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Earmarks in Another Form

July 5th, 2010

The lead article in today’s New York Times, “Companies Find Ways to Bypass Earmarks Ban,” describes attempts by a variety of groups to circumvent the new prohibition against earmarks — hidden legislative grants inserted by individual representatives to benefit businesses in their districts.

Apparently, non-profit organizations are exempt from the ban so businesses are creating their own mini-charitable organizations, or using educational institutions, who then pass on the bulk of the grant back to the business. The process comes complete with lobbyists and all the other unsavory elements supposedly outlawed by the ban on earmarks.

The New York Times expose should not come as any surprise to anyone who has followed previous reforms in a variety of areas, including campaign finance. There always seems to be some loophole in the legislation allowing clever lawyers or lobbyists to take advantage of the new situation.

The article provides several examples of the exploitation of the new “non-profit loophole,” focusing on the acquiescensce of a particular representative, Marcy Kaptur of Ohio, to a defense contracting firm in her district. The firm has contributed several thousand dollars to Ms. Kaptur’s campaigns and created a non-profit group that manufactures the same product and is located at the same address.

One observer used the phrase in Jurassic Park, “Life will find a way,” to describe the inevitable evasion of reform attempts by Congress. One would hope this “way” is swiftly remedied.

Egad, an Earmark

March 11th, 2010

The lead story in The New York Times this morning, “Leaders in House Block Earmarks to Corporations,” describes a ban on a particularly pernicious practice, the inclusion of special grants for local representatives, inserted into a larger bill to please their constituencies.

The ban only covers for-profit companies but could still save over $1 billion per year. However, the Senate still allows earmarks for corporations, meaning they must be reconciled with the House version before being sent to President Obama’s desk for signature.

Excuse me for cynicism but does anyone believe this will significantly reduce the power of lobbyists in Congress? Instead, they will work to influence representatives on the actual legislation, a far more lucrative attempt in any case.

And the real problem with influence peddlers remains the nation’s campaign finance laws. As long as you have corporations donating significant amounts to political campaigns, there will be the expectation of some return on their investment.

And now the Supreme Court has made matters even worse in their recent ruling, granting “corporations” the same rights of free speech, creating political ads, etc. as those of ordinary citizens. President Obama was right when he decried this ruling in his State of the Union speech.

So money and politics will continue to go together despite the well-meaning attempt of an earmark ban.