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The Honolulu Advertiser
Posted on: Thursday, March 11, 2010

Earmark ban targets for-profit companies

Advertiser News Services

Hawaii news photo - The Honolulu Advertiser

Chairman Daniel Inouye

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WASHINGTON House Democratic leaders yesterday barred the long-standing practice of earmarks that allows members to direct federal spending to private companies that often return the favor with campaign contributions.

Rep. David Obey, D-Wis., chairman of the appropriations committee, said he hopes the step will mean 1,000 fewer earmarks and break the linkage between campaign contributions and earmarks that has sparked intense criticism and resulted in ethics probes of several lawmakers.

The Senate so far has refused to go along.

The House move sparked strong opposition from Senate Appropriations Committee chairman Daniel Inouye, D-Hawai'i, Obey's Senate counterpart and a long-standing defender of earmarking.

Inouye issued a tartly worded response defending the current system and calling Obey's move "quizzical."

"It does not make sense to discriminate against for-profit organizations," Inouye said. "I don't believe this policy or ceding authority to the executive branch on any spending decision is in the best interests of the Congress or the American people."

The election-year step comes after the ethics committee investigated seven members of a Pentagon spending panel for awarding earmarks to companies whose executives and hired lobbyists showered them with campaign cash. The panel found no linkage and absolved the lawmakers.

Republicans, meanwhile, are weighing giving up earmarks altogether in an appeal to voters frustrated with Washington's free-spending ways.

Criticism is often generated by such earmarks as the $200-million-plus "bridge to nowhere" in Alaska that was supposed to connect an island, with a population of just 50 or so, to the mainland. But among congressional watchdogs, the more odious element has been the pay-to-play culture in which campaign cash flows from earmark beneficiaries into the coffers of lawmakers.


The most commonly accepted definition of an earmark is a specific project not requested by the president but inserted into one of the annual spending bills by a member of Congress. They come in countless varieties, such as grants to police departments, improvements for military bases, renovations to historic buildings and research grants for home-district colleges.

But at issue in the new edict are earmarks aimed at for-profit entities, especially those seeking to tap into the Pentagon's $600-billion-plus budget. Many if not most of such companies hire lobbyists to navigate the process, and it's common for both company executives and the hired lobbyist to give campaign cash to lawmakers who sponsor their earmarks.

Critics said the ethics committee turned a blind eye to a corrupt system in dismissing an investigation into whether the seven lawmakers broke House rules when funneling earmarks to a lobbying firm that was somewhat blatant in tying campaign contributions from firm lobbyists and their clients to winning earmarks.

"Simply because a member sponsors an earmark for an entity that also happens to be a campaign contributor does not, on these two facts alone, support a claim that a member's actions are being influenced by campaign contributions," the ethics committee found.

Critics called that a whitewash.

House Republican leaders issued a joint statement urging their colleagues to unilaterally adopt a moratorium on all earmarks at a meeting today.

"For millions of Americans, the earmark process in Congress has become a symbol of broken Washington," said House Minority Leader John Boehner, joined by second-ranking Republican Eric Cantor of Virginia and third-ranking Republican Mike Pence of Indiana.

House Speaker Nancy Pelosi, a California Demo-crat, said her party's ban "will ensure good stewardship of taxpayer dollars." She said Congress "is continuing to uphold our pledge to bring honesty back to government."


Inouye said "it is no secret" that for-profit companies, like nonprofits, hire lobbyists and make political contributions.

"That is how most of them make the Congress aware of their products and services. ... All lobbyists file disclosure reports. These contributions are all fully disclosed and available for all to see on the Internet," he said.

Pointing to the Predator drones used in Afghanistan, Inouye said, "this program was the direct result of a congressional earmark directed to a for-profit company."

The House Democrats' plan was cheered by earmark critics. Steve Ellis, vice president of Taxpayers for Common Sense, a Washington group that tracks projects, called it a "significant positive step forward" because "earmarks to for-profit entities are certainly ground zero for pay-to-play."

"Much of this ground gained will be lost if the Senate doesn't step up to the plate," Ellis said. "The campaign cash will flow a little more heavily to the Senate side of the Capitol and for-profit earmarks will remain alive and well."

Ellis, who said "for-profit earmarks are really where the rubber meets the road as far as corruption," proposed that President Obama settle the issue by threatening to veto bills that include corporate earmarks.

Last year's defense appropriations bill contained 1,720 earmarks worth $4.2 billion, according to Taxpayers for Common Sense.

The Associated Press, USA Today and Bloomberg News Service contributed to this report.