Inappropriate Appropriations

Just a few months ago, we heard tough talk from Congress about the need to eradicate “earmarking.” That is the the polite term for political pork-barreling, by which members of Congress discreetly insert money for favored projects and companies into massive spending bills. But now, as with the other proposals for reform on Capitol Hill, those calls are predictably petering out. Earmarking allows members of Congress to reward their friends and donors, and encourage even greater campaign disbursements down the road. If the system isn’t broke, why fix it?

Representative Pete Visclosky and The PMA Group

Consider here the tangled tale of Representative Pete Visclosky, an Indiana Democrat and a powerhouse on the House defense appropriations subcommittee, and a Washington lobby shop called The PMA Group. In November 2004, Visclosky secured a $900,000 earmark—the final tranche of $6.9 million in federal funding he won—to build the Purdue Technology Center, a high-tech “business incubator” in Merrillville, Indiana. Two months later, Visclosky participated in a ribbon-cutting ceremony at the inauguration of the center.

Visclosky also took credit for recruiting four of the center’s seven charter firms, 21st Century Systems of Virginia, ProLogic of West Virginia, ACT-I of Texas, and Sierra Nevada of Nevada. But on closer inspection, Visclosky’s actions are less like “recruiting” and more like “quid pro quo.” According to campaign finance records, all four of those firms have donated generously to Visclosky in the past, with ProLogic giving $19,000 to Visclosky since last year—making it the leading donor for his current reelection campaign. Sierra Nevada, ACT-I and, 21st Century are each on the list of the top-20 donors.

In addition to being defense contractors, all four firms had another thing in common: each hired the PMA Group to help them win earmarks from Visclosky’s House defense appropriations subcommittee. The PMA Group is Visclosky’s second biggest reelection donor (after ProLogic), having given him $18,000 for his current campaign. Since 2005, PMA employees have contributed an additional $25,000 to Visclosky’s personal Leadership PAC.

One PMA employee worth noting is Richard Kaelin, Visclosky’s former chief of staff. He directly represents ProLogic and Nuvant, another firm that has offices at the Purdue Technology Center. Kaelin’s biography says that while working for the congressman, he developed “long-term planning and strategy” for the appropriations process and fund-raising. Translated, this suggests that he’s an expert in the high art of the political payoff.

Keith Ashdown of Taxpayers for Common Sense found that all five PMA clients at the Technology Center have been awarded bountiful federal contracts or earmarks over the past few years. Adding up their combined haul is virtually impossible because earmark recipients are rarely named in appropriation bills. There’s also no way to know for sure if Visclosky played a role in winning any of the funding, as earmark requests are submitted anonymously and the congressman’s office isn’t talking. But logic—and a Hill source who brought this story to my attention—decrees that Visclosky has supported disbursements for PMA’s clients.

“It’s clear that Viclosky’s office or Kaelin let the firms know that if they locate at the Technology Center they’ll be taken care of,” said Ashdown. “The Center is Visclosky’s ’Field of Dreams’: He built it and the companies come.”

ProLogic—headquartered in the West Virginia district of Representative Alan Mollohan, who recently was forced to step down from the House Ethics Committee and with whom the company formed very close ties—has fattened up on federal contracts and earmarks, receiving at least $57.2 million over the past three years, according to Ashdown. The company was founded by Jay Reddy in 1995 as a one-man operation; its office, in the Alan B. Mollohan Innovation Center business incubator, was constructed with $3.4 million in earmarks secured by the congressman. ProLogic now has multiple offices and 220 employees, and its revenues have increased six-fold in just the past four years.

Dan Gordon, ProLogic’s President, said that a key factor in ProLogic’s “ability to grow” was opening offices in “areas that have historically been underserved by the technology industry.” My guess is that they have been thinking less about opening up new offices in neglected areas than they have about finding friends on the appropriations committees. In addition to their office at the Purdue Center, Gordon pointed to two other new facilities, one in Manassas, Virginia (represented by Representative Jim Moran) and the other in Uniontown, Pennsylvania (represented by Representative John Murtha). Like Visclosky, Moran and Murtha are key Democrats on the House defense appropriations subcommittee.

ProLogic has made large donations to both congressmen, and so has PMA. But the connections go even deeper: Melissa Koloszar, Moran’s former chief of staff, is now a lobbyist at PMA. Another firm lobbyist, Daniel Cunningham, who formerly worked for the Army, is extremely close to Murtha. According to Cunningham’s online bio, he “fostered an exceptional working relationship with Appropriations committees,” and according to my Hill source, Murtha even uses Cunningham as his unofficial driver. (Cunningham and Murtha’s office did not return phone calls.)

Representative Alan Mollohan and Robison International

Now we come back to Representative Alan Mollohan, another member of the House Appropriations Committee. When it comes to earmarking, Mollohan makes Visclosky look like an amateur.

You’ll recall that Mollohan recently stepped down from the House Ethics Committee after it was reported that he had steered $200 million in earmarks and federal contracts to a network of West Virginia nonprofit groups whose top officials were major campaign donors to the congressman, and in some cases, business partners.

Like Visclosky, Mollohan seems to have had a few favored lobbyists, including the PMA Group. The company is the second-largest career donor to Mollohan ($51,320) and represents three other firms on his top-20 campaign donors list: ProLogic, Electronic Warfare Associates, and SAIC.

But Mollohan has even closer ties to a Washington lobby shop called Robison International, which is headed by retired Maj. Gen. Randall L. West, a former Pentagon official and deer hunting enthusiast. Robison International is a steady political contributor to Mollohan, and West represents four of the congressman’s biggest career contributors: Azimuth Inc., Information Manufacturing Corp., Lockheed Martin, and Boeing.

Azimuth has received earmarked funds with Mollohan’s help and is the congressman’s number-15 career donor with $23,000. Information Manufacturing of Rocket Center, West Virginia, is number 13 on Mollohan’s top-20 list, with $24,000 in career contributions. Back in 2001, Information Manufacturing helped to pay for a golf tournament hosted by the Robert H. Mollohan Family Charitable Foundation, a charity named for Mollohan’s father. (Information Manufacturing was also a business partner of MZM, the firm headed by Mitchell Wade, who recently pleaded guilty to bribing Representative Duke Cunningham. Wade has donated more than $20,000 to Mollohan.)

Retired Maj. Gen. West also represents three other firms connected to Mollohan. The first, FMW Composite Systems Inc., has received millions in federal funding with Mollohan’s help, and its owner, Dale McBride, is a friend of the congressman and of West. “Who would have believed ten years ago,” said Mollohan at a signing ceremony for one contract he had helped line up for the firm, “that a small West Virginia company would be providing sophisticated products for NASA’s space shuttle and critical components for our military efforts?” Just yesterday, the Wall Street Journal reported that Mollohan and McBride had bought a $900,000 farm together on the Cheat River in West Virginia.

The second firm, The Institute for Scientific Research of Fairmont West Virginia, was created by Mollohan and has received earmarks courtesy of his office. The Institute has been building a new $136 million headquarters, with most of the funding secured by Mollohan. Laura Kuhns, a former staffer for Mollohan, is on the Institute’s board. She and Mollohan have bought some $2 million worth of property together, the Journal has reported.

The third firm, The West Virginia High Technology Consortium Center, was created 15 years ago by Mollohan. Last year alone, Ashdown found, Mollohan steered $25 million to the center through the Science, State, Commerce, and Justice appropriations subcommittee, where he is the ranking Democrat. The Center is the home of the Alan B. Mollohan Innovation Center.

The ties between Maj. Gen. West and Mollohan don’t end there. At the Robert H. Mollohan Family Charitable Foundation’s annual golf tournament last September, Representative Mollohan announced the foundation’s formation of a charitable fund named for West. The fund is intended benefit West Virginia veterans. (Incidentally, Representative Murtha and his driver Daniel Cunningham tied for second at the tournament. Small world.)

This May 31, a Fairmont, West Virginia, nonprofit called Teaming to Win is hosting a fishing tournament at the Stonewall Resort. All proceeds will go to Maj. Gen. West’s Emergency Fund. Teaming to Win, which seeks to “advance and improve small business prospects in West Virginia,” was created with help from Mollohan, who has supported the group and has given the keynote speech at several of its events. But it goes both ways: in late spring of 2004, Teaming to Win gave the Robert H. Mollohan Charitable Family Foundation a $10,000 check to supplement the Teaming to Win Business Scholarship Fund.

At least five of Teaming to Win’s board members represent firms that are campaign donors to Mollohan, and three are from Azimuth or the West Virginia High Technology Consortium Center—both clients of West. Another board member is Belinda Sheridan, head of a Pentagon agency that helps businesses sell goods and services to the federal government. The agency, the Procurement Technical Assistance Center, was created by—you guessed it—Representative Mollohan, who has steered plenty of money its way.

In 2004 Mollohan addressed a Teaming To Win event at the Mountaineer Race Track & Gaming Resort. “More than 450 . . . entrepreneurs,” a local newspaper said in describing the event, “heard from the experts last week about what it takes to land lucrative federal contracts.”

It’s a bizarre quirk of our government that the companies and organizations that benefit from earmarking are permitted to remain anonymous (see my article on earmarking from the July 2005 Harper’s Magazine for more background). It’s clearly a system that is too easy to abuse, so much so that getting a handout is a streamlined, four-step process, as both Visclosky and Mollohan could attest. First you select a member of Congress on the House or Senate appropriations committees; you then purchase their influence with campaign donations; you then retain the member’s favored lobby shop; and for the fourth step—just watch your business grow.

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