September 9, 2009
Editor's note: This is the second of a three-part series titled “Reyes the Rainmaker,” focusing on the power and influence of U.S. Rep. Silvestre Reyes in national security, homeland security, border security, and intelligence operations, how those programs have been integrated into regional economic development efforts, and how Reyes has drawn increasing support from the military contracting sector. In addition, there is a sidebar story to the series, Reyes and the Aerospace Missions Corporation earmark.
U.S. Rep. Silvestre Reyes (D-Texas) has enjoyed an increasing stream of campaign contributions from government defense, security, and intelligence contractors. Contributions from these firms are now among his largest sources of campaign funds.
Reyes and his staff have repeatedly denied that there is any connection between contributions and his congressional actions. But the appearances of “pay-to-play” activity continue to follow the congressman.
One of the first cases surfaced in 2004 as part of a federal GSA investigation of shoddy work by International Microwave Corporation on an electronic surveillance program on the border. The president of the company had made several large contributions to the Reyes campaign committee, and Rebecca Reyes, the congressman’s daughter, was director of the project. Reyes has said that he had nothing to do with her employment.
In the summer of 2006, just after Reyes became chairman of the House Intelligence Committee, media reports associated contributions by The PMA Group, the defense lobbying giant, to favored treatment by Reyes of PMA clients in the form of earmarks and contracts. Over the past four years, the defense companies that have received earmarks have also been the source of generous campaign contributions.
The opening this summer of a congressional review of the lobbying and campaign operations of The PMA Group by the House ethics panel and a parallel Justice Department investigation have sparked new media reports about the now-defunct PMA.
The Rise of Defense Industry Campaign Contributors
When Reyes first ran for Congress he counted largely on friends, local business, and traditional Democratic Party special interest groups, like labor and education. In the 1998 campaign (the earliest tracked by the Center for Responsive Politics’ opensecrets.org website), among the top five individual contributors were the Teamsters, AFSME, and the National Education Association.
The following election cycle (2000), defense and security contributions became more prominent. Lockheed Martin was his fourth largest campaign contributor, and the defense/aerospace industry ranked among the top five industry contributors for the first time –- a positioning it has maintained through subsequent election cycles.
Figuring among Reyes’ top campaign contributors in each of the 2002, 2004, and 2006 election cycles were Lockheed Martin, Raytheon, General Dynamics, with Boeing and SAIC figuring among the top 20 contributors in two of the three cycles.
Other major defense contractors that were among the top 20 contributors in those three election cycles were Northrup Grumman, BAE Systems, Voight Aircraft, and L-3 Communications.
In the last election cycle (2007-2008) military and security contractors dominated the ranks of the top contributors. Among the top five individual contributors, four were defense/security related: PMA Group (top contributor), Digital Fusion, General Dynamics, and SAIC.
Among the top five sectoral contributors were defense/electronics (top contributor) and defense/aerospace. Law firms, lobbying firms, and real estate associations were also ranked among the top five.
Long since gone among the ranks of the top five contributors are the traditional Democratic Party interests such as labor and education.
Contributions are just starting to trickle in for the 2010 contest even though Reyes has a virtual lock on the job. Among the top five ranking contributors are SAIC and Women’s Alliance for Israel, with General Dynamics, Raytheon, and Boeing tying for fifth place. The defense/electronics industry, along with pro-Israel associations, rank among the top five sectoral contributions to the Reyes campaign committee and leadership PAC.
Today, Rep. Reyes routinely counts among the major congressional recipients of defense industry contributions.
According to the most recent count, with figures from the 2008 and 2010 election cycles, Rep. Reyes ranks among the top 20 congressional members receiving defense industry contributions. With $173,000 in industry contributions, Reyes ranks No.17, according to Common Cause. Among the other Texans on the list are U.S. Sen. John Cornyn, and U.S. Reps. Ron Paul and Kay Granger.
Commenting on the power of the defense industry, Common Cause President Bob Edgar, upon releasing the names of the top 20 recipients on July 22, observed: "Having spent more than $31 million in lobbying plus $3.2 million in campaign contributions during the first three months of 2009 alone, defense contractors seem to have as much influence in Congress over defense spending as Secretary of Defense Robert Gates or President Obama.”
The PMA Group Scandal and Reyes’ PAC
One measure of Rep. Reyes’ increased standing among military contractors was his increased financial links to the The PMA Group and its clients. The DC lobbying firm and its clients directed more than $40 million in campaign contributions to Congress between 1998 and 2008. PMA closed shop earlier this year after the FBI raided its offices as part of a continuing Department of Justice investigation into influence peddling.
Although his hold on the congressional seat has never been at serious risk, Reyes’ campaign committee and his political action committee received steadily increasing donations from PMA Group and its clients. Since 1989 the two-decade old lobbying firm has specialized in securing earmarks for its clients by way of currying favor with congressional members, particularly those who, like Reyes, sit on military and intelligence committees.
The PMA Group (Paul Magliochetti & Associates) was named after its founder and president Paul Magliochetti, who founded the lobbying firm after stepping down from the House Defense Appropriations Subcommittee, where he worked under John Murtha (D-Pa.)
From 1998 to 2008 PMA received more than $115 million from its clients, mainly in the defense and security industries. CQ MoneyLine has charted the rapid growth of PMA, which raked $1.4 million in the first six months of 1998, placing it 44th among K Street lobbying firms. By the first half of 2008, PMA had risen to the 9th largest lobbying firm with earnings of $8.6 million.
But PMA’s fortunes and influence began to wane late last year.
Media exposés, led by Washington, DC’s Roll Call, began to track the firm’s money trail in April 2007. It’s a trail that starts with defense and homeland security contractors who were PMA’s clients and leads to congressional members, especially those who sit on such influential committees as the House Defense Appropriations Subcommittee and the Armed Services Committee.
In addition to its direct lobbying on the Hill, PMA channeled more than a third of its client income to congressional members in the form of contributions to their political action committees and campaign committees.
The cause-and-effect relationship between PMA’s contributions and favors to its clients have become the subject of media attention and ongoing congressional and executive-branch investigations.
In November 2008, FBI raids on the PMA offices and on the home of its founder Magliocchetti signalled the coming end of PMA’s legally and ethically questionable lobbying work. Few details are known about the Justice Department investigation. However, prosecutors apparently raided PMA offices because of concerns that he may have funneled money through straw donors to avoid openly violating campaign finance laws.
“The seizure of the PMA Group’s computer files and financial records last November raised the possibility that the authorities might seek evidence of wrongdoing by members of Congress as well," stated an April 3, 2009 New York Times report.
Earlier this year PMA shuttered its office, with its team of lobbyists fleeing to other firms in face of the DOJ investigation.
Neither DOJ or the House ethic committee has revealed the details of the ongoing investigations, such as which congressional members are under suspicion for participating in pay-to-play deals. But media reports and advocacy groups such as Center for Responsive Politics and Taxpayers for Common Sense are shedding important light on PMA’s 20-year history of campaign contributions.
Those contributions were spread widely throughout Congress but especially benefited the members of the House Defense Appropriations Subcommittee, chaired by Rep. Murtha, and the House Armed Services Committee, where Reyes is a senior member.
One of the early reports on the unfolding contribution/earmark scandal came from Roll Call in an Oct. 1, 2007 article focused on Rep. Reyes and his newly established political action committee, BEST PAC. The new PAC received most of its donations from The PMA Group.
When asked if the congressman was the subject of either the House ethics or DOJ investigations, Reyes spokesman Vincent Perez said that “Congressman Reyes has not been contacted because he is not the target of the investigation.”
Where Did PMA Money Go in Congress
More than $40 million flowed to congressional members from PMA and its clients between 1998 and 2008.
The top three recipients were Democratic congressional members, Rep. John Murtha, Rep. Pete Visclosky (D-Ind), and Rep. Jim Moran (D-Va.). According to the Center for Responsive Politics, Murtha and Visclosky collected a total of $3.8 million from PMA and its clients during the last decade.
In fourth spot in the PMA recipient list is President Barack Obama, ranking 7th is U.S. Sen. John McCain, and 11th is Secretary of State Hillary Clinton. As the Center for Responsive Politics notes, the high rankings of Obama, McCain, and Clinton are the result of an influx of contributions to their presidential campaigns. The contributions to Obama, for example, jumped from $7,850 in the 2006 election cycle to $763,626 in 2008.
Presidential candidates tend to rank high in such lists because they collect so much more than congressional candidates. About Obama, the Center for Responsive Politics observed: “PMA represented some very large companies, whose employees supported Obama, but the lobbying firm’s own people gave him a total of $4,225 in the 2004 and 2008 cycles.”
The top 10 in donations from PMA and its clients also included Jerry Lewis (R-Calif.), Norm Dicks (D-Wash.), C.W. Bill Young (R-Fla.), and Ike Skelton (D-Mo.).
Among the 515 congressional members who received contributions from The PMA Group and its clients from 1998 to 2008, Rep. Reyes ranked 21st, with a total of $295,000 in PMA donations, although much of it came recently.
Reyes Enjoyed Increasing PMA Campaign Support
PMA and its clients contributed $7,000 to his campaign committee in 1998, rising to $12,000 in 2000, $26,500 in 2002, $44,500 in 2004, $51,500 in 2006, and then tripling to $153,900 in 2008.
Rep. Reyes’ BEST PAC (established in 2007) received $47,500 in the 2008 cycle from PMA and its clients. The top 20 contributors to BEST PAC included these defense firms: PMA Group, SAIC, Lockheed Marking, Raytheon, General Dynamics, Boeing, BAE Systems, Digital Fusion, Potomac Advocates, Alliant Techsystems, Honeywell, Romanyk Consulting, Argon ST, Concurrent Technologies, DLM Group, Electronic Warfare Associates Services, Jacques & Associates, L-3 Communications, and ProLogic.
Of the top 20 donors, only three –- Reyes Campaign Committee, American Optometic Assn, and Brownco Capital -– are not in the business of securing defense contracts.
BEST PAC has received only two contributions for the 2010 election cycle: General Dynamics and Northrup Grumman.
Reyes and other members of Congress, particularly those on the House Defense Appropriations Subcommittee and the Armed Services Committee, have been favored recipients of contributions from PMA’s own PAC and from the firms employees. From 1989 to 2008, the top recipients of PMA campaign funding were Representatives Visclosky, Moran, and Murtha. “Congressman Reyes does not have any more defense-industry contributions than many of his colleagues on the House Armed Services Committee,” noted Reyes spokesman Vincent Perez.
Among the major PMA clients were Lockheed Martin, General Dyanamics, and Boeing, firms that gave generously to the campaign committees and PACs of the members of the House Appropriations Defense Subcommittee in the 1998-2008 period: Lockheed Martin ($862,7000, General Dynamics $693,400, and Boeing $578,600).
These three corporations are also major campaign contributors to Reyes, and are all continuing financial sponsors of the Border Security Conference at UTEP.
PMA’s former clients continue to spend millions in lobbying costs. In the first six months of 2009, the clients of the now-defunct firm spent $31.9 million. The top spenders were Lockheed Martin ($6.7 million), General Dynamics ($4.7 million), and L-3 Communications ($3.1 million), according to the Center for Responsible Politics.
PMA’s Pervasive Reach
The House Committee on Standards of Official Conduct, commonly called the ethics committee, announced its “review of certain, specific allegations.“ But it hasn’t yet named the lawmakers being investigated or the possible violations of House rules it is reviewing.
The committee is in a politically uncomfortable position as it undertakes its review since numerous panel members come from districts that have benefited from the defense and security earmarks tied to The PMA Group.
The Washington Post reported that the 10 committee members had themselves sponsored 29 earmarks for $59 million in federal projects included in the military spending bill recommended by the House Appropriations defense subcommittee and approved by the full House in late July.
"At the same time the committee is investigating the ties between lobby shops and earmarks and appropriators, they are actually playing the game themselves," said Steve Ellis, of the watchdog group Taxpayers for Common Sense. "It's hard not to see some conflict of interest in that."
Both the ethics committee chair Zoe Lofgren (D-Ca.) and the ranking minority member Jo Bonner (R-Ala.) submitted earmarks to the defense appropriations bill that will, among other projects, result in federal defense-related grants to university research centers in California and Alabama -– not unlike the newly established CDSR at UTEP, which was established by an earmark by Rep. Reyes.
Another challenge for any congressional investigation of the earmarks/campaign contribution link is that contributions by The PMA Group and its clients, while targeting members of the defense subcommittee of the Appropriations Committee and of the House Armed Services Committee, have gone to more than 500 Congressional members since 1998. In other words, more than just a few members of Congress may have dirtied their hands with PMA-tied contributions.
The contributions cross party lines, but 58 percent of the contributions from PMA and its clients went to Democrats. In the 111th Congress, PMA contributions went to 284 members.
The PMA Group and BEST PAC
For nearly two decades The PMA group had received little scrutiny despite being one of the nation’s largest lobbying firms, despite its close ties to Rep. Murtha, and despite the vast sums the flowed from the firm to congressional members.
However, when Jesus “Chuy” Reyes established BEST PAC for his brother Silvestre, on March 1, 2007, he may have set off of a chain of events that led to the current investigations of PMA and congressional members, who may have provided earmarks or other defense appropriations in return for campaign contributions by PMA and its clients.
BEST PAC stands for Border, Education, Security, and Technology Political Action Committee. According to press aide Perez, “The primary purpose is to support strong candidates in these fields. The PAC helps support candidates running for election or re-election, period. Trading favors for PAC contributions is illegal under U.S. law, just as trading favors for ordinary campaign contributions is unlawful.”
By national standards the finances of BEST PAC pale in comparison to the major PACs. It spent $122,550 in the 2008 cycle.
What was striking about BEST PAC was that most of its income came from PMA and its employees -- and that soon after the contributions were made, earmarks were put into the 2008 appropriations bill that benefited the contributors.
Soon after BEST PAC was established in the spring of 2007, donors associated with PMA were awarded with defense earmarks by Rep. Reyes and other congressional members with ties to PMA.
According to an investigative report by Roll Call (Oct. 1, 2007):
By the first week of June , the PAC had raised $35,000 from 32 individuals, almost every one of whom was an employee of the PMA Group or an employee of a defense or intelligence technology firm represented by PMA. Most of the donations were made on May 7, four days before the Intelligence panel approved the 2008 intelligence authorization bill, which included earmarks for several donors to the PAC.
Eight other political action committees (several of which were PMA clients) gave BEST PAC $16,500. According to Roll Call, most of the non-PMA related individuals and firms that donated to BEST PAC were affiliated with Potomac Advocates, which specializes in defense and intelligence.
As part of the defense authorization bill, Reyes, together with Murtha, Visclosky, and Rep. Alan Mollohan (D-WVa.) (all of whom were major recipients of campaign contributions from PMA and its clients), entered 12 earmarks totally $30 million that specifically targeted the industry donors to BEST PAC.
One of Reyes’ earmarks went to the El Paso-based Romanyk Consulting. According to Roll Call:
“Andrew Nicholas Romanyk made several donations totaling $4,000 to Rep. Reyes’ campaign between Sept. 18, 2006, and March 8, 2007. On March 16, Reyes issued a request letter seeking $800,000 for Romanyk Consulting to “develop a program to help secure laboratories working with biological agents,” an earmark that ultimately was added to the Defense appropriations bill. On June 1, Romanyk made a $1,000 donation to BEST PAC.”
BEST PAC donors also included several executives of Concurrent Technologies Corp., a nonprofit that Rep. Murtha had help establish and has provided with millions of dollars in earmarks, according to the Roll Call article. Other BEST donors included three officials from Electronic Warfare Associates, a large donor to Rep. Mullohan’s campaigns. Another donor was William Nichols, a Potomac Advocates. According to Roll Call:
Two of Nichols’ clients — Raytheon and Trex Enterprises — received $2 million in earmarks requested by Reyes in the Defense appropriations bill. In the same bill, Electronic Warfare Associates received a $5 million earmark from Mollohan, and Concurrent Technologies received $7 million in three separate earmarks requested by Murtha.
Reyes’ intelligence authorization bill included two earmarks for Concurrent Technologies totaling $2 million The bill also included a $2.5 million earmark requested by Rep. Mike Honda (D-Calif.) for Spyrus Inc. and a $2 million earmark requested by Rep. John Tierney (D-Mass.) for L-3 Communications. Both companies are PMA clients and donated to BEST PAC a few days before the bill passed.
At the time the scandal broke, Reyes’ Press Secretary Kira Maas denied any cause-and-effect relationship between the PAC contributions and Reyes’ actions in Congress., calling the timing of the PAC donations and the earmarks entirely “coincidental.” According to Maas, Reyes formed the PAC after becoming intelligence committee chairman, telling Roll Call that the PAC was intended to fund candidates who are strong on national security.
When asked about PMA and BEST PAC, Jesus Reyes said, “I don’t even know who PMA is.” He said that BEST PAC’s fundraising was the responsibility of his daughter, Veronica Cintron, who was also Reyes’ fundraiser and is the wife of the PAC’s treasurer, Guillermo Cintron.
The extended Reyes family has been a recipient of BEST PAC dollars in the form of campaign contributions and expense payments. Guillermo received $9,000 in the 2008 cycle , while Martha Reyes, wife of Jesus Reyes, received $1,000 for her campaign for the Ysleta School District (YISD) Board (the YISD Education Fund also received two contributions of $1,000). Another education contribution of $1,000 went to the Canutillo Middle School District, where Monica Reyes-Garcia, daughter of the congressman, is the school principal.
Taylor Bengston of Arlington, Virginia was the top recipient of BEST PAC funds. Benston, a Reyes aide, received $28,500 in more than a dozen contributions. Second largest recipient was the Democratic Congressional Campaign Committee.
Asked about the mission of BEST PAC and whether contributions to other members of Congress might influence votes, Reyes aide Perez said: “The PAC helps support candidates running for election or re-election, period. Trading favors for PAC contributions is illegal under U.S. law, just as trading favors for ordinary campaign contributions is unlawful.”
Military-Industrial Complex Comes to Congress
It may be that there are no direct links between the contributions that Rep. Reyes received for his campaign or for his PAC and the defense and intelligence appropriations that benefited these donors. The current House review and Justice Department investigation may shed light on the campaign and PAC contributions from the defense and security industry and the shaping of the defense appropriations bills.
Although neither the House ethics panel nor DOJ has released any details about their investigations, it’s likely that the targets of the investigation are the senior members of the House Defense Appropriations Subcommittee, where the Pentagon’s defense budget is reshaped and approved, rather then the members of the Armed Services Committee, where Reyes sits.
The investigations apparently do not target the House Intelligence Committee, which came under intense scrutiny several years ago, when one of its members, former Rep. Randy “Duke” Cunningham (R-Ca.), came under judicial scrutiny for accepting bribes in exchange for favors as part of his work on the intelligence committee. Cunningham, who used his House position to channel millions of dollars to defense and intelligence contractors, began an eight-year sentence in 2006 for accepting bribes bribes and evading taxes. When Reyes became chairman of the committee, he drew criticism when he opposed releasing an internal review, saying in a statement at the time that "my view was that the report was an internal review, principally of staff activity, and that the full report — with all of the names of staff — was not intended for dissemination beyond the committee.” [2007 article from the hill]
At stake is not just the rule of law, but the quality of governance. The dominance of campaign and PAC contributions from defense, security, and intelligence contractors that depend on government appropriations for virtually of their revenues raises issues about undue influence.
It’s a concern that President Dwight Eisenhower raised in his farewell address:
“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted.”
In the past five decades the influence of this sector has expanded as the defense budget has grown, and it’s a sector that now comprises not only defense contractors but private contractors for the Department of Homeland Security and all intelligence community agencies, where outsourcing is even more prevalent than at the Pentagon.
Next: Electronics and Earmarks on the Border