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Murtha in trouble?

Back when I was working for Harper's this summer, I shared a byline with my boss Ken Silverstein on a story about Congressman John Murtha (D-Pa) and  what Ken dubbed "the Murtha rules":

Murtha basically runs a racket. He helps win taxpayer money for companies that support his campaigns and hire lobbyists he approves of–often his former staffers and in at least one case blood kin. Companies that set up shop in his district do better yet, even if they only set up a smaller satellite office, thereby allowing Murtha to pose as a champion of his constituents as opposed to his political cronies. “There’s been no report of Mr. Murtha’s profiting personally,” the New York Times has written. “But the Murtha operation–which has become a model for other entrepreneurial lawmakers–is a gross example of quid pro quo Washington.”

One of contractors that featured in the piece was Kuchera Defense Systems and now, via The Hill, it looks like the company is in a spot of trouble:

Federal agents raided the offices of a Western Pennsylvania defense contractor that has received millions in federal earmarks at the request of Rep. John Murtha, according to local media reports.

The offices of Kuchera Industries and Kuchera Defense Systems were shuttered for the day following the raids, the chief financial officer told the Johnstown Tribune-Democrat. The companies' phone system says they will open again Friday morning, and e-mails sent to top company officials went unanswered.

Based in Windber, Pa., just outside Johnstown, Kuchera won $8.2 million in federal defense earmarks in the 2008 budget. The earmarks came at the request of Murtha (D-Pa.).

Also worth a read is this story

hat tip: Ken

Update: Ken posts some more info on the Murtha-Kuchera connection.

Universities cut back on spending

Over on NPR's excellent blog Planet Money, Caitlin Kenney writes that public universities all over the country are struggling to find ways to cut their costs in the face of the economic downturn:

Universities around the country are bracing for massive cuts as states rethink their shrinking budgets. In preparation for expected budget cuts, many are asking their staffs to look for any way to save money. School officials say cutting a university budget is complicated by factors like tenure, which make it harder to lay people off.

The same problems apply here at Princeton University and at the other Ivies-- per The Wall Street Journal:

Princeton said its endowment supports 45% of its roughly $1.25 billion budget -- far more than most universities, making budget cuts necessary. Dr. Tilghman said the best-compensated employees would have their raises capped at $2,000 and administrative budgets would be reduced by 5%. Princeton said it would scrutinize all new hiring, including new faculty searches and defer new capital projects to save more than $300 million over 10 years.

And it appears the worst is yet to come, with the Journal reporting that "none of the schools gave data on performance to date of their holdings of more exotic and illiquid investments, such as real estate, commodities and private equities. The expected losses in those categories have led to the bigger, full-year loss estimates."

Question of the day: when will universities make the pilgrimage to Capitol Hill to request a bailout?

Princeton Endowment Drops

By Sebastian Jones

This morning Shirley Tilghman, the President of Princeton University, sent an e-mail to students and staff with an "update on Princeton's response to the economic downturn", spelling out some of the losses the university's endowment has suffered. According to Tilghman, by late October, "the University’s endowment had declined by 11%, based upon our standard reporting protocols, using information that is the best available as of the reporting date." She added that this figure likely "understates the actual economic loss":

And, of course, financial markets have continued to decline since then. Although we cannot know what the next six months will bring, we believe it is prudent for the University to plan for the possibility that its endowment will have declined by 25% at the end of the fiscal year.

Full e-mail below...