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MARCY KAPTUR discusses the earmarks controversy and “fighting for her district.”Story by Kristen Rapin, Page A5

Washington, D.C.

A5COMMUNITYDog is shot 6 times, lives to bark about it (AP) — Th e Toledo dog warden said a dog named Sarge was shot six times and survived. Witnesses tell police the dog’s owner and another man took turns shooting the dog while he howled in his cage. Lucas County Dog Warden Julie Lyle said Sarge was shot in his head, neck and chest. Th e dog’s owner is due in court July 21. He told offi cers that the dog had bitten him and that he was dangerous. Th e other man pleaded no contest July 12.

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Rep. Marcy Kaptur is under na-tional scrutiny from critics accusing her of helping for-profi t businesses fi nd a way around a ban on earmarks. But Kaptur told Toledo Free Press on July 13 that she believes she is in com-pliance with the ban.

On March 10, the House of Rep-resentatives announced the ban on earmarks to for-profi t companies, but according to articles by Th e New York Times and Th e Huffi ngton Post In-vestigative Fund, Kaptur (D-Toledo) and area businesses have found a way around that ban.

Th e New York Times article, “Com-panies Find Ways to Bypass Ban on Ear-marks,” and Th e Huffi ngton Post story, “Despite Pledge to Curtail Corporate Earmarks, Politicians Pursue Th em,” both found instances where for-profi t companies, which were previously re-ceiving earmarks, were indirectly ben-efi ting from earmarks through a non-profi t organization or university.

Kaptur, along with some of her colleagues, sponsored $150 million in earmarks that indirectly benefi ted for-profi t companies, according to Th e Times. Within days, commentators such as Rush Limbaugh and David Asman of the FOX Business Network singled out Kaptur as an example of “corruption” and “kickbacks.”

Encouraging companiesTh e Times article said despite Kap-

tur’s public praise of the new earmark ban, privately her “offi ce encouraged Ohio companies whose earmark re-quests were in peril to quickly line up deals with nonprofi t organizations.”

Kaptur told Toledo Free Press she sent an e-mail on March 11 notifying

those for-profi ts that were asking her offi ce for earmarks of the new rules.

“We have worked with for-profi t organizations and we have worked with not-for-profi t organizations for a very long time. But, now with the new rules, they said no for-profi t could be eligible, so we had to let people know that,” she said.

Kaptur said all of the companies named in the stories have patents, so with the intellectual property and the investment involved, the companies needed to be notifi ed of the new rules.

“I thought it was important to no-tify them that they had to comply with the rules if they were to proceed,” she said. “We absolutely thought we were straightforward. We provided the in-formation to them. We didn’t keep it secret. We told them, ‘this is what you have to do if you want to submit this year’ ... I felt an obligation to move them forward. Th ey had been pro-ceeding in good faith, they didn’t do anything wrong.”

Th e e-mail Kaptur’s offi ce sent to companies stated:

“Due to yesterday’s announcement by the United States House of Repre-sentative’s Committee on Appropria-tions your proposal for a Congressio-nally Directed Initiative is not eligible for consideration by the House Ap-propriations Committee, due to the recipient being a for-profi t entity. As a result your organization’s proposal must be resubmitted through a not-for-profi t institution or not consid-ered by our offi ce. Th e deadline for resubmission is Monday, March 15, 2010, by noon and due to time con-straints this is a hard deadline.”

Th e e-mail asked any business with questions to contact her offi ce and concluded with a press release from the House Appropriations Committee about the new rules.

House banTh e House passed a ban on ear-

marks to benefi t for-profi t companies to create a competitive process for funding based on merit, according to a news release by the House Appro-priations Committee.

Only nonprofi t organizations, gov-ernment entities and universities can receive earmark funding. To ensure compliance with the rule, the com-mittee will require at least 5 percent of all earmarks directed at nonprofi ts to be inspected annually.

Recent reforms on earmarks re-quire Congress members to post their earmark request online for public re-view. Th e Appropriations Committee hopes to establish an online “one-stop” link to all members’ earmarks.

In 2009, more than $16 billion in earmarks were passed by Congress. If the March ban had been imple-mented one year earlier, it would have resulted in $1.7 billion less spending and 1,000 fewer earmarks.

Republicans’ banFor the 2011 fi scal year, House Re-

publicans, with the exception of a few, have decided to participate in a ban on all earmarks. Th e Republicans made the decision to propose the one-year ban to reform the earmark process and come up with set procedures for choosing earmarks, said Bob Latta (R- Bowling Green).

“Th e American people are de-manding that their money be well spent,” he said. “Th at is why we’ve in-stituted the earmark ban for this year.”

Th e Republicans’ goal is to make earmarks as transparent as possible so every American can “follow the money,” Latta said. Th e Republicans want to make sure there is a proper way of using earmarks and the process isn’t being abused, he said.

Th e Democrats’ reform left earmarks “half open and half closed,” making it diffi cult to enforce reform, Latta said. Th e for-profi ts fi nding a way around the ban, “goes back to why, for this year, the Democrats should have had a total ban. We should have taken the fi scal year to work out the procedure for earmarks and there would have been a clear cut process on how any earmark would be given to a nonprofi t,” Latta said.

Th e Senate has no ban on earmarks to for-profi t companies.

POLITICS

Kaptur criticized for circumventing new earmark ban

■ MARCY KAPTUR IS SERVING HER 14TH TERM AS AN OHIO REPRESENTATIVE.

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A6 n Toledo Free Press july 18, 2010community

Armor to nowhere?Kaptur has faced criticism, nation-

ally and locally, that some of her spon-sored earmarks are not viable and are “pay to play,” kicking back funds to her campaign chest.

In the 2010 fiscal year, Kaptur is ranked 24 out of 435 representatives in the number of sponsored earmarks. she has sponsored 57 earmarks, 36 as sole sponsor, accounting for $71.3 million in funds, according to opensecrets.org.

during a recent FoX Business Network show, “America’s Nightly scoreboard,” david Asman summa-rized examples from The Times article criticizing Kaptur’s support of Toledo-based Imaging systems Technology.

“For years, Ms. Kaptur has been getting tens of thousands of dollars in campaign cash from Imaging systems Technology ... that makes parts for body armor. In exchange, the company has received $8.2 million ... in earmarks that Ms. Kaptur has inserted into fed-eral spending bills,” Asman said. “Now, that’s bad enough, this kind of circle of corruption, but what makes matters worse is the Pentagon isn’t even buying what the company is being paid by tax-payers to produce. so a company that can’t sell its product in the marketplace gives tens of thousands of dollars to their congressman and gets in return millions of your tax dollars for some-thing that will probably never even be used. That sounds like a kickback to us.”

rich Iott, Kaptur’s republican op-ponent in the fall, uses the same ex-ample to criticize Kaptur.

“In many cases like [Imaging sys-tems Technology] it’s a waste of tax-payers’ dollars. They received $8 mil-lion previously and now another $10 million in taxpayer money for making a product for which there is no market,” he said. “you have to back up and look at what the issue is. Basically, she is get-ting federal earmarks, funneling them through a sham nonprofit to a for-profit company. The principals of those com-panies donate to her campaign chest and, incidentally, they’re producing a product that there is no market for.”

Kaptur should return any cam-paign dollars received from a com-pany that received earmark funding, Iott said, adding that although Kaptur has legally given earmarks to nonprofits and universities, that doesn’t mean it’s moral.

“To say it’s legal isn’t a good re-sponse, if it’s not right,” Iott said. “It’s a circumvention of the rules.”

Iott is opposed to earmarking and believes the money should stay in the district, he said.

“using this process of earmarks, what the federal government is doing is interfering in the free market — who is going to be the winners and who is going to be the losers, it puts [compa-

nies] at an advantage to others who are in the same industry and that’s not right,” Iott said.

Kaptur, who according to the Fed-eral elections Commission website has received approximately $7,300 in

campaign con-tributions from employees and family members of Imaging sys-tems Technology between 2006 and 2008, said her earmarks aren’t influenced by campaign contributions.

“under current law, any citizen or organization that is properly consti-tuted under the law, can give to your campaign. But you have to have a fire-wall between your campaign and of-ficial duties,” she said. “There isn’t any individual or any group that has given us extraordinary amounts of money ... I think we struggle to raise funds for campaigns and there isn’t any interest or individual that predominates.”

Kaptur also argues that ear-

marking funds for Great lakes re-search Center, a nonprofit set up by a principal of Imaging systems Tech-nology to develop light-weight armor, is not another “bridge to nowhere.”

“They’re trying to create a light-weight material for the armed forces. They aren’t the only company, but if the [department of defense] didn’t want them, they wouldn’t have signed agreements with them. Now, will they succeed in what they are attempting to do? We don’t know,” she said.

Kaptur said the Army solicits pro-posals from all over the world to com-pete for contracts and to have a company in the district that is in the mix is “great.”

Carol Ann Wedding, president of Imaging systems Technology (IsT), told Toledo Free Press the company has been working with the Army research laboratory (Arl) since 2007. The Army has purchased and tested some of their materials and is interested in further development, Wedding said.

Great lakes research Center, a nonprofit established by Victoria Kurtz, vice president of IsT, could receive $10.4 million in earmarks in 2011. The nonprofit was established to

promote “technology, job creation and opportunity in Northwest ohio.”

IsT and deep springs Technology, a spin-off company of Imaging located in the same building, will work with Great lakes research Center.

Kaptur gave Toledo Free Press a jan. 25 letter from the department of de-fense that said the Arl is interested in the research and development of syntactic foams based on light metals.

n KAPTUR CONTINUED FROM A5

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Every year, Congress passes budgets for each federal agency to operate within. An earmark is funding, taken from the agency’s budget as a whole, that is designated by members of Congress to sup-port a specific project.

“By specifying exactly how and where money is to be spent, Congress can use earmarks to bypass executive branch agencies,” said John Wright, pro-fessor of political science at The Ohio State Univer-sity. “In the typical appropriations process, Congress approves lump sum budgets to executive agencies who then administer previously authorized programs and projects. But with earmarks, Congress essentially ‘mainlines’ money to pet projects in their districts.”

Earmarks are a common part of the legislative process and are Constitutionally valid, but they aren’t

a required component of the process, Wright said. Earmarks limit the ability of agencies to decide

where their funding should be allocated and removes merit-based allocations, said David King, public policy lecturer at Harvard Kennedy School. The policy justi-fication for using earmarks is members believe they know more about their district and the needs of their district than the bureaucracy, King said.

“[Earmarks are] positive when a member legiti-mately knows more about how the money should be spent on a program, but usually it’s just an ex-cuse for sending money back to a Congressional district,” he said.

Earmarks are often criticized in the public “for good reason” King said.

“It looks like members are taking money from the

public as a whole to benefit their own district,” he said. “It’s great if you happen to live in the member’s district, but it’s not so great if you live anywhere else.”

The main complaint about earmarks is “they cir-cumvent the usual channels of public accountability, while adding billions of dollars to the federal budget,” Wright said.

“The only way to find earmarks is to read the text of legislation. Since so few of us do that, and because earmarks are not administered by execu-tive branch agencies, earmarks often go unnoticed and avoid public scrutiny,” Wright said. “Thus, earmarks are a convenient way for legislators to reward contributors or provide other favors to key interests in their constituencies.”

— Kristen Rapin

CASH FLOW WHAt iS An eArmArk?

A8 n Toledo Free Press july 18, 2010community

The letter, from Vincent H. Ham-mond, materials engineer at the Arl, to deep springs Technology, stated:

“your ongoing efforts in these ma-terial systems are of special interest in the development of lightweight armor and energy absorbing materials ca-pable of meeting the current and pro-jected needs of the Army.”

Pairing with universitiesThe Times and Huffington Post ar-

ticles reported on several businesses that previously received earmark funding in partnership with uT and will still receive earmarks.

Frank Calzonetti, vice president of research and economic development at uT, said Kaptur’s office contacted him earlier this year about the univer-sity collaborating with new businesses.

“We deal with [Kaptur’s office] very frequently relating to federal projects and industry projects. They bring to our attention a company that may have an interest in coming into the district or developing a collabora-tive project with us,” Calzonetti said.

uT determines if there is a possibility of a collaboration with a private business and the school and decides what to do next. Not all of the companies referred from Kaptur’s office end up collabo-rating with the university, he said.

“We’ve referred many companies there, little startups. I do it every day,” Kaptur said. “We use the university to help companies to advance their tech-nology so they can make a difference in the marketplace.”

Kaptur said the businesses in The Times story were not referred to uT just because of the new earmark ban.

“We have worked over the years to build some capacity in our community to create jobs of the future, higher tech jobs. We can’t do that without the uni-versity because we’re not big enough,” Kaptur said. “The university is impor-tant because even with business people who have some assets, you have to have a basic research staff — which most of them can’t afford — to do the scientific work necessary for high-tech research.”

Calzonetti said The Times inac-curately reported that uT receives “at least $70,000 on a $1 million ap-propriation to cover the cost of faculty members and a researcher to work with the partners.”

No predetermined or set amount for who receives what is determined before a project, Calzonetti said. Funding is determined after the col-laborating groups decide who is bringing what to the table, he said. All collaborations must be mutually ben-eficial to the faculty, staff and students at uT and the collaborating business.

Seeking earmarksearly on in her 14 terms as con-

gresswoman, Kaptur discovered the

importance of earmarks.Kaptur noticed that out of the

transportation gas dollars, 83 cents on every dollar that ohio sent to Washington came back to the state. Kaptur, who was interested in where the funding was going, discovered that when the government sent the money back, funding ended up in Cleveland, Columbus and Cincinnati.

“I thought, ‘Hey, what’s going on here?’ I began in transportation bills to say if my state isn’t helping our re-gion, then I’m going to. If my federal government isn’t helping my region — then I’m going to,” Kaptur said.

Kaptur began writing earmarks, into the transportation bills that cre-ated projects, such as the Buckeye Basin Greenbelt Parkway and the I-280 interstate lift bridge, bringing some of the area’s dollars back to the region, she said.

“I have the right to fight for my district. I have the right to fight for my state and I do. When they say earmark ... earmark has come to be kind of an ugly word,” Kaptur said. “For me, it’s actually supporting the advancement of something in my district — an in-terest in my district and that’s my job.”

Crystal ballon March 15, right after the new

Congressional ban on earmarks to for-profit companies was announced, The Washington Post published an article, “Curbing earmarks: even with new re-strictions, for-profits play a role.” The ar-

ticle discussed how for-profit companies were likely to collaborate with nonprofits to still receive earmark funding, noting that many for-profit companies were already receiving earmark funding through collaborations with universities.

steve ellis, vice president of Tax-payers for Common sense, who was quoted in the article, told Toledo Free Press he was not surprised by the re-

sults found in The New York Times and Huffington Post articles. He said the biggest issue is which companies are contributing to which candidates and what was the motivation of the congress members to go against the chairman of the appropriations committee.

“Why did the representatives, the Kapturs, decide to pursue this ap-proach?” he said. “Why did they sub-

vert the intent of the ban?”ellis believes the earmarks that

have been reported on now have a “scarlet letter,” and people are paying more attention to those businesses, so he wouldn’t be surprised if the ear-marks weren’t approved.

ellis said the current earmark ap-proach is a “political muscle system rather than a project merit system.”

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Ohio representative name Total earmarks Total contributions Contributor Earmark rank All earmarks All earmarks

FY2010Steve Driehaus (D-Ohio) $800,000 $10,004 1.3% 302 $10,937,300 7.3% Marcy Kaptur (D-Ohio) $1,200,000 $2,000 0.2% 24 $71,301,300 1.7% Mary Jo Kilroy (D-Ohio) $1,600,000 $16,750 1.0% 201 $18,215,500 8.8% Steven C LaTourette (R-Ohio) $5,500,000 $6,500 0.1% 125 $27,277,000 20.2% Robert E Latta (R-Ohio) $500,000 $1,250 0.3% 375 $4,990,000 10.0% Tim Ryan (D-Ohio) $7,350,000 $4,250 0.1% 81 $35,400,000 20.8% Zachary T Space (D-Ohio) $2,000,000 $250 0.0% 257 $13,725,000 14.6% Betty Sue Sutton (D-Ohio) $6,550,000 $9,000 0.1% 142 $24,372,700 26.9% Michael R Turner (R-Ohio) $2,600,000 $5,000 0.2% 120 $28,113,200 9.2% FY2009Dave Hobson (R-Ohio) $400,000 $1,000 0.3% 28 $88,254,210 0.5% Robert E Latta (R-Ohio) $355,000 $600 0.2% 368 $8,093,500 4.4% DY2008Dave Hobson (R-Ohio) $9,333,100 $14,450 0.2% 22 $87,702,650 10.6% Stephanie Tubbs Jones (D-Ohio) $82,000 $3,250 4.0% 341 $10,392,560 0.8% Marcy Kaptur (D-Ohio) $20,311,000 $24,950 0.1% 25 $76,878,000 26.4% Steven C LaTourette (R-Ohio) $4,139,000 $7,600 0.2% 306 $12,796,500 32.3% Tim Ryan (D-Ohio) $2,346,000 $16,950 0.7% 143 $28,677,850 8.2% Zachary T Space (D-Ohio) $2,245,000 $1,400 0.1% 310 $12,442,320 18.0%Betty Sue Sutton (D-Ohio) $2,327,000 $1,250 0.1% 271 $16,338,600 14.2%Patrick J Tiberi (R-Ohio) $228,000 $1,250 0.5% 431 $913,000 25.0%Michael R Turner (R-Ohio) $1,600,000 $750 0.0% 212 $22,432,100 7.1%

CASH FLOW EArmArkSto contributors to contributors %from earmark recipients earmark %

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