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Getting around earmarks

By Amanda Becker,

When congressional Republicans vowed to do away with earmarks late last year and President Obama promised in his State of the Union address he would veto any bill with earmarks that reaches his desk, the K Street firms that specialized in securing funding for pet projects in large appropriations bills took notice.

Cassidy & Associates, a trailblazing adviser on earmarks with clients that include major universities, cities and states, then laid off a fifth of its staff in December, a move some interpreted as the inevitable result of the policy turn.

But now some lobbying shops known for such work are saying: Not so fast.

That's because some lawmakers, realizing the limitations of an earmark ban, are re-examining their options. Others are openly discussing how they intend to work around the ban by contacting departments and agencies to request grants for their constituencies. Lobbying shops say they too are at the ready, having recently hired people who specialize in the sort of appeals to agencies and departments known as grant writing.

“We've been doing grants for the past few years,” said Howard Marlowe of Marlowe & Co., an earmark specialist that has moved into agency work. “We didn't do it so much in the anticipation of earmarks being prohibited, we did it because we saw a bunch of money that was available -- that came in handy when they cut off earmarks.”

In many ways, the idea of going to agencies directly is a return to the old way of doing things, lobbyists said. Bill Ferguson, a lobbyist with the Ferguson Group, remembers securing grants when he first entered the business in 1976. When he scored his first earmark, earmarks didn't even have a name.

“Nobody knew it was an earmark if you read the bill, but the agency knew it was an earmark, the people in Fort Worth knew it was an earmark, and the road got built,” Ferguson said.

Lobbyists said the real issue with the earmark ban isn't the blow to their business but other unforeseen and unintended costs that have been largely ignored, like an overall decrease in transparency. Earmark specialists will still be able to contact lawmakers on Capitol Hill, who can in turn approach the agencies. Or lobbyists can go to the agency directly. The only difference is that there will likely be less of a paper trail.

“To make a request to a member of Congress” means a record will be kept on file, Marlowe said.

“They need to list on their Web site who they've received requests from, what the requests are for,” Marlowe said. “You have the perfect ability to trace what's going on; when you move it over to the executive branch, you have none of that.”

According to the nonprofit transparency group Sunlight Foundation, there actually is a rule on the books that requires agencies to post spending decisions online. President George W. Bush signed an executive order that requires any congressional spending request to be submitted in writing, which the agency is then instructed to post on the Internet, policy director John Wonderlich said. (Capital Business has partnered with Sunlight to provide lobbying registration data.)

“We've given up looking, some do and some don't,” Marlowe said of the agencies' efforts.

Wonderlich said it all depends on the interpretation.

“The order doesn't have any requirement for officials to share correspondence from lobbyists or other special interests,” Wonderlich said. It “does require that officials make decisions on the basis of ‘transparent, statutory criteria,' but that is an encouragement that is hard to enforce.”

Ferguson said other potential unintended consequences from the earmark ban can be gleaned from what happened in the fiscal year 2007, when Congress passed a law that funded the government at the same level as the year prior and offered agencies no direction on how to distribute allocated funds. A recent analysis done by his lobbying shop of the projects that were funded that year shows that the money went to fewer projects overall and larger cities had the upper hand. In 2006, for example, money allocated to buses and bus facilities went to 441 different programs. Without earmarks, that number dropped to seven in 2007. Once Congress resumed earmarking, the number of programs jumped to 316 in 2008.

If the government is not going to allow earmarks, “we want to make sure that a competitive process gets set up,” Ferguson said.

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