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December 13, 2005

How Lobbyists Use Gov't to Turn Profits

By

Seventh in a Series

 

Some words get a bad reputation they don't deserve. If you call someone an "ideologue," he'll probably be insulted. But if the idea is good, where's the shame?

Like most conservatives, I'm an ideologue, devoted to the idea that Washington should spend less, tax less and be less involved in our lives. But the opposite is happening. Washington is spending more and more, and that spending is being prodded by a group known as "K Street conservatives," named for the Washington street many lobbyists call home.

Lobbyists are spending our tax money, and they're becoming ever more brazen about it. Not long ago, a local newspaper reported that a K Street lawyer had visited Culpepper County, Virginia. The government there planned to build a $3.5 million sports complex with money it would borrow on the bond market.

This lawyer had a "better" idea. He said he could get Congress to provide funding with an earmark, the process through which lawmakers set aside money in a spending bill to fund a specific pork barrel project.

Culpepper would get its $3.5 million from Uncle Sam, and all it would cost the county was the lawyer's fee, some $90,000 over 18 months.

What a deal. Instead of borrowing money at market rates, the county would be getting it at 2.6 cents on the dollar. Taxpayers there would save and still get their sports complex. It's the rest of us who'd end up paying the bills.

Notice that in this case, it wasn't even a lawmaker pushing for a specific project at the request of local officials. A lawyer simply went client hunting, decided he could make money with this project, and knew he could always find a congressman or senator to back the project later.

The Army Corps of Engineers provides an even more dangerous example of K Street conservatism. Congress and the White House earmark almost 85 percent of the money the Corps spends. Unfortunately, that means lower-priority projects sometimes get funded before important ones.

Consider Louisiana, where the Corps spent some $1.9 billion between 2000 and 2005. A mere $72.2 million of that went to protecting levees in 2005. Meanwhile, $748 million was spent on building a new lock on an underutilized canal.

Corps experts knew that project was a waste of money, but went ahead with it after a barrage of "Herculean" lobbying (as a port memo put it). Hurricane Katrina showed the danger of building by earmark.

This trend has gotten so out of hand that some firms even brag about their ability to bring home the bacon. The lobbying form Marlowe & Co. took in more than $700,000 in 2003 from local communities that wanted to win congressional earmarks for beach replenishment. In return, the firm says it has won more that $100 million in beach projects. Marlowe's Web site has a 13-page list of the 170 beach earmarks it has secured for clients from coast to coast.

The market for selling earmarks to communities will probably grow -- as the medieval sale of indulgences did -- until Americans get fed up and put an end to it. Doing so wouldn't be especially difficult. Lawmakers simply need to eliminate earmarks (there were more than 6,300 in the most recent highway bill) and this form of K Street conservatism will disappear.

In the 1920s, President Calvin Coolidge said, "The business of America is business." Ever since, most people have assumed that corporations are conservative. But the truth is that businesses have a profit motive, not an ideology.

Thus, the danger of K Street conservatism isn't that it's an ideology. It's that its practitioners want to use the government to turn a profit, and this fuels Washington's ever-increasing appetite for spending.

Next week, we'll wrap up this series with a look at practical solutions to Washington's overspending.

Ed Feulner is president of The Heritage Foundation (heritage.org), a Washington-based public policy research institute.

First Appeared in Investor's Business Daily

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