Is to possible to set up a distribution list (for internal employees) in Marketo?


There is no such feature called "Distribution list" in Marketo. An email can be sent to people only of they are part of your lead database.

Alternate Workaround: You can create a excel sheet for your internal employees with their email addresses and import them into a Marketo static list.  You can refer this list in your smart campaign whenever you would need to send a communication email.

Note: Mark the email you send as "Operational" to ensure that it reaches all the people in the imported list.