In light of the New York Times article detailing ways in which companies are circumventing the House Appropriation Committee's ban on for-profit earmarks, I thought I'd repost what I wrote when the ban was implemented. The end of the post has been altered to reflect the introduction of the Earmark Transparency Act.
Originally posted on March 15, 2010:
The recent policies imposed by the House Appropriations Committee and the House Republican Caucus to ban for-profit earmarks and all earmarks respectively will reduce the ability of the public to track directed spending and do little to stem this type of spending. Perhaps this is counter-intuitive to some people, but, as the late, great Bill Hicks would say, "I know this is not a very popular idea. You don't hear it too often any more … but it's the truth."
First of all, the obvious, the for-profit earmark ban and the House Republican earmark ban both only apply to the House of Representatives. The Senate refuses to follow suit. With the Senate earmarking precious appropriations dollars, House members will take to lobbying their state's senators for earmarks in their respective districts. The money isn't drying up, so why not try to get some.
Second, tons of not-for-profit earmarks go to colleges, universities, non-profits and state and local governments that then contract out to for-profit firms. Here are some quoted examples, one from the Washington Post:
Twice in recent years, House Appropriations Committee Chairman David R. Obey (D-Wis.) helped obtain earmarks totaling $3.2 million for a home-state university to study how to make military jet fuel from plants. Standing behind that nonprofit work, however, is a for-profit Chicago firm that often partners with universities to reap part of their earmark benefits.
From The Hill:
Another example of controversial earmarks the new reform would not touch is a nonprofit defense research center at Pennsylvania State University that collected nearly $250 million in earmarks through [Rep. John Murtha (D-Penn.)], then channeled a significant portion of the funds to companies that were among Murtha’s campaign supporters.
According to a report in the Washington Post, officials at the center regularly consulted with two “handlers” close to Murtha, one of whom was a lobbyist for the PMA Group, a firm that recently disbanded in the wake of an FBI raid on its offices.
The above-linked Washington Post article rightly notes that, "[the] new rule was widely touted as a crackdown, but in reality it could leave untouched almost 90 percent of typical earmarks."
Third, there are a variety of other ways for lawmakers to secure earmarked funds outside of the appropriations committee. One such example are the earmarks included in the transportation reauthorization bill. Unlike the Appropriations Committee, the House Transportation & Infrastructure Committee does not post online the requests they receive from members, nor does it require members to post their transportation earmarks to their official websites. Transportation earmarks only come up every four years. If a ban remains in effect, lawmakers will certainly look for other ways to direct spending to their district. By going through Transportation Committee they would be circumventing transparency rules set up by the Appropriations Committee.
Even more troubling could be the increase in "phone-marks" in place of earmarks. "Phone-marks" are the practice of lawmakers lobbying executive agencies to give money to particular organizations. Lawmaker lobbying could easily be instigated by an outside lobbyist or campaign contributor seeking funding for a project. And, of course, there is no transparency in this process.
What Congress really needs to do is pass real earmark reform. Earmark reform that makes the process totally transparent and encoded in rules or laws. Committee imposed rules or bans can easily be changed or circumvented -- this includes the committee's imposed rules on earmark transparency.
Passing the Earmark Transparency Act would allow people to actually see the earmarking process before their eyes, instead of head-faking with a ban and then taking the process underground.
