In earmark fight, Flake targets Obey

Sensing a major shift in the political winds, Rep. Jeff Flake (R-Ariz.) is zeroing in on groups that receive earmarks to help businesses win even more federal dollars.

And he’s not making any exceptions: Flake’s targets include a pet project of Appropriations Committee Chairman David Obey (D-Wis.).

{mosads}Unlike some of his rank-and-file peers, Flake isn’t afraid to confront powerful appropriators who wield the ability to grant or withhold money from members’ districts. Flake doesn’t request earmarks for his district so he’s free to go on the attack.

Flake last year made waves by taking aim at an earmark of Rep. Jerry Lewis’s (R-Calif.), who headed the spending panel at the time. But that vote, as well as all of his efforts to kill earmarks, went down in flames.

All of sudden, however, Flake has plenty of friends joining his anti-pork crusade. Republican leaders last week challenged Obey for not wanting to disclose earmarks in spending bills until the final stage of the legislative process. Republicans declared victory when Obey reversed course, but Democrats claimed that GOP lawmakers were acting like reborn reformers because last year most failed to support Flake’s earmark challenges.

How Republicans respond to earmark challenges this year will test their commitment to transparency and reform. And Flake isn’t wasting any time. Last week, while Republicans were busy fighting Obey’s proposed earmark policy, Flake was taking issue with the chairman’s earmarks to a group known as the Wisconsin Procurement Institute (WPI), whose main purpose is trying to help the state’s businesses obtain more federal contracts and grants.

 To Flake, the idea of providing federal money to subsidize the process of trying to obtain more federal money is absurd.

“Just thinking about it makes your head spin,” Flake remarked on the House floor last year before an attempt to kill the WPI’s earmark failed. “…I certainly support the outsourcing of federal functions that can be better performed by private companies, but there is something inherently wrong with funding an organization whose purpose it is to help others secure government funding.”

Obey has helped the WPI win at least $1.4 million in earmarks in the last three years, a small sum in the universe of earmark requests. The more troubling issue, Flake argues, is that earmarks to these types of groups appear to be proliferating, along with the total number of all earmarks. In 2006, Flake tried and failed to kill earmarks to several procurement institutes and business consortiums he believes are similar to WPI, non-profit groups whose mission, at least in part, appears to be increasing their area’s share of federal contracts and grants.

Obey agrees that the main goal of the group is to help Wisconsin companies, which have traditionally ranked near the bottom in the number of federal contracts and grants they receive, become more competitive in winning government contracts and grants — and he sees nothing wrong with it.

 “I will do anything I can to legally help any legitimate organization that is trying to meet national needs and help Wisconsin get its fair share of federal dollars and I make no apology whatsoever for that,” Obey said in a written statement.

There’s nothing wrong with forming a non-profit group to help state businesses attract government contracts, said Steve Ellis, a spokesman for the watchdog group Taxpayers for Common Sense. Providing earmarks for these groups, however, is wasteful, he says, because a number of government programs and the entire Small Business Administration already exist to help smaller companies compete for government contracts, among other things.

 “This is basically a perpetual-motion model for federal spending,” Ellis said. “You’re essentially using tax dollars to increase the amount of taxpayer spending…at some point it’s sort of mind-boggling.”

The groups remind Flake of the late-night commercials featuring a man named Matthew Lesko who wears the unusual eyeglasses and a suit with question marks all over it.       

 “He will wave a book and say, ‘There is millions and millions of government dollars just for you, and if you pay me $19.95, I will tell you how you can get these contracts, how you can get this money, how you get these scholarships, how you can get these grants, how you can get these loans.’”

The WPI also stands out because it appears that the group may be using some of its earmark money to hire lobbyists to help it win more earmarks or for other government assistance of some kind, yet another step in the federal money cycle.

According to lobbying disclosure reports, last year the WPI spent $120,000 to hire four lobbyists whose stated purpose was “bridging the gap between Wisconsin businesses and the federal government,” according to lobbying records. Those
lobbyists work for Whyte Hirschboeck Dudek Government Affairs (WHDGA), and one of them, John Rogers, is president of WPI’s board.

Despite the reported lobbying expense, the group didn’t list any lobbying activity in its filing with the IRS that covers the majority of the 2006 period, as non-profits are required to do.

Asked about the lobbying, Rogers said he registered just as a “precaution” and referred all questions about WPI’s lobbying, to Alan MacLeod, another one of the listed lobbyists and a principal at the WHDGA D.C. office. MacLeod, former chief of staff to Rep. Ron Kind (D-Wis.), did not return a call seeking comment.

 Rogers and Aina Vilumson, WPI’s executive director, said the lobbying disclosure record was a mistake, which is being corrected. That money was paid to WHDGA for “legal services, event planning and strategic consulting.” Rogers said WPI paid WHDGA just $6,000 for actual lobbying, which falls below the threshold that triggers a lobbying disclosure report. 

 “Additionally, WHDGA provides WPI and its constituents with experience and education, in other words, the knowledge and experience from individuals from the Beltway; part of the legal and government affairs community would be included and available,” Vilumson said.

Vilumson also said that “a small business, especially from the Midwest, does not have the access or the budget to support their individual efforts” without hiring Beltway experts.

Vilumson received more than $90,000 in salary in fiscal 2005, according to information filed with the IRS.

Obey is just one of a group of Wisconsin lawmakers who have helped WPI. Obey, Kind, Rep. Tammy Baldwin (D) and Sen. Herb Kohl (D) sent out a press release touting a $400,000 earmark WPI received in the fiscal 2006 science, state, justice and commerce appropriations conference report.

Another member of the delegation, Rep. Paul Ryan (R), a frequent earmark critic, said he has participated in the WPI’s seminars but didn’t realize it had received earmarks. He declined to comment until he had researched the matter.

 The WPI’s website says the group is a nonprofit established in 1987 “to ‘bridge the gap’ for Wisconsin companies interested in supplying their products and or services to federal, state, local agencies and prime contractors.”

The group received $1 million in 2004 to “develop an electronic based system to provide access and opportunity to federal funding,” according to language in the 2004 omnibus appropriations bill. Rogers says the system is more than a database; it employs sophisticated technology to match roughly 100,000 Wisconsin businesses to the government contracts that best suit them.

“It allows Wisconsin businesses to be able to reach into all of those contracts,” Rogers said.