To: Shadegg Insiders
From: Congressman John Shadegg
The two articles below point out, once again, the corruption and public distaste for the earmark abuse which has become embedded in the culture on Capitol Hill. Now, more than ever, we need real earmark reform.
Wall Street Journal Officials Investigate Alleged Conspiracy At Missile Unit
Probe Puts Spotlight on Earmarks
By JOHN R. WILKE
April 14, 2008; Page A4
HUNTSVILLE, Ala. -- A federal bribery and political-influence investigation at the Army Space and Missile Defense Command here is turning a harsh new light on companies that lobby Congress for no-bid defense contracts. Two former missile-command officials pleaded guilty early this year in federal court in nearby Birmingham to public-corruption and conspiracy charges. Their plea agreements detail a conspiracy in which politically connected defense contractors that lobbied for congressional funding, called earmarks, bribed the officials to steer the funds to sham subcontractors. Charges under seal in the same court allege a conspiracy among at least four defense contractors doing business in Huntsville, according to lawyers and witnesses close to the case. Because the case is under seal, the contractors haven't been publicly identified.
Investigators also are looking into whether the contractors' lobbying and political ties played roles in earmarks awarded to the Army command and its contractors. Separately, federal agents are reviewing allegations that another Huntsville defense contractor broke the law by repaying executives for political contributions to lawmakers who granted their company's earmarks, the witnesses and lawyers close to the case said. Lt. Gen. Kevin Campbell, who runs the Army missile command, said through a spokesman that he couldn't comment on the role of political influence there because of the investigation. But in an internal memo sent to command officers after the first indictments, he ordered new oversight of congressional earmarks and banned staff from direct contact with Congress without prior command approval. Much of the criticism of earmarks has centered on whether they waste public funds. But the Hunstville investigations show another risk: that earmarks invite problems -- even corruption -- because they are subject to less oversight and often a re awarded without competitive bidding. And it isn't illegal for politicians to use earmarks to reward campaign contributors.
Use of earmarks has ebbed over the past three years following promises by leaders of both parties to curtail the practice.
Still, they remain prevalent. Nearly 12,900 earmarks, worth $18.3 billion in all, were included in the $1.4 trillion in spending approved by Congress for fiscal 2008, according to Taxpayers for Common Sense, a nonpartisan Washington group that tracks government spending. The Army Space and Missile Defense Command awards some $500 million a year in research work. In some years as much as one-third of the funds is directed by members of Congress through earmarks or other means to contractors in this military boomtown. In January, missile-command executive Michael Cantrell, 51 years old, admitted he accepted $1.6 million in bribes and payments from contractors for construction of a house in Huntsville.
His 48-year-old deputy, Doug Ennis, admitted a role in the conspiracy in February, including accepting a suitcase with $75,000 in cash at Reagan National Airport in 2004. Both men are cooperating with prosecutors, and more indictments are expected. Alice Martin, the U.S. attorney for northern Alabama, said the investigation has revealed "a massive procurement-fraud scheme." The investigation highlights the coziness between contractors, lawmakers and the military officials who award funding.
Many contractors here routinely contribute to U.S. Sen. Richard Shelby and Rep. Terry Everett, both Republicans, and Rep. Robert "Bud" Cramer, a Democrat, and they have sought earmarks or other funding from them. The contractors employ former congressional staff members. These lawmakers defend their earmarks and deny any link to contributions. Lawmakers say earmarks can serve local needs overlooked by federal agencies, such as construction of an exit ramp.
They defend their right to accept contributions from business executives, even those who benefit from earmarks. Sen. Shelby, whose Defend America political-action committee has received hundreds of thousands of dollars from Huntsville defense contractors, said contributors aren't given special treatment. He says he prioritizes projects of merit that promote the national security. "I don't back any projects -- general programs or earmarks -- that the military services and federal agencies do not support," Sen. Shelby wrote in a statement.
While the companies being investigated in the Huntsville inquiry haven't been publicly charged or identified, witnesses and others close to the case point to at least three companies doing business there: Vicus Technologies LLC of Kennebunk, Maine; Innovative Business Solutions Inc. of Glenn Allen, Va.; and Maximum Technologies of Huntsville. People involved said Maximum appears to have been an unwitting participant.
Each has received millions of dollars in earmarks. Another focus of the criminal investigation is a longtime defense contractor, Maurice Subilia, former president of Fiber Materials Inc., a Maine composite-materials manufacturer. Federal investigators believe a contractor conspired with missile-command officials to direct earmarked funds to affiliates in Huntsville and elsewhere, according to court documents. People close to the matter identified the contractor as Mr. Subilia. His attorney, Toby Dilworth, Portland, Maine, said Mr. Subilia declined to comment.
Vicus and its chief executive, Paul Hurlburt, also declined to comment, Mr. Dilworth said. An attorney for Innovative Business Solutions, Tim Heaphy, also declined to comment. A Maximum executive said the company had been unaware of the issue and has cooperated with prosecutors. Mr. Ennis has told investigators that some earmark-funded contracts were of little value to the Army and that some companies did little work under these contracts.
For example, the same prototype carbon-fiber nose-cone assembly was delivered more than once for different contracts, according to Mr. Ennis's attorney, Walter Braswell. Mr. Enn is kept the nose cone in his garage so the company couldn't submit it again under the next contract, Mr. Braswell said. Mr. Ennis has cooperated with prosecutors, who are examining "not only his employer in Huntsville but activities in other states," including lobbyists and campaign donors, Mr. Braswell said. "It's a system that invites waste and abuse," said James Sturdivant, Mr. Cantrell's attorney. "Even if it's legal." In the 2008 defense-spending bill, members of Congress gave $1 million more to Vicus and $2.4 million to Maximum. As is typical with earmarks, the Pentagon didn't request the work.
Many Huntsville contractors complain that earmarks distort the competitive process. Ron Klein, chief executive of Belzon Inc., a small federal contractor, said that when a company makes a campaign contribution and then gets funding for a contract, "they don't always have in mind the best interests of taxpayers or soldiers."
Arizona Daily Star
Readers don't like earmarks
April 14, 2008
Readers who responded to last week's online poll on congressional earmarks were overwhelmingly opposed to their use for the benefit of specific congressional districts. A majority of respondents said earmarks are not effective and 78 percent of readers said they should be banned. When asked if their congressional representatives should request earmarks to benefit their district, a vast majority of readers said members of Congress shouldn't request any earmarks.
On the question, "If earmarks were eliminated, how should funds be allocated?" here's what some readers had to say: " Funds for all federal programs should be requested using the existing appropriation/authorization process. All funding requests should be openly debated and approved. " All appropriations should be on separate bills. They should not be tied into something that might be good for the people. Sink or swim on their own merit. " Congress can do what the rest of us do and go without. " They should be formally included in bills for a up or down vote. " Pay off the national debt and let the taxpayers pay for these goodies. " Include items in the budget. Don't budget by anticipating earmarks. " All appropriations should be voted on. Congressional earmarks survey results
Are earmarks effective?
Yes 7% Sometimes 36% No 56%
Should they be banned? Yes 78% No 22%
What do you think of your representatives in Congress requesting earmarks to benefit your district?
They shouldn't request earmarks 74%
They should put in few requests 16%
They should put in many requests 11%
Poll results aren't scientific and reflect only the opinions of those who chose to participate. Results as of noon Friday. Percentages may not add up to 100 percent due to rounding.
PAID FOR BY JOHN SHADEGG'S FRIENDS
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