Funds went to Kerry, Cunningham, Hunter
By Marisa Taylor
UNION-TRIBUNE STAFF WRITER
February 12, 2004
A former San Diego defense contractor pleaded guilty yesterday to illegally giving two California congressmen and Massachusetts Sen. John Kerry campaign contributions that his company later listed as expenses in Navy contracts.
Parthasarathi Majumder, the former chief executive officer of Science and Applied Technology, admitted circumventing campaign finance laws between 1993 and 1998 by using his employees and friends to funnel money to Kerry, who is the front-runner for the Democratic presidential nomination, and to U.S. Reps. Randy "Duke" Cunningham, R-Escondido, and Duncan Hunter, R-El Cajon.
Majumder, 52, reimbursed the donors for their contributions and then recovered the money by billing the Navy.
In a plea agreement filed in San Diego federal court, prosecutors estimated that the illegal contributions totaled at least $95,000. They did not specify how much each lawmaker received.
The politicians, who have not been accused of wrongdoing, said they had cooperated in the investigation and were unaware of any improprieties concerning the donations.
The three lawmakers have handled the question of what to do with the illegal contributions differently.
A Kerry spokeswoman said the senator donated $13,000 to charity as soon as federal authorities told him what had happened.
Hunter said he hasn't given back the contributions because federal authorities haven't identified how much money his campaign received and to whom the funds should be returned.
A spokeswoman for Cunningham said he is waiting for advice from the Federal Election Commission. She said the congressman has already returned money donated legitimately by Majumder, though she couldn't immediately say how much.
Federal authorities said Majumder's guilty plea serves as a reminder of the importance of following campaign finance laws.
"Part of what America is about is that everybody gets one vote and everybody is allowed a certain amount of influence in that vote," prosecutor Phillip Halpern said. "Anybody who tries to circumvent that system is committing a crime that goes to the very heart of the democratic process."
The case also raised questions about how a small businessman who lied to the Navy about having a doctoral degree became a well-connected defense contractor who got more than $130 million in military funding.
Science and Applied Technology, or SAT, began in 1989 as a tiny player in the defense industry. Starting out with a $50,000 small-business loan, the company promised to develop missile defense technology that would revolutionize the industry.
Known as AARGM, or Advanced Anti-Radiation Guided Missile, a program was set up to develop an improved anti-radar missile that could be used to attack enemy surface-to-air missile sites.
Current anti-radar missiles, which target enemy radar signals, can go astray once the radar is turned off. AARGM missiles are designed to lock onto a missile site even if the site's radar is switched off.
As Majumder's company grew, he and his employees began making frequent contributions to political campaigns.
According to the nonprofit Center for Responsive Politics, SAT's employees and its political action committee gave Hunter $21,300 during the 1996 election cycle, making them the congressman's largest contributor.
The same group donated $15,500 to Cunningham during the 1996 election cycle to become his second-largest contributor.
Between 1993 and 1998, SAT employees and the company's political action committee contributed $31,400 to Kerry's campaign, making them fourth on his list of top donors during that period.
Meanwhile, the AARGM program was winning strong bipartisan support.
When the Department of Defense didn't immediately set aside money for the program in the mid-1990s, the three lawmakers were among a group of politicians who fired off letters demanding that the funds be released.
Kerry, who had long worked with SAT's Massachusetts partner, Militech, wrote 18 letters to military officials and members of Congress in a push for funding.
"Mr. Secretary, I ask that you advise me immediately of the grounds on which the Navy refuses to release these funds," Kerry wrote to the secretary of the Navy. "Development of this important program already has been delayed by the unnecessary delays in fund ing. This not only is resulting in our air forces being unable to benefit from the protection of the AARGM ... but also very soon will require the contractor to terminate its personnel associated with this project."
Hunter and Cunningham also wrote letters urging the immediate release of funding, saying the program could advance missile defense technology at a reasonable cost. At the time, Cunningham was serving on the House Appropriations Committee and Hunter was on the House Armed Services Committee.
John Hamre, the Department of Defense comptroller at the time, responded that the Navy was considering cutting the $35 million slated for the program that year.
"The Navy has not budgeted or programmed any funds to continue AARGM development," Hamre wrote. "We strongly recommend the Congress concur with our request, but we will fully comply with Congress' decision once it is made."
A year later, the Navy released the funding.
The campaign contributions from Majumder and his employees caught the attention of federal authorities in 1999, and the FBI, the Internal Revenue Service and the Defense Criminal Investigative Service launched an investigation.
After Majumder was indicted in July 2002, he sold SAT to Alliant Techsystems, or ATK, a Minnesota aerospace and defense giant. Financial terms were not disclosed.
The three politicians, all of whom served in the military, have insisted they supported the AARGM not because Majumder was a top contributor, but because of the program's merits.
"Having personally been shot down by a surface-to-air missile on May 10, 1972, I can say with all certainty that this technology is a major advancement," Cunningham said yesterday in a prepared statement. "My support for such programs is strictly non-partisan and is in no way based on whether an individual contributes to my campaign."
According to Defense Department and Alliant news releases, preproduction testing on the AARGM is set to begin next year. If the tests succeed, the missile would start replacing a Raytheon missile in U.S. fighters in 2008.
"This isn't just something that congressmen put into the budget," Hunter said. "This system has turned out to be very valuable."
Campaign finance experts said Majumder's relationship with politicians illustrates the problem not just with illegal contributions, but with legal contributions, as well.
"Congressmen are a little too promiscuous with their love when it comes to special interest money," said Bill Allison, a spokesman for the Center for Public Integrity, a nonpartisan group that tracks contributions. "What you have is a very small group that is getting special treatment."
At his sentencing hearing April 28, Majumder faces up to five years in prison, but he is likely to receive a year or less. He and SAT agreed in December to pay more than $3 million to settle a separate civil lawsuit filed against him by the government for submitting false claims.