This article about Rep. John P. Murtha's use of earmarks for federal spending projects, and the extent to which the numbers of jobs promised were delivered, incorrectly said that in 2005 the Pennsylvania Democrat steered $150 million to Caracal Inc., a technology company opening in his district. The $150 million went to the Electro-Optics Center at Penn State; the university then directed a small portion of those research funds to Caracal. The article also incorrectly described Murtha as 78 years old; he was 77 when he died Feb. 8.
Rep. Murtha's earmarks lead to fewer jobs than promised
Thursday, December 31, 2009
FORD CITY, PA. -- In 2005, Rep. John P. Murtha announced here that a technology firm was moving into an abandoned plate glass factory. Best of all, he promised, the new firm would generate 140 jobs.
The Pennsylvania Democrat steered $150 million in defense money to Caracal Inc., along with a $3 million grant for factory renovations. "Today's ribbon-cutting ceremony is yet another indication that our investment in this region's economic revitalization is paying off," he said that day. But Caracal never created the jobs the congressman touted. The firm peaked at 10 employees and then folded in early 2008. Once its Murtha-engineered Navy contracts ended, the company could not survive.
Murtha, 78, the chairman of the House Appropriations defense subcommittee, has been dubbed the "King of Pork" because he is the House member with the most requests for earmarks, funding added by lawmakers without going through normal reviews. Murtha has defended the practice as a way to create jobs in this hard-hit former coal-mining region.
"Let me tell you: We look at jobs. How do we attract jobs?" he said. A Washington Post analysis of Murtha's earmarks, however, shows that his job promises often come up short. Of 16 local companies the congressman has helped win federal earmarks, 10 have generated far fewer jobs than forecast, and half of those already have closed operations in his district. Murtha's strategy yielded some successes too. Four firms have expanded dramatically with the aid of earmarks, notably Concurrent Technologies Corp., which after more than a dozen years of earmarks has grown to employ 800 in Johnstown and now wins competitively bid contracts.
The Post analysis illustrates the fleeting success of some of the companies backed by earmarks. Some of the jobs generated by Murtha's earmarks cost about $2 million each, and scores disappeared as soon as projects were completed.
Peter Fiske, a former defense executive in Murtha's district, said awarding earmarks to fledgling companies often backfires, a problem that might be avoided with a more rigorous assessment of project risks. Fiske helped found RAPT Industries, a company that Murtha forecast would generate 45 new jobs. It shuttered its four-person office this year.
"If you looked at Congressman Murtha's efforts in the same way you look at an investor's efforts, it's easy to see that the business model originally conceived hasn't really panned out in terms of its rate of return, " Fiske said.
Murtha's office said that all new businesses have a high failure rate and that it is natural for him to be optimistic in the early days of a startup.
"Have we seen startup companies offer a good product only to fail in the end? Unfortunately, yes. But, we've seen a far greater number of companies come to western Pennsylvania and find success, illustrated by the fact that today our local unemployment rate is below the national average," spokesman Matthew Mazonkey said.
In October, the national jobless rate hovered around 10 percent, while the nine counties in Murtha's mountainous central Pennsylvania district reported unemployment of 7.7 to 10.6 percent.
For all the billions in federal contracts the congressman has steered to the region in the past 10 years, now at a rate of $100 million a year, joblessness in his distressed district has not improved. In six of the nine counties in his district, the unemployment rate rose or did not budge, from 1998 to 2008, according to state employment records.
Steve Ellis, vice president of Taxpayers for Common Sense, said members of Congress in economically depressed areas, such as rural Pennsylvania, West Virginia and Mississippi, have tried for years to use earmarks to generate new industry. But he contends the money is wasted because those areas are still left with some of the lowest household incomes and highest unemployment rates in the nation.