From the Copley News Service
Critics say it's hard to tell with congressional earmarks

By DORI MEINERT
COPLEY NEWS SERVICE

Published Wednesday, April 26, 2006

WASHINGTON - Firefly Energy, a three-year-old Peoria firm, received a significant boost when Rep. Ray LaHood earmarked $2.5 million in federal defense funds for it last fall.
Web extra: Local Congress members' earmarks

LaHood, R-Peoria, a member of the House Appropriations Committee, also helped direct $26 million in defense funds to Caterpillar Inc., the largest employer in his district.

In addition, he steered $200,000 to Peoria's Proctor Hospital.

What LaHood failed to mention when touting the federal funds he had brought home to his district was that lobbyists for all three enterprises were at the same time raising money for his campaign.

It's the kind of mutually beneficial relationship that critics of earmarking point to when arguing for reform.

"That is like the textbook example of why earmarks pose such a potential for the appearance of a conflict of interest," said Mike Surrusco, director of the ethics campaign for Common Cause, a government watchdog. "A reasonable person can look at that and wonder if there is a quid pro quo. ... It adds to the cynicism in this country."

LaHood denies any connection between earmarks he helped secure for local businesses and the fundraising their lobbyists did on his behalf.

"There is absolutely no link," LaHood said. "I help Caterpillar because they're the company in my district. I help Firefly because I think they have a very worthwhile research-and-development project going on. ... Some of these hospitals that have benefited, I think we've benefited by the fact that they've been able to get some federal dollars.

"I've helped these organizations because of where they are. They're in Peoria. They're in my district."

Earmarks have come under increased scrutiny because of scandals involving lobbyist Jack Abramoff, who pleaded guilty to bribery and other charges, and Randy "Duke" Cunningham, a California Republican who resigned from Congress last fall and was sentenced to prison last month for taking bribes for earmarking funds for specific defense contractors.

As early as Thursday, the House could take up a bill that would require earmarks and their sponsors to be identified in committee reports accompanying appropriations bill. The measure also would make it easier to challenge earmarks that lawmakers slip into bills at the last minute.

However, several watchdog groups complained Tuesday that House Republican leaders have deleted parts of the bill requiring lobbyists to report their contacts with lawmakers and their fundraising activities on lawmakers' behalf.

Earlier this year, LaHood notified the 23 lobbyists who serve on his campaign steering committee that he no longer wanted them to organize fundraisers for him. He said he wanted to eliminate any perception of a special relationship.

At the time, he said he didn't know how much the lobbyists had raised on his behalf, but he later provided Copley News Service with a tally: Eight of the 23 lobbyists had sponsored fundraisers that pulled in a total of $99,655 last year, or about one-third of the money LaHood raised through fundraising events in 2005.

One of those lobbyists was Bill Lane, Caterpillar's Washington director of governmental affairs, who co-sponsored a Washington fundraiser on May 25, 2005, that raised $16,000 for LaHood. Lane sponsored the fundraiser with Johanna Schneider, who lobbies for the Business Roundtable, and Charles Bruse, who represents Allstate Insurance Co., according to LaHood.

LaHood said his constituents won't question his support of Caterpillar, which employs 18,000 people in his district, and noted that federal law limits Caterpillar's political action committee to giving him $5,000 each for the primary and general elections.

Since 1997, the PAC has donated more than $40,000 to LaHood's campaigns, while Caterpillar employees have contributed another $52,900, according to a study undertaken of Federal Election Commission data done at the request of Copley News Service by the Center for Responsive Politics.

Sen. Dick Durbin, D-Ill., who assisted with the earmarks on the Senate side, received $7,000 from Caterpillar's PAC and employees since 1997, none of it in the past three years. He's never had a fundraiser hosted by Lane or the Firefly lobbyist, a spokesman said.

LaHood took the lead in securing two earmarks - one for $17.5 million and another for $9.1 million - for a Caterpillar program that rebuilds heavy equipment used by the Army and Navy.

Lane declined to respond to questions about his fundraising efforts on LaHood's behalf, but Caterpillar issued a statement: "Caterpillar has long been involved in the political process, supporting candidates, policies and programs that are consistent with our business goals."

The firm supports LaHood because he "has been a tireless advocate for his constituents in Central Illinois, many of whom also work for Caterpillar," the statement said.

Firefly Energy, a spinoff of Caterpillar, will use its $2.5 million earmark to develop a lighter-weight, longer-lasting battery for the military, which could lead to lucrative Pentagon contracts.

LaHood said he didn't know that the firm had hired Washington lobbyist Michael Herson, who sits on LaHood's steering committee. He said they have never talked about the company.

Firefly hired Herson in March 2005, at the start of the fiscal 2006 appropriations process, paying his firm $40,000 for four months, according to lobbyist registration records.

Herson was recommended for the fundraising committee by LaHood's former professional fundraiser, the lawmaker said. The congressman said he tried unsuccessfully to obtain an earmark for Firefly two years ago. He attributed his success last year to the fact that the firm had developed a better relationship with the Pentagon.

Herson was the Pentagon's senior manpower official from 1990 to 1993, when Vice President Dick Cheney was defense secretary, according to his company's Web site. As president of American Defense International, Herson represents scores of defense contractors. Earlier this year, a USA Today article revealed that six of Herson's clients benefited from earmarks by Sen. Arlen Specter, R-Pa., who employs Herson's wife, Vicki Siegel, who handles his work on the Senate defense appropriations subcommittee.

Neither Herson nor Firefly co-founder Mil Ovan returned telephone calls.

A third lobbyist from LaHood's steering committee, Arthur Mason, represents Proctor Hospital, which also won an earmark from LaHood. Mason, who works for one of Washington's biggest lobbying firms, Cassidy & Associates, is a long-time friend, LaHood said. Former Rep. Jack Quinn, R-N.Y., who is president of Cassidy & Associates, also served on LaHood's fundraising committee.

Their firm also represents Memorial Health Systems in Springfield, which has received earmarks in the past, LaHood said.

Mason and Proctor also failed to return calls.

Cassidy & Associates also represents Peoria NEXT, a collaborative project to attract high-tech development to the city. The group received a $1 million earmark from LaHood to construct an "innovation center," LaHood said. He said he had encouraged the group to hire a lobbyist because of the specialized nature of the grant programs involved and that several people were interviewed.