> Democrats Hide Billions in Pentagon Pork!
- From: Patriot Games <Patriot@xxxxxxxxxxx>
- Date: Sun, 19 Oct 2008 11:38:07 -0400
http://www.military.com/news/article/congress-hides-billions-in-pentagon-pork.html?ESRC=dod-bz.nl
Congress Hides Billions in Pentagon Pork
October 14, 2008
No matter who wins, the next president promises to take back
Washington from powerful interests and lobbyists.
It is the same stirring promise Congress made last year when -- rocked
by scandal and under new leadership -- lawmakers passed what they
trumpeted as some of the most significant ethics reforms in years.
Key among those reforms: rules requiring lawmakers, for the first
time, to disclose their earmarks -- federal dollars they were quietly
doling out as favors.
But time after time, Congress exploited loopholes or violated those
rules, a Seattle Times investigation has found. An in-depth
examination of the 2008 defense bill found $8.5 billion in earmarks.
Of those, 40 percent -- $3.5 billion -- were hidden.
And Congress broke its pledge -- and President Bush's challenge -- to
cut earmarks in half. Lawmakers cut the dollar amount of defense
earmarks by about a fourth and the number by 19 percent.
The hidden earmarks range from $8 million for lighting sold by a
financially troubled company in North Carolina to $588 million for a
submarine the administration doesn't want.
After months of investigating the $459 billion 2008 defense bill, The
Times found:
--The hidden $3.5 billion included 155 earmarks, among them the most
costly in the bill. Congress disclosed 2,043 earmarks worth $5
billion.
--The House broke the new rules at least 110 times by failing to
disclose who was getting earmarks, making it difficult for the public
to judge whether the money is being spent wisely.
--In at least 175 cases, senators did not list themselves in Senate
records as earmark sponsors, appearing more fiscally responsible. But
they told a different story to constituents back home in news
releases, claiming credit for the earmarks and any new jobs.
Lawmakers do not face penalties for failing to follow these ethics
rules.
"The whole ethics bill was a sham," said Sen. Jim DeMint, a Republican
from South Carolina, after being told of The Times' findings.
"It was written to create loopholes, to get around any transparency
and our ability to cut out those earmarks. Neither leadership is
committed to significantly changing the earmarking process."
Complicating matters, lawmakers routinely accept campaign donations
from the people asking for earmarks, raising the specter of
corruption.
The Times found that people at companies that benefited from defense
earmarks this year gave more than $60 million in campaign donations to
incumbents in Congress over the past six years. In addition, companies
getting earmarks in the 2008 defense bill spent $141 million lobbying
Congress last year alone.
"The people who want the earmarks are the same people who we count on
to raise us money for the campaigns," DeMint said. "It's just a little
too cozy."
Last year, Congress promised to shed light on the secretive process.
But the lists of earmarks are still buried in obscure documents that
are difficult to find and search. Until Congress put them online a
couple of weeks ago, the House disclosure letters, linking lawmakers
to companies, were thick volumes of paper kept in a cabinet in the
offices of the House Appropriations Committee.
When a reporter for the Congressional Quarterly pointed out how
difficult it remains to pull all the information together, Rep. John
Murtha, D-Pa., chairman of the committee that drafts the defense bill,
had a quick answer: "Tough shit."
The Times spent months compiling this information -- including
campaign donations and companies' lobbying efforts -- and put it in a
searchable database. It can be found on our Web site at
http://community.seattletimes.nwsource.com/favorfactory/favorfactory_2008/
Big bucks for little-known product
One case in which Congress clearly broke its disclosure rule involves
an $8 million earmark to buy a "portable illumination system." It
turned out to be for Cyberlux, a tiny lighting company in Durham,
N.C., that is struggling to survive.
Cyberlux competes against corporate giants such as General Electric
but advertises that its lights save energy and cost less than common
household bulbs. Despite its efforts, the company barely sells any
products to consumers.
Cyberlux lost $9 million on sales of only $332,000 for the first six
months of this year. Since its founding in 2000, Cyberlux has lost
more than $50 million and the company has sunk deeply in the red. Its
stock sells publicly for about a penny. Earlier this year, its
independent auditor said in the company's financial statement that
Cyberlux was in danger of failing.
To stave off failure, Cyberlux has turned its attention to the
military and to earmarks.
In a December letter to shareholders, Cyberlux said: "After product
demonstrations to aides in the Capitol building, they enthusiastically
recommended budgetary provisions for the BrightEye to their respective
Representatives and Senators who responded with a line item inclusion
of $8 million."
Thanks to the undisclosed earmark, the company announced in February
that the Air Force had made a commitment to order $3.3 million of
portable lighting products from Cyberlux, including one product on
collapsible legs that looked much like its name, "Watchdog."
Cyberlux's chief executive officer declined requests for an interview.
The Times was not able to get confirmation of the order from the Air
Force.
Cyberlux hosted separate fundraisers in the spring for Rep. David
Price, D-N.C., and Sen. Elizabeth Dole, R-N.C., and even posted
solicitations on its company Web site, asking people to donate $500 to
the lawmakers. The events raised $10,600 for the two.
(Lawyers with expertise in campaign-finance laws say it's illegal for
a company to assist in raising campaign donations from the public.)
Through a spokesman, Dole said that her staff met with the company but
that she did not ask for an earmark.
Price serves on the powerful House Appropriations Committee. His
staffers met with Cyberlux and contacted the defense subcommittee "to
see if they are favorably inclined to the technology, to putting
funding in the bill," said Price's chief of staff, Jean-Louise Beard.
Even so, she said, they didn't consider those actions an earmark
request.
Cyberlux announced it was seeking $25 million in defense earmarks for
2009 and that it had "submitted this forecast to its sponsorship in
the House of Representatives and Senate."
The biggest single earmark in the defense bill was $588 million to
"accelerate" buying a new submarine made by General Dynamics, which
builds submarines in Groton, Conn.
The military never asked for the project, and the Bush administration
asked that it be stripped from the bill.
After the earmark was added, the Office of Management and Budget
complained in a statement: "This funding is unnecessary and takes
resources away from more urgent defense needs."
It stayed in.
Although they don't list themselves as sponsors of the submarine
earmark, independent Sen. Joe Lieberman and Democratic Sens. Chris
Dodd of Connecticut and Jack Reed of Rhode Island did take credit for
the new submarine program in news releases back home, highlighting
their work to bring jobs to the region.
"The funding for a second submarine has been an extended battle for
Connecticut, and today we declare victory," Lieberman said.
According to Congress, this spending was not an earmark. Its reform
bill is full of loopholes that allow lawmakers to insert favors and
not have to disclose them as earmarks.
For example, a Senate report describes situations in which no
individual senator championed a request but instead it somehow arose
through group consensus. In those cases, the add-on was not considered
an earmark but a "committee initiative."
Under the reforms, Congress uses a semantic maneuver to conceal
earmarks.
The common definition of an earmark is money that somebody gets from
Congress because they cannot get it from a federal agency. Congress
uses a far narrower definition: an earmark has to be "primarily at the
request of a member," targeted to a specific company or location, with
no competitive bidding.
This past spring during budget season, staffers at the House
Appropriations Committee toiled round the clock not vetting the
earmarks on their merits but trying to decide whether to actually call
them earmarks, according to a congressional aide involved in the
process. If they believed the project might enjoy broad support and
pass a vote of the House on its own, then they decided not to list it
as an earmark.
A pet project in Pennsylvania reveals how Congress tries to hide
earmarks using the semantic loopholes.
Latrobe Specialty Steel of Latrobe, 40 miles east of Pittsburgh, makes
specialty steel for aircraft parts.
In 2006, its parent company, Timken, spent $2.9 million lobbying
Congress on various issues and persuaded lawmakers to ban the Defense
Department from buying any products using foreign-made specialty
steel. As the sole U.S. producer of certain kinds of specialty steel,
Latrobe saw its orders climb. Timken then sold Latrobe to a group of
investors in a $250 million deal.
But the buy-American restrictions for specialty steel caused serious
problems for the Air Force, creating a 17-month lag in getting spare
parts for aircraft used in the wars in Iraq and Afghanistan.
In May 2007, Latrobe said it needed to expand but complained of high
electric bills and publicly threatened to build a new plant in
Virginia or West Virginia instead. Pennsylvania offered grants and tax
credits to the company worth $1.2 million.
In Congress, lawmakers were quietly lining up a much sweeter package.
In the defense bill passed in December, someone had inserted language
that ultimately directed $18.4 million for "domestic expansion of
essential vacuum induction melting furnace capacity and vacuum arc
remelting furnace capacity."
"Latrobe Specialty Steel is the only domestic producer of that steel,"
Army Lt. Gen. William Mortensen said at a hearing.
A month after the bill passed, Latrobe began a $62 million expansion
in its home state.
No one in Congress has admitted sponsoring the Latrobe earmark.
One congressman's fingerprints, however, weren't so easy to conceal.
Latrobe sits in the congressional district of Rep. John Murtha, a
Democrat who chairs the subcommittee that drafts the defense bill and
wields the most power over defense earmarks.
Latrobe's officials have given $5,000 to Murtha's re-election fund in
the past two years.
Also, Murtha had talked about giving taxpayer dollars to Latrobe.
"We're trying to get together to see how we can work out an increased
capacity for that particular company," Murtha said at a subcommittee
hearing in April 2007. "I've talked to that producer. And what I'd
like to see is them put some money in, us put some money in, and
reduce the time it takes to get those spare parts out."
This spring, the Air Force carried out the earmark by asking companies
to submit proposals for a $16.6 million research grant that would
expand production of specialty steel made through "vacuum induction
melting and vacuum arc remelting."
The money was aimed at alleviating the shortage of specialty steel.
But the foreign-steel ban proved so restrictive that the military and
major defense contractors, such as Boeing, complained that they
couldn't get parts. In December, Congress loosened the ban.
Latrobe has tentatively won the research grant, a Pentagon spokeswoman
confirmed, although details are still being worked out.
The company would not comment on any discussions it had with Murtha. A
spokeswoman defended getting the grant, saying it had been
competitively bid. Even so, she acknowledged that Latrobe is the sole
U.S. producer of certain specialty steels, a requirement for getting
the money.
She said Latrobe was a few months away from completing the $62 million
expansion while it waits for the government handout.
Through a spokesman, Murtha said the project was not an earmark
because the contract was competitively bid. Last year at a hearing,
however, Murtha talked of giving Latrobe funding because it was the
only U.S. company that could make that steel.
At first, the Senate seemed gung-ho about eliminating the secrecy
surrounding earmarks. Last year, senators voted 96-2 to force
themselves to reveal the names of those getting earmarks. But
leadership stripped that rule out before the bill's final passage.
So this year, for example, Sen. Maria Cantwell, D-Wash., listed 28
earmarks. A typical entry reads: "Mobile Objects for Net-Centric
Operations, $2.4 million." No company or names are listed.
She disclosed far more before the widely publicized reforms, through
news releases that identified who received the favors.
Cantwell's office would not explain why the senator no longer
identifies companies that benefit from her earmarks.
The House has stricter rules, requiring members to sign letters naming
the intended recipient of their earmark. But in 110 cases, lawmakers
didn't follow the rules.
Some House members merely said their favors went to the Department of
Defense or a military branch or unit.
For example, Rep. Mike Conaway, R-Texas, said a $1.6 million earmark
he co-sponsored would go to the "Office of Naval Research." Yet other
co-sponsors tagged the money for Global Delta, a young company created
by two longtime lobbyists.
John Albertine and his brother James, past president of the American
League of Lobbyists, have knocked on lawmakers' doors seeking earmarks
on behalf of clients. In 2003, they formed Global Delta and decided to
get an earmark for themselves. Several months later, they succeeded.
With no background in engineering, the two lobbyists landed a $4.1
million contract with the Office of Naval Research to study and
develop advanced, cost-effective radars.
Soon after getting the contract in June 2004, John Albertine hired a
couple of engineers to do research. Meanwhile, he and his brother
continued to operate Albertine Enterprises, their lobbying firm.
Over the past five years, Global Delta officials have donated $35,000
to Conaway and others who sponsored its earmarks.
Conaway's office said he was unavailable for comment.
The company snagged a defense earmark in 2006 for $3 million and
another in 2007 for $1 million.
John Albertine said he asked for $4 million in 2008 but landed only
$1.6 million.
Global Delta turned down the earmark because it wasn't enough funding,
he said. They opted to search for private funding so they could own
the intellectual property rights to some of the research, he said.
Their concept was to build a low-cost radar system to track ships. A
prototype was never built, Albertine said.
Other than a little embarrassment, there's no cost to lawmakers for
failing to disclose earmarks.
In past reforms, Congress imposed criminal penalties for filing false
disclosure forms on personal finances or gifts. Republican Sen. Ted
Stevens of Alaska, for example, is standing trial on charges he failed
to disclose at least $250,000 in gifts from a wealthy supporter who
got earmarks.
Last year, as public cries for reform grew louder, Congress enacted
civil and criminal penalties for lobbyists who failed to detail their
activities on federal disclosure forms. Yet lawmakers included no
penalties for themselves if they failed to disclose earmarks.
If Congress were serious about reform, it would close the loopholes,
said Steve Ellis of Taxpayers for Common Sense.
"An awful lot of members of Congress would much prefer to have
business as usual and they are going to do whatever they can get away
with," said Norm Ornstein, a political scientist at American
Enterprise Institute.
"Clearly what this suggests," he said of The Times' findings, "is that
we need another wave of reform."
A new administration could bring that. Sen. John McCain, R-Ariz., vows
to veto any bills with earmarks, arguing that pork-barrel spending is
not only wasteful but leads to corruption.
"We Republicans came to power to change government, and government
changed us," McCain said during the first presidential debate.
Sen. Barack Obama, D-Ill., pledges he'd scrutinize earmarks more
closely as president, eliminating those that are wasteful.
But Congress shows no inclination to give up on earmarking and has
shot down recent reform efforts. In March, both McCain and Obama voted
for a one-year moratorium on earmarks, but the measure failed in the
Senate, 71-29.
After first avoiding the issue, President Bush in the past two years
has talked tough about curbing earmarks. This year he ordered federal
agencies to ignore any earmarks buried in "conference reports" --
obscure, fine-print attachments -- rather than written into the clear
language of a bill.
In response, Congress wrote language into the bills that in essence
told federal agencies they had to honor the earmarks buried in the
conference reports.
Bush also threatened to veto any spending bill that didn't cut
earmarks in half this year. But Congress ignored it and Bush did not
follow through on his threat.
Perhaps nothing shows more how entrenched earmarks are than the recent
$700 billion financial bailout.
At first, the bill failed because lawmakers were deluged with calls
from angry constituents who didn't trust Congress to put the interests
of the country ahead of the special interests of Wall Street. The bill
to ease the credit crunch and avoid a severe recession passed only
after the Senate included favors for the makers of wooden arrows,
NASCAR racetrack owners, the rum industry and makers of wool -- in
all, more than $100 billion in targeted tax cuts and earmarks.
.
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