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.

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"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.

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 of reducing all tariffs unilaterally. But he called, the MTB is 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.

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.

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.

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.

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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.

Since the current leadership "ban" on earmarks went into effect at the beginning of this Congress, there has been an enormous amount of media coverage on how this ban will likely be evaded by appropriators. Appropriators are basically saying that they can still earmark, but that they'll simply contact agencies directly, apparently completely out the the public view.

There's one problem with this story, as told by the lawmakers quoted in these stories: there is an Executive Order (EO) from President Bush that is supposed to make this sort of involvement impossible.

Executive Order 13457 requires that agencies make spending decisions based on "transparent, statutory criteria." It mandates that agencies ignore congressional input unless it's offered in writing, and even requires all written attempts by Congress to influence executive spending decisions to be posted on the Internet.

I don't know of a single instance in which an agency posted correspondence from an appropriator online as a result of this EO. If anyone has one, I'd love to see it.

This order is still on the books, and, despite being an EO from President Bush, should be something that President Obama supports. It looks like something Obama's OMB could have written, all about protecting merit-based decision making, and requiring online transparency.

Unfortunately, there has been no pressure on agencies to follow this Executive Order and post congressional correspondence about spending decisions online. It's also unclear whether OMB has issued any exemptions to the requirements, as the EO allows.

If Congress and the President are going to walk away from earmark transparency in Congress for now (by instituting a "ban"), then the least they can do is make sure the process that replaces it follows the transparency requirements that already exist.

CRS covered this Executive Order when it came out, but mostly from a separation of powers perspective, saying that it was a legitimate move from the President. It's time for some attention to the online transparency aspects of the Order, and for the current debate about earmark accountability to take this EO into account.

For comprehensive earmark transparency context, see this page on transparencyhub.

Eliza Newlin Carney has an interesting article in today's National Journal about the fall of earmarks and how that will affect the internal bargaining involved in passing appropriations bills this year. In the past, earmarks were used as bargaining chips by the majority to secure needed votes from straying members and as local prizes to tout to constituents back home. In a post-Tea Party environment the notion of bargaining chips for lawmakers or constituents is toxic and earmarks have gone underground.

While I found that section of Carney's article to be interesting, I have to point out that her article also helps to disprove the notion of an earmark moratorium.

Here's some relevant text from Carney:

Lawmakers who want to steer money toward their states and districts can still put in requests to federal agencies, a process called “phone-marking” or “letter-marking.”

They also can write bills that fail to name a pet project but that apply narrowly to only one funding recipient. Some lawmakers will also fight to preserve money for highways, water resources projects, and controversial weapons systems such as the F-35 Joint Strike Fighter alternate engine—battles that will now move to the fore.

Let's start with the second paragraph. This is just describing earmarks. These could easily be viewed as earmarks by definition, so I don't see how this circumvents the supposed earmark moratorium. If they do not qualify as earmarks--particularly, "bills that fail to name a pet project but that apply narrowly to only one funding recipient"--then there is no real moratorium.

The first paragraph describes the attempts of a lawmaker to try to influence the appropriations process once an agency has received the money from Congress and is deciding where to spend it. Now the lawmakers may be doing this at the behest of a lobbyist or a local company, but it is also possible that the lawmaker believes that the company in their district could do the best job or that their district deserves the money. Isn't this the job of a lawmaker? Aren't they supposed to represent their district?

People may want an appropriations process that exists in a vacuum, but none exists. Lawmakers can and do try to influence agency decisions on spending. There may even be lobbyists pushing lawmakers to do this. What is needed is not the elimination of one form of directed spending, but disclosure of all forms of directed spending.

The truth is that Congress chose the easy route on dealing with earmarks. The moratorium is temporary and cosmetic. Lawmakers will still direct spending as it is their prerogative to do so. Only now they won't disclose how they are doing it.

The real route of reform would start with the creation of a permanent, centralized earmark database, including both earmarks approved and earmarks requested. They could follow this by approving the disclosure of lobbying contacts. This would allow the public to see the contacts between lawmakers and earmark lobbyists to discourage bad behavior.

Even further, the House Ethics Committee could have ceased shielding lawmakers from ethical complaints by having properly reviewed and taken action in the PMA Group earmark investigation. The committee received numerous e-mails showing lobbyists tying the receipt of earmarks directly to their campaign contributions to lawmakers, but decided to take no action. An honest reading of the documents in this case could have led Congress to real earmark reform before the enactment of a pandering earmark moratorium that appears to be riddled with loopholes.

Late last week, PMA lobbyist Paul Magliocchetti was sentenced to 27 months in prison and a $75,000 fine after pleading guilty to making illegal campaign contributions. For five years, Magliocchetti illegally used corporate funds from the once powerful PMA lobbying firm to reimburse friends and colleagues who made contributions to political candidates. Magliocchetti’s illicit generosity helped him secure earmarks from Members of Congress for many of his clients.

Some small measure of justice is served by Magliocchetti’s sentence, but if there were real time online reporting of lobbyists’ activities, perhaps it wouldn’t have taken five years to detect his scheme. Or, perhaps the scrutiny that comes with more frequent, detailed disclosures would have had a deterrent effect—Magliocchetti might have been less likely to commit a crime had he thought he risked being caught.

Sunlight is embarking on a campaign to improve lobbyists’ disclosures. (Check it out here, and sign up if you want to learn more.) Among the changes we propose is a requirement that lobbyists identify, in real time, who they are meeting with and what they are asking for. Such disclosures will, we believe, improve the democratic process and the ongoing policy dialogue by providing the public a clear idea of the issues that are hot on Capitol Hill and the interests that are lobbying in support or opposition to them. In the Magliocchetti case, such disclosures might also have quickly uncovered, or even prevented, the corrupting influence of Magliocchetti’s money laundering scheme.

Slate's Dave Weigel has a really interesting take on why the omnibus spending bill just stalled in the Senate:

The omnibus spending bill died in the Senate last night, and the death was a long time coming. It started to bleed in 2006, when a series of rule changes and the Federal Funding Accountability and Transparency Act were passed, opening up the process by which bills were marked up to public scrutiny.

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The increasing transparency of the earmark process was going to make it tougher for Republicans to support this bill and get away with it. There is nothing -- literally, nothing -- that currently motivates most Republicans to send money back home.

The more transparent the process became the more difficult it has become for critics of government to lob their bombs at spending while simultaneously bringing home the bacon for their state. It becomes a whole lot more clear as to why Sens. Ted Stevens and Robert Byrd put a secret hold on the Federal Funding Accountability and Transparency Act after seeing what transparency hath wrought.

Weigel also gives a good explanation as to why transparency is important in this instance:

It's extremely important that earmarking has become a more transparent process, and that it's now easy to call out members for their requests before bills are voted on. Look at the context, though. Earmarks are only the easiest way to nail members for doing what has never really been controversial -- appropriating.

Of course, the irony in this whole story is that the Obama administration is now in a pickle over funding the government--Secretary Gates went so far as to state that a defeat of the omnibus would harm national security--brought about by a federal spending transparency bill that was one of the chief accomplishments of Obama's short Senate career. The Federal Funding Accountability and Transparency Act is also popularly known as the Coburn-Obama bill.