Probe Puts Spotlight on Earmarks

[question everything]

The Wall Street Journal

Probe Puts Spotlight on Earmarks
Officials Investigate Alleged Conspiracy At Missile Unit
By JOHN R. WILKE
April 14, 2008; Page A4

HUNTSVILLE, Ala. -- A federal bribery and political-influence investigation at the Army Space and Missile Defense Command here is turning a harsh new light on companies that lobby Congress for no-bid defense contracts. Two former missile-command officials pleaded guilty early this year in federal court in nearby Birmingham to public-corruption and conspiracy charges. Their plea agreements detail a conspiracy in which politically connected defense contractors that lobbied for congressional funding, called earmarks, bribed the officials to steer the funds to sham subcontractors. Charges under seal in the same court allege a conspiracy among at least four defense contractors doing business in Huntsville, according to lawyers and witnesses close to the case. Because the case is under seal, the contractors haven't been publicly identified.

(snip)

Much of the criticism of earmarks has centered on whether they waste public funds. But the Hunstville investigations show another risk: that earmarks invite problems -- even corruption -- because they are subject to less oversight and often are awarded without competitive bidding. And it isn't illegal for politicians to use earmarks to reward campaign contributors. The Army Space and Missile Defense Command awards some $500 million a year in research work. In some years as much as one-third of the funds is directed by members of Congress through earmarks or other means to contractors in this military boomtown.

In January, missile-command executive Michael Cantrell, 51 years old, admitted he accepted $1.6 million in bribes and payments from contractors for construction of a house in Huntsville. His 48-year-old deputy, Doug Ennis, admitted a role in the conspiracy in February, including accepting a suitcase with $75,000 in cash at Reagan National Airport in 2004. Both men are cooperating with prosecutors, and more indictments are expected. Alice Martin, the U.S. attorney for northern Alabama, said the investigation has revealed "a massive procurement-fraud scheme." The investigation highlights the coziness between contractors, lawmakers and the military officials who award funding. Many contractors here routinely contribute to U.S. Sen. Richard Shelby and Rep. Terry Everett, both Republicans, and Rep. Robert "Bud" Cramer, a Democrat, and they have sought earmarks or other funding from them. The contractors employ former congressional staff members. These lawmakers defend their earmarks and deny any link to contributions. Lawmakers say earmarks can serve local needs overlooked by federal agencies, such as construction of an exit ramp. They defend their right to accept contributions from business executives, even those who benefit from earmarks.

(snip)

Another focus of the criminal investigation is a longtime defense contractor, Maurice Subilia, former president of Fiber Materials Inc., a Maine composite-materials manufacturer. Federal investigators believe a contractor conspired with missile-command officials to direct earmarked funds to affiliates in Huntsville and elsewhere, according to court documents. People close to the matter identified the contractor as Mr. Subilia. His attorney, Toby Dilworth, Portland, Maine, said Mr. Subilia declined to comment.

(snip)

In the 2008 defense-spending bill, members of Congress gave $1 million more to Vicus and $2.4 million to Maximum. As is typical with earmarks, the Pentagon didn't request the work. Many Huntsville contractors complain that earmarks distort the competitive process. Ron Klein, chief executive of Belzon Inc., a small federal contractor, said that when a company makes a campaign contribution and then gets funding for a contract, "they don't always have in mind the best interests of taxpayers or soldiers."


URL for this article:
http://online.wsj.com/article/SB120814078247412035.html (subscription)

[HowHasItComeToThis]

1. THERE IS ALWAYS A SLIMEY SOUTHERN CONNECTION

DO YOU NOTICE THE PATTERN

[unhappycamper]

2. No surprises here

However I am amazed that this sort of 'stuff' is getting looked at AND reported on. The second word in the article is 'federal' - does this mean the 'Justice' Department is looking into this?

[displacedtexan]

3. You should see the DOJ paperwork for an after-school program!

Earmarks aren't just for big no-bid contracts. My husband works for a foundation,
and he has to account for every penny spent for simple after-school programs.

The Dept. of Justice paperwork is a quarterly nightmare.

[question everything]

4. Catch-22

We complain on no-contract bidding so everyone has to pay for it.

I remember in California one had to provide a lot of paperwork for any contract with the state: number of minority employed, etc.