March 12, 2010
Energy and Water Earmarks Flow to Campaign Donors
By ANNE C. MULKERN of Greenwire
In the new political era, House members consider earmarks fraught with peril. But before House Republicans voted to stop asking for them, before Democrats vowed to limit where the money goes, lawmakers from both parties sought federal funding for profit-making companies.
The bill that funds the Energy Department and water projects for this year contains at least six earmarks giving grants to for-profit companies. And in at least two cases, lawmakers obtained earmarks for companies that had given those same House members campaign contributions.
Rep Charlie Dent (R-Pa.) secured a $750,000 earmark for a company that has given him $14,250 this election cycle. Rep. Steve LaTourette (R-Ohio) won a $300,000 earmark for a company that has contributed $3,000 to his re-election campaign.
Those are the kind of earmarks that have prompted calls to eliminate special project funding, government watchdogs and outside analysts said.
"Obviously, we can't prove a quid pro quo, but certainly looking at this, we see that a few thousand dollars in campaign contributions netted them hundreds of thousands of dollars in taxpayers money," said Steve Ellis, vice president of Taxpayers for Common Sense, a watchdog group.
"These companies they're not making contributions out of altruism," Ellis added. "They see this as an investment, as something that's going to help their bottom line."
House Republicans yesterday voted to eschew all earmark requests this year, a day after House Appropriations Chairman David Obey (D-Wis.) announced that he would ban earmarks aimed at for-profit corporations. The Senate so far has declined to go along, meaning many earmarks still could go forward if they have Senate sponsors.
While the bill funding the Defense Department is the place where lawmakers pile in the most earmarks for private companies, the Energy and Water Development bill also is a popular spot because there is funding for research and development efforts, Ellis said. The companies that made campaign contributions to Dent and LaTourette and received earmarks each are involved in efforts to turn coal and other fossil fuels into a gaseous form.
Dent obtained the $750,000 earmark for Pennsylvania-based Air Products & Chemicals Inc., money that is intended for development of ceramic membranes "which can be integrated into a state-of-the-art gasification system," Dent said in his earmark request letter.
"This versatile technology also enables the capture of greenhouse gases such as carbon dioxide and can be applied in a cost-effective and environmentally responsible manner to a broad list of energy sources, including coal, natural gas, liquid hydrocarbons, biomaterials, and waste materials," Dent wrote.
The $14,250 in contributions that Air Products & Chemicals Inc. has given Dent through its political action committee make it his top contributor this election cycle, according to the Center for Responsive Politics.
Dent has supported many projects involving companies that are not campaign contributors, said Dent spokesman Gregg Bortz.
"If you look at the majority of what's on there, the requests that he's made, there's not a correlation between contributions and what he's supporting," Bortz said.
"Should he not help a company who is one of our area's largest employers?" Bortz added. If Dent helps other companies "that have legitimate business with the federal government, should he cut one out?"
Air Products & Chemicals has been a federal contractor for decades, Bortz said, adding, "what the congressionally directed funding does it helps them move forward on a project quicker. It helps them make sure a project is definitely going to be funded one year to the next." Sen. Bob Casey (D-Pa.) also signed on to the Air Products & Chemicals earmark.
A spokeswoman at Air Products & Chemicals did not respond to a request for comment on the earmark or the campaign contributions.
Dent voted for the one-year moratorium on earmarks that House GOP members approved yesterday, Bortz said. Dent has previously advocated a moratorium, he said.
"Congressman Dent acknowledges there's clearly something wrong with the system as it's been done," Bortz said. "Have there been abuses? Yes, there have been."
Asked why Dent still asked for earmarks while backing a moratorium, Bortz said that "money's going to be spent so you're basically cutting your district out of the loop."
LaTourette received a $300,000 earmark for Parker Hannifin Corp., an Ohio manufacturer with more than $10 billion in annual sales. In his request letter for the earmark for Parker Hannifin, LaTourette said that the money would be used for "hydrogen and coal-derived syngas fuel injection technologies for power generation project."
LaTourette's office and Parker Hannifin's spokesman did not respond to multiple requests for comment.
Other earmarks
The fiscal 2010 spending bill for energy and water had requests for earmarks that would have directed money to seven total for-profit companies, including Parker Hannifin and Air Products & Chemicals Inc. It was not clear how many of those made it in to the final bill because once they are in the bill the name of the company often is not included.
There are at least six that made it into the bill that became law, however. One of the biggest earmarks secured was $1 million for Trenton Fuel Works, won by Reps. Rush Holt (D-N.J.) and Steve Rothman (D-N.J.). The funding would go toward a project that would construct a biofuel plant in Trenton, N.J. Specifically, it was for a "detailed engineering design for the reconstruction of an existing but unused sludge dehydration plant into a biofuels manufacturing plant," Holt said in his request letter.
"Mr. Holt is a huge believer in trying to find alternative sources of energy," said Patrick Eddington, Holt's senior policy adviser. "One of the technologies that's being investigated is ... biomass. This was money to help Trenton Fuel Works see if they could get a functioning biorefinery up and running in Trenton."
Holt believes government has "a role to play" in helping new businesses. There are limits on how much money is available through the government's small business development program, Eddington said, and "an awful lot of these requests come from companies desperate for research and development dollars.
"Companies to complete a project they require some additional funding ... to have a project have a chance of reaching the market," Eddington said.
Eddington said he had not had an opportunity to talk to Holt about his reaction to Democratic leadership's ban on earmarks to private companies.
In addition to the Air Products & Chemicals earmark, Dent and Rep. Tim Holden (D-Pa.) secured a $500,000 earmark for East Penn Manufacturing Co. Inc., a funding that "would be used to design, test, fabricate and implement new advanced battery energy storage technology that would be used to balance the fluctuating generation of electricity in wind systems and improve the efficiency of the current electricity grid," Dent said in his earmark request letter.
"The company basically said that this was a program that we're looking to work with" at the Department of Energy, Dent spokesman Bortz said. "Companies are constituents. They employ a lot of people."
Sen. Arlen Specter (D-Pa.) backed the earmark in the Senate.
Holden's office did not respond to requests for comment.
LaTourette and Rep. Dennis Kucinich (D-Ohio) obtained a $500,000 earmark for Cleveland-based Technology Management Inc. "to engineer prototypes for fuel cell systems manufacturing and planning a pilot manufacturing facility," Kucinich said in his request letter. Kucinich's office did not respond to requests for comment on the earmark or the new ban on directing funding to for-profit companies.
Lobbying efforts
In addition to the campaign contributions, many of the companies that received earmarks paid lobbyists, who among other things lobbied for earmarks.
Air Products & Chemicals spent $1.8 million on lobbying last year, according to the Center for Responsive Politics. The company sought earmarks in the Defense Department and transportation spending bills as well as the Energy and Water appropriations bill. The company also lobbied on energy and climate legislation and a number of other energy measures.
Parker Hannifin paid $486,000 for lobbying efforts last year. Its lobbyists sought federal earmarks and also lobbied on cap-and-trade legislation, according to the Center for Responsive Politics' records.
It is a circular process companies use to get federal money, Ellis said.
"That's the way the game has been played," Ellis said. "Private companies are hiring K Street lobbyists to try to get taxpayers' money."
If the projects lawmakers seek earmarks for are worthwhile, businesses should compete for federal funding in an open bidding process, said Kenneth Green, resident scholar at the American Enterprise Institute, a conservative think tank.
"No bid contracts are generally considered to be economically bad and politically corrupting, not to mention distorting of the market," Green said, because lawmakers are "picking and choosing winners and losers."
While there is gnashing of teeth over earmarks, they are small in the overall economic picture compared to the energy policies Congress sets, said Adele Morris, policy director for climate and energy economics at the Brookings Institution. A climate bill essentially gives earmarks to certain industries, Morris said, if it gives free pollution permits under a cap-and-trade program. The Senate bill under development from Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) has not settled on how it will handle allowances.
"If they start giving these allowances away, they're going to make some of these earmarks look like small potatoes," Morris said.
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