and corporations. This treasonous person has his voter base bought and paid for by the taxpayers of the entire country.

[cbsblogger]

Murtha is an example of why term limits are needed. The longer they stay in office the more cronies they find and the more corrupt they become. D or R makes no difference. Find any Senator or Congressman with over 10 years in office and you will likely have a corrupt Congress person who is working for himself and cronies, not the greater good of the USA and his constituents.

[USA_Constitution]

I AM VERY VERY HAPPY AND RELEIVED TO SEE THAT SOME OF THE MEDIA - WHO HADN'T DONE SO IN THE RECENT PAST...IS NOW ACTUALLY REPORTING THE NEWS TO ITS READERS -- THE CITIZENS OF THE USA.

THANK YOU. ITS YOUR DUTY TO REPORT THE NEWS....NOT CREATE IT TO YOUR LIKING OR TO PROTECT THOSE WHO VIOLATE LAWS AND OUR CONSTITUTION. NO MATTER WHO THEY ARE.

THANK YOU. KEEP IT UP!!

[postmaniac1]

I don't see the problem here with Murtha. He is following what the majority of the middle class believe he is, a scam artist, a crook, and a poor excuse for an American Congressman and a Veteran. I served 21 years in the Navy, I'm not sure, perhaps I served my country and Military wrong. I have always believed "honor, courage and comitment" over anything else. Just think for a moment the example Murtha sets for the youth in this nation, definetly something and someone to look up to! Keep up the good work Attkisson and Strickler. The American people need to hear more of what you two do for us!

[USA_Constitution]

Flashback Video: 2004 Congressional Hearings on Fannie Mae and Freddie Mac.

Let?s not lose sight of the origin of this economic crisis.


http://www.mikefrancesa.com/wordpress/?p=1328

[USA_Constitution]

ENOUGH IS ENOUGH...IF THERE IS ONE THING GOOD THAT HAS COME OUT OF THIS DEMOCRAT CONGRESS REVEALING THE ECONOMIC DISASTER OF THE REAL ESTATE MORTGAGE INDUSTRY AND THE ELECTION OF OBAMA... AND I EMPHAZIZE "ONE THING" - AT LEAST MANY THINGS ARE BEING UNCOVERED IN OUR USA POLITICAL ARENA.

THEY ALL NEED TO BE CLEANED OUT AND ESCORTED OUT OF OUR BUILDINGS IN WASHINGTON, DC.

[USA_Constitution]

SEEN ENOUGH YET? NEVER, EVER VOTE DEMOCRAT. SOME REPUBS NEEDS TO BE CLEANED OUT TOO!

[USA_Constitution]

Gee Whiz...another Democrat under dishonest activities. Now the FBI needs to investigate bigger fish..........

Flashback Video: 2004 Congressional Hearings on Fannie Mae and Freddie Mac______
Let?s not lose sight of the origin of this economic crisis. ______
http://www.mikefrancesa.com/wordpress/?p=1328

[briannorwood]

Murtha is a total disgrace to PA and the country. He is so corrupt and so arrogant that he thinks what he is doing is OK. Hopefully some prison time will straighten out his thinking. --Posted by jfowlerofky52

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I agree. As a Pennsylvanian and a Democrat, I believe Murtha is dirty. Has been throughout his career (remember ABSCAM?) On top of that, the guy just isn't the sharpest crayon in the box.

We'd be better off without him!

[dante805]

Murtha is pathetic. He lost all his marbles about 5 years ago. I washed up and eccentric vet who sold out his office to the highest bidder. A poster child for term limits. He called our troops cold-blooded killers and rapists and got away with it. Now he needs to be throw out of office, but only after arrested and jailed.

[va1863]

Unfortunately, this poor fat excuse for human excrement will be forever re-elected by the red-neck, racist (Murtha's description of his idiot supporters) herd animals. They're outright stupid animals like Murtha. As for the fat man, he needs a jail cell to get his attention. Just some more low dirt democrat pols working for themselves. On poxx on their families!!

[TheTruthDetective]

GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS
GOTTA VOTE OUT OBAMA, MURTHA, PELOSI AND THE REST OF THOSE DEVILS

[jfowlerofky52]

Murtha is a total disgrace to PA and the country. He is so corrupt and so arrogant that he thinks what he is doing is OK. Hopefully some prison time will straighten out his thinking.

[I_am_me1953]

by enriquieGonzales June 2, 2009 4:25 PM PDT

Part of the Obama thugs. Vote Democrat and thats what you get.
_________________________________

PLEASE! You can't be that ignorant can you?

Most of what has occurred with this company has been between August 1, 2000 (read the article) and 2009. That means that most of this occurred under the cover of GWB and the republicans who had control of congress until 2007 (after the 2006 elections).

Geeze, it took two years for the dems to uncover what the repubs appear to have validated, big military contract business.

[Dgunner]

Sh---t doesn't always roll down hill. It just takes alittle longer up hill. If the organization is crooked it will be uncovered. If the congressmen and women of the other states don't stand up and voice the laws ? Then they need to be voted out along with Dirty Mother Murtha.Swamp your congressional offices with letters and phone calls . Demand action don't request it.

[patocc123]

Congress never declared war on Iraq. Congress did not specifically vote for "war", as in "a declaration of war". Instead, Congress voted for an Authorization for Use of Military Force Against Iraq Resolution of 2002, to use "necessary and appropriate" military force to "defend the national security of the United States against the continuing threat posed by Iraq".
Posted by alphaa10000

Regardless of the wording that was used, the vote did enable the President to attack Iraq. So no matter how you look at it or twist it Congress voted yes and takes the blame as well as Bush's administration. One would think that the american people would be educated enough to know that ignorance is not an excuse. Especially coming from a United States Congressman or Senator.