Earmarks’ cash flow lifts firms, lobbyists, lawmakers

Companies often bolster campaigns

Ana Hayes inspected military goggles at Fosta-Tek in Leominster. The company is slated to receive $1 million in federal earmarked funding. Ana Hayes inspected military goggles at Fosta-Tek in Leominster. The company is slated to receive $1 million in federal earmarked funding. (Yoon S. Byun/ Globe Staff)
By Bryan Bender
Globe Staff / November 12, 2009

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WASHINGTON - kSARIA Corp., a small defense company in Lawrence, has landed $3.5 million in congressional handouts in recent years and now, thanks to Representative Niki Tsongas of Lowell, the company is in line for $2.5 million more.

The money is supposed to fund development of a fiber-optic cable repair tool, one that could, at least theoretically, one day be useful to the Navy. But the Navy never requested the tool and, with development no further along than a prototype, taxpayers have little to show for the multimillion-dollar investment.

kSARIA is one of 16 defense-related firms in Massachusetts that have secured nearly $30 million in federal funding in next year’s defense appropriations bill pending in Congress. The tally offers a lesson in the practice known as congressional earmarking, in which lawmakers direct federal money to specific projects, usually in their districts.

The phenomenon carries clear rewards for local companies as well as lobbyists and politicians: In Massachusetts, nearly 40 percent of the defense earmarks are slated to go to companies whose top executives contributed to the sponsor’s campaigns, hired former lawmakers or congressional aides to lobby on their behalf, or both.

Massachusetts lawmakers say the money will help create jobs and eventually prove useful to the military. The earmarks were chosen after careful review, they maintain, and campaign contributions played no role in the decisions.

For example, a Tsongas spokesman, John Noble, said the money for kSARIA, which employs 25 people, “will create and retain jobs in an area where unemployment is near 20 percent.’’

But critics say earmarking is also central to a system of political backscratching.

“An enormous percentage of earmarks are going to campaign contributors,’’ said Laura Peterson, a senior analyst at Taxpayers for Common Sense, a nonpartisan watchdog that tracks government spending. “If the companies are smart they will hire a [lobbyist] that has a relationship with lawmakers on the right committee, and then they will sell their project to the lawmaker.’’

Peterson’s organization found that campaign contributors who gave a total of $823,000 to members of the subcommittee who drafted the defense bill are set to receive 148 earmarks worth $461 million.

“We think the process is broken,’’ she said. “It creates fertile ground for the pay-to-play system.’’

There are no allegations of wrongdoing by Massachusetts lawmakers, unlike others - including Representative John Murtha of Pennsylvania, chairman of the defense subcommittee - who have secured earmarks for clients of the lobbying firm PMA Group. At least a half a dozen lawmakers are under scrutiny by the House Ethics Committee for their dealings with the lobbying firm, whose offices have were raided by the FBI earlier this year.

Instead, Massachusetts representatives are partaking in a ritual embedded in the Capitol Hill culture - and one that, despite its cost to taxpayers, many of their constituents say they count on.

kSARIA’s chief executive says assistance from Tsongas and her predecessor in the Fifth Congressional District seat, Marty Meehan, has been crucial. “They have been very helpful,’’ said Sebastian Sicari, who donated $1,000 to Tsongas in 2007, according to campaign records.

kSARIA’s lobbyist is Bill McCann, Meehan’s former chief of staff, who worked in Meehan’s congressional office when the earmark was first requested.

“I worked with [Tsongas’] office,’’ said McCann, who contributed at least $7,000 to her primary campaign and general election campaigns since 2007, Federal Election Commission records show. “The value we have is understanding the process.’’

Noble said the money for kSARIA has broad support in the district and as with other earmarks slated for Massachusetts, Senator John F. Kerry also was enlisted in the effort, cosponsoring funding in the Senate version of the appropriations bill. Other earmarks are also in the Senate version, and the two bills are being negotiated in a conference committee.

Another Massachusetts earmark beneficiary has been Scientific Systems Co. in Woburn, which was assisted by Representative Edward J. Markey, a Malden Democrat.

The company, which employs 53 people, received $800,000 last year to develop a navigation system that the Pentagon did not request. The company is slated to receive the same amount next year.

Raman Mehra, the founder of Scientific Systems, has contributed $2,000 to Markey’s campaign since 2008, while another top executive, Andrew Bennett, gave $250, the records show. The company did not respond to several requests for comment.

The company’s main lobbyist, according to federal records, is Steven A. Wolfe, who served as a senior policy adviser on military issues to Senator Edward M. Kennedy and is now a senior executive at Cardinal Point Partners, a government relations firm.

The Woburn company has paid at least $80,000 to Wolfe’s firm in the last two years, including to secure backing for the project from both Kerry and, before Kennedy’s death in August, his old boss.

Wolfe contributed at least $2,000 to Markey’s 2008 campaign, according to public records. Wolfe declined to comment. “We have a firm policy of not talking about our client’s business with outside folks,’’ he said.

Markey’s spokesman, Daniel Reilly, insisted that “campaign contributions do not play a part in the selection process.’’

He said the money will “help protect local jobs in these difficult economic times’’ and if the project is successful, the military will have access to precise navigation in case of a failure of the Global Positioning System, the primary satellite guidance system for military and civilian use.

In another case, after being turned down by the military, a tiny Pittsfield company with just three employees is now in line to receive $1 million - in addition to $1.2 million approved last year. The money was inserted through an earmark sponsored by Representative John Olver.

“Unfortunately, there is not a mechanism to approach the military,’’ said Gene Krug, the president of Springboard CIM, who has contributed $1,250 to Olver’s campaign coffers. “You have to kind of go to the top and have it filter back down.’’

Krug is hoping to develop a new manufacturing process that will make better-fitting ceramic body armor for troops. He acknowledges that the technology, known as ceramic injection molding, “is still very developmental.’’ Krug doesn’t expect to have a product to sell until the “2012 timeframe,’’ and said he will probably need millions more to succeed.

Olver also included $1 million for Fosta-Tek Optics, which employs about 150 people in Leominster, to develop new optical sites for rifles. The company first received a $1.2 million earmark for the project from Olver over the last two years, his office said, adding that he hopes the company will grow.

Fosta-Tek’s main lobbyists are David Urban, a longtime aide to Senator Arlen Specter of Pennsylvania, and Michael Barbera, a former aide to Representative Curt Weldon of Pennsylvania, according to lobby disclosure records.

Olver’s spokeswoman, Sara Merriam, says her boss employs four economic development aides who “thoroughly research [earmark] requests’’ to determine which ones hold the most promise for the economy in Central and Western Massachusetts.

“Per congressional ethics rule,’’ she added, “Congressman Olver and his staff keep a strict separation between congressional and campaign activity.’’

Some lawmakers want earmark money destined for private companies to be awarded through a bidding process. But there is strong opposition to such a measure in both parties.

Even if such a requirement were adopted, watchdog groups say they doubt bidding would be fair, because the earmark language is commonly tailored for a specific product and manufacturer.

Critics of the earmarking also assert that whether the individual projects are worthwhile or not is almost beside the point.

“The process is largely the problem here,’’ said Mandy Smithberger, national security investigator at the Project on Government Oversight, another watchdog group. “The only review that occurs is in the office of the member requesting them.’’

Bryan Bender can be reached at