Earmark bans forcing K Street to get creative

Wide-ranging bans on earmarks are forcing appropriations lobbyists to look for other avenues to find money for their clients.

Last week, House Democrats announced a ban on federal earmarks to corporations. House Republicans soon followed suit with a more extensive prohibition: banning all earmark requests from their caucus members.

ADVERTISEMENT
The most obvious response from lobbyists is to turn to the Senate, which doesn’t seem likely to follow the House’s lead. Sens. Daniel Inouye (D-Hawaii), the chairman of the Senate Appropriations Committee, and Thad Cochran (R-Miss.), the panel’s ranking member, released stern rebukes to the House.

Lobbyists are also turning their attention to the pursuit of federal grants administered by administration officials.

In other cases, lobbyists are seeking to link their corporate clients with nonprofits that are still eligible for earmarks from Democrats, at least, in both chambers.

At stake is billions of dollars for thousands of projects that have won congressional favor. According to an analysis by Taxpayers for Common Sense, a budget watchdog group, House Republicans sponsored more than 1,200 earmarks worth in total $1 billion in fiscal 2010.

In addition, there were more than 1,000 earmarks worth about $1.7 billion earmarked for companies in 2010.

Howard Marlowe, president of Marlowe & Co., said his firm has been lobbying in the House for a wind energy project for North Myrtle Beach, S.C., which is based in Rep. Henry Brown Jr.'s (R-S.C.) district.

With the House Republican ban on earmarks and Sen. Jim DeMint (R-S.C.) refusing to submit earmark requests, however, Marlowe and his client will have to rely on Sen. Lindsey Graham (R-S.C.) for help.

“We have got to hope we can sell our client’s request to Sen. Graham,” Marlowe said. “If that doesn’t work, we will have to go to Plan B, which we don’t know yet.”

Marlowe worried, however, that Graham will be overwhelmed with earmark requests from other South Carolina sources. The likelihood that everyone’s needs would be satisfied is unlikely, Marlowe said.

Others on K Street are working on their grant-writing skills. Some believe competitive grant programs run by the Obama administration are probably the best shot at securing federal funds for their clients.

“You should be working with the administration and not be relying solely on Congress for funds,” said David Whitestone, a partner at Holland & Knight.

Other lobbyists are stressing that their clients fall outside of the Democratic earmark ban. Gregory Gill, a partner at Venable, said he is stressing to Capitol Hill aides that his firm’s clients are nonprofits, and that the earmarked funds will be put to good use and not embarrass lawmakers.

Despite the reassurance, though, the climate for spending requests is becoming more and more toxic each day.

“The more the earmarks become the cause célèbre, the harder it is going to be to separate the good from the bad,” Gill said. “It is difficult to have a reasonable conversation with a staff member about an earmark request when they are being bombarded by the press and everyone else on how bad they are.”

Another appropriations lobbyist said he expected that for-profit companies will step up efforts to try to partner with his nonprofit clients to secure federal money. Universities and other nonprofit entities would then pay out money from the earmark to the company.

Compounding K Street’s frustration with the earmark bans is the fact that they will apply not only to spending bills but to other pieces of legislation as well.

ADVERTISEMENT
Lobbyists are especially concerned that the House Republican ban on earmarks will extend to the long-awaited surface transportation authorization legislation, or the highway bill. One transportation appropriations lobbyist said House Republicans on the Transportation and Infrastructure Committee have “dreaded” this day.

“They are afraid the ban will carry over to the highway bill. And I think it will, and that bill is the biggest earmarking exercise in the history of Congress,” the lobbyist said.

One big fear is the administration will again forbid federal employees from discussing specific projects with lobbyists, a ban it imposed on the economic stimulus package.

“Our ability to make the case for various projects will be severely hampered or at a minimum diminished by administration officials,” said the lobbyist.

Questions remain over the process, however, due to the disagreement between the House and the Senate on how best to handle doling out funds for lawmakers’ pet projects.

One overriding concern is if the Senate can convince the House to include earmarks in the spending bills in conference committee.

“What does the House do? Roll over? I don’t know,” Marlowe said. “This is worrisome because it is new territory. People don’t know what the impact will be, including members of Congress.”