Published: October 13, 2009 11:27 pm      

2 former colonels sentenced: Military contract case had ties to Murtha

PENSACOLA, Fla. — A federal judge sentenced two former Air Force colonels to prison on Tuesday for destroying documents, lying to a grand jury and other crimes related to a wider fraud scheme by contractors and defense lobbyists with ties to a powerful Rep. John Murtha, D-Johnstown.

The men, both engineers and graduates of the U.S. Air Force Academy, are among those accused by federal prosecutors who are looking into alleged wrongdoing by contractors with ties to Murtha, chairman of the House Appropriations Subcommittee on Defense.

Murtha has not been accused of criminal wrongdoing.

U.S. District Judge Lacey Collier sentenced Richard Schaller to 18 months in prison and five years probation. Schaller was convicted of helping Mark O’Hair, a supervisor at the research lab at Eglin Air Force Base, steer contracts to Schaller’s defense contracting company.

O’Hair previously pleaded guilty to federal charges of false statements and conflict of interest. Collier sentenced O’Hair to six months in prison and three years probation – the strongest sentence he could give under the sentencing guidelines.

Also involved in the Eglin case is Richard Ianieri, the former chief executive for a defense contractor.

Ianieri set up a company in Murtha’s congressional district and worked closely with another defense contractor in Murtha’s district, William Kuchera.

Kuchera’s company has received tens of millions of dollars in congressional appropriations that were directed to the firm by Murtha.

Ianieri hired a lobbying firm that at the time employed Murtha’s brother. After hiring the firm, Ianieri’s company, Coherent Systems International Corp., received a congressional appropriation of more than $8 million.

Around that time, Murtha announced in an April 2006 news release that Coherent and Kuchera Defense Systems were working “virtually as one company” on 14 contracts worth $30 million to develop high-tech military gear.

Ianieri pleaded guilty July 20 to defrauding the Air Force and has been cooperating with federal prosecutors.

His sentencing had been set for September, but was delayed indefinitely while he cooperates with the Justice Department in its ongoing probe.

On July 29, Ianieri testified at Schaller’s trial in federal court in Pensacola, Fla., that Ianieri had taken $200,000 in kickbacks from Kuchera’s company after providing the defense contractor with $650,000 from the congressional appropriation of more than $8 million.

Ianieri testified that O’Hair approved numerous invoices dividing the appropriation of more than $8 million among Ianieri’s company and four smaller companies including Schaller engineering.

On Tuesday, Collier denied a request by Schaller to leave prison to attend his daughter’s November wedding. Collier said he felt the retired colonel had shown no remorse for manipulating the earmark system.

U.S. Attorney Stephen Pressier said Schaller’s conduct was a betrayal of his military service.

“It is inconsistent with the nobility that comes from being retired officers of the U.S. Air Force. You have somebody that in his mind thinks that they are above the law,” he said.

But Albert Oram, Schaller’s attorney, said his client and O’Hair were trying to help airmen and soldiers on the ground by working to obtain earmark funding for high-tech research that would save lives in Iraq and Afghanistan. Oram said it was something Air Force officials encouraged.

Collier disagreed.

“The evil of the earmark process is that I don’t even know how they come up with the money and the contractor that has the relationship with the congressman then gets the money,” he said.