Questions About Murtha Contract Awards

CBS News investigative correspondent Sharyl Attkisson and investigative producer Laura Strickler reported this story for CBS News.

Few politicians are as polarizing as Pennsylvania Rep. John Murtha.

Voters in his district love all the federal funding he lines up for projects back home. But critics call him the king of earmarks who wastes a lot of taxpayer money. Now, the FBI is taking a close look at some of those projects, reports CBS News correspondent Sharyl Attkisson.

Under fire for his earmarking practices, Murtha wouldn't grant CBS News an interview today. But he did turn and address our camera while passing by in a hallway.

"That's the Constitution of the United States," he said, holding up a pocket-sized copy. "What it says is the Congress of the United States appropriates the money. Got that?"

What he means is Congress gets to decide how tax dollars are spent. Specifically, Murtha himself often gets to decide. As head of the Defense Spending Committee he has the power to steer hundreds of millions of tax dollars in earmarks to companies of his choice.

But now the FBI is asking whether people who have benefited from Murtha's earmarks have made improper donations to his political campaigns.

There's been a flurry of activity. Agents raided lobbying firm PMA, started by a Capitol Hill staffer who worked closely with Murtha In Murtha's hometown Johnstown, Pennsylvania the FBI has issued subpoenas for Concurrent Technologies and raided Kuchera Defense Industries and a game ranch owned by Kuchera's CEO, once the site of a Murtha fundraiser.

CBS News has learned that federal agents are also looking into a Murtha-backed research firm "Electro Optic Center." According to a source interviewed by the FBI: In one year, the Center sought $120 million in earmarks directly through Murtha's office and managers urged employees to donate to Murtha so the Center would get favorable treatment.

We found at least six donors linked to the Center gave to Murtha on the same day last year, just days before earmarks were decided.

Republican Rep. Jeff Flake, who's against earmarks of any kind, is calling for an ethics investigation and says it could dwarf the last lobby mess to hit Washington.

"In terms of contributions and circular fundraising and the involvement of members it's much bigger [than the Abramoff scandal]," he said. "Much bigger."

In the coming weeks, Murtha will help divy up a new round of defense earmarks.

Though he wouldn't talk with us about the FBI investigation, his office has said he's done nothing wrong and there's no reason to believe he is a target.

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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.