Though Republicans came into power promising a moratorium on earmarks -- the special legislative deals that benefit a single company or interest group -- Congressman Tom Reed (R-NY) explained to Republic Report that an array of bills he recently introduced that only benefit one or two companies in his district are not, in his opinion, earmarks.
Reed, who has led efforts to bring back earmarks in the form of special tariff-reductions and exemptions, defended his practice of handing out these specific giveaways to his campaign contributors. The GOP leadership banned the practice of earmarks to deter rampant pay-to-play corruption. Reed, however, says that these trade-related earmarks are important for creating jobs.
A search of recent bills introduced by Reed reveals that a majority of the legislation that he has introduced in Congress as an original co-sponsor have simply been earmark-tariffs for his campaign contributors. Republic Report conducted the following analysis:
-- Reed Provided Two Earmark-Tariffs To His Largest Campaign Contributor: Reed introduced H.R. 5487 and H.R. 5488, bills to suspend the duty on low expansion stoppers, lids, and low expansion laboratory glassware. Notably, the bills only benefit two firms in the entire country, one of which, Corning Incorporated, is Reed's largest lifetime contributor. Employees of Corning have given him $50,800 over the course of the this campaign cycle and last.
-- Fourteen Earmarks-Tariffs For A Single Lightbulb Company: Reed introduced fourteen earmarks that only benefit Philips Lighting Company, a subsidiary of the Dutch electronics firm Koninklijke Philips Electronics N.V. The company has contributed at least $1,750 to Reed's reelection campaign using its corporate political action committee. The company, which promotes Reed in videos circulated online, has spent at least $4.9 million on federal lobbying since 2009. In 2009, the executives at the firm were charged with providing bribes to government officials in Ohio.
-- Earmark-Tariffs For A Steel Company That Gave Him $6,000: Reed introduced H.R. 5467 & H.R. 5468, bills to "suspend temporarily the duty on vacuum-grade ferroniobium or ferrocolombium" and "on standard-grade ferroniobium or ferrocolombium." A disclosure filed shows that the bills would only benefit Nucor Corporation and/or Reference Metals, a Pennsylvania-based company. Nucor Corporation has given Reed at least $6,000 this campaign cycle, including one check for $1,000 on May 25 -- just over a week after he introduced these earmarks-tariffs. Another Reed earmark-tariff, H.R. 5469, would also benefit Nucor.
Reed's earmark-tariffs clearly violate the GOP earmark ban, which state that "it is the policy of the House Republican Conference that no member shall request a congressional earmark, limited tax benefit or limited tariff benefit, as such terms have been described in the rules of the House." A special duty exemption must benefit at least 10 firms to qualify for an exemption to the earmark ban. None of Reed's tariff exemptions come close to benefiting 10 companies.
In our interview with Reed, he defended the practice by claiming that his earmarks do not benefit a single company (watch above):
FANG: The Wall Street Journal reported that you were placing many tariff exemptions for manufacturers in your district. One of those, Corning Incorporated, is a contributor to your campaign. Isn't this breaking the GOP earmark ban?
REED: No, the MTBs are not earmarks. They're open to any general manufacturer. They protect local manufacturing jobs. I'll tell ya, we'll stand with any local manufacturer because its about creating jobs.
FANG: These tariff exemptions only benefit one or two firms. Some of these firms contribute to your campaign. Is that why you've place these?
REED: Oh no, absolutely not. We're dealing with sound tax policy [...] It's open to anybody, anybody that qualifies.
Reed was quick to claim that his tariff exemption bills aren't targeted earmarks. But as our analysis shows, most of Reed's tariff bills only benefit one firm. In other cases, they benefit at most two firms. Rather than "sound tax policy," these legislative items are clearly targeted gifts. Of course, any earmark supporter could claim their legislative items "create jobs" -- indeed, the infamous "Bridge to Nowhere" would have created a few construction jobs at a cost of $398 million.
The Wall Street Journal, in an expose published in May, noted that many staunch conservatives oppose the targeted tariffs championed by members like Reed. Senator Jim DeMint, a critic of earmarks, has called out the practice of earmark-tariffs, suggesting that such bills lead to corruption and an unequal playing field for the market. The deals allow corporations with the most connections to obtain preferential treatment, while forcing other businesses to "grovel for attention from politicians just to be heard."
This is Part One in a series about how members of both political parties have evaded the earmark ban to award their campaign contributors with special legislation.