June 8, 2009 4:41 PM
- Text
Two Former Drug Dealers Tied To Murtha
(CBS/AP)
Rep. John Murtha steered millions of dollars in defense work to a campaign donor and the Pentagon went along with it, even though two convicted drug dealers had been deeply involved with the company.
Records filed in U.S. District Court in Pittsburgh starting in 2005 raise questions about whether the government ever checked into the background of William Kuchera of Windber, Pa., a constituent who has been doing government work for over 20 years.
The records point to the political peril of Murtha, a Pennsylvania Democrat, and other members of Congress directing federal funds to particular contractors, an oft-criticized process known as earmarking that has directed hundreds of billions of dollars in the federal budget to favored contractors and programs over the past two decades.
The companies owned by William Kuchera and his brother Ronald - Kuchera Defense Systems and Kuchera Industries Inc. - have received $53 million in federal contracts in this decade alone.
According to the court records, Kuchera was convicted of marijuana distribution in 1982 in Wisconsin.
In addition, a man who describes himself as an early partner in Kuchera's business in the 1980s is a convicted cocaine dealer who has served two terms in prison, according to the records.
The man, Peter Whorley, sued the Kuchera companies and William Kuchera for a share of the money the companies have collected in federal contracts. Whorley lost the case when it went to arbitration.
On Friday, Kuchera's lawyer said that his client had served nine months in prison and since that time "has built two highly successful and reputable companies with enviable records of quality, first-rate work."
In April, the Navy suspended Kuchera Defense Systems, William Kuchera and his brother for "alleged fraud," including "multiple incidents" of incorrect charges, along with allegations of defective pricing and ethical violations. Kuchera is appealing the suspension.
In 2007 and 2008, Murtha sponsored $14.7 million in defense earmarks for Kuchera Defense Systems. Before 2007, Congress did not disclose the identities of earmark sponsors, so it is impossible to say how much in earmarked funds Murtha directed to the Kuchera family business.
In one early link to Murtha, Kuchera made a $1,000 campaign contribution to the congressman in March 1992.
Kuchera and his uncle started doing business in the mid-1980s and Murtha became chairman of the House Appropriations defense subcommittee in 1989.
According to the court records, in 1985 William Kuchera approached his uncle, Michael, who was just starting up Kuchera Industries.
William Kuchera "confided to me that he had just spent time in prison and he was looking for a fresh start," Michael Kuchera said in an affidavit filed in federal court in 2005.
"After I agreed to go into business with my nephew, he introduced Peter Whorley to me," Michael Kuchera's affidavit states. "One day shortly after I had met Mr. Whorley, Bill told me that Peter had agreed to invest in the business."
Under questioning in the lawsuit, Whorley said that he had invested $50,000 in the Kucheras' new business. Before that, Whorley said, he had been in prison for drug trafficking. Answering questions in the lawsuit, William Kuchera said that the $50,000 from Whorley was a personal loan that "helped for my living expenses, it helped with marketing expenses, it helped with sales expenses."
Whorley said that he and William Kuchera were best friends and that they had been involved in "drug dealings."
In the statement Friday, Kuchera's lawyer pointed to findings by the federal court in the lawsuit rejecting Whorley's claims in their entirety. The court split the costs of the case, ordering Whorley to pay one-third and the Kuchera defendants to pay two-thirds.
"William Kuchera has built two highly successful and reputable companies with enviable records of quality, first-rate work," said Kuchera attorney Dennis McGlynn. "In doing so, he has also created 360 new jobs in the Johnstown area. He should be applauded for his accomplishments and not denigrated for a crime he committed almost three decades ago."
The government's overall earmark spending reached $18 billion in 2009 and $18.3 billion for 2008, and adding to that to the decades of earmarks before, "you easily top a $100 billion and even more, into the hundreds of billions of earmark spending, in the last few decades," said Steve Ellis of Taxpayers for Common Sense, a group that tracks congressional earmarks.
Earlier this week, CBS News investigative correspondent Sharyl Attkisson reported that the FBI is investigating a little-known not-for-profit organization called Commonwealth Research Institute. Commonwealth gets the same benefits as any other charity - it doesn't have to pay taxes. But its line of work may be surprising. It's a defense contractor.
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 in government contracts. But, it pays nothing, reported Atkisson.
Records filed in U.S. District Court in Pittsburgh starting in 2005 raise questions about whether the government ever checked into the background of William Kuchera of Windber, Pa., a constituent who has been doing government work for over 20 years.
The records point to the political peril of Murtha, a Pennsylvania Democrat, and other members of Congress directing federal funds to particular contractors, an oft-criticized process known as earmarking that has directed hundreds of billions of dollars in the federal budget to favored contractors and programs over the past two decades.
The companies owned by William Kuchera and his brother Ronald - Kuchera Defense Systems and Kuchera Industries Inc. - have received $53 million in federal contracts in this decade alone.
According to the court records, Kuchera was convicted of marijuana distribution in 1982 in Wisconsin.
In addition, a man who describes himself as an early partner in Kuchera's business in the 1980s is a convicted cocaine dealer who has served two terms in prison, according to the records.
The man, Peter Whorley, sued the Kuchera companies and William Kuchera for a share of the money the companies have collected in federal contracts. Whorley lost the case when it went to arbitration.
On Friday, Kuchera's lawyer said that his client had served nine months in prison and since that time "has built two highly successful and reputable companies with enviable records of quality, first-rate work."
In April, the Navy suspended Kuchera Defense Systems, William Kuchera and his brother for "alleged fraud," including "multiple incidents" of incorrect charges, along with allegations of defective pricing and ethical violations. Kuchera is appealing the suspension.
In 2007 and 2008, Murtha sponsored $14.7 million in defense earmarks for Kuchera Defense Systems. Before 2007, Congress did not disclose the identities of earmark sponsors, so it is impossible to say how much in earmarked funds Murtha directed to the Kuchera family business.
In one early link to Murtha, Kuchera made a $1,000 campaign contribution to the congressman in March 1992.
Kuchera and his uncle started doing business in the mid-1980s and Murtha became chairman of the House Appropriations defense subcommittee in 1989.
According to the court records, in 1985 William Kuchera approached his uncle, Michael, who was just starting up Kuchera Industries.
William Kuchera "confided to me that he had just spent time in prison and he was looking for a fresh start," Michael Kuchera said in an affidavit filed in federal court in 2005.
"After I agreed to go into business with my nephew, he introduced Peter Whorley to me," Michael Kuchera's affidavit states. "One day shortly after I had met Mr. Whorley, Bill told me that Peter had agreed to invest in the business."
Under questioning in the lawsuit, Whorley said that he had invested $50,000 in the Kucheras' new business. Before that, Whorley said, he had been in prison for drug trafficking. Answering questions in the lawsuit, William Kuchera said that the $50,000 from Whorley was a personal loan that "helped for my living expenses, it helped with marketing expenses, it helped with sales expenses."
Whorley said that he and William Kuchera were best friends and that they had been involved in "drug dealings."
In the statement Friday, Kuchera's lawyer pointed to findings by the federal court in the lawsuit rejecting Whorley's claims in their entirety. The court split the costs of the case, ordering Whorley to pay one-third and the Kuchera defendants to pay two-thirds.
"William Kuchera has built two highly successful and reputable companies with enviable records of quality, first-rate work," said Kuchera attorney Dennis McGlynn. "In doing so, he has also created 360 new jobs in the Johnstown area. He should be applauded for his accomplishments and not denigrated for a crime he committed almost three decades ago."
The government's overall earmark spending reached $18 billion in 2009 and $18.3 billion for 2008, and adding to that to the decades of earmarks before, "you easily top a $100 billion and even more, into the hundreds of billions of earmark spending, in the last few decades," said Steve Ellis of Taxpayers for Common Sense, a group that tracks congressional earmarks.
Earlier this week, CBS News investigative correspondent Sharyl Attkisson reported that the FBI is investigating a little-known not-for-profit organization called Commonwealth Research Institute. Commonwealth gets the same benefits as any other charity - it doesn't have to pay taxes. But its line of work may be surprising. It's a defense contractor.
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 in government contracts. But, it pays nothing, reported Atkisson.
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