Thursday, December 20, 2007

Getting Burned by Earmarks

Lawmakers play favorites; local merchant loses out

By David Heath
Seattle Times staff reporter

Doug Hoschek sells the Army's elite Special Forces a T-shirt that resists burning — a feature that can save the lives of soldiers under fire.

He wanted to sell his creation to the Marines, as well. Working out of his Sammamish home, the seasoned garment maker toiled for months preparing to bid.

But Hoschek was stunned to learn recently that another company, InSport International, snagged the T-shirt contracts without having to compete.

InSport had lobbied members of Congress for an "earmark" — federal dollars lawmakers direct to favor seekers, often campaign donors.

Company executives also donated nearly $9,000 to the re-election effort of Rep. David Wu, D-Ore., who sponsored three earmarks for InSport.

The lobbying worked, despite a flaw with InSport's synthetic T-shirt. It melts to the skin under intense heat, causing serious burns. As a result, Marines are forbidden from wearing the shirts in combat.

"This earmarking thing is crooked," Hoschek said.

Earmarks, he said, cheat businesses that play by the rules. They not only deprive the military of getting the best price, he said, but can saddle soldiers with inferior products that politicians handpick.

It's not supposed to work that way. Federal law requires that all military contracts, even earmarks, be offered through competitive bidding. Exceptions are allowed in those few cases in which the military has an urgent need or the product is unique.

But in case after case, The Seattle Times found, earmark contracts were awarded without competition.

Agency officials often believe they have no choice. Congress controls the size and makeup of their budgets. So government agencies have a stake in keeping lawmakers happy and in keeping their pork-barrel projects intact.

Federal workers who do try to follow federal procurement laws can come under pressure if, in going by the book, they anger members of Congress, said Sandra Sieber, former director of the Army Contracting Agency.

"It's a difficult choice," she said.

Such was the case of a top Pentagon officer, Cheryl Roby, who didn't give a $2 million earmark to a company selected by former California Congressman Randall "Duke" Cunningham.

Cunningham summoned her to his office, scolded her for "not executing my vision," and later tried to get her fired.

As a result of Cunningham's threats, a Roby underling began routinely asking congressional appropriations staffers which company was supposed to be rewarded with each earmark, according to court documents.

Cunningham was convicted in 2005 of taking $2.4 million in bribes in exchange for giving earmarks to certain companies.

Awarding contracts to chosen companies is so well established that members of Congress typically announce the winners of earmarks even before the defense bill is signed into law.

Because of recent reforms, House members have to publicly attach their names to the earmarks they sponsor. Previously, lawmakers could conceal which earmarks they pushed for.

Even though such pork-barrel projects are supposed to be bid, House members specify the favored companies and their addresses in the signed public letters now required for each earmark. The Senate still keeps this information secret.

Lawmakers are mostly successful in having their favors go to the companies they select. Rep. Norm Dicks, D-Bremerton, said that each year, on average, only one company he favors with an earmark fails to get the contract. He had 23 earmarks in the most recent defense bill.

Take the case of one of his 2006 earmarks. The Marines gave Seattle-based Outdoor Research a sole-source contract for fire-resistant winter gloves. At the time, the Marine Corps was evaluating several gloves, according to documents obtained by The Times. But the Marines justified giving Outdoor Research the no-bid contract because evaluation results "will not be available in time to proceed immediately."

The Marines said the earmarked gloves were needed urgently, but it never asked Congress for them in its budget request from months earlier.

Outdoor Research has succeeded in getting earmarks again for 2007 and 2008. Congressional sponsors of these earmarks — Dicks and Sens. Patty Murray and Maria Cantwell — have collected more than $11,000 in combined campaign contributions from Outdoor Research executives since 2005.

Another small business hurt by an earmark was Amrel, a California-based maker of rugged military computers. Murray and Cantwell earmarked $1.65 million this year on behalf of a large competitor, Itronix of Spokane, a subsidiary of huge General Dynamics.

"There is definitely something wrong there," said Amrel sales manager Ron Capron, who recently learned that Itronix was getting no-bid contracts.

Murray says earmarks are misunderstood, and that they give members of Congress — rather than agency bureaucrats — a chance to decide whether local companies have a product worth trying.

She says her job is "to make sure that the state I represent that's 2,500 miles away from the nation's capital has a fair shot."

Earlier this month, Congress scuttled a tough new measure to try to assure competitive bidding for earmarked items. Except in limited cases, it would have barred contracts unless more than one bid was received.

Sen. Tom Coburn, the Oklahoma Republican who sponsored the failed measure, said Congress has no intention of letting the Pentagon put earmarked money up for competitive bidding.

"What we do is we earmark for a company rather than a device," he said in an interview.

Although federal law requires competitive bidding, Coburn said his colleagues and the Pentagon know how to get around it.

"They are very slick in the way they do this earmarking to make sure only one company can get it," he said.

A common technique is to describe a product only one company makes. But even when an earmark doesn't accurately describe a product, the favored company can still end up with the contract.

Such was the case with the Marine T-shirts. For the third time in three years, Congress approved an earmark last month for cold-weather T-shirts, described in the budget as "base-layer" garments. Those garments are worn next to the skin, and earmark sponsors have consistently said they were appropriating money for T-shirts.

But InSport tried and failed to make a fire-resistant T-shirt that Marines could use in battle. So last year, using the money already set aside for InSport, the Marines bought a fleece pullover — what it describes as a "warming layer" — from the company, formerly of Oregon but now part of a larger New York company.

This year, Congress appropriated $2.4 million again for a "base-layer" garment, or T-shirt. And again, Rep. Darlene Hooley of Oregon — one of the earmark's sponsors — described it as a T-shirt in a news release.

But the Marine Corps, after initially saying the contract would be put out for bid, later acknowledged that it plans to buy the fleece pullover again, even though it doesn't match the description in the budget bill passed by Congress.

"This is extremely valuable to Marines; especially those Marines deployed today," Lt. Col. Arthur Pasagian, who oversees buying clothing for the troops, said in an e-mail to the earmark's congressional sponsors. He wrote the e-mail after The Times raised questions about the contract.

Kerry Kligerman, head of InSport's parent company, blamed the confusion on inexact wording carried over from the first year.

"Some of the language didn't get changed, but the product sure did," Kligerman said.

A spokeswoman for Rep. Wu of Oregon said Marines are getting what they want.

"The Marine Corps is happy. That is the bottom line," said Jillian Schoene, Wu's press secretary.

Hoschek argues that handing the business over to one company favored by Congress robs the process of all integrity.

"I spent 40 years of my life doing it the way you're supposed to do it," he said. "Do it the competitive way, so that everybody wins."

David Heath: 206-464-2136 or dheath@seattletimes.com

Copyright © 2007 The Seattle Times Company
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