Peoria Journal Star

April 26, 2006

LaHood: Earmarks good for district
Congressman: No connection between lobbyists' fund-raising efforts, cash steered to their projects

By Dori Meinert
of Copley News Service

WASHINGTON, D.C. - Firefly Energy, a three-year-old Peoria firm, received a significant boost when U.S. Rep. Ray LaHood earmarked $2.5 million in federal defense funds for it last fall.

A member of the House Appropriations Committee, LaHood also helped direct $26 million in defense funds to Caterpillar Inc., the largest employer in his district.

In addition, he steered $200,000 to Peoria's Proctor Hospital.

What LaHood, R-Peoria, did not mention when touting the federal funds he brought home to his district was that lobbyists for all three businesses were at the same time raising money for his campaign.

It's the kind of mutually beneficial relationship that critics of the current "earmarking" process point to when arguing for reform.

"That is like the textbook example of why earmarks pose such a potential for the appearance of a conflict of interest," said Mike Surrusco, director of the ethics campaign for Common Cause, a government watchdog. "A reasonable person can look at that and wonder if there is a quid pro quo. . . . It adds to the cynicism in this country."

LaHood denies any connection between the earmarks he helped secure for local businesses and the fund raising their lobbyists did on his behalf.

"There is absolutely no link," LaHood said. "I help Caterpillar because they're the company in my district. I help Firefly because I think they have a very worthwhile research and development project going on. . . . Some of these hospitals that have benefited, I think we've benefited by the fact that they've been able to get some federal dollars.

"I've helped these organizations because of where they are. They're in Peoria. They're in my district."

Earmarks under pressure

Earmarks have come under increased scrutiny because of recent scandals involving former lobbyist Jack Abramoff, who pleaded guilty to bribery and other charges, and former U.S. Rep. Randy "Duke" Cunningham, the San Diego-area Republican who was sentenced to prison last month for taking bribes in exchange for earmarking federal funds for specific defense contractors.

As early as Thursday, the House could take up a bill that would require earmarks and their sponsors to be identified in committee reports accompanying appropriations bills and to make it easier to challenge earmarks that lawmakers slip into bills at the last minute.

However, several watchdog groups complained Tuesday that House Republican leaders have deleted parts of the bill requiring lobbyists to report their contacts with lawmakers and their fundraising activities on lawmakers' behalf.

Earlier this year, LaHood notified the 23 lobbyists who serve on his campaign steering committee that he no longer wanted them to organize fund-raisers for him. He said he wanted to eliminate any perception of a special relationship.

At the time, he said he didn't know how much the lobbyists had raised on his behalf. But he later provided Copley News Service with a tally: Eight of the 23 lobbyists had sponsored fundraisers that pulled in a total of $99,655 last year, or about one-third of the money that LaHood raised through fund-raising events in 2005.

One of those lobbyists was Bill Lane, Caterpillar's Washington, D.C., director of governmental affairs, who co-sponsored a Washington fundraiser on May 25, 2005, that raised $16,000 for LaHood. Lane sponsored the fund-raiser with Johanna Schneider, who lobbies for the Business Roundtable, and Charles Bruse, who represents Allstate Insurance Co., according to LaHood.

The Cat PAC

LaHood said his constituents won't question why he supports Caterpillar, which employs 18,000 people in his district, and noted that federal law limits Caterpillar's political action committee to giving him $5,000 each for the primary and general elections.

Since 1997, the PAC has donated more than $40,000 to LaHood's campaigns, while Caterpillar employees have contributed another $52,900, according to a Center for Responsive Politics analysis of Federal Election Commission data at the request of Copley News Service.

U.S. Sen. Dick Durbin, D-Ill., who assisted with the earmarks on the Senate side, received $7,000 from Caterpillar's PAC and employees since 1997, none of it in the past three years. He's never had a fund-raiser hosted by Lane or the Firefly lobbyist, a spokesman said.

LaHood took the lead in securing two earmarks - one for $17.5 million and another for $9.1 million - for a Caterpillar program that rebuilds heavy equipment used by the Army and Navy.

Lane refused to respond to questions about his fund-raising efforts on LaHood's behalf. But Caterpillar issued a statement saying it "has long been involved in the political process, supporting candidates, policies and programs that are consistent with our business goals."

The company has been a longtime supporter of LaHood because he "has demonstrated strong leadership skills in Congress and has been a tireless advocate for his constituents in central Illinois, many of whom also work for Caterpillar," the statement said.

Firefly's lobbyist

Firefly Energy, which is a spinoff of Caterpillar, will use its $2.5 million earmark to develop a lighter-weight, longer-lasting battery for the military, which could lead to lucrative Pentagon contracts in the future.

LaHood said he didn't know the company had hired Washington lobbyist Michael Herson, who sits on LaHood's steering committee. He said they have never talked about the company.

Firefly hired Herson in March 2005, at the start of the fiscal 2006 appropriations process, paying his firm $40,000 for four months, according to lobbyist registration records.

Herson was recommended for the fund-raising committee by LaHood's former professional fund-raiser, the lawmaker said. The congressman said he tried unsuccessfully to obtain an earmark for Firefly two years ago. He attributed his success last year to the fact that the company had developed a better relationship with the Pentagon.

As president of American Defense International, Herson represents scores of defense contractors.

Neither Herson nor Firefly co-founder Mil Ovan returned telephone calls.

Other earmarks

A third lobbyist from LaHood's steering committee, Arthur Mason, represents Proctor Hospital, which also won an earmark from LaHood.

Mason, who works for one of the city's biggest lobbying firms, Cassidy and Associates, is a longtime friend, LaHood said. Former U.S. Rep. Jack Quinn, R-N.Y., who is president of Cassidy and Associates, also served on LaHood's fund-raising committee.

Mason and Proctor also failed to return calls.

Cassidy and Associates also represents Peoria NEXT, a collaborative project to attract high-tech development to the city. The group received a $1 million earmark from LaHood to construct an "innovation center," LaHood said. He said he had encouraged the group to hire a lobbyist because of the specialized nature of the grant programs involved and that several people were interviewed.

Dori Meinert can be reached at (202) 737-7686 or