Lawmakers' properties can benefit from earmarks

This story is the latest installment in the Washington Post's series "Capitol Assets," based on an examination of the finances of all 435 members of the House of Representatives and 100 members of the U.S. Senate. This story was written by David S. Fallis, Scott Higham and Kimberly Kindy.

A U.S. senator from Alabama directed more than $100 million in federal earmarks to renovate downtown Tuscaloosa near his own commercial office building. A congressman from Georgia secured $6.3 million in taxpayer funds to replenish the beach about 900 feet from his island vacation cottage. A representative from Michigan earmarked $486,000 to add a bike lane to a bridge within walking distance of her home.

Thirty-three members of Congress have steered more than $300 million in earmarks and other spending provisions to dozens of public projects that are next to or within about two miles of the lawmakers' own property, according to a Washington Post investigation.

Under the ethics rules Congress has written for itself, this is both legal and undisclosed.

The Post analyzed public records on the holdings of all 535 members and compared them with earmarks members had sought for pet projects, most of them since 2008. The process uncovered appropriations for work in close proximity to commercial and residential real estate owned by the lawmakers or their family members. The review also found 16 lawmakers who sent tax dollars to companies, colleges or community programs where their spouses, children or parents work as salaried employees or serve on boards.

In recent weeks, lawmakers have acknowledged the public's growing concern that they appeared to be using their positions to enrich themselves. In response, the Senate last week passed legislation that would require lawmakers to disclose mortgages for their residences. The bill, known as the Stop Trading on Congressional Knowledge Act, would also require lawmakers and executive branch officials to disclosure securities trades of more than $1,000 every 30 days. At the same time, the Senate defeated an amendment, 59-40, that would have permanently outlawed earmarks.

The House is scheduled to vote on the Stock Act on Thursday.

Earmarks have long been controversial, with the focus on spending that unduly favors campaign donors or constituents. The Post's review is the first systematic effort to examine the alignment of earmarks with lawmakers' private interests.

Earmarks are a fraction of the federal budget, and the numbers uncovered by The Post are relatively small in the scheme of the overall Congress, but the behavior by lawmakers from both parties points to a larger issue at a time when confidence in Capitol Hill is at an all-time low.

The congressional financial disclosure system obscures certain relationships. Lawmakers are not required to disclose the addresses of their personal residences or the employment of their children and parents. The lawmakers are also allowed to put properties in holding companies without disclosing the properties' locations. Current versions of the Stock Act would not change that. To provide a fuller portrait of congressional connections, The Post compared the disclosure forms with the public record to track spending on projects near legislators' properties or on programs employing their relatives.

In interviews, lawmakers said their earmarks were needs brought to them by the city and state officials they represent to help pay for safer roads, nicer neighborhoods or improved local economies. They characterized questions about the nearby locations of their own holdings as irrelevant, insisting there is no conflict. Any potential personal benefit -- financial or otherwise -- is nonexistent, minimal or secondary to the needs of the public, they said.

Mere proximity to a lawmaker's property does not establish that an earmark was unwarranted. In some cases, the public benefit of the spending was large, improving life for thousands. In others, the benefit appeared narrower. In some cases, the work was within a mile or two of the properties; in others, it was directly in front of the lawmaker's land.

Rep. Bennie Thompson (D-Miss.) secured a $900,000 earmark that was used to resurface about two dozen roads in Mississippi in 2010. One of those was LC Turner Circle, a quarter-mile residential loop in the small town of Bolton, where Thompson and his daughter own two homes.

Thompson said it was one of numerous paving earmarks he secured for his district.

"I didn't say, 'Do the street that I live on,' " Thompson said. "The earmark went to the county. It had no designation on it whatsoever, and that was it."

Bolton Mayor Lawrence Butler said city leaders chose to repave the street, where about 48 families live, because "it had gone to the dogs." Butler described Thompson as a close friend but said the lawmaker "didn't have anything to do with where the asphalt went."

By design, ethics rules governing Congress are intended to preserve the freedom of members to direct federal spending in their districts, a process known as earmarking. Such spending has long been cloaked in secrecy and only in recent years has been subjected to more transparency.

Although Congress has imposed numerous conflict-of-interest rules on federal agencies and private businesses, the rules it has set for itself are far more permissive.

Lawmakers are required to certify that they do not have a financial stake in the actions they take. In the cases The Post examined, not one lawmaker mentioned that he or she owned property that was near the earmarked project or had a relative who was employed by the company or institution that received the earmark. The reason: Nothing in congressional rules requires them to do so, and the rules do not address proximity.

Congress's interpretation of what constitutes a conflict is narrowly construed: If lawmakers or their immediate families are not the sole beneficiaries, there is considered to be no conflict.

The chambers of Congress have different standards. In the Senate, members must certify that neither they nor their "immediate" family members have a financial interest. But in the House, only lawmakers and their spouses are covered, not children or parents.

The economic impact of earmarks on lawmakers' properties was often difficult to determine. Many of the earmarks documented by The Post went to projects still underway. Public works projects can have the immeasurable benefit of stabilizing land values in the volatile market of recent years.

Lawmakers insist the earmarks are in the public's interest, not theirs.

"His personal benefit was no different than that of tens of thousands of his constituents," said Lisa Wright, press secretary for Rep. Roscoe G. Bartlett (R-Md). The lawmaker since 2005 has helped secure about $4.5 million to upgrade a Frederick County interchange at Interstate 270 and Buckeystown Pike. From there, Buckeystown Pike leads south and west to Bartlett's home, his 104-acre farm and rental properties that earn the lawmaker up to $150,000 a year.

That interchange project, now in design, is part of an ongoing push by Maryland officials to improve links between I-270 and Interstate 70 and relieve massive backups on the highway and along Buckeystown Pike, Wright said.

"He was being an advocate for what was presented to him as the highest priority," Wright said. "Coincidentally, this was around two miles from his farm."

Some lawmakers pursued earmarks near properties that they or their family members were preparing for commercial development.

In the Rio Grande Valley of south Texas, Rep. Ruben Hinojosa (D-Tex.) sought an earmark in 2008 to widen a 1.5-mile stretch of road next to property his family was developing.

After taking office in 1997, Hinojosa remained as a one-fifth stock owner and consultant to his family's longtime food processing plant, H&H Foods, in Mercedes. The lawmaker also co-owned, through a separate family partnership with three brothers, 3.7 acres of vacant land between the plant and Mile 1 East along U.S. 83.

In December 2006, his business, Hinojosa Enterprises, asked the city of Mercedes for permission to subdivide the property into three lots. In 2007, officials in the town of 15,000 asked Hinojosa to secure congressional funding to widen that stretch of Mile 1 East, a two-lane road that city officials said had grown clogged with traffic to a nearby outlet mall.

In March 2008, Hinojosa formally requested that Congress earmark funds to widen the road, certifying that neither he nor his wife had "any financial interest in this project."

By that fall, the city approved Hinojosa Enterprises's application to subdivide, and the family partnership sold the corner lot on Mile 1 East to a convenience store developer. In early 2009, Congress approved Hinojosa's earmark request, giving the city $665,000 for the road. The money will pay for initial engineering and design work on the road project, which is expected to cost up to $3 million and require local funding to complete.

"This road expansion project will be a definite improvement to the flow of traffic," Hinojosa said in a news release. He did not mention his personal business interests nearby.

The food company, located about 600 feet from Mile 1 East, closed in 2010 after a series of setbacks that pushed the firm into bankruptcy. That failure forced the lawmaker to also file for bankruptcy because he had guaranteed a company loan and was held liable for millions.

In an interview, Hinojosa said he saw no conflict in securing an earmark for work next to his property or the plant, which is now owned by a bank.

Hinojosa noted that his partnership sold the property before Congress approved his earmark. A spokeswoman said that Hinojosa Enterprises did not discuss the road expansion with the convenience store developer.

City manager Richard Garcia said it is the only earmark Mercedes has received from Hinojosa.

"It helps everybody," Hinojosa said. "The only way it made sense to handle this tremendous population growth and avoid problems for the school buses that go through that intersection was to widen it."

Lawmakers create earmarks by inserting provisions to legislation, steering or adding federal funds for projects and programs not requested by the executive branch. Earmark decisions are made behind closed doors in committee rooms and rarely debated on the floor of the House or Senate. The more powerful the member, the more likely he or she is able to get an earmark through.

The practice has long been a lightning rod for criticism. Then-speaker of the House J. Dennis Hastert (R-Ill.) caused a scandal in 2006when it was revealed that he had inserted a $207 million earmark to build a highway near property he owned in Illinois.

Yet earmarking shot to new levels in the past decade as hundreds of lawmakers stuffed bills with pet projects. In 2010, the number of earmarks hit a new high: 11,320 worth $32 billion.

As earmarking increased, reporters and watchdog groups, including Taxpayers for Common Sense and Citizens Against Government Waste, publicized dubious earmarks. The public backlash eventually prompted Congress to make changes, beginning in 2007. For the first time, lawmakers were required to put their name next to earmarks they sought. Last year, as criticism and scrutiny mounted, Congress imposed a two-year moratorium on new earmarks. The Senate last week extended the ban another year.

Some contend the moratorium has just driven the practice underground. Six months into the moratorium, Sen. Claire McCaskill (D-Mo.) identified more than 100 special spending provisions in a House defense bill that she said were clearly earmarks.

McCaskill's efforts prompted lawmakers to strip the provisions from the final bill, but her attempts to turn the moratorium into a permanent ban has found little support on Capitol Hill. So far only 12 lawmakers have signed onto her bill.

Congress polices its own conflicts through House and Senate ethics committees. Under the 2007 reforms, members were required to certify that they had no financial interest in the earmarks they sought. Under Senate rules, a lawmaker is considered to have a financial interest only when the "principal purpose" of the spending is to benefit a "limited class" -- themselves, their spouses or their immediate family. In other words, the spending is permitted unless lawmakers are guiding money to build such things as private roads or driveways, or directly funding their relatives' salaries.

Instead of cracking down on the practice, the change codified a lax and permissive culture, government watchdog groups say.

In March 2007, Rep. Stephanie Tubbs Jones (D-Ohio) and Rep. Doc Hastings (R-Wash.), leaders of the House Ethics Committee at the time, defined a financial interest as "a direct and foreseeable effect" on a lawmaker's assets.

"Remote, inconsequential or speculative interests" do not count, they wrote in an advisory opinion to members.

A few months later, the committee weighed in on the case of Rep. Ken Calvert (R-Calif.), who was seeking an earmark to build a bus terminal and park-and-ride center near seven commercial properties he owned in Corona, Calif. Five of them were within one mile of the project; one was less than three blocks away.

The committee found no conflict for Calvert. "It appears that any increase in the value of your properties resulting from the earmark would be incremental and indirect," Tubbs Jones and Hastings wrote, "and would be experienced as a member of a class of landholders in the vicinity of the Transit Center."

Two years later, Hastings himself sought an earmark for a project near property he was selling to his brother. In 2009, he secured $750,000 toward the planning of a new bridge that will replace an outdated railroad underpass in Pasco, Wash.

As Congress required, Hastings certified he and his wife had "no financial interest" in the earmark. Hastings noted on his Web site that the project would "improve the safety of motorists and pedestrians, while improving freight mobility and response times for emergency services."

He said nothing, however, about its proximity to Columbia Basin Paper & Supply, the janitorial supply company that Hastings owned and ran until he was elected. His brother now operates the company. County records show Hastings and his wife still own the land and a 7,000-square-foot building. The overpass, as planned, will start about three blocks away.

Hastings does not list the business property on his financial disclosure form. His press secretary said debts owed by immediate family members -- spouses, parents, children or siblings -- do not have to be reported.

"After winning election in 1994, the Congressman acted to remove himself from the business as he took office and made an agreement with his brother for him to purchase it over time," wrote Erin Daly, Hasting's press secretary.

City officials said replacing the underpass is one of their top priorities.

In an interview, Hastings said the location of his property had no bearing on his support for the project.

"It never crossed my mind," he said. "Every business in Pasco will benefit by that."

Off the coast of Georgia, Tybee Island depends on earmarks to maintain the shorelines that pull tourist dollars into the community.

Rep. Jack Kingston, (R-Ga.) a member of the House Appropriations Committee, was in position to secure the funding to protect the beaches of the three-square-mile barrier island. He co-sponsored a $6.3 million earmark for the U.S. Army Corps of Engineers to replenish the beach in 2008. "This is better than we hoped for," Kingston said in a news release his office issued at the time.

What the statement didn't say is that Kingston owns a cottage on Tybee Island that sits about 900 feet from the beach. It's a modest vacation home that he has rented out in the past. It's worth about $142,900, and its value has been falling because of the downturn in the real estate market.

Real estate agents familiar with Tybee Island say property values would plummet further without beach replenishment projects.

Kingston, who has represented the 1st District of Georgia for nearly 20 years, said the beach project doesn't help his Tybee Island property, which sits a little more than a block from the ocean.

"It's absurd to suggest that this benefits me," Kingston said. "The beach doesn't improve the real estate of a house, unless it's on the beach. . . . The only thing that changes in value is the beachfront property. It does have an economic impact on the beach and the community."

In Maryland, Rep. C.A. Dutch Ruppersberger helped obtain a $187,000 earmark in 2008 toward replenishing the Ocean City shoreline -- more than 90 miles away from his home district of Baltimore County. The funds helped pay for a shoreline survey.

Ruppersberger and his wife own two condominiums on the Ocean City beach. The Democrat reports on his financial disclosure form that one of them generates up to $15,000 in rental income.

Ruppersberger said the request for the beach funding originally came from the Maryland governor's office to the House Appropriations Committee on which he served at the time. He said beach replenishment is critical to the state's tourism industry and characterized questions about the proximity of his condominiums as "ridiculous." He certified that he had no financial interest in the earmark and said he saw no conflict in his actions, noting that his properties have lost value in recent years.

"That's a stretch to say that thing's going to benefit me," Ruppersberger said.

Bringing funds home

Some lawmakers guided earmarks to projects not far from their personal residences.

In Harrison Township, Mich., Rep. Candice S. Miller's home is on the banks of the Clinton River, about 900 feet downstream of the Bridgeview Bridge. The Republican lawmaker said when she learned local officials were going to replace the aging bridge, she decided to make sure the new one had a bike lane.

"I told the road commission, 'I am going to try to get an earmark for the bike path,' " Miller said, recalling that she said, "If we don't put a bike path on there while you guys are reconstructing the bridge, it will never happen."

A member of the House Transportation Committee, Miller in 2006 was able to secure a $486,000 earmark that helped add a 14-foot-wide bike lane to the new bridge. That lane is a critical link in the many miles of bike paths that Miller has championed over the years. When the bridge had its grand reopening in 2009, Miller walked over from her home.

"People earmark for all kinds of things," she said. "I'm pretty proud of this; I think I did what my people wanted. Should I have told them, 'We can never have this bike path complete because I happen to live by one section of it'? They would have thrown me out of office."

Rep. John W. Olver (D-Mass.) joined the House Appropriations Committee in 1993. During the past six years, he has secured nearly $100 million in earmarks for an array of projects across his western Massachusetts district, ranging from bus terminals to scenic byways.

These days, Olver's earmark acumen can be seen in Amherst, a bucolic town where contractors have been realigning a stretch of road leading to a new intersection under construction near Hampshire College. The project, funded in part by $5.1 million worth of earmarks, begins at Country Corners Road along Route 116 -- 209 feet from the border of the congressman's 15-acre home and several adjoining parcels of property he owns with his wife.

The project will improve a stretch of Route 116 from near Olver's property to the intersection, which will be replaced with two traffic circles. That intersection has bedeviled motorists with traffic tie-ups and car crashes.

E-mails obtained by The Post show that Olver's staff kept in close touch with state and local transportation planners, requesting status updates. The congressman also met with top state transportation officials to discuss that project and others.

"I have to provide this update to the Congressman by Friday," Natalie M. Blais, an economic development specialist for Olver in his district, wrote in September 2008 to a Massachusetts transportation official. "Any information you could provide before then would be REALLY helpful!"

Blais said in a recent interview that she sent that and other e-mails to obtain updates on the Amherst project and many other transportation projects in the congressional district to ensure that they stayed on track and were completed on time.

"We treat all of these projects the same way," she said.

Olver said in an interview that local officials requested the project and he played no role in its design. He rejected any suggestion that the road improvements will boost the value of his property in a region where there is little room for development and much of the open land has been preserved.

"I am concerned about appearances. But I had no monetary interest whatsoever in this project," Olver said. "I had nothing to do with the design. I was never notified of any of the hearings. I had no involvement whatsoever."

Olver does not disclose his property on his annual financial reports because he's not required to under House rules. The proximity of his property to the project also is not disclosed on a certification he filed with the House stating that neither he nor his wife have a financial stake in the earmarks.

When asked why he didn't choose to include that information on his certification, even though he's not technically required to do so, Olver said: " Maybe I should have disclosed that, I don't know. I try to live my life by the rules as they are set."

In Kentucky, Rep. Harold Rogers (R) has been called the "Prince of Pork" for his success guiding federal money to his Appalachian home district. The longtime member and current chairman of the House Appropriations Committee helped secure about $250 million in earmarks from 2008 through 2010 -- but when the House imposed the moratorium, Rogers embraced it. The country, he said, needed to "turn back from the edge of fiscal ruin."

Prior to the moratorium, Rogers earmarked funds for the revitalization of downtown Somerset, his hometown. That project continues today: More than $7 million in Rogers's earmarks have gone toward it.

Part of the project involves overhauling a strip of North Main Street around the corner from Citizens National Bank. Rogers is director emeritus of the bank and owns between a $1 million and $5 million interest in the bank's holding company.

On the edge of downtown, millions of Rogers's earmarks for the revitalization in 2007 also improved a half-mile strip of College Street. Sixty houses, a high school and city hall sit on the road.

A city official said that street was a priority because of pedestrian safety. Student drivers were speeding up and down the road.

Contractors narrowed parts of the street to slow traffic, buried overhead utilities, rebuilt sidewalks, paved streets and installed new driveway aprons, curbs and decorative lamps. One of the residences on that street is a neat two-story, yellow home with a gabled roof and a flagpole in the front yard.

It's Rogers's residence.

"Congressman Rogers sees no conflict of interest in helping local community leaders achieve their goals for growth -- at large or in this case in particular," said Michael R. Higdon, chief of staff for Rogers.