Tariff waivers open floodgates of dollars for sponsors

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Watchdog,Mark Flatten

When 65 Republican freshmen pressed House leaders to jumpstart the stalled tariff waiver approval process in April, the Democratic Congressional Campaign Committee (DCCC) blasted them for violating a ban on special-interest earmarks.

At the same time, however, DCCC chairman Rep. Steve Israel, D-N.Y., was sponsoring 18 waivers - Miscellaneous Tariff Bills (MTBs) - to benefit companies that have contributed heavily to his campaigns or that have major facilities in his district.

Israel is far from unique, according to an analysis by The Washington Examiner. At least 59 members of Congress have received almost $600,000 in total contributions since 2009 from companies that are beneficiaries of MTBs they are sponsoring.

Not all companies seeking tariff waivers spend money on campaigns. But the ones that benefit most tend to do so.

Twenty-three companies with at least 10 pending MTBs have made campaign donations over the past four years, and they account for about a third of the more than 2,000 MTBs introduced this year.

Of 72 congressmen sponsoring MTBs for those companies that gave campaign money, 59 got money from at least one of the MTB seeking firms.

Each MTB has a maximum value of $500,000 per year.

There is no way to tie campaign money directly to sponsorship of a bill, said Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense. Contributing in return for specific legislation is illegal.

Instead, influence comes via a mix of campaign giving, lobbying and the leveraging of hometown clout that comes from being a major employer in a congressman's district, Ellis said.

Earmarks directing federal spending were a favored method of rewarding campaign donors until they were banned last year. Now, MTBs create the same opportunity for abuse since a congressman must sponsor an MTB to get the tariff waiver.

"These are people that are throwing around a lot of cash and they are getting some benefit," Ellis said of the big companies benefitting most from the current MTB process.

"It's cash flowing to lawmakers who are doing things that are actually benefitting the company's bottom line. While it's almost impossible to prove a quid-pro-quo without some sort of smoking gun, it certainly puts lawmakers in a position of looking like they are dealing favors for campaign contributions," he said.

The politically active companies with MTBs have given a combined $25 million to federal campaigns since 2009, according to the latest data from the Center for Responsive Politics.

Those firms tend to have a wide swath of issues in Congress, and give money for a variety of reasons. Bayer, for instance, has 148 tariff waivers sponsored on its behalf this year, the most of any company.

Disclosure reports filed by the company list more than 50 issues it is lobbying on, including MTBs. The reports don't specify how much time and money are spent lobbing each issue.

Bayer has given $900,000 to federal campaigns since 2009, including about $109,000 to congressmen sponsoring its MTBs.

Of the 17 congressmen sponsoring bills for Bayer, only two - both senators who are not up for re-election until 2014 - have received no money from the company since 2009.

Similar splits were found with other companies. Honeywell International, for instance, gave money through its Political Action Committee (PAC) to all three members of Congress who sponsored MTBs on its behalf.

The top recipient was Israel, who sponsored four Honeywell MTBs and has received $36,000 in the last four years from the company. Honeywell also gave $30,000 to the DCCC.

Israel sponsored MTBs for two other companies that made no political donations, Leviton Manufacturing Co. and Nikon USA. Both firms are based in his congressional district.

Israel did not respond to requests for comment.

Mark Flatten is a member of The Washington Examiner's special reporting team.

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