Democrat Dirty Laundry: Dem Rep. Visclosky Secures Millions in Shady Earmarks for Lobbying Firm

October 27, 2009

Dem Rep. Visclosky Secures Millions in Shady Earmarks for Lobbying Firm

Did Visclosky Receive Thousands in Campaign Cash for Securing Earmarks?



SPIN CYCLE: Speaker Pelosi Vowed that Democrats Would Serve the People’s Interests, Not Special Interests


“Democrats declare that it is time to end the culture of corruption prevailing through all levels of government. We are committed to immediate change to lead this country in a new direction, to put an end to business as usual, and to make certain this nation’s leaders serve the people’s interests, not special interests. Our responsibility to our constituents and to our nation is to represent all of the people, not just the powerful. (Nancy Pelosi’s “A New Direction for America, Page 21)



RINSE CYCLE: Dem Rep. Visclosky’s Shady Ties With Lobbying Firm, Secures Millions in Earmarks


It takes a while for most start-up companies to gain the confidence of a U.S. congressman and the promise of federal funds. But last year, a small Illinois company accomplished its goal in 16 days with the help of Rep. Peter J. Visclosky, a little-known Indiana Democrat who sits on the House committee that funds the Pentagon.


In rapid succession, the three-employee technology firm, NanoSonix, filed its incorporation papers in Skokie, Ill., and hired a Washington lobbying firm, K&L Gates, which boasted to clients of its close relationship with Visclosky. A week later, Visclosky wrote a letter of support for a $2.4 million earmark for NanoSonix from the House Appropriations Committee’s defense subcommittee.



Murdock’s company was not the only one to find a winning formula in pursuit of federal earmarks through Visclosky. The congressman sponsored or supported at least $44 million in earmarks in fiscal years 2008 and 2009 for more than 15 technology firms that had hired K&L Gates as lobbyists. None of the companies operated in Visclosky’s home state, but nearly all of them donated to Visclosky’s campaign just before or soon after receiving the promise of federal money.


K&L Gates used its relationship with Visclosky as a marketing tool, a document obtained by The Washington Post reveals. “We also have a very good relationship with Representative Peter Visclosky, chairman of the House Energy and Water appropriations subcommittee and third ranking member on the defense appropriations committee,” lobbyist Edward C. Olivares, a former Army Special Forces officer, wrote to a potential client in early 2007, soon after Democrats took control of the House. “We can ensure that Mr. Visclosky has visibility of this important project when funding is debated.”


Federal investigators are scrutinizing Visclosky’s earmarks and whether a member of his staff tried to raise campaign money by promising funding. The Post recently reported that the Justice Department probe is examining the role played by Visclosky’s recently departed chief of staff, Charles Brimmer, in negotiating with lobbyists and companies to solicit campaign donations. Brimmer’s attorney declined to comment.


Much of the public focus in the investigation has been on PMA Group, a former lobbying powerhouse that won $299 million in earmarks in the past two years from the defense panel — $34 million of it directly from Visclosky. Visclosky’s pattern of help for K&L Gates clients has not been previously disclosed.


A Post review shows that the K&L Gates clients winning Visclosky’s support, along with their lobbyists and investors, donated almost $200,000 to Visclosky and an additional $130,000 to the House Democratic campaign committee since 2005. The donations often came in clusters, around the time Visclosky’s committee was crafting its annual earmarks, which are added to the budget by committee members and do not go through the competitive or approval processes required for most government contracts.



David Rosenberg, who founded Hycrete in New Jersey in 2006, said he hired K&L in August 2007 and has since paid the firm $190,000 to help obtain defense appropriations and other funds.


Rosenberg said he knocked on dozens of doors trying to get the Army Corps of Engineers to read data showing that his moisture-control additive would strengthen concrete structures. Success eluded him until K&L Gates made a presentation to Visclosky’s staff last year.


Rosenberg said K&L encouraged him to donate to Visclosky — “to build a relationship with a member of Congress.” Last year, Visclosky requested a $2 million Army earmark to evaluate Hycrete’s technology. The next month, Rosenberg and his colleagues donated $20,000 to Visclosky and the Democratic Congressional Campaign Committee.


“I’m a fan of earmarks,” Rosenberg said. “None of that would have happened without this funding — there was no light at the end of the tunnel.”


Genocea Biosciences, a Boston area vaccine maker founded in 2006 by Harvard professors David Sinclair and Darren Higgins, began a relationship with K&L Gates soon after it was formed, according to a spokesman. Lobbying reports show that K&L Gates began lobbying for the company in March 2007, and within weeks, company officials and investors gave $18,000 to Visclosky. It was the first time many of them had ever contributed to a federal politician, records show.


Visclosky then sought $2 million to help Genocea, which hoped to develop vaccines for chlamydia and bacterial meningitis. He later helped it secure an additional $1.6 million.


The earmarks helped the firm position itself financially. Earlier this year, it raised $23 million in private capital, largely from a GlaxoSmithKline fund, and is now positioned for sale, according to trade reports.



Over 16 days in March 2008, it started operations, hired the lobbying firm and won Visclosky’s help seeking $2.4 million for research to see whether a polymer might have improve night-vision goggles.


As Visclosky’s committee moved the earmark forward, Murdock, his wife and executives from the NanoBusiness Alliance wrote $21,700 in campaign checks to the congressman and the DCCC. Murdock said he could not recall whether K&L Gates suggested the donations.


Before the federal probe became public, nearly 30 percent of Visclosky’s earmarks — $63 million worth in 2008 and 2009 — were steered to firms outside Indiana. And nearly three-quarters of his campaign donations came from out of state, as well, most of it tied to firms requesting earmarks. (Paul Kane and Carol Leonnig, “A congressman, a lobbying firm and a swift path to earmarks,” The Washington Post, 10/26/2009)


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