POLITICS - Our Pay-to-Play Culture Still Lives

"Companies Find Ways to Bypass Ban on Earmarks" by ERIC LIPTON & RON NIXON, New York Times 7/4/2010

Excerpt

Just one day after leaders of the House of Representatives announced a ban on earmarks to profit-making companies, Victoria Kurtz, the vice president for marketing of a small Ohio defense contracting firm, hit on a creative way around it.

To keep the taxpayer money flowing, Ms. Kurtz incorporated what she called the Great Lakes Research Center, a nonprofit organization that just happened to specialize in the same kind of work performed by her own company — and at the same address.

Now, the center — which intends to sell the Pentagon small hollow metal spheres for body armor that the Defense Department has so far declined to buy in large quantities and may never use — has $10.4 million in new earmark requests from Representative Marcy Kaptur, Democrat of Ohio.

The congresswoman, who has received tens of thousands of dollars in campaign contributions from Ms. Kurtz’s family and her business’s lobbyists, thought the quickly hatched nonprofit organization was a convenient solution.

“They met the requirements of the reform,” Ms. Kaptur said in an interview. “Yes, they did.”

The proposed earmarks are among dozens — totaling more than $150 million — from around the country that would indirectly benefit profit-making companies, according to an examination by The New York Times of House appropriation requests submitted after the new rule was imposed in March.

Adopted because of repeated scandals over wasteful spending — the bridges to nowhere and expensive pet projects like a water-taxi service — the ban was intended to help eliminate earmark abuses. Critics say spending on earmarks, which added $16 billion to the federal budget last year, diverts money from higher priorities, typically does not require competitive bids and is often directed to experimental research that will never be used.

But given the appeal of free government money, the fees that lobbyists can earn by helping businesses grab a handful of it and the persistence of lawmakers in trying to satisfy constituents or donors, the pay-to-play culture in Washington has once again proved hard to suppress.