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Earmark Change Could Hit Pet Projects in Maryland

Maryland employers, particularly those in the defense and aerospace industries, could take a hit from a decision Wednesday by House Democrats to ban corporate earmarks in 2010.

In an election-year effort to contest Republicans for the "reform" mantle, Democratic leaders in the House said they won't approve earmarks for corporate entities this year. Earmarks that go to for-profit enterprises are among the most controversial uses of the practice, because of the potential for scandal.

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Potentially, tens of millions of dollars in federal spending in the state could be affected.

The top Democrat and Republican on the Senate Appropriations Committee--two of the most prolific earmarkers in Congress--harshly criticized the move, raising questions about the ultimate impact of the House effort.

House Speaker Nancy Pelosi said the change was designed to limit the influence of lobbyists and is part of a broader Democratic effort to end "a culture of corruption" in Washington and increase the transparency of government.

The decision could have the effect of also preventing senators from delivering earmarks to corporations, since both houses of Congress must ultimately approve the measures that include money for lawmakers' pet projects.

Earmarks are funds set aside for specific projects that circumvent the normal spending process. They have declined in number in recent years and make up only a tiny portion of overall federal spending, but still amount to $15.9 billion in the current fiscal year, according to Taxpayers for Common Sense, a non-profit watchdog group.

Most of Maryland's lawmakers in Washington, Democrat and Republican, solicited earmarks over the past year for corporations. The exceptions were Democratic Reps. Steny H. Hoyer, Donna Edwards and Chris Van Hollen, who solicited funds for non-profit or governmental projects only.

However, even in many of those cases, private companies were the ultimate beneficiaries.

Hoyer, the House Democratic leader, obtained $31.2 million in earmarked defense spending at Maryland installations, for procurement and construction projects. The companies who actually were paid to do the work were not disclosed in the earmark requests posted on Hoyer's official Web site.

As part of the House Democratic earmark reform, federal inspectors general will be required to audit five per cent of all earmarks that go to non-profits, to make sure they aren't really destined for corporations.

Democratic Sen. Barbara A. Mikulski, an influential member of the Senate Appropriations Committee, added nearly $10 million to the 2010 defense spending measure for three of her top campaign donors--executives and political action committees of Northrop Grumman, Thales Communications and L-3 Communications.

Republican Rep. Roscoe G. Bartlett, a member of the House Armed Services Committee, had $15 million in earmark requests granted, including for Northrop Grumman, one of his largest contributors over the years. Here is Pelosi's statement, issued Wednesday:

"When Democrats assumed the majority of Congress in 2007, we pledged to place people ahead of lobbyists and the public interest before special interests. Over the last three years, we fought to replace a culture of corruption with a new direction of transparency and accountability, including earmark reforms in the last Congress.

"Today's proposal totally bans corporate earmarks – critical reform that addresses concerns that many Americans have. It ensures that for-profit companies no longer reap the rewards of congressional earmarks and limits the influence of lobbyists on Members of Congress. This ban will ensure good stewardship of taxpayer dollars by the federal government across all agencies.

"To prevent any conflicts of interest, this initiative will empower the Defense Department – not Members of Congress – to choose which businesses and projects will receive funding. It will open the doors of the Pentagon to small start-ups with no inside connections. It will also require federal agencies to audit 5 percent of all earmarks directed to non-profit entities, to help ensure that non-profit earmarks go for their intended purpose.

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"This measure builds on a record that began on the first day of the 110th Congress, when we passed the toughest ethics reform in a generation. The House created an independent ethics panel to fundamentally change how we investigate ourselves. We required that every earmark be listed online, next to the name of the Member who requested it. And the landmark Honest Leadership and Open Government Act demanded an unprecedented level of disclosure, closed the revolving between the Capitol and K Street, banned gifts from lobbyists and limited privately-funded travel. Previous Republican Congresses had years to act on these reforms. This New Direction Congress is actually implementing them."

"Thanks to the leadership of Chairman Obey and Chairman Dicks, this Congress is continuing to uphold our pledge to bring honesty back to government."

Here is the response by Democratic Sen. Daniel Inouye of Hawaii, chairman of the Senate Appropriations Committee:

"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. In my view, it does not make sense to discriminate against for-profit organizations. I am not sure why we should treat for-profit earmarks any differently than non-profit earmarks.

"All of our for-profit earmarks are already subject to competition. What is the rationale to eliminate them? All earmarks are also subject to the strict transparency rules that were implemented at the beginning of last year, including a single location on the Committee website that links to a list of every Senator's earmark requests. I would also note that all Senators file statements declaring that they and their immediate families have no financial stake in any earmark request.

"By increasing the transparency and reporting requirements we have erased the impropriety that could have existed when these matters were done in private. If mistakes were made by House members in the past, the new transparency rules eliminate that potential.

"Moreover, I am troubled by what this policy insinuates. It seems to suggest that for-profit entities are corrupt and non-profit entities are above reproach.

"The truth of the matter is that many, if not most, for-profit and non-profit entities lobby for themselves or employ lobbyists. That is how most of them make the Congress aware of their products and services. It is no secret that these meetings take place. In addition, it is no secret that many of these individuals make political contributions. All lobbyists file disclosure reports. These contributions are all fully disclosed and available for all to see on the Internet.

"I find the House Appropriations Committee's recommendation quizzical. For example, I would note in the House's Fact Sheet on earmarks it criticizes the explosion of earmarks in the Labor-HHS, Commerce, and Transportation bills, among others, but fails to point out that virtually all of this earmark growth came in the non-profit sector. Eliminating for-profit earmarks won't address the growth areas that the House has criticized.

"I would conclude by pointing out that for-profit earmarks have met with some outstanding results. Here is one example. We are all proud of the success of the Predator drone. This program was a direct result of a Congressional earmark directed to a for-profit company. The initiative was put into a defense appropriations bill as a Congressional initiative. It was not an initiative from the Executive Branch. If the House's proposed policy had been in effect at that time, we would not have the Predator today."

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Sen. Thad Cochran of Mississippi, the senior Republican on the Senate Appropriations panel added:

"Congress cannot ignore its constitutional responsibilities to approve the allocation of federal funds. I will continue to work with Chairman Inouye to ensure that the bills reported by the Senate Appropriations Committee are prepared in a transparent manner, conform to federal laws and only approve spending that is in the national interest."

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