Earmarks

 

Darkmarks: Are largest defense contractors benefiting from programmatic requests?

Virginia Class Submarine Of the roughly 1,040 Pentagon procurement programs--the $99.3 billion part of the Defense budget devoted to purchasing new equipment--some 212 of them, worth $21.4 billion, fund the work of a single company.

The Army wants $551 million to buy surface-to-air missiles from Lockheed Martin. The Navy wants to spend $157 million the aerospace giant's KC-130J tanker plane. The Air Force has $291 million worth of JASSM missiles on its wish list. Altogether, defense procurement programs worth $6.9 billion name Lockheed Martin as their sole contractor. And they're not the only one: 14 companies, including Boeing, Raytheon and Northrop Grumman, were the only contractor listed on programs totaling $100 million or more.

Congress is now in the midst of its secretive spending process, with members of the Appropriations Committees of the House and Senate considering programmatic and language requests submitted by their colleagues--increases or decreases in the amount spent, or changes in emphasis in each program in the federal budget. Unlike an earmark, which directed money to a single, named recipient, a programmatic request refers only to a specific program in the the federal budget.

Some requests ask for additional funding for programs with hundreds of thousands of individual beneficiaries like loans and other aid for low income housing. And some requests can benefit a handful of contractors, or even just one.

Defense Appropriations Subcommittee Chairman C.W. "Bill" Young, R-Fla., instructed colleagues to "include the applicable account and line number in the beginning of the program request description (i.e. RDTE A Line 30)." That particular account refers to the Army's Research, Development, Test and Evaluation budget; line 30 is for medical advanced research, which, according to the Army's budget justification documents for the program, includes 8 separate projects ranging from treating combat injuries to breast cancer.

In contrast, line 4 of the Navy Procurement budget refers to advanced funding for Virginia Class submarines. The Navy's budget justification lists Connecticut-based Electric Boat, a subsidiary of General Dynamics, as the prime contractor (four other companies--Kollmorgen, Lockheed Martin, BAE Systems and Stanley Associates, provide components for the submarine). In 2012, during the last round of Pentagon budgeting, one of the company's home state lawmakers, Sen. Richard Blumenthal, included that line item in his programmatic requests, which he disclosed online. Blumenthal requested an additional $777.6 million to expedite work on an additional submarine. The Navy's current budget justification notes that "Advance Procurement includes $778M required to fund the 2nd FY14 SSN as proposed as a FY13 Congressional Add."

Chances are Blumenthal wasn't the only member of Congress who requested the additional funding. But because neither the Senate nor the House discloses programmatic requests, it's impossible to say how many other members of Congress added their names to the request for additional funding for the Virginia Class Submarine.

Programmatic and language requests can direct hundreds of millions of dollars to programs that benefit a specific company. But unlike earmarks, many of which went to obscure firms like Kuchera Defense Systems, companies that have their own programs are generally among the biggest defense contractors. Lockheed Martin, for example, is the sole contractor listed for procurement programs totaling a proposed $6.9 billion, an increase of $1.3 billion over the programs' budget in the last fiscal year. Boeing is the sole contractor listed on $5.8 billion worth of programs, a drop of $95 million from last year. Raytheon was listed on $2.2 billion worth of programs, Northrop Grumman for $1.7 billion, and United Technologies for $1.2 billion. Not every dollar budgeted for those programs will go to those contractors--part will pay for oversight of the project within the military and other expenses, some will go to subcontractors, but if the Pentagon buys an extra submarine, or ups the number of replacement engines for the Joint Strike Fighter it acquires, the firm that provides those items will benefit accordingly.

In the first quarter of 2013, all five companies have disclosed lobbying on the procurement budget (to see the disclosures for Lockheed Martin, click here and here; for Boeing here and here; for Raytheon here, for Northrop Grumman here and for United Technologies here).

To view or download a complete list of Pentagon procurement programs that list only one recipient in the budget justification, click here. The data comes from a spreadsheet we downloaded from the Comptroller of the Defense Department; we looked up each line item in the procurement budget justifications--available from the Army, Navy, Air Force and Defense Department--to look for contractor names. As always, if you find errors, please contact us and let us know. Note: We only looked in the procurement budget for Defense, so this by means exhausts the number of federal programs that primarily benefit one company.

To read prior posts on darkmarks, click here and here.

U.S. Navy photo by Chris Oxley.

Darkmarks: Defense programs can have one beneficiary

Advertisement for the F-35 in a Washington, D.C. metro station By making a programmatic request asking for additional funding for line 3 of the Army aircraft procurement budget, a member of Congress can direct taxpayer money to General Atomics. Increasing funding for line 7 of the Army missile procurement budget does the same for Raytheon. Line 19 of the Navy's weapons procurement funds a program supplied solely by Lockheed Martin.

Yesterday, we started exploring programmatic and language requests--the mechanism that allows individual members of Congress to ask the Appropriations Committees to provide additional funding for different programs in the President's Budget. House members face their next deadline for submitting requests, via an online system, tomorrow.

Unlike earmark requests, which Congress declared a moratorium on after Republicans captured the House in 2010, programmatic requests are not directed to a single recipient, but rather affect set levels and priorities for specific programs. The requests are not disclosed to the public.

In a letter sent to members, Rep. C.W. "Bill" Young, R-Fla., chair of the Defense Appropriations Subcommittee, instructed members to include the account and line number for each request. A spreadsheet listing all of them is available here. In addition to the spreadsheet, the Defense Department and the service branches publish thousands and thousands of pages of justifications for each program (you can access them all from the bottom of this page). These include descriptions like this one:

The F-35 Joint Strike Fighter program will develop and field a family of aircraft that meets the needs of the United States and its international partners. ... Its advanced avionics, data links and adverse weather precision targeting incorporate the latest technology available. The highly supportable, affordable, state-of-the-art aircraft commands and maintains global air superiority.

They also list the contractor--or contractors--that work on each program, like the F-35. That plane actually has more than one manufacturer involved. Lockheed Martin is the project lead while United Technologies' subsidiary Pratt & Whitney builds the engines (they're listed in the budget justification) and Northrop Grumman and BAE Systems also contribute to the project.

The F-35 in its various configurations can be found in the Airforce and Navy budget justifications--Navy Procurement Lines 5 to 8 (for carrier and short vertical take-off and landing configurations) and Air Force Procurement Lines 1-3. A member of Congress requesting additional funding for the Joint Strike Fighter is also requesting additional funding for Lockheed Martin and its partners.

There are 1,062 total procurement programs listed in Pentagon budget justifications. Sunlight has slogged through about 680 of them, of which about 145 list just one contractor. In other words, requesting additional funding for those 145 programs could benefit just one company. Generally, it's the bigger contractors that have programs all to themselves, companies like Lockheed Martin, Boeing and General Dynamics.

Some go so far as to spell out that a program is devoted to a single company, like this entry from a Fiscal Year 2013 budget justification for upgrades to an Air Force surveillance plane: "Delivery Orders were awarded on 31 July 2009 for the replacement portion of the RASP hardware and software subsystem along with Central Computer Subsystem upgrades and on 1 June 2010 for the replacement portion of the OWS computer. The contract is Sole Source to Northrop Grumman under the Joint STARS System Improvement Program II (JSSIP) contract."

Tomorrow, we'll look at a programmatic request referencing that line item.

Darkmarks: Has Congress found a way to fund pet projects?

Earmarks on Google Earth The instructions are written in obscure Washingtonese that only an insider could understand: "Please include the applicable account and line number in the beginning of the program request description (i.e. RDTE A Line 30)." The sentence is in a letter from House Defense Appropriations Subcommittee Chair C.W. "Bill" Young, and explains one of the requirements for filing "programmatic and language requests," due starting today.

For most reporters, that kind of obscure language tends to make news antennae twitch. In this case, there's good reason: Through these requests, a member of Congress, or group of members, can express own spending priorities, such as more money for community health centers or for various loan and aid programs that support low income housing. They may also give members a way to direct money to big contributors.

This is the third year that Congress will go through the appropriations process without earmarks, the line items in spending bills that allowed a member to direct money to urgent local priorities -- or political cronies, depending on one's point of view. But it turns out, there's another way for members to ask for additional funding above and beyond what President Barack Obama requested in the budget he submitted to Congress last week, more than two months late.

Beginning in 2009, House and Senate rules required members to disclose their earmark requests online. In this case, because programmatic and language requests are not earmarks--they do not specify individual recipients--disclosure rules do not apply.

Bob Rapoza, executive secretary of the National Rural Housing Coalition, which is pushing for more money for low income housing along with Rep. Rubén Hinojosa, D-Texas, explained how the system works:  Members circulate "Dear Colleague" letters asking support for funding. "By signing onto it, members are agreeing to send a programmatic request," he said. Rapoza added that, "All the programs we support have never been in an earmarked account. All the money is distributed on a competitive basis."

To borrow the jargon of social media, think of it as "liking" a request to spend taxpayer dollars: More signers mean more programmatic requests, which means a better chance to secure the funding. In his instructions, Young asks each member co-sponsoring a programmatic request for the Defense appropriations bill to "use identical language" and to include "a scanned copy of the group request letter."

And given the nature of the Pentagon's budget request, it's entirely possible for a member or group of members to steer money to a single recipient. That's where that Washingtonese we started with comes in. "RDTE A Line 30" refers to funding for the Army's Research Development Test and Evaluation budget. Line 30 refers to a specific program--Medical Advanced Technology--that the Army describes in its budget justification book, available here. In 24 pages of budget numbers and program descriptions, one finds that some components of the project are "congressionally directed," others are described as congressional interest items. The recipients include a multitude of military and government research institutions. Other programs, however--particularly in the procurement section of the Defense budget--list just a single recipient.

Tomorrow, we'll take a closer look at those.

Sunlight's Priorities for the Next Administration

Regardless of who wins the presidential election, the next administration will have enormous power to say how open our government will be. We have organized our priorities for the next administration below, to share where we think our work on executive branch issues will be focused, in advance of the election results. From money in politics to open data, spending, and freedom of information, we'll be working to open up the Executive Branch.

We'd love to hear any suggestions you might have for Sunlight's Executive Branch work, please leave additional ideas in the comments below.

(We'll also be sharing other recommendations soon, including a legislative agenda for the 113th Congress, and a suite of reform proposals for the House and Senate rules packages.)

Sunlight Reform Agenda for the Next Administration:

Read more

What ever happened to earmark transparency?

Late last year, the Obama administration floated a draft Executive memo that would have brought transparency to the currently opaque earmark process. The document appeared to build upon Executive Order 13457, issued by President George W. Bush, that would have put written earmark requests online. Unfortunately, the Obama administration still hasn't enforced EO 13457 or taken further action on their own memo.

With Congress slowly working its way through appropriations and other spending bills, and the future of the earmark ban unclear, now is the time to act on, not forget about, earmark transparency.

Earmarks have been under constant attack for the better part of the past decade.  But, despite a Congressional ban, they have not been eradicated entirely. Instead, earmarks have retreated to the shadows, becoming harder to track than ever before.

Before the ban earmarks in legislation had some small level of transparency baked into their creation process. After a series of reforms they appeared in appropriations packages or committee reports and could often be tracked, albeit with great difficulty.

Under the current "ban", it is more difficult than ever to track earmarks. It has been widely reported that savvy lawmakers have figured out how to steer funding towards their favored projects, appealing directly to executive agencies. We have been keeping track of such reports.

Executive Order 13457, if enforced, would have instructed agencies to ignore earmark requests that were not put in writing. When requests were issued in writing agencies would have to put relevant documents online within 30 days of receipt. The Obama memo aimed to enforce and build on EO 13457, including stronger reporting requirements and searchable online formats.

The Sunlight Foundation has been calling for enforcement of the Bush Executive order since March, 2011, came out in favor of the Obama memo when it was circulated last November, and has been advocating for earmark transparency for even longer.

Earmarks haven't gone away, they've just disappeared from view. The Obama administration should make the memo a reality and ensure that members of Congress have to stand up for their pet priorities all the time, not just when it's politically expedient for them. If Congress moves to lift their self-imposed earmark ban they should also pass the Earmark Transparency Act, which would create a single searchable, sortable database of earmark requests.

News Without Transparency: House Passes Bridge BIll After an Earmark Debate

Matt Rumsey and Melanie Buck wrote this post.  Earlier this spring, the New York Times reported that the House approved bipartisan legislation allowing construction of a new bridge crossing Minnesota and Wisconsin. At the price of $700 million the bridge will connect two towns, each with 4,000 residents. Much of the information included in the article can be accessed via Congress’ online legislative information system, THOMAS. THOMAS was launched as part of Newt Gingrich’s efforts to modernize House technology following the 1994 elections and continues to provide an outlet for increasing public access to government information. Using THOMAS you can access the text of the legislation as well as information on votes, sponsors, and related bills. The article states that “the vote was 339 to 80, with 16 Republicans and 64 Democrats voting against the measure.” Roll call votes are recorded by the Clerk of the House and can be accessed through either the Clerk’s website or in a centralized THOMAS location. House rules mandate that most votes are recorded electronic device. Vote information is then published in the Congressional record and posted online. Critics of the bill claimed that the legislation effectively served as an earmark, approving a specific project in its sponsors’ congressional district and including $8 million that had previously been earmarked for the project. Since Congress decided to ban earmarks in late fall 2010, it has frequently been reported that similar projects are still being funded through various loopholes. Prior to the earmark ban, both the House and Senate required that earmark requests be reported to the Office of Management and Budget. It is still possible to search for earmarks between FY 2005 and FY 2010 using the OMB database. The new bridge is intended to replace The Stillwater Lift Bridge, originally built in 1931. The article states that while the bridge was initially intended for light traffic, it now carries 16,000 cars per day. This information can be confirmed by  accessing a public website maintained by the Minnesota Department of Transportation. -----
"The News Without Transparency" shows you what the news would look like without public access to information. Laws and regulations that force the government to make the data it has publicly available are absolutely vital, along with services that take that raw data and make it easy for reporters to write sentences like the ones we've redacted in the piece above. If you have an article you'd like us to put through the redaction machine, please send us an email at mbuck@sunlightfoundation.com.

Tariff bill opens the floodgates for lobbyists

In the three months before congressional leaders announced that they are once again opening the process to suspend tariffs, at least 71 private companies have already lobbied to get their own exemption and nine more have registered. Each one has a product they’d like to import a little more cheaply. So far this year, the companies report lobbying expenditures of $14 million on issues including this one – but if history is any guide, it may be well worth the expense.

The last time Congress passed a miscellaneous tariff bill (MTB), in 2010, it cost taxpayers $298 million in lost revenue over three years, according to the Congressional Budget Office.

Members have until tonight to send in provisions they want included in this year’s legislation, according to House Ways and Means Committee Chairman Dave Camp, R-Mich., and Senate Finance Committee Chairman Max Baucus, D-Mont.

In short, the MTB is legislation written for corporations, by corporations to save them money on products they import and use in manufacturing. The companies solicit members of Congress to introduce bills reducing their tariffs and those bills eventually get rolled into the MTB, a long green eyeshade document that few members of Congress likely will take the time to read. Call it “nearmarking.” With earmarks now banned, critics say the tariff bill offers members of Congress an alternate route to get special favors for pet concerns at taxpayer expenses. Republican Sens. Jim DeMint, R-S.C., and Claire McCaskill, D-Mo., have introduced legislation would send all tariff requests directly to the International Trade Commission (ITC), cutting Congress out of the process.

“There is no good reason why businesses go to members of Congress and not directly to the International Trade Commission with their petitions,” said DeMint spokesman Wesley Denton.

But guess who’s pushing the tariff bill? Sixty freshman Republican lawmakers –who generally have been among the loudest voices against special dealing and for deficit reduction -- recently wrote to House Speaker John Boehner, R-Ohio, and House Majority Leader Eric Cantor, R-Va., urging favorable treatment of the MTB. They argued that it’s a bill that will spur American jobs.

Lobbying

Congress considers tariff legislation almost every two years. And while heavy corporate lobbying on it is typical, it's hard to compare historic spending trends because lobbying records weren't digitized until 2008 and congressional lobbying records didn't begin tracking lobbying specifically on the miscellaneous tariff bill until the last few years.

Lobbying disclosure information reported to the Senate Office of Public Records.

But the number of tariff suspensions enacted by Congress appears to be on the upswing. In 2004, Congress passed an MTB with 433 tariff suspensions. Two years later, the MTB that passed two years later suspended duties on 280 products and generated a tariff savings of about $660 million for corporations according to a study conducted by Capital Trade, Incorporated, an economic consulting firm that focuses on international trade. But later that year, Congress approved a second bill suspending duties on another 580 products. During the 111th Congress, which ran from 2009 through 2010, lobbying records on file with the Senate show 192 companies with $385 million in lobbying expenses on tariff issues. Of that amount, $205 million was spent in the final six months before passage of H.R. 4380, the United States Manufacturing Enhancement Act of 2010. The bill included duty suspensions on 665 products, benefiting 113 corporations, according to data provided by the House Ways and Means committee.

An examination of the 2010 bill and lobbying records related to the MTB provides vivid examples of how members of Congress use the tariff legislation to do favors for home-state businesses.

Bayer

Rep. Emanuel Cleaver, D-Mo., submitted 28 requests to suspend duties on products for Bayer. All but three made it into law. Overall, Bayer got a remarkable 62 duty suspensions from 15 members of Congress, making the German drug manufacturer the top beneficiary of the bill. Mary Petrovic, Rep. Cleaver's press secretary, defended the support, noting that Bayer employs a number of people in his home district in Missouri.

Bayer and its subsidiaries spent $8.3 million lobbying the bill and other issues in 2009 and 2010 according to records disclosed with the Senate. The corporation has reported spending $7.2 lobbying the issue and others this session so far.

Cleaver also received $5,500 in campaign contributions from employees of Bayer and their family members during the 2007-2008 and the 2009-2010 election cycles. So far this cycle he’s received $2,000 from people associated with Bayer, according to InfluenceExplorer.com.

Michelin

An examination of lobbying records disclosed in 2010 showed that the tire manufacturer Michelin lobbied on 21 bills introduced by Senator Lindsey Graham, R-S.C., to reimburse duties they paid on tire products. Michelin, which operates a number of plants in Graham’s state, reported spending at least $1.1 million on issues including tariffs and was the only company that reported lobbying on the 21 original bills dealing with tariff reimbursements that Graham introduced. The provisions Michelin wanted made it into the final bill.

Tracking which corporations benefit from provisions that originated on the Senate side is harder than the House side, because the Senate traditionally has not revealed which members requested each provision. It’s not clear whether the Senate will adopt the House transparency process this time around. That potentially could shed more light on relationships between senators and the corporations they help through this bill.

Dan Ikenson, an expert in trade issues at the Cato Institute, favors reducing all tariffs unilaterally. But he called the MTB a good thing even though it only temporarily suspends duties on a limited number of products. He described the measure as “gradual progress” towards creating more competition in the markets.

Ikenson, however, doesn’t agree with all of the rules that go into writing the MTB. Only allowing import products to be considered if they are not produced in the United States is bad for competition., he said. Magnesium, for instance, is only produced by one company in the United States and therefore has little incentive to make prices competitive, Ikenson said. He argued that lifting duties on imported magnesium would allow U.S. manufacturers to get better prices.

“We’re picking winners and losers in our markets by placing duties on certain items,” Ikenson said.

Obama Administration May Take on Earmarks

While there's currently a so-called "ban" on earmarks in the Congress, it's widely reported that this earmark ban isn't really effective, because Members just write letters to the administration, requesting funding for their pet projects.

The Obama administration may finally drag this practice into the light, according to the National Journal.

Since March, Sunlight has been pointing to an Executive Order issued under Bush that requires agencies to post requests for funding sent by Congress online.  Agency officials are required to ignore verbal requests for funding, and post any paper copies online.

The only problem with this order is that nobody seemed to have heard of it, and the agencies were almost completely out of compliance with the order.

This is made even more clear as a flood of investigative pieces have demonstrated Members' requests for funding, often in a manner in contradiction with their public anti-spending personae.  We've been compliling a list of those stories, to bolster the case that these requests should be public, and that the Obama administration should implement and enforce this order. (Here's a recent New York Times letter to the editor to that effect, for example.)

The National Journal piece suggests that the administration will refer to, and add to this order, requiring agencies to start posting spending requests that they receive. The President should sign this Executive Order, and require Members of Congress to stand publicly for the spending they would prefer to request in private.

Sunlight would also like to see this disclosure done in as strong a way as possible.  Images of letters are difficult to reuse and analyze, so they should be posted with the actual text exposed, through OCR if necessary.  Agencies should disclose these requests retrospectively, as well, since there's a wealth of important information contained in the letters Members have sent in recent years.

It looks like the administration has gotten the message on earmark accountability. We can't wait to look through what they've got.

Still No Earmark Moratorium

I've been over this before: there is no earmark moratorium. USA Today just proves that even more with this report today:

House Republicans who crafted two short-term spending bills made $5.3 billion in cuts by going after some of Washington's least popular spending: those congressional pet projects known as "earmarks." Even so, a congressional report shows they left $4.8 billion in earmarks untouched — and critics of congressional pork say they should go after it. "Many in Congress promised taxpayers a full earmark moratorium, not a half moratorium," says Sen. Tom Coburn, R-Okla., an earmark opponent who requested the report from the non-partisan Congressional Research Service. "Protecting nearly $5 billion in earmarks from cuts sends the wrong message to taxpayers." Most of the remaining funds that congressmen set aside for pet projects are in defense, military construction and veterans affairs, according to the report last week. They account for $4.1 billion of the $4.8 billion that could be cut.

Defense earmarks have not ended. These include some of the biggest contracts created by earmarks. So much for the earmark moratorium. All we have to show for it is less transparency.

There Is No Earmark Moratorium (Cont'd)

As previously stated, there is no earmark moratorium. Politico reports on the joint work of Sen. Jim Inhofe, earmark fan, and Sen. John McCain, earmark foe, in finding a work around for approving earmarks:

But in an unexpected twist, longtime earmark apologist Inhofe has quietly scored McCain’s endorsement on a proposal that would allow home-state projects if they are first authorized by Senate committees. It’s a major coup for Inhofe, who has emerged as the most aggressive Republican battling to save earmarks in a year when Congress has effectively banned them.

...

Under the Inhofe-McCain proposal, the definition of earmarks would exempt projects specifically authorized by Senate committees, that meet “funding eligibility criteria” established by the relevant committees or that are created through a competitive-bidding and formula-based process. Earmarks could also be enacted with the support of 75 senators.

I also suggest reading my colleague John Wonderlich's post about a mostly unknown earmark transparency executive order issued by President George W. Bush that is apparently going unenforced.