Executive Branch earmarks: walking-around money for bureaucrats

The practice of congressional earmarking – Congress designating money to go to specific recipients, such as water and sewer districts or public universities – ended in 2011. This “earmark moratorium” was the result of years of pressure from anti-earmark crusaders, both inside and outside Congress.
 
The demise of earmarks was cheered by groups such as Citizens Against Government Waste, which said “the eradication of earmarks is a victory for all taxpayers, one that will shave $8.6 billion off our nation’s bloated budget.” (“CAGW Reacts to Inouye’s Statement,” January 26, 2011)
 
There are two problems with CAGW’s statement. First, the earmark moratorium did not shave one penny from the budget. The money was simply redirected to other programs.
 
Second, earmarks were not eradicated. They continued to thrive in the Executive Branch.
 
Earmarking by Presidents and other officials of the Executive Branch existed long before the congressional earmark moratorium, and it persists to this day. Most Executive Branch earmarking is done far from public view - deep within the federal bureaucracy. Unlike procedures that were followed for congressional earmarking in the years prior to the earmark moratorium, there are no requirements for the Executive Branch to publish earmarks, identify recipients, or disclose potential financial conflicts of interest.
 
Executive Branch earmarking takes multiple forms. Decisions on how and where to award discretionary grants may be politically slanted, favoring the party in power at the White House. Decisions on contracts may have a political influence, or, worse, be tainted by personal relationships between public officials and contractors. The most troubling cases are bribes or favors granted in exchange for favorable contract decisions.
 
When these issues come to light, the details aren’t pretty.
 
In 2016, a U.S. Navy contracting officer was sentenced to 72 months in prison for bribery in a case that involved him steering contracts to a defense contractor in exchange for cash, prostitutes, and other favors.
 
A 2009 Department of Justice Inspector General investigation found that an official in charge of grant decisions for the Office of Juvenile Justice and Delinquency Prevention violated ethics rules by accepting a gift from an organization that received grants from that office.
 
The same official reportedly may have used political and ideological considerations over merit-based factors when awarding grants. The Inspector General noted that merit-based factors need not be the only determinants of the grant awards, but the IG also said there was no documentation to support how grant decisions were made. Without documentation, questions of impropriety potentially overshadow those decisions.
 
Political factors in grant decisions were raised by a 2014 Associated Press analysis of “Transportation Investment Generating Economic Recovery” (TIGER) grants. Despite Republicans controlling the majority of seats in the U.S. House of Representatives, more grants were awarded by the Democratic administration to Democratic congressional districts than to Republican congressional districts, according to the AP. While there was a competitive process for evaluating grant applications, in 2013, out of the 136 applications ranked as “highly recommended,” only 33 were funded. TIGER grants with lower rankings were awarded, but there was no documentation regarding why those applications were given preference over higher-ranked applications.
 
The Executive Branch could also potentially use the leverage of potential contracts or grants to encourage support for its policies. According to the Boston Globe, officials of the New Balance shoe company said in 2016 that the Executive Branch promised them “serious consideration” for a shoe contract from the Department of Defense – if they withdrew their objections to the Trans-Pacific Partnership (TPP). While New Balance remained neutral on TPP for a time, the company renewed its opposition to the trade agreement when the contract didn’t materialize.
 
The Washington Post reported last week that the Department of the Interior issued new guidance for political appointee review of grantmaking so that financial assistance “better aligns with the Secretary’s priorities.” To be sure, any administration may promote its priorities (within authority granted by Congress), and the guidance states that it applies only to discretionary grants where there is “legal authority to direct funds for particular purposes or to particular participants.” However, the newly-developed guidance and the accompanying “Top Ten Priorities” are likely to raise questions in Congress regarding how far unelected officials within the Department might go to direct grants to recipients who align with their views – and whether those grant decisions are consistent with, or are in place of, congressional priorities.
 
What can Congress do to better exercise oversight over how the Executive Branch uses its grant-making and contract-awarding powers?

• Congress can set stronger and clearer criteria in law with regard to who is eligible for grants and how competitive awards should be made.
• Congressional committees can develop legislation and perform rigorous oversight to support the principle of merit-based decisions for contract awards.
• Congress can boost the staff and resources of agency inspectors general and the Government Accountability Office so that possible abuses are more fully investigated.
• Congress can also reclaim their constitutional power of the purse by ending the moratorium on congressional earmarks.

 
The restoration of congressionally directed spending, along with strong transparency and accountability rules for that spending, would give the people’s elected representatives, rather than bureaucrats, better say over how tax dollars are spent.