Six months after Rep. Dan Lungren, R-Calif., joined a House Republican voluntary moratorium on requesting earmarks, his staff met with executives from a cyber security company that requested an earmark to explain their appropriations process, according to internal company emails from the firm released by a group of hackers known as Anonymous.
Though House Republicans requested no earmarks in 2010 and the House Republican leadership agreed to a ban on requesting earmarks–appropriations directed to specific beneficiaries in congressional spending bills–in 2011, there have been some indications that members have found ways around the ban. For example, Rep. James Moran, D-Va., recently claimed that he’d managed to direct funds to his pet projects, and there have been reports of other lawmakers attempting to do the same.
How the new earmarking process without earmarks might work has yet to be uncovered, but there may be a clue in an unlikely source: Emails released by a group of hackers who targeted HBGary Federal, a cybersecurity firm that was seeking to out members of the group, known as Anonymous, who attacked a series of firms that stopped doing business with WikiLeaks after that organization published thousands of U.S. government documents.
One of the email threads released by the hackers contained correspondence between July 2008 and September 2010 Greg Hoglund, CEO of HBGary, his wife Penny Leavy-Hoglund, the company’s President, and Marilyn Erbes, the district director for Lungren. In a Sept. 13, 2010 email, Erbes offered to schedule a meeting about Lungren's appropriations process in response to an email from an email from Leavy-Hoglund.
The H.B. Gary president had written three days earlier, "I'd like to see if we can get an earmark or funding in a bill to see if we can continue to train law enforcement on malware and catching criminals using the computer."
Erbes told the Sunlight Foundation that Lungren's office did not seek any federal funds on the company's behalf. She explained that the interview was informational there was no intention of earmarking funds to the company, but the office wanted to learn more about the company, “hear their needs and explore projects.”
Erbes responded to Leavy-Hoglund's request for an earmark by suggesting that Lungren's office could potentially help HBGary seek funding through a federal grant. “Perhaps you and I can have a separate conversation about earmark and appropriation funding. We handle the appropriations process out of our district office and I would be happy to explain the process and perhaps discuss our process in support of grant funding.”
One way that members of Congress and their staffs can influence spending without earmarking funds is to help walk organizations through the grant process. For example, Rep. Mike Ross D- Ark, outlines on his website, “I encourage applicants to contact my office for assistance. I can write letters on behalf of a grant application to alert agencies of my support of a project.”
Congressional letters carry weight and can influence spending. “Lettermarking” refers to Congressmen writing to various agencies to direct funding to their home districts.
Leavy-Hoglund also explains in the email to Erbes that HBGary has benefited from federal funds in the past. "[W]e were funded by three phase 2 SBIRs [Small Business Innovation Research grants]. Two from the Air force (Wright Patterson) and one from DHS Science and Technology…
"[B]ecause of the funding, we are able to hire in Sacramento. This means jobs in a depressed economy."
The House Armed Services Subcommittee on Emerging Threats and Capabilities has requested any contracts the Defense Department may have signed with HBGary.
In private correspondence, Leavy-Hoglund playfully bragged of her lobbying skills to her husband. “Who says I have to pay for a lobbyist. I think it could be my next career.” She did not register as a federal lobbyist, and most likely wasn't required to: only individuals who spend more than 20 percent of their time lobbying must file disclosures with the House and Senate.
Though Lungren agreed to the ban on earmarks, he has been critical of other efforts to cut government spending, and opposed a measure sponsored by Rep. Michelle Bachman, R- Minn., to cut the budgets of federal agencies by a percentage rather than achieving spending cuts by choosing individual programs to slash. On the House floor Lungren complained, “Across-the-board cuts are a lazy member's way to achieve something. This will cut 11 percent for the security of the Congress.”