FBI Eyes Charity Linked To Rep. Murtha
FBI Investigating Multi-Million-Dollar Defense Contractor With Tax-Exempt Status In Congressman's Hometown
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Play CBS Video Video Charity Under Investigation Commonwealth Research Institute, a not-for-profit with connections to U.S. Rep. John Murtha, D-Pa.., has spent millions of tax dollars. Now they are under investigation. Sharyl Attkisson reports.
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U.S. Rep. John Murtha, D-Pa., in front of the Commonwealth Research Institute in his home district. (CBS/ AP)
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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."
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."Click here to read correspondence between the IRS and Commonwealth Research Institute
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.
There’s a lot of tests to being a charity, and just saying, ‘Well I’m doing research paid for by the government,' - if that were the case, I would have 10,000 companies that would tomorrow be a charity.
Dean Zerbeformer Senate investigator
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.)
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Extra Video: Murtha Gets Annoyed With Reporter Asking About Connections to Kuchera Defense Systems (Courtesy of CBS affiliate WTAJ in Altoona, Pa.)
Michelle Obama tells how her role as the First Lady has changed her perspective.





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See all 95 CommentsYou 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.
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
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!!!!!!
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!!
Let?s not lose sight of the origin of this economic crisis.
http://www.mikefrancesa.com/wordpress/?p=1328
THEY ALL NEED TO BE CLEANED OUT AND ESCORTED OUT OF OUR BUILDINGS IN WASHINGTON, DC.
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
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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!
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
Part of the Obama thugs. Vote Democrat and thats what you get.
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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.
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.
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