No. 1924April 27, 2006

This paper, in its entirety, can be found at: www.heritage.org/research/budget/bg1924.cfm

Produced by the Thomas A. Roe Institute for Economic Policy Studies

Published by The Heritage Foundation214 Massachusetts Avenue, NEWashington, DC 20002–4999(202) 546-4400 • heritage.org

Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or

hinder the passage of any bill before Congress.

A Primer on Lobbyists, Earmarks, and Congressional Reform

Ronald D. Utt, Ph.D.

Because of the regrettable actions of a few, Con-gress is now considering significant reforms thatwould curb the influence of lobbyists and discouragethe use of wasteful earmarks. Among the Members ofCongress with more notable lapses in fiscal responsi-bility that triggered the current quest for reform wereRepresentative Don Young (R–AK), who showed apenchant for pork-barrel excess in the highway bill,and former Representative Randy Cunningham (R–CA), who has been convicted for accepting bribes inreturn for earmarks. Taken together, their actionshelped to precipitate a national backlash against thegrowing influence of lobbyists on the federal budget.

This backlash has encouraged several Membersof Congress to introduce legislation designed todiscourage some of these practices. Of the 51pieces of such legislation introduced by early April2006, most would make only cosmetic changes inthe earmarking process and would leave the lobby-ing community untouched.

Two notable exceptions are pieces of legislationintroduced by Senator John McCain (R–AZ) thatwould require extensive reporting and transpar-ency of the entire lobbying/earmark process andprovide a remedy against some of the more waste-ful earmarks included in appropriations bills.Enactment of these two bills, the Lobbying Trans-parency and Accounting Act of 2005 (S. 2128) andthe Pork-Barrel Reduction Act (S. 2265), woulddeter some of the more outrageous lobbying andlegislative practices related to earmarks.

Among their many provisions, these two billswould:

• Require lobbying firms, lobbyists, and theirpolitical action committees to disclose theircampaign contributions to federal candidatesand officeholders;

• Mandate both the disclosure of fundraisershosted, co-hosted, or otherwise sponsored bythese entities and the disclosure of contribu-tions for other events involving legislative andexecutive branch officials;

• Allow Senators to oppose earmarks by raising apoint of order, which, if sustained, woulddelete the earmark from the bill; and

• Require recipients of earmarked funding bothto disclose the amount of money that theyspent on registered lobbyists to obtain the ear-mark and to identify the lobbyists.

What Congress Should Do. While these billsare by far the best of the many bills introduced todate and could improve the integrity of the legisla-tive process, they could be made tougher byincluding several additional provisions:

No. 1924 April 27, 2006

• Disclosure of family relationships. With somany close family (and family-like) connec-tions between registered lobbyists and Mem-bers of Congress and their staffs, the Pork-Barrel Reduction Act should also require regis-tered lobbyists to disclose blood and maritalrelationships (including in-laws) with Mem-bers of Congress, senior congressional staff,and senior executive branch officials.

• Disclosure of campaign contributions. TheLobbying Transparency and Accounting Actshould also require both the disclosure of anycampaign contributions from the client or theclient’s staff to a Member of Congress and thedisclosure of any contributions paid by a clientor lobbyist to a Member’s charitable affiliate.Combined with the other provisions in S. 2128,these changes would make it somewhat easier toconnect earmarks to campaign contributions.

• A reasonably precise definition of an ear-mark. Any successful effort to limit Members’propensity to earmark spending and other fed-eral privileges requires a reasonably precisedefinition of what is and what is not an ear-mark. A good definition would also help to

prevent the congressional abuses that transfervaluable public resources to other interests forreasons based solely on influence and privi-lege. Of the bills introduced so far, the Trans-parency and Accountability Act of 2006 (S.2349), sponsored by Senator Trent Lott (R–MS), offers the most detailed definition of anearmark. Section 3 defines it as covering “bud-get authority, contract authority, loan authority,and other expenditures, and tax expendituresor other revenue items.”

Conclusion. These bills would have their biggestimpact in deterring some of the corrupt and waste-ful practices that appear to be associated with anumber of earmarks. By requiring extensive report-ing and transparency and by making the linkbetween earmarks and campaign contributionsmore obvious, they would enhance the integrity ofthe legislative process. While these provisions arenot likely to slow the growth of earmarks, theyshould make the process more honest.

—Ronald D. Utt, Ph.D., is Herbert and Joyce Mor-gan Senior Research Fellow in the Thomas A. Roe Insti-tute for Economic Policy Studies at The HeritageFoundation.

• Growing evidence that links earmarks tobribes from lobbyists and their clients hasencouraged Congress to enact reforms.

• Many of the reform proposals would makeonly cosmetic changes and leave the worstof the problems in place.

• Much more transparency is needed, andstiffer reporting requirements should beimposed on lobbyists, their clients, and theMembers of Congress and congressionalstaff that they contact.

• Even with meaningful reform, the number ofearmarks will continue to increase, but theprocess will likely be more honest.

• The press deserves much of the credit forexposing the problems and instigating theformal criminal investigations that haverevealed the shady nature of the earmarkingprocess. If not for a free and inquisitive press,the comprehensive reform process nowunderway would never have happened.

This paper, in its entirety, can be found at: www.heritage.org/research/budget/bg1924.cfm

Produced by the Thomas A. Roe Institute for Economic Policy Studies

Published by The Heritage Foundation214 Massachusetts Avenue, NEWashington, DC 20002–4999(202) 546-4400 • heritage.org

Nothing written here is to be construed as necessarily reflect-ing the views of The Heritage Foundation or as an attempt to

aid or hinder the passage of any bill before Congress.

No. 1924April 27, 2006

Talking Points

A Primer on Lobbyists, Earmarks, and Congressional Reform

Ronald D. Utt, Ph.D.

Two seemingly unrelated events in 2005 promiseto contribute to some of the most significantchanges in federal budget practices since the enact-ment of the Budget Control and Impoundment Actin 1973.

First, the enactment of the Safe, Accountable, Flex-ible, Efficient Transportation Equity Act (SAFETEA-LU)1 in late July revealed that there was a limit to thecongressional waste that the American public wasprepared to tolerate. With its more than 6,300 pork-barrel earmarks, the federal highway program andRepresentative Don Young’s (R–AK) $220 million forthe infamous “bridge to nowhere” became objects ofnational ridicule. As the public demanded a remedy,many fiscally conservative Members intensified theirefforts to curtail the embedded fiscal irresponsibilitythat has made pork-barrel spending increasinglycommonplace.

Second, the indictment of former RepresentativeRandy Cunningham (R–CA) for selling earmarks todefense contractors and the revelations of JackAbramoff’s unethical lobbying practices have addedthe taint of corruption to the earmarking process,which had once seemed merely irresponsible.

Egged on by the national media, the publicresponded with a degree of disgust that initiallyforced worried Members of Congress to take a num-ber of steps to appear responsive to the public’s con-cern. Among these early steps was a dramaticrequest from Senator Ted Stevens (R–AK) that theSenate delete funding for the two controversial

April 27, 2006No. 1924

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bridges in Alaska, though the governor decided torestore spending for them a month later.2

Despite the Senate’s empty gesture, the public’sconcern was not satisfied. As evidence of moreimproprieties emerged, demands for a fundamentalreform continued to escalate. In response, many inCongress have sought ways to clean up the process.As of mid-April 2006, 51 bills had been introducedin the House and Senate to regulate the relationshipbetween Congress and its earmarks and lobbyists.President George W. Bush took the unprecedentedstep of addressing the issue in his State of theUnion address:12

I am pleased that Members of Congress areworking on earmark reform—because thefederal budget has too many special-interest projects. And we can tackle thisproblem together, if you pass the line itemveto.3

Yet despite the broad public concern, presiden-tial interest, and the introduction of dozens of leg-islative remedies, most in Congress remainskeptical about the need for any change in behav-ior. In a radio interview, Senate Minority LeaderHarry Reid (D–NV) said, “There’s nothing basi-cally wrong with the earmarks. They’ve beengoing on since we were a country.”4 In response tothe President’s expression of concern, SenatorStevens retorted that “What needs fixing is to havethe public understand what we do when we ear-mark bills.”5 During his recent primary challenge,Representative Tom DeLay (R–TX) emphasized“that he can bring home pork. His handoutsclaimed more than $1 billion in federal dollars toHouston-area transportation projects, the port,

NASA, universities and law enforcement.” Of thetransportation earmarks, Delay said, “Quitefrankly…[we’re] using earmarks to force dollarsinto this region.”6

With their lucrative client contracts now at risk,the vast lobbying community is providing congres-sional skeptics and opponents of reform with vocalsupport and will certainly use its considerableskills, contacts, and resources to thwart any mean-ingful reform that would undermine its prosperity.John Engler, head of the National Association ofManufacturers and former Michigan governor, tes-tified in a Senate hearing that “Additional rules andlaws weren’t needed.” At the same hearing, PaulMiller, president of the American League of Lobby-ists, echoed a theme that will be at the core of theanti-reform defense effort in the coming months:“[T]his is not a widespread scandal…. Our gov-ernment is not corrupt, lobbyists are not bribingpeople, and members of Congress are not beingbought for campaign contributions…. I don’tthink we can say with certainty that the currentsystem is broken.”7

Put on the defensive, many Members of Con-gress and the lobbyists have responded to the crit-icism with justifications for their actions andactivities. Some have promised to consider changesand reforms, but not everyone has. The leadershipand staff of the House Appropriations Committeewent on the offensive in February 2006 by compil-ing a list of earmark requests submitted to the com-mittee by Members who have co-sponsored theearmark control legislation introduced by Repre-sentative Jeff Flake (R–AZ). In turn, the committeestaff leaked the list of 717 earmarks and who

1. Public Law 109–59.

2. See Ronald D. Utt, Ph.D., “Bait-and-Switch on Alaska Bridges Undermine Congress’s Credibility—Again,” Heritage Foun-dation WebMemo No. 951, December 22, 2005, at www.heritage.org/Research/Budget/wm951.cfm.

3. George W. Bush, “The State of the Union,” January 31, 2006, at www.whitehouse.gov/stateoftheunion/2006/index.html (March 26, 2006).

4. Robert Novak, “Looking to Fry Pork,” The Washington Post, January 30, 2006, p. A17.

5. Liz Ruskin, “Stevens: Earmarks Don’t Need Reforming,” Anchorage Daily News, February 2, 2006, p. B1.

6. Cox News Service, “Unrepentant DeLay Stresses Pork,” February 27, 2006.

7. Dana Milbank, “For Would-Be Lobbying Reformers, Money Habit Is Hard to Kick,” The Washington Post, January 26, 2006, p A6, at www.washingtonpost.com/wp-dyn/content/article/2006/01/25/AR2006012502232.html (March 20, 2006).

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No. 1924 April 27, 2006

Chart 1 B 1924

The Number of Earmarks in Appropriations Bills

1,439 9581,596 2,100

2,8384,326

6,333

8,3419,362

10,656

13,997

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: Citizens Against Government Waste, at www.cagw.org.

requested them to select journalists in an effort toembarrass the bill’s supporters.8

Earmark Corruption: Widespread or an Aberration?

As Congress and the lobbying communityscramble to defend themselves against charges ofquestionable practices and illegal influence ped-dling, many note—quite correctly—that the vastmajority of Members and lobbyists are scrupu-lously honest, abide by all the rules, and are doingnothing more than exercising their constitutionalright to petition government on behalf of them-selves or their clients. Nonetheless, a growing bodyof evidence suggests that illegal and questionablelobbying practices are not uncommon and that

incidents such as those involving Mr. Abramoffhave likely been repeated in similar transactionsbetween other lobbyists and Members.

A recent Congressional Research Service (CRS)analysis indicates the scope of such activities. Theanalysis found that the number of earmarksauthorized by Congress in appropriations billsalone increased from 4,155 in 1994 to 15,887 in2005—an increase of 282 percent.9 Using aslightly different methodology, Citizens AgainstGovernment Waste (CAGW) concluded that therewere 1,439 earmarks in 1995, which grew to13,997 in 2005, for an increase of 872 percent.10

By both the CRS and CAGW counts, earmarks infiscal year (FY) 2006 fell by about 3,000, in largepart as a result of the refusal of Senator Arlen

8. David Espo, “New House Leader Seeks to Rebuild Unity,” CBS News, February 10, 2006, at www.cbsnews.com/stories/2006/02/10/ap/politics/mainD8FM6FTG0.shtml (March 20, 2006).

9. Press release, “McCain Statement on Earmark Reform Before Senate Rules Committee,” Office of Senator John McCain, Febru-ary 8, 2006, at mccain.senate.gov/index.cfm?fuseaction=Newscenter.ViewPressRelease&Content_id=1656 (March 20, 2006).

10. Brian M. Riedl, “Federal Spending: By the Numbers,” Heritage Foundation WebMemo No. 989, February 6, 2006, at www.heritage.org/Research/Budget/wm989.cfm.

April 27, 2006No. 1924

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Specter (R–PA) to allow any in the Labor–Healthand Human Services bill.

Earmarking in federal highway reauthorizationbills shows an even more dramatic longer-termtrend. Notwithstanding Senator Reid’s contentionthat “They’ve been going on since we were a coun-try,” the data in Table 1 and the data provided by theCRS and CAGW demonstrate that today’s volume ofearmarking is a relatively recent phenomenon.

In large part, this escalation in the number ofearmarks reflects the growing number of lobbyistsoffering to obtain them for a fee. As the number ofearmarks increases with each passing year, thebusiness attracts more lobbyists who apply morepressure on Congress to spend more on pork-bar-rel spending.

For example, the annual appropriations bill forthe civilian programs of the Army Corps of Engi-neers typically is the most earmarked bill producedby Congress. The Corps’ $5.3 billion annual budgetfor FY 2006 spawned a lucrative practice among lob-byists seeking a piece of the action for their payingclients. Among them is Marlowe & Co., which spe-cializes in representing seaside resort communitiesseeking money from the Corps for “beach nourish-ment” projects. With the Corps’ budget limited byannual appropriations, beach projects that promotetourism and enhance the value of vacation homescome at the expense of investment in flood control,including improved levees.

In a 2004 interview, firm owner Howard Mar-lowe bragged: “We know beaches.” The articlewent on to note that the company earned morethan $700,000 in 2003 and estimated that it hadwon more that $100 million in beach projects sinceentering the business.11 Even more revealing is theMarlowe & Co. Web site, which provides prospec-tive clients with its success stories. In its beach

nourishment practice, the firm lists 172 beach ear-marks that it claims to have earned for its clientsover the past several years.12 Assuming that Mr.Marlowe is providing an accurate description of hiscompany’s successes, taxpayers deserve an expla-nation of how a for-profit firm is allowed to partic-ipate so intimately in the congressional budgetingand appropriations process.

Turning Pennies into Dollars. As the number ofearmarks has escalated, there has been a similarincrease in the number of lobbyists registered withthe House and Senate, indicating their intentions topursue clients’ interests with the AppropriationsCommittees. According to a Knight-Ridder articleon lobbying, 1,865 lobbyists were registered withCongress in 2000 to pursue appropriations issues,

11. Jim Snyder, “Marlowe & Co.: ‘We Know Beaches’ Howard Marlowe Is K Street’s Man on the Waterfront,” The Hill, July 6, 2004, at www.hillnews.com/business/070604_profile.aspx (March 20, 2006).

12. For the list, see Marlowe & Company, “Summary of the Federal Coastal Accomplishments of Marlowe & Company,” revised June 2005, at www.marloweco.com/files/MCo_coastal_accomplishments_(2).pdf (March 20, 2006). Alternatively, the lobby reports posted on the Secretary of the Senate’s Web site list the contracts registered for such purposes and include the City of Solana Beach, California, which paid the firm $20,000 for “Beach restoration funding,” and the “American Shore and Beach Preservation Association,” which paid less than $10,000 for similar services in general, including advo-cacy before the U.S. Office and Management and Budget “to ensure that shore protection is not a low budget priority.”

Table 1 B 1924

* Includes only earmarks assigned a number in the bill and listed in specific sections of the bill. Including the earmarks in dozens of other provisions would increase the total to about 7,000.

Earmarks in Highway Reauthorization Bills, 1982–2005

Year of Bill Earmarks

19821987199119982005

10152538

1,8506,371 *

Source: Highway reauthorization bills, 1982–2005.

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No. 1924 April 27, 2006

but by 2004, the number is estimated to haveincreased to 3,523 lobbyists, an increase of 89 per-cent in four years.13 Even if Mr. Abramoff’s activitieswere an aberration or a “not widespread” practice,3,522 other lobbyists would still be registered topursue earmarks for paying clients.

Adding to the pressure for earmark growth is lob-byists’ increasingly common practice of aggressivelymarketing their services with unsolicited offers toprospective earmark buyers. This side of the busi-ness was exposed more than a year ago when offi-cials in Culpeper County, Virginia, received anunsolicited offer of assistance to obtain a congres-sional earmark from Alcalde & Fay, a Washington-area lobbying firm. According to the public discus-sion of the offer at a subsequent meeting of thecounty’s board of supervisors, a representative of thefirm approached a county official with the offer toobtain an earmark of $3.5 million to construct acommunity sports complex in the county.

Although the county had planned to finance thecomplex with the proceeds of a county bond offeringthat the voters had already approved, the represen-tative “expressed optimism that funds for the $3.5million sports complex could be tied to one or morefederal appropriation bills.”14 “The cost of hiringAlcalde and Fay would be $5,000 per month, withan 18-month recommended contract.”15 For a totalfee of $90,000 in return for a prospective federalgrant of $3.5 million, the lobbying firm was propos-ing to sell the county federal taxpayer money for just2.6 cents on the dollar—something that was notreally the firm’s to sell. That the lobbyist believed he

could deliver on the transaction indicates that some-thing is terribly wrong in today’s Congress.

Members of Congress making pork-barrel spend-ing promises to their constituents and delivering onthem is one thing, but the buying and selling of ear-marks by private speculators as if they were bushels ofwheat on the open market is quite another.16 Appar-ently, all this wheeling and dealing is taking placewithout any involvement (at least not yet) by a Mem-ber of Congress. Since Article I, Section 9, Clause 7 ofthe Constitution reserves the power of appropriatingmoney from the U.S. Treasury exclusively to Con-gress, how is it that these lobbyists have come by thesame privilege, and who has allowed it to happen?

Representatives of Alcalde & Fay and Marlowe& Co. are just a few of the many registered lobby-ists who attempt to provide clients with taxpayer-funded earmarks and other legislative favors inexchange for costly retainers. Exactly how thesemany firms make good on their client commit-ments remains something of a trade secret that nei-ther the lobbyists nor the Members and staff of theAppropriations Committee are eager to reveal.

Nonetheless, those firms with a successful trackrecord are not shy about reporting it. In a recentinterview, David Carmen, president of the CarmenGroup, a mid-size lobbying firm in Washington,D.C., revealed:

In 2004, the latest year available…[CarmenGroup] collected $11 million in fees anddelivered $1.2 billion in benefits—a ratio ofless than 1 to 100. The payoff is large butfairly typical of modern-day lobbying.17

13. James Kuhnhenn, “Corruption Probes, Pork Projects on the Rise,” The Free Lance Star (Fredericksburg, Virginia), Decem-ber 4, 2005, p. A1.

14. Donnie Johnson, “Culpeper May Hire Sports-Complex Lobbyist,” The Free Lance Star, November 4, 2004, at www.freder-icksburg.com/News/FLS/2004/112004/11042004/1560642 (March 20, 2006). Before this incident, the county had planned to finance the complex with the proceeds of a county bond offering that the voters had already approved. The county has since chosen not to hire the firm or to seek the earmark.

15. Jeffrey H. Birnbaum, “Clients’ Rewards Keep K Street Lobbyists Thriving,” The Washington Post, February 14, 2006, p. A1, at www.washingtonpost.com/wp-dyn/content/article/2006/02/13/AR2006021302239_pf.html (April 4, 2006).

16. Of course, Alcalde & Fay is not the only firm engaged in the misdirection of federal resources through the pay-to-play pro-cess. The market for earmarks in appropriation bills has been growing rapidly and, given its abundant profitable opportu-nities, will likely continue its robust growth. See Ronald D. Utt, Ph.D., and Christopher B. Summers, “Can Congress Be Embarrassed into Ending Wasteful Pork-Barrel Spending?” Heritage Foundation Backgrounder No. 1527, March 15, 2002, at www.heritage.org/Research/Budget/BG1527.cfm.

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Carmen’s fee/reward ratio compares favorably toAlcalde & Fay’s proposal to Culpeper County,which was more than double Carmen’s impliedrate. It also compares favorably to former Repre-sentative Cunningham’s price list, in which ear-marks of up to $20 million were for sale for a nickelon the dollar. Perhaps reflecting volume discounts,his price for larger earmarks fell to half this rate.18

In defense of the lobbying practice, some contendthat the lobbyists earn their fees because they aremore adept at making an effective pitch to Membersand staff on the importance of a project. Yet if that wasall there was to it, why could the Culpeper Countyofficials not simply visit with their Congressmanwhen he or she was back in the district and make therequest themselves? While many earmarks may infact result from routine meetings between Membersand constituents, the fact that so many petitioner/constituents pay tens of thousands of dollars for analternative channel to the U.S. Treasury offers dis-turbing insight into the appropriations process andthe extent to which parts of it have been outsourcedto the K Street lobbyists in return for campaign con-tributions and other sorts of rewards and favors.

Delivering the Earmark. Who the lobbyists areand whom they represent is known from their con-gressional registrations, and the evidence of theirsuccess appears annually in the appropriations andvaried authorization bills. However, little is knownabout the process by which the lobbyists securethese rewards from Congress for their paying cli-ents. Recent investigations by some in Congressand in the U.S. Department of Justice are beginningto shed some light on the process.

One such instance was exposed by SenatorMcCain, who released copies of a September 2001

e-mail exchange between Jack Abramoff (JA) andhis colleague Tony Rudy (TR) at a hearing beforethe Senate Committee on Indian Affairs in mid2005. The afternoon exchange between the twolobbyists was in an e-mail entitled “Is This Viable?”:

TR to JA: There are a few senate staffers Iwould like to help reward. Would thechoctaws or coushetta donate like 10k topay for a trip? Tony Rudy

JA to TR: A trip where?

TR to JA: There is a hunting and fishingresort 3 hours south of texas that smith’s19

people expressed an interest in. Tony Rudy

JA to TR: I don’t see how we can sell themon funding that.

TR to JA: Thank you trip for the approps wegot. Tony Rudy20

The bribery investigation into former Representa-tive Cunningham has revealed additional informa-tion on how earmarks are placed into legislation. Atthe hearing held to accept a guilty plea from Mitch-ell Wade of MZM Inc.—the defense contractoraccused of bribing Cunningham—Wade alsopleaded guilty to making nearly $80,000 in illegalcampaign contributions to “Representatives A andB” in return for earmarks that would benefit MZMoperations in their districts. According to newsreports, Representative A succeeded in placing theearmark in a bill, while Representative B “madesuch a request for funding, but it was notgranted.”21

Given how little access the public and mediahave to the detailed process of lobbying and therewards that are privately offered and received inresponse to legislative favors, there is no way of

17. Birnbaum, “Clients’ Rewards Keep K Street Lobbyists Thriving.” Emphasis in original.

18. Charles R. Babcock and Walter Pincus, “Bribery a la Carte,” The Washington, Post, February 26, 2006, p. B3.

19. There were two Senator Smiths in the U.S. Senate in September 2001, and there is no evidence to indicate that the pro-posed trip took place.

20. Jack Abramoff, “RE: Is This Viable?” e-mail to Tony Rudy, September 21, 2001, in hearings, Oversight Hearing on In Re Tribal Lobbying Matters, et al., Committee on Indian Affairs, U.S. Senate, 109th Cong., 1st Sess., June 22, 2005, exhibits, part 1, pp. 71–72, at indian.senate.gov/exhibitspart1.pdf (April 4, 2006).

21. Charles R. Babcock, “Contractor Pleads Guilty to Corruption,” The Washington Post, February 25, 2006, p. A1, at www.washingtonpost.com/wp-dyn/content/article/2006/02/24/AR2006022401737.html (March 20, 2006).

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No. 1924 April 27, 2006

knowing how typical such reward arrangementsare among Members and staff.

Recommendation #1: The House Committeeon Standards of Official Conduct and the SenateSelect Committee on Ethics should invite a crosssection of registered lobbyists and current andformer congressional staff to testify on all facetsof the lobbyist/earmark process.

Some in Congress Propose ReformsIn response to the many revelations of misbehav-

ior by Members of Congress, congressional staff, andregistered lobbyists, the House and Senate leadershiphave promised to develop a package of reform pro-posals that would more closely regulate the conductand contact between Congress and the lobbyists. OnMarch 29, 2006, the Senate passed an amended ver-sion of the Transparency and Accountability Act of2006 (S. 2349), sponsored by Senator Trent Lott (R–MS), which would ban gifts from lobbyists, requiremore extensive reporting by both Members and lob-byists, allow for points of order against earmarks thatoriginate in conference, and provide a comprehen-sive definition of earmarks. The House has yet to pro-duce a comprehensive bill, but an effort to do so isunderway in the committees of jurisdiction.

For the most part, the delays in developing acomprehensive legislative response reflect strongdisagreements among Members on key provisionsand the extent to which they are willing to limittheir discretion. While the leadership debated theproper course of action, many Members introducedtheir own proposals as pending legislation.

Lobbying Reform. Of the 51 bills introduced onearmarks/lobbying reform through early April2006, the most notable is the Lobbying Transpar-ency and Accountability Act of 2005 (S. 2128),introduced by Senator McCain. Among its manyprovisions, the bill would:

• Require lobbying firms, lobbyists, and theirpolitical action committees to disclose theircampaign contributions to federal candidatesand officeholders, their political action com-mittees, and political party committees;

• Mandate both the disclosure of fundraisershosted, co-hosted, or otherwise sponsored bythese entities and the disclosure of contribu-tions for other events involving legislative orexecutive branch officials;

• Require registrants to list as clients those enti-ties that contribute $10,000 or more to a coali-tion or an association;

• Lengthen the period during which senior mem-bers of the executive branch, Members of Con-gress, and senior congressional staff arerestricted from lobbying;

• Require registrants under the Lobbying Disclo-sure Act to report gifts worth $20 or more; and

• Require Members of Congress and congres-sional staff to pay the fair market value fortravel on private planes and the cost of thehighest-priced ticket in the arena for sports andentertainment tickets in skyboxes.

Introduced in mid-December 2005, SenatorMcCain’s bill had only seven cosponsors as of earlyApril 2006. The companion bill in the House (H.R.4667) fared worse, gaining no cosponsors out ofthe 434 Representatives.

The absence of congressional support is espe-cially disturbing given that the bill would mostlyjust require greater disclosure of certain activitiesand contributions and require Members to pay theirown way (at full market value) on private planesand at entertainment events. The bill’s only newlimitation would be extending the prohibition onlobbying former colleagues from 12 months to 24months after the official leaves government. Severalof the provisions of Senator McCain’s bill have beenincorporated into the final version of S. 2349, butoverall, the bill is not as tough as S. 2128.

Earmark Reform. Senator McCain has alsointroduced two other lobbying reform bills: TheObligation of Funds Transparency Act of 2005 (S.1495)22 is intended to establish better control overthe growth of congressional earmarks. The Pork-Barrel Reduction Act (S. 2265), which was intro-duced several weeks later, should be viewed as a

22. The House version is H.R. 1642, introduced by Representative Flake.

April 27, 2006No. 1924

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much-improved version of S. 1495. It wouldattempt to limit the incidence of earmarks by:

• Allowing Senators to oppose an earmark byraising a point of order, which requires 60 votesto overrule under Senate rules. If the point oforder is sustained, the earmark would bedropped from the bill or its report.

• Requiring that conference reports be filed andavailable publicly for at least 48 hours beforeconsideration on the Senate floor.

• Requiring the disclosure of earmarks, includingthe identity of the lawmaker seeking the ear-mark and a description of the earmark’s “essen-tial government purpose.”

• Requiring recipients of earmark funding bothto disclose the amount of money that theyspent on registered lobbyists to obtain the ear-mark and to identify the lobbyists.

• Prohibiting federal agencies from spendingmoney on items and earmarks that are includedonly in conference reports.

• Strengthening Senate rules against the inclu-sion in conference reports of matters not con-sidered by either the House or the Senate.

With only nine cosponsors as of early April 2006,the provisions of the Pork-Barrel Reduction Act weremore than most Senators were willing to accept.Nonetheless, the House should revisit many of theseproposals as it develops its own package of reforms.

One weakness in S. 2265 is that it would applyonly to earmarks in appropriations bills, not thosein authorization bills. While appropriations billshave been the chief legislative vehicles for ear-marks, authorization bills have also been used, andseveral have been loaded with costly earmarks. Themost notorious pork-laden authorization bill isSAFETEA-LU, the recent highway bill. Signed intolaw in 2005, it contained more than 6,300 ear-marks, compared to the 13,997 to 15,877 ear-marks included in the 12 appropriations bills in2005. If the Pork-Barrel Reduction Act were passedas is, Congress would likely shift more and moreearmarks to authorization bills to preserve the ear-marks and keep their origins and associated finan-cial rewards confidential.

Although the Pork-Barrel Reduction Act hasattracted more cosponsors than many of the otherreform measures, the number was well short of thevotes needed to pass it, especially since many Sen-ators view the pursuit of earmarks as an essentialand legitimate part of their duties. As a result, thereis a profound lack of enthusiasm for any type ofearmark reform but lots of interest in figuring outhow to get even more. Indeed, in October 2005, 82Senators voted for spending more than $220 mil-lion on the infamous bridge to nowhere in a well-publicized, stand-alone vote after the project hadbecome an object of national ridicule.

In response to the Pork-Barrel Reduction Act,the Senate Rules Committee produced the Trans-parency and Accountability Act of 2006 (S. 2349),which is more modest in scope, provides for lesstransparency, and includes fewer requirements andprohibitions. S. 2349 allows for points of order ona relatively small fraction of legislative earmarks,bans all gifts except for meals (which must bereported within 15 days), imposes limits on travel,and prohibits Senators from having “official” con-tact with a spouse or an immediate family memberwho is a registered lobbyist. While a weaker billoverall, it has some good points, notably a morerobust definition of an earmark and limits on con-tact with family members acting as lobbyists. Afterextensive debate and numerous amendments, theSenate passed S. 2349 in late March 2006 by a widemargin.

Perhaps recognizing that their colleagues willnot support any meaningful lobbying and earmarkreform, Senators McCain and Tom Coburn (R–OK)have also announced that they intend to use whatauthority they have under existing Senate proce-dures to challenge each pork-barrel project. In apress release on January 26, 2006, the Senatorsannounced: “We are committed to doing all we canto halt this egregious earmarking practice and planto challenge future legislative earmarks that cometo the Senate floor.”23

Pressure to Move Forward with ReformsFor much of 2005, many in Congress responded

to the public’s escalating concern over lobbyists,earmarks, and corrupt practices with the attitude

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that these were one-day stories and individualaberrations that will soon be forgotten. Beyondsome perfunctory sense of regret and an acknowl-edgement that they can probably do a little bit bet-ter, some Members and staff believe that nothingmuch needs to change and that the only prioritythat matters is the swift return to business asusual.24 Campaign fundraisers with lobbyistsremain on the schedule, including golf outings toFlorida.

A week after the President urged earmarkrestraint in his State of the Union address, a staffmember of the Senate Committee on Appropria-tions sent an e-mail notifying all Senate Republicanoffices that they had until April 5, 2006, to submittheir earmark requests for the FY 2007 Labor andHealth and Human Services bill. The staffer urgedthem to be “realistic,” noting that “You should nothave 50 project priorities. Remember, these listswill be held confidential by the committee.”25

Thanks to an enterprising media and JusticeDepartment prosecutors, this state of blissfulavoidance may not last much longer. Former Rep-resentative Cunningham and Jack Abramoff andhis associates have all agreed to cooperate withprosecutors, and revelations to date suggest thatmany more will be implicated and that new mech-anisms and channels for illicit influence peddlingwill be uncovered.

Added to this will be the evidence uncovered bythe many more investigations now being con-ducted by the media. After all, a San Diego Tribunereporter was the one who asked why the newowner of Cunningham’s former home—a defensecontractor benefiting from congressional ear-marks—was selling it six months later for abouthalf of the purchase price and why Cunninghamwas living rent-free on a yacht owned by the samecontractor. This successful investigation has led to

dozens more, and several more Members of Con-gress have recently been linked to questionable leg-islative initiatives that closely coincide withcampaign contributions and lobbyist influence.26

Essential Provisions of Lobbying and Earmark Reform

With the prospect of ongoing revelations of cor-ruption and influence peddling, Congress will beforced to address fundamental lobbying and ear-mark reform. The bills introduced by SenatorMcCain offer an excellent place to start, but theseproposals should be strengthened.

Letting the Sun Shine: The Need for GreaterDisclosure. Key to any meaningful reform is muchgreater transparency in the lobbying process. Asformer Supreme Court Justice Louis Brandeisobserved, “Sunshine is the best disinfectant.”

Several of the bills designed to diminish the cor-rupt aspects of the process would require morereporting on lobbyist contributions to Members ofCongress and other government officials, but whilethis would lead to important improvements, mostof the proposals stop well short of the degree of dis-closure necessary to clean up existing problems.For example, S. 2128 does not require any addi-tional reporting by Members of Congress or con-gressional staff, nor does it require lobbyists toreport anything more than contacts at which some-thing of value transpires. It does not extend thereporting requirement to lobbyist’s clients, who areoften the ones providing the campaign contribu-tions and the other types of rewards and favors(although S. 2265 does cover clients).

The exemption of lobbyists’ clients is of particu-lar importance because even though registered lob-byists are relatively modest contributors tocandidates, evidence from several investigations ofimproprieties indicates that financial transactions

23. See press release, “Coburn and McCain Put Colleagues on Notice; Each Pork Project to Be Challenged on Floor,” Office of Sen-ator Tom Coburn, January 26, 2006, at coburn.senate.gov/index.cfm?FuseAction=News.PressReleases&id=194 (March 20, 2006).

24. For example, see Representative Mike Simpson (R–ID), undated “Dear Colleague” letter, “The Other Side of Earmarking,” at www.townhall.com/docs/blogs/EarmarkingSimpson.pdf (April 4, 2006).

25. E-mail made available to author by Senate staff.

26. Babcock, “Contractor Pleads Guilty to Corruption.”

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between Members of Congress and the clients oflobbyists are significantly more substantial. Indica-tive of the confusion stemming from the lack oftransparency are the hairsplitting allegationsbetween the two political parties about whethercampaign contributions and other financial favorsfrom Jack Abramoff’s clients, as opposed toAbramoff himself, reflect an attempt by Abramoffand his associates to influence a Member’s vote.27

Similarly, officers of a company seeking legislationto require the Transportation Security Administra-tion to buy its products contributed a total of$122,000 to a well-placed Member’s political actioncommittee (PAC).28 While some of these question-able contributions came from organized fundraisingevents and thus would have to be reported under theprovisions of S. 2128, conducting these same finan-cial transactions outside the scope of an organized orreportable event would be relatively easy, thus escap-ing the reporting requirement. Such a loopholewould not exist if clients of lobbyists were alsorequired to report campaign contributions regard-less of the mechanism used to move money from oneperson to another.

New reform legislation should also require fulldisclosure by lobbyists of blood, marital, andother formal relationships between them andMembers of Congress, senior congressional staff,and executive branch officials. At present, somerestrictions apply to husbands and wives, butnone address relationships between parents, sib-lings, or lobbyists serving as officers on a Mem-ber’s campaign finance organization or politicalaction committee.

As the lobbying industry has grown in size andprofitability and as the appearance of ethical propri-ety becomes less important in today’s Washington,more and more wives and husbands, sons anddaughters, and in-laws of Members of Congress andstaff have become registered lobbyists. Moreover, asthe traditional family structure gives way to alterna-tive relationships among consenting adults, many ofthese otherwise close and intimate relationships arenot subject to the same limits that would apply to alegally married husband and wife.29

In 2003, a lengthy investigative report in the LosAngeles Times revealed an extensive network of law-makers’ sons who were registered lobbyists andwere serving clients whose business and financialinterests involved issues that came before their par-ents’ congressional committees. Part 1 of the articlenamed at least 17 Senators and 11 Representativeswith family members who lobbied or worked asconsultants on government relations. The articlealso quotes an attorney who worked as a consultanton government ethics for one of the political partiesand who believed that at least 70 relatives of law-makers lobbied at the federal or state level.30

Part 2 focused on the relationship between oneSenator and his four sons and his son-in-law, each ofwhom was then employed by one of two law firmswith extensive lobbying practices targeted at stateand federal officials.31 Following publication of thisinformation, the Senator announced that his son andson-in-law (the only two of the five who were regis-tered as federal lobbyists at the time) would not beallowed to visit his office on behalf of clients. Laterthat year, the son gave up his position as a Washing-

27. Derek Willis and Laura Stanton, Graphic, The Washington Post, December 12, 2005, at www.washingtonpost.com/wp-dyn/content/graphic/2005/12/12/GR2005121200286.html (April 4, 2006), and Deborah Howell, “The Firestorm Over My Col-umn,” The Washington Post, January 22, 2006, p. B9, at www.washingtonpost.com/wp-dyn/content/article/2006/01/21/AR2006012100907.html (March 20, 2006).

28. Scott Higham and Robert O’Harrow, Jr., “The Quest for Hometown Security,” The Washington Post, December 25, 2005, p. A19, at www.washingtonpost.com/wp-dyn/content/article/2005/12/24/AR2005122400990.html (March 21, 2006), and Robert O’Harrow, Jr., and Scott Higham, “Post-9/11 Rush Mixed Politics with Security,” The Washington Post, December 25, 2005, p. A1, at www.washingtonpost.com/wp-dyn/content/article/2005/12/24/AR2005122400372.html (March 21, 2006).

29. For example, see Eric Fetterman, “Love and Work: NJ’s New Rule,” The New York Post, December 14, 2005, p. 39.

30. Chuck Neubauer, Judy Pasternak, and Richard T. Cooper, “The Senator’s Sons—A Washington Bouquet: Hire a Lawmaker’s Kid,” The Los Angeles Times, June 22, 2003, p. 1.

31. Chuck Neubauer and Richard T. Cooper, “The Senator’s Sons,” The Los Angeles Times, June 23, 2003, p. 1.

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ton-based federal lobbyist and returned to Nevada towork for a developer.32

While expressions of concern over potentialconflicts of interest between Members of Congressand their family members and relatives who areregistered as lobbyists have become more commonin recent years, similar problems are emerging oversuch conflicts between congressional staff and theirfamily members who lobby. In mid-February 2006,a Senator acknowledged allegations that clients of alobbyist married to a member of his staff hadreceived 13 earmarks totaling $48.7 million. To theSenator’s credit, he has asked the Ethics Committeeto look into the allegations.33

Recommendation #2: Lobbyist reportingrequirements should be extended to blood andmarital connections with Members of Congressand senior congressional staff.

The Pork-Barrel Reduction Act could be mademore effective if the provision requiring publica-tion of the client and the fee paid to lobbyists alsoincluded blood and marital relationships withMembers of Congress, senior staff, and seniorexecutive branch officials. The Lobbying Transpar-ency and Accountability Act should also requirethe lobbyist’s client and the client’s staff to reportany campaign contributions or contributions to aMember’s charitable affiliate related to the pursuitof an earmark.

Developing a Workable Definition of an Earmark

One potential deficiency in most of the reformproposals before Congress is the absence of a cleardefinition of what constitutes an earmark. Withoutsuch a definition, many existing legislative abuseson behalf of lobbyists, their clients, and influentialconstituencies could escape scrutiny and control,and future Congresses could circumvent the newcontrols by devising earmark-like acts that fall out-side the implied definition of an earmark.34

To avoid these potential pitfalls, legislativereform proposals should include an expansive def-inition of earmarks that covers all existing practicesused to provide some tangible benefit to some nar-row constituency. That definition should alsoattempt to anticipate attempts by future Congressesto avoid the new controls.

As the following examples suggest, Congress isincreasingly using the legislative process to provideother kinds of financial rewards—in addition toearmarks for location-specific projects—to influen-tial constituents in their states and districts.

Earmarks for Location-Specific Projects.Although not formally expressed, the earmarkreform proposals focus primarily on the type of ear-mark generally found in annual appropriation billsand in highway reauthorization bills, which areenacted once every six years. For the most part,these earmarks appear in neat lists that enumerateexact sums of money to be provided to tangibleprojects in specific locations. The infamous “bridgeto nowhere” was one of the 6,371 location-specificearmarks in SAFETEA-LU, along with the HighKnob Horse Trail in Virginia, the National PackardMuseum in Ohio, the American Tobacco Trail inNorth Carolina, and the Sapelo Island Visitor Cen-ter in Georgia.

As this type of earmark has become more com-mon, the practice has been extended to all federalprograms. Project-specific earmarks are included inbills to fund the Federal Aviation Administration’sAirport Improvement Program, the Federal TransitAdministration’s New Starts Program, the Commu-nity Development Block Grant Program at theDepartment of Housing and Urban Development,and virtually all spending by the civilian compo-nent of the U.S Army Corps of Engineers.

Individually Tailored Earmarks. While tangi-ble, location-specific projects are the most com-mon type of earmark, Members of Congress areincreasingly using the legislative process to provide

32. Associated Press, “Latest News in Brief from Southern Nevada,” The Reno Gazette-Journal, December 14, 2003.

33. Matt Kelley, “Senate Aide’s Spouse Gets a Windfall,” USA Today, February 16, 2006, at www.usatoday.com/news/washington/2006-02-15-specter-earmarks_x.htm (March 21, 2006).

34. For example, see Representative Jim Kolbe (R–AZ), “Dear Colleague” letter, “How Do You Define an Earmark,” March 8, 2006.

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other kinds of individually tailored financialrewards to influential constituents in their statesand districts. A close reading of SAFETEA-LUreveals many more earmarks buried in the textbeyond the 6,371 already identified. For example:

• Sections 1937 through 1963 mandate 24project-specific earmarks, including some ben-efits for the Apollo Theater in Harlem andfunding for a documentary about Alaska’s infra-structure.

• Section 1925 requires spending $2 million on aCommunity Enhancement Study conducted by“a national organization representing architects”with the stated goals of “Enhancement of com-munity identity” and “Creation of a greater senseof community through public involvement.”

• Section 5505 provides combined grants of$160 million to 10 identified universities,including the University of Alaska.

• Section 5506 provides grants totaling $188million to another 32 universities specified inthe bill.

• Section 5504 awards a grant to the NationalAssociation of Development organizations toestablish the Center for TransportationAdvancement and Regional Development.

The 844-page bill is peppered with hundredsmore such special-interest provisions, yielding atotal earmark count well in excess of the acknowl-edged 6,371.

Transfers of Federal Land to the Private Sector.Past efforts to sell federal land to raise revenue forprograms have almost always faced strident oppo-sition and congressional rejection.35 Opponents ofland sales contend that the land will be degradedby development, mining, or other commercialuses. As a consequence, federal land holdings, nowtotaling more than 700 million acres, have actually

increased in recent years as new land is acquired tosave it from commercial uses.36

Despite nearly consistent opposition to land saleproposals that would benefit the general public,Congress sometimes votes to give valuable parcelsaway to politically influential developers or to localcommunities that in turn sell or transfer the land tofor-profit developers.37 Although federal spendingremains unaffected by these transfers, the govern-ment loses valuable assets and the opportunity toraise more revenue for programs, tax relief, anddeficit reduction.

Research Grants. Many long-time observers ofcongressional earmarking contend that the modernlobbyist/earmark market originated a few decadesago when innovative lobbyists discovered willing(and paying) clients among universities and Mem-bers of Congress happy to accommodate them withresearch grants and other types of spending tied tospecific institutions of higher education. Althoughthe federal government has long funded academicresearch, the traditional practice had been to iden-tify high-priority areas of research and study thatwould benefit the nation at large, encourage quali-fied institutions to compete for the federal fundingto perform the research, and award the contractbased on merit. Through such competition, thefederal government would be more likely to obtainthe best results from the most qualified organiza-tion in a cost-effective manner.

However, because competition yields both win-ners and losers, Members of Congress have increas-ingly intervened to ensure that less qualifiedacademic institutions in their states and districtsreceive a share of federal research dollars. Increas-ingly, they are absolving the grant recipients fromthe pesky requirement of actually performingresearch on specific topics of interest to the federalgovernment. More recently, federal research grants

35. One example is President Bush’s February 11, 2006, plan to sell select parcels of federal land and reinvest the proceeds in education, which provoked swift opposition.

36. Currently, 51.9 percent of all federal land holdings are in 13 Western states.

37. For a discussion of several such transfers, see Neubauer and Cooper, “The Senators’ Sons,” June 23, 2003, p. 1, and Susan Crabtree, “Miller Helped Free Land for a Business Partner,” The Hill, March 30, 2006, at www.hillnews.com/thehill/export/TheHill/News/Frontpage/033006/news2.html (April 4, 2006).

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are being provided directly to the trade and profes-sional associations that lobby on behalf of the grant,as in Sections 1924 and 5504 of SAFETEA-LU.38

As with the traditional earmarks, SAFETEA-LUoffers numerous examples of such grants. Forexample:

• In addition to the earmarks in Sections 5504,5505, and 5506, Section 5309 creates four newCenters for Surface Transportation Excellence,designating Virginia Tech and the Hubert H.Humphrey Institute for two of them and allow-ing the Department of Transportation to selectthe other two based on competition.

• Section 5508 funds grants to investigate thedevelopment and/or deployment of IntelligentTransportation Infrastructure in congested met-ropolitan areas and lists the 51 cities that are toreceive the grants, including Richmond, Vir-ginia, which is one of the least congested met-ropolitan areas in the country.

As more and more research earmarks are addedto a fixed total of research funds, spending on high-priority, merit-based research must be reduced toaccommodate the academic pork. In a review of the2005 energy and water appropriations bill, an offi-cial with the American Association for theAdvancement of Science calculated that:

[E]armarks in energy research anddevelopment hit $266 million in the currentfiscal year, “more than double the previousrecord from last year.” Among the earmarkedmoney is $495,000 for a pilot project inNorth Dakota to make hydrogen from windpower, $1.5 million for wind turbines inAlaska, and $500,000 for the expansion ofethanol fuel pumps in several states.39

Product and Service Purchase Requirements.Another common mechanism used by some Mem-bers of Congress to transfer federal budget resourcesto influential constituents is to require a federalagency to purchase a product or service from com-panies owned by the constituent regardless of thegovernment’s need for the product or product’s per-formance compared with competing products.Examples of this practice include the following:

• A provision was included in the FY 2006 Trans-portation Appropriations bill to give Amtrak anadditional $8.3 million to compensate for thecost and inconvenience of hauling certainfreight cars, used to transport perishable fruitsand vegetables, that are owned and operated bya particular company. The company is locatedin the district of the Congressman who addedthe provision to the law and who has receivedsubstantial campaign contributions from thecompany’s owner.40 After the press confrontedhim with documents concerning his relation-ship with the company and its lobbyists, theCongressman announced that he would workto rescind the $8.3 million appropriation.

• In 2000, Congress required the Federal Avia-tion Administration (FAA) to buy and installairport baggage screening machines made by aspecific company. The FAA had previouslybeen reluctant to buy and install the company’smachines because the Department of Transpor-tation Inspector General concluded that themachine’s performance was substandard indetecting weapons and bombs.41 The new lawrequired the FAA to buy one of this company’smachines for every machine that it purchasedfrom a competitor.

38. Earmarks have become such a common practice for universities that at least one (George Mason University in Virginia) offers an academic course to teach “how you can influence the legislative process at every stage in order to be the benefi-ciary of an earmark,” how to counter “public criticism of pork,” and “where to find earmarks.”

39. Matthew L. Wald, “In Energy Work, One Hand Giveth and the Other Taketh,” The New York Times, February 3, 2006, p. A17.

40. Matthew L. Wald and Glen Justice, “Congressman Adds More Vegetables to Amtrak’s Load,” The New York Times, December 11, 2005, Section 1, p. 48.

41. Stephanie Mencimer, “Tom Daschle’s Hillary Problem,” The Washington Monthly, January–February 2002, pp. 30–31, at www.washingtonmonthly.com/features/2001/0201.mencimer.html (March 21, 2006), and “L-3 Reliability Questioned in Boston Bag Screening System,” Airport Security Report, Vol. 10 (November 19, 2003).

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• In 2004, the Homeland Security Appropria-tions Committee included a similar require-ment in legislation, which strongly encouragedthe Transportation Security Administration tobuy baggage screening equipment made by acompany that had just developed a new prod-uct. However, rather than explicitly identifyingthe company and its product, the bill’s languagerequired spending $30 million on explosives-detection devices “that are currently beingtested, certified, and piloted.”42

• Although much of the earmarking takes placein the discretionary programs subject to theappropriations process, earmarking also occursin the federal entitlement programs—for exam-ple, when Members of Congress require Medic-aid to offer eligible beneficiaries a certainproduct in response to lobbying and politicalsupport by influential constituents. Ironically,one such costly measure was included in the2005 budget-cutting bill to pare $38.8 billionfrom future federal spending. The Congres-sional Budget Office estimates that the provi-sion will add $125 million to the federal budgetover the next five years and possibly even moreto state budgets in shared Medicaid costs. Cali-fornia contends that the provision will cost thestate $50 million per year.43

Federal Loans and Loan Guarantee Earmarks.In addition to the more common practice of ear-marking federal spending, Congress is earmarkingdirect loans and loan guarantees to private entitiesthrough many of the federal credit programs. TheEnergy Policy Act of 2005 (an authorization bill)contains a number of direct loans, loan guarantees,tax credits, and grants for the construction ofenergy production plants in certain specific loca-tions, including an integrated coal/renewableenergy system in the “Upper Great Plains” (Section

411); a clean coal technology plant near Healy,Alaska (Section 412); a coal gasification plant in aWestern state at “an altitude greater than 4,000 feetabove sea level” (Section 413); and new researchfacilities to derive fuels from Illinois Basin coal atSouthern Illinois University, the University of Ken-tucky, and Purdue University.44

Legislation That Directly Profits Members andTheir Families. For the most part, much of theCapitol Hill–K Street market for earmarks appearsto revolve around the exchange of campaign contri-butions for legislative and budgetary favors, withno apparent personal financial benefit to a Member.However, there are exceptions to this practice,many of which are not prohibited under congres-sional rules or traditions. For example, Members ofCongress are not required by either rule or tradi-tion to recuse themselves from involvement in leg-islation that would provide direct financial benefitsto themselves or their relatives.

While the more typical connection would bebetween legislation and the value of a Member’sinvestment portfolio, in some cases, the connectionis even more direct. For example, between 1995and 2002, nine Members of Congress received atotal of $2,177,491 in federal farm subsidies. In2002, they received a total of $243,605,45 andthese and other Members of Congress voted toextend the federal price supports for another fiveyears at substantially more generous levels.

Relatives also often benefit from a Member’s leg-islative actions. A few months after the highway billwas enacted, it was revealed that close relatives oftwo of the three members of Alaska’s congressionaldelegation owned land on the islands that would beserved by the two controversial bridges funded byearmarks in the highway bill. The land’s value isexpected to increase as a result of the better accessto the mainland.46

42. O’Harrow and Higham, “Post-9/11 Rush Mixed Politics with Security.”

43. Jonathan Weisman, “Drugmakers Win Exemption in House Budget-Cutting Bill,” The Washington Post, November 30, 2005, p. A8, at www.washingtonpost.com/wp-dyn/content/article/2005/11/29/AR2005112901650.html (March 21, 2006).

44. The Energy Policy Act of 2005, Public Law 109–58.

45. Brian M. Riedl, “Another Year at the Federal Trough: Farm Subsidies for the Rich, Famous, and Elected Jumped Again in 2002,” Heritage Foundation Backgrounder No. 1763, May 24, 2004, p. 6, at www.heritage.org/Research/Budget/bg1763.cfm.

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More troubling cases of personal gain stem fromthe use of legislation for corrupt purposes subjectto criminal charges and punishment. Former Rep-resentative Cunningham pleaded guilty to accept-ing bribes in return for earmarking federal funds toa specific government contractor. Likewise, a con-gressional aide to another Member pleaded guiltyto charges of bribery in January 2006.47

Private Communication from Congress to aDepartment or Agency. In some cases, an earmarkmay be “authorized” without ever appearing in thelegislation, the accompanying conference report, orany other public document. Instead, as agency anddepartment officials privately acknowledge, once thelegislation is enacted and signed into law, the chair-man of the relevant committee writes a letter to thesecretary of the relevant department strongly suggest-ing that a portion of the funds provided in the recentlegislation be spent on a series of projects that aredescribed in the letter. Although such letter requestshave no force of law, department heads know that it isin their interest to accommodate requests from thecongressional committees that control their budgets.

Miscellaneous Types of Earmarks. Other typesof earmarks and self-dealing do not fit into any ofthe above categories but nonetheless involve usingthe legislative process to provide location-specificfederal benefits to a particular constituent or nar-row constituency. For example, Section 4408 ofSAFETEA-LU includes the following statement:

Notwithstanding any law, regulation, or grantassurance, but subject to the requirements ofthis section, the United States shall release allrestrictions, conditions and limitations on theuse, encumbrance, conveyance, or closure ofthe Rialto Municipal Airport, in Rialto,California, to the extent such restrictions,conditions and limitations are enforceable bythe United States.

In other words, Section 4408 absolves Rialtofrom paying back the $14 million that it receivedfrom the FAA to improve and expand the airport,$9 million of which was used to acquire the landfor the expansion.

Instead of expanding the airport, Rialto decided toshut it down and sell the land acquired with federalmoney to a private developer.48 Because this was animproper use of the federal grant, the FAA demandedits return, but Section 4408 overruled the agency.Instead, Rialto can sell the land for development,keep 55 percent of the proceeds for itself, and rein-vest the remaining 45 percent in a nearby airport.How an aviation provision ended up in legislationrelated solely to surface transportation is a puzzle thatmerits further investigation and explanation. What-ever the ultimate findings, this represents a new anddeeply troubling type of earmark in which recipientsof federal grants can be legislatively absolved of thefederal penalties for misuse of federal funds.

While the previous examples of earmarks weredesigned to reward certain constituencies, in late2005, Representative Tom Davis (R–VA) floated theidea of a novel type of “anti-pork” earmark when hethreatened to use his legislative clout to punish sev-eral of his constituents financially. At the time, Fair-fax County, Virginia, where Representative Davislives, was in the process of approving a large, high-density, mixed-use real estate development near hisneighborhood of single-family detached houses.Although most of the land to be developed was pri-vately owned, a small 3.7 acre slice was owned bythe Washington Metropolitan Area Transit Author-ity (Metro), the regional public transit authority,which receives federal subsidies.

Metro planned to sell that parcel to the developerto allow for a seamless connection between the newdevelopment and the Metrorail station, but nearbyresident Representative Davis opposed the devel-

46. John Fund, “Don Young’s Way,” Opinion Journal, February 7, 2006.

47. Shailagh Murray and Allan Lengel, “The Legal Woes of Rep. Jefferson,” The Washington Post, February 16, 2006, p. A1, at www.washingtonpost.com/wp-dyn/content/article/2006/02/15/AR2006021502752.html (March 21, 2006).

48. Crabtree, “Miller Helped Free Land for a Business Partner.” See also John R. Wilke, “Appropriations, Local Ties, and Now a Probe of a Legislator: West Virginia Rep. Mollohan Has Real-Estate Holdings That Also Bring Scrutiny: Growth of Budget ‘Earmarks,’” The Wall Street Journal, April 7, 2006, p. A1.

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opment and the congestion it might cause, and hethreatened to use his congressional clout to enactlegislation forbidding the sale if Metro tried to sellthe land.49 After public criticism of his threat,Davis decided that a taxpayer-funded incentivemight work better than a threat and introducedH.R. 3496, which would prohibit Metro from sell-ing the land but soften the blow by offering Metroan additional federal subsidy of $1.5 billion (pro-vided that all of the jurisdictions served by Metroenact additional taxes dedicated to the transit sys-tem.)50 If enacted, H.R. 3496 could become one ofthe most expensive earmarks in U.S. history.

Finally, there is an earmark category bestdescribed as the “stealth earmark” in which the lan-guage of the authorizing bill is vague enough toobscure its purpose or value. For example,SAFETEA-LU includes designations such as:

• $100 million for “CREATE” (what and whereis it?);

• $1.6 million for “Lewis and Clark Expressway” (isthis for repairs, expansion, or flower plantings?);

• $400,000 for Jeanette Truck Route (for whatpurpose?); and

• $880,000 to “Provide pedestrian and water accessto Convention Center from surrounding neigh-borhoods” (where is this convention center?).

Other language may be deliberately misleading:Earmark number 4584, for example, provides $2.5million for “Improvements for West 125th Street inWest Harlem,” which is the street on which theApollo Theater is located. Since Section 1963 alsocontains opaque language regarding some addi-tional federal benefit to Harlem’s Apollo Theater,the use of “for” instead of “to” in the earmarkdescription may be telling.

While most of the earmark language is reason-ably clear and precise, vague descriptions are notuncommon. To the extent that any enacted reformsallow for points of order against wasteful earmarks,

future descriptions will likely be made even morevague and misleading. To discourage such prac-tices, reform legislation should require clarity aswell as transparency.

Legislative Remedies to Curb EarmarksAs the previous discussion indicates, Congress

has devised a number of legislative mechanisms toprovide financial benefits to influential individuals,relatives, businesses, universities, trade and profes-sional associations, and communities. In additionto the typical earmark involving the spending ofmoney on a tangible project in a particular commu-nity, other forms of congressional earmarkinginvolve mandatory product purchases by govern-ment agencies, transfers of federal land to privatedevelopers, research grants to universities, and for-giveness of debt to the U.S. government. Whilemany more kinds of legislative mechanisms proba-bly can be devised to transfer financial rewardsfrom government to private interests, the examplesprovided above were drawn largely fromSAFETEA-LU, which was an authorization bill.

SAFETEA-LU is a fitting target for an investiga-tion of earmark abuse, not just because it took theprocess to its historic extreme by designating arecord number of earmarks—more than 7,000—but also because not one of those earmarks wouldbe subject to any of the exposure, transparency, orcontrol provisions that would be established by thePork-Barrel Reduction Act. This is because S. 2265would apply only to appropriations bills, not toauthorization bills.

Under current practices, this is not a seriousdeficiency because the vast majority of earmarks—between 13,000 and 16,000 in 2005—are in theappropriations bills. With the exception of thehighway bill, most authorization bills have notbeen used as vehicles for significant numbers ear-marks, and highway bills are enacted only onceevery six years.

49. Lisa Rein, “Lawmaker Steps in on Va. Growth,” The Washington Post, April 21, 2005, p. B1, at www.washingtonpost.com/wp-dyn/articles/A6031-2005Apr20.html (March 21, 2006).

50. Lindsey Layton, “Bill Offers Metro $1.5 Billion with Greater Oversight, Dedicated Funding,” The Washington Post, July 28, 2005, p. A1, at www.washingtonpost.com/wp-dyn/content/article/2005/07/27/AR2005072702437_pf.html (March 21, 2006).

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Nonetheless, if appropriations bills are subjectedto greater scrutiny and spending controls, Mem-bers of Congress will quite probably begin to useauthorization bills as earmark vehicles. Therecently enacted energy bill is a good example ofthis likely outcome. Because the controls in S. 2265would apply only to “unauthorized” earmarks inappropriations bills, adding an earmark to bothappropriations and authorization bills wouldshield it from points of order and all of the impor-tant transparency provisions.

Distinguishing Between Good and Bad Earmarks

Excluding authorization bills from control andtransparency may appear to be a significant defi-ciency in S. 2265, but this exclusion may recognizethat the earmarking process in some federal pro-grams is not only acceptable, but also essential.What follows is an attempt to delineate betweenprograms in which earmarks are a source of abuseand programs in which they may be essential foreffective operation.

Earmarks on Formula Programs Based onState and Local Discretion. To date, much of theconcern over earmarks has been focused on theseveral discretionary programs in which federalmoney is allocated to states and communitiesaccording to a formula that attempts to measureneed. In turn, the states and communities allocatethose funds to their priorities, subject to the pro-gram’s rules and restrictions. For example:

• The highway program uses a formula that con-siders miles of roads, number of licensed cars,vehicle miles driven, and other quantitative fac-tors to determine how much money (expressedas a share of the total spent nationwide) eachstate receives from the highway trust fund.States are then free to spend this money ontheir own transportation priorities, subject to aseries of rules and guidelines.

• The Department of Housing and Urban Devel-opment’s Community Development BlockGrant program operates in a similar manner,

using a formula to determine need within acommunity. It assumes that the cities and coun-ties receiving the money are capable of ade-quately identifying their own priorities.

Over time, however, Congress has been reducingthe states’ discretion by creating more categoricalprograms (SAFETEA-LU created about 30 newones) and by carving out more and more earmarksfrom the money that states would otherwise have tospend on their own priorities. By earmarking theseotherwise discretionary funds, Members of Con-gress (urged on by influential constituents andhired lobbyists) are taking the position that theyand their staffs—not the state and local govern-ments—know what is best for the communities intheir states and districts.

Speaker of the House Dennis Hastert (R–IL) spokein support of this view when he asked rhetorically:“Who knows best where to put a bridge or a highwayor a red light in their district?”51 Many of his col-leagues and their staffs share his view, which reflectspoorly on the quality of the Illinois Department ofTransportation and on how they see their duties asmembers of the legislature of the world’s greatestdemocracy. Either way, this new attitude reflects botha growing propensity of Congress and its staff tomicromanage policy to the minutest degree and a sig-nificant centralization of power in Washington.

Earmarks and Entitlements. While earmarkingcan be detrimental to the efficacy of discretionaryformula grant programs, the issue is less clear-cutin other federal programs. In entitlements in whichfederal statutes define benefit levels and eligibility,Congress must influence all facets of a program andbecome involved in the details by exercising itsoversight authority.

In a health care program like Medicare, forexample, congressional micromanagement of pric-ing decisions, eligibility, benefit levels, and broadissues of treatment is unavoidable. Because Medi-care sometimes lags in approving treatments andprocedures already widely approved by privateinsurance plans, it may be appropriate on policygrounds to push Medicare into covering them as

51. Novak, “Looking to Fry Pork.”

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well. However, it would be inappropriate for Mem-bers of Congress to decide which company’s drugsand devices can be used in approved treatmentsand which ones cannot.

Many of the federal food assistance programs areunder pressure to include the products of influen-tial agriculture groups. Food processors and grow-ers use their influence to obtain the eligibility anduse of their products in the school lunch program;the Women, Infants, and Children Program; andmilitary commissaries.52

Centralized Discretionary Spending. The mostproblematic are discretionary spending programs inwhich project earmarking is essential to their valuebecause of their objectives and modes of operation,such as in national defense and the civilian compo-nent of the Army Corps of Engineers. In operatingthese programs, Members of Congress (and the Pres-ident) are well within the responsible execution oftheir duties to insist that the annual authorizationsand appropriations for these programs be very spe-cific on a project-by-project basis.

Tasked with a number of responsibilities thatinclude flood control and river navigation, the ArmyCorps of Engineers each year submits to Congress itsbudget request (currently in the $5 billion range),which details what it intends to do with the money.In theory, the Corps applies a comprehensive cost-benefit analysis to all of the projects under consider-ation and selects those with the highest comparativebenefits. In this way, its fixed budget yields the max-imum benefit to the nation, in comparison to a pro-gram that uses a formula to allocate money to thestates or communities as an entitlement. Because therisk of flooding is higher in some areas than in othersand river navigation improvements are limited tonavigable rivers, Corps spending tends to be con-centrated in a relatively small number of places toensure maximum benefits.

In practice, however, Congress and lobbyistsoften interfere with this allocation process and use

the project-by-project nature of the programs toinclude projects of low social or economic prioritybut high political benefit. For example, in recentyears, Congress has allocated much more money tohigh-cost, low-benefit navigation programs in Lou-isiana at the expense of the state’s levee repair andflood control programs.53

The annual Department of Defense (DOD) budgetis also subject to considerable earmarking as theDOD makes its case to Congress for the next year’sbudget. As with the Corps and its diverse goals, theDOD budget begins with the goal of protecting thenation, which involves identifying threats and pro-posing a detailed spending request to meet thosethreats. In doing this, the DOD proposes broad allo-cations of spending among the uniformed services,detailing manpower needs, where the personnel willbe stationed, the requested additions to its weaponsinventory, and investments in new weapons andweapons technology. Of necessity, the proposeddefense budget is quite specific on where and howthe funds will be spent on a project-by-project basis.

As in the Corps budget, the project-based natureof the DOD budget allows for plenty of opportuni-ties for traditional pork-barrel earmarking. Becausemost weapons are produced by a single companyor a consortium of several companies, individualbusinesses stand to benefit substantially from thenecessary earmarking and thus have a compellinginterest in shaping the budget decisions. As aresult, weapons, services, and products that theDOD does not want are often forced on it, and mil-itary bases of little value but high expense are keptopen well beyond their useful life.

Defense-related research has also been subject to agrowing incidence of earmarking, as the criminalcase against former Representative Cunninghamillustrates. Among the charges against Cunninghamis accepting bribes in return for using defense appro-priations bills to provide research grants to influentialcompanies represented by Washington lobbyists.54

52. For the current list of preferred commodities available for the various federal food and nutrition programs, see U.S. Department of Agriculture, “Commodity Food Network” Web site, at www.commodityfoods.usda.gov (March 21, 2006).

53. Ronald D. Utt, Ph.D., “The Army Corps of Engineers: Reallocating Its Spending to Offset Reconstruction Costs in New Orleans,” Heritage Foundation Backgrounder No. 1892, November 4, 2005, at www.heritage.org/Research/Budget/bg1892.cfm.

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Several other government departments havesimilar operational and program structures thatrequire some allocation of spending to specificprojects and locations.

• The Veterans Administration builds, renovates,and expands its hospitals located throughoutthe country.

• The Departments of the Interior and Agricul-ture allocate a portion of their funds to specificprojects and improvements at various sitesmanaged by the National Park Service, theBureau of Land Management, and the NationalForest Service.

• The National Aeronautics and Space Adminis-tration spends a substantial portion of its bud-get at a few sites in Texas, Alabama, and Floridaand depends on a handful of companies tobuild its rockets and satellites.

Nonetheless, some in Congress have abused thisneed for project specificity to direct taxpayer dol-lars to influential constituents that might otherwisenot be qualified to participate in the programs.

Adjusting to the Differences. As the above dis-cussion demonstrates, the process of earmarkingthe federal budget does not always lead to frivolouswaste but is sometimes essential to effective bud-geting and agency accountability. Any effort toreform the budget process to diminish wasteful ear-marks must devise a mechanism that allows for anorderly process that can distinguish between goodand bad earmarks.

To some extent, S. 2265 achieves this in threeways.

First, it would exempt authorization bills fromcoverage, excluding many of the project-basedspending proposals from review. This is particu-larly important for the Defense Department, whichrelies on the authorization bill to establish prioritiesamong projects, weapons, bases, and other opera-tional factors—a necessity that many Members ofCongress regrettably abuse.

Second, with earmarks subject to a point of orderrather than a prohibition, Congress would beinclined to focus only on those that seemed wasteful.

Third, inasmuch as many earmark-like spendingplans are proposed by the agencies, there would beno formal lobbying activity to be exposed, therebysuggesting some greater measure of legitimacy.Nonetheless, enactment of S. 2265 would forceCongress to stop shirking its responsibility to maketough choices.

Recommendation #3: Any successful effort tolimit Congress’s propensity to earmark spend-ing and other federal privileges requires a rea-sonably precise definition of what is and what isnot an earmark.

A reasonably comprehensive definition is alsoneeded to control congressional abuses that allowthe transfer of valuable public resources to otherinterests for reasons based solely on influence andprivilege. Members of Congress have used a num-ber of legislative mechanisms to benefit specialinterests at the expense of the general public, andall of these costly and questionable mechanismsshould be discouraged.

Of the bills introduced so far, S. 2349 offers themost detailed definition of an earmark. Section 3defines it as covering “budget authority, contractauthority, loan authority, and other expenditures,and tax expenditures or other revenue items.”

There are as yet no easy answers to these impor-tant questions of scope and definition. To close thisgap in knowledge, Congress should investigate thisissue of definition and applicability through publichearings and in consultation with its key supportinstitutions: the Congressional Research Service,the Government Accountability Office, and theCongressional Budget Office.

ConclusionAs is apparent from a review of the earmark and

lobbying reform legislation introduced by SenatorsMcCain and Coburn and Representative Flake,

54. Of note, one lobbyist associated with the Cunningham case is being sued by another client because the resultant earmark was smaller than promised. See Charles R. Babcock, “Earmarks Became Contractor’s Business,” The Washington Post, February 21, 2006, p. A3, at www.washingtonpost.com/wp-dyn/content/article/2006/02/20/AR2006022001154.html (March 21, 2006).

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much of the hoped-for improvement would rely onmore detailed reporting and greater transparencythan exists at present. While that would certainlylead to some beneficial results and deter some ofthe more questionable practices and projects, it isnot apparent that reform proposals that rely largelyon better reporting would make much of a dent inthe legislative malpractice that they are designed todiscourage and end.

In commenting on new federal laws requiringmore detailed reporting by publicly traded corpo-rations, Professor Todd Henderson of the Univer-sity of Chicago Law School observed:

Ever since Brandeis turned the neat phrase“sunlight is the best disinfectant; electriclight the best policeman” in praise oftransparency, it has been virtually acceptedwisdom in legal and policy making circles.But the efficiency and efficacy of “sunlight”is not always so obvious.55

Representative Flake expressed a similar senti-ment when he wrote to Speaker Hastert of his con-cern about a proposal from then-Acting MajorityLeader Roy Blunt (R–MO) to reform the earmarkprocess by having Members of Congress attachtheir names to earmark requests: “Anyone whothinks that members are averse to claiming creditfor securing earmarks hasn’t been reading his ownpress releases.”56

Both Representative Flake and Professor Hend-erson have raised an important concern that needsto be addressed in any reform proposal thatdepends largely on transparency and reporting tocurb fiscally irresponsible behavior. Much of thesensational reporting in the media since August2005, when SAFTETEA-LU became law, hasdepended on facts and acts openly available in leg-islation, legislative reports, lobbyist Web sites andregistration forms, federal election law disclosure

reports, open invitations to fund raising events(including pay-to-play Florida golf outings), andcongressional press releases. These are just a few ofthe public venues in which the information is notjust available, but often flaunted.

As noted earlier, lobbyist Howard Marlowe listson his Web site details of every beach nourishmentearmark that he has obtained for clients, and pub-licly available documents filed with the Clerk of theHouse and the Secretary of the Senate would revealwhich clients paid him for those services. Congres-sional press releases would reveal who facilitated thetransfers of money from the taxpayers to the clients.

The Carmen Group puts all of this informationtogether to show the great service that it providesclients by calculating and promoting the dollaramount of earmarks that it has obtained comparedto client fees paid. With regard to the most notori-ous earmark of all—the bridge to nowhere—Alaska’s congressional delegation defended itaggressively and sometimes flamboyantly to ensureits survival. Believing that the problem was notwith the infamous earmark but with the Americanpublic’s misperception of it, Alaska’s governorannounced plans to fund a nationwide publicityeffort to set the record straight and restore thestate’s tarnished reputation.

Under the circumstances and relying on thesuper majority required in points of order to strikean earmark, it seems likely that the vast majority ofearmarks will survive this modest procedural gant-let. Absent a stronger deterrent, the increasinglypopular process of earmarking is likely to grow atan accelerating rate.

Where the provisions of some of the bills couldhave their biggest impact is in deterring some of thecorrupt practices that appear to be associated withsome earmarks. By requiring extensive reportingand transparency and by making the links between

55. Todd Henderson, “Is Sunlight Always the Best Disinfectant?” The Faculty Blog, October 8, 2005, at uchicagolaw.typepad.com/faculty/2005/10/is_sunlight_the.html (March 21, 2006).

56. Press release, “Congressman Flake Sends Letter to Speaker Hastert Outlining Standards for Earmark Reform,” Office of Representative Jeff Flake, January 23, 2006, at www.house.gov/apps/list/press/az06_flake/060123earmarkreform.html (March 21, 2006). See news release, “Blunt’s Southwest Missouri Highway Priorities Traveling to President’s Desk,” Office of Repre-sentative Jeff Flake, July 29, 2005, at www.blunt.house.gov/Read.aspx?ID=458 (March 21, 2006).

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earmarks and campaign contributions more obvi-ous, these bills would enhance the integrity of theprocess. While these provisions are unlikely toslow down the growth of earmarks, they shouldmake the process more honest.

As is apparent from the Cunningham incidentand the information referenced in many of thisreport’s footnotes, the press deserves much of thecredit for exposing the problems and instigating theformal criminal investigations that have revealed theshady nature of this process. In turn, these exposés

have led to helpful legislative proposals and theprospect of greater integrity in the future.

If not for a free and inquisitive press, the com-prehensive reform process now underway wouldnever have happened. With more reporters beingassigned the earmark beat and with more transpar-ency forced on Congress, some of the worst prac-tices should disappear.

—Ronald D. Utt, Ph.D., is Herbert and Joyce MorganSenior Research Fellow in the Thomas A. Roe Institutefor Economic Policy Studies at The Heritage Foundation.