By R. Jeffrey Smith Washington Post Staff Writer
Monday, March 15, 2010

Twice in recent years, House Appropriations Committee Chairman David R. Obey (D-Wis.) helped obtain earmarks totaling $3.2 million for a home-state university to study how to make military jet fuel from plants. Standing behind that nonprofit work, however, is a for-profit Chicago firm that often partners with universities to reap part of their earmark benefits.

Similar collaborations between private companies and nonprofits will pose tricky questions under a policy intended to end earmarks to profit-making firms, which Obey helped shepherd through the House Democratic caucus last week. That new rule was widely touted as a crackdown, but in reality it could leave untouched almost 90 percent of typical earmarks.

The reason is that, like Obey’s earmarks, most of the billions of dollars in earmarks approved by Congress each year involve handing out funds to state or local agencies or to nonprofit institutions, which then dole out part of the money to private contractors.

As a result, the new Democratic rule, and a proposal by House Republicans to stop all earmarks for one year, are unlikely to significantly curb Washington’s booming earmark industry, experts said. Steve Ellis of Taxpayers for Common Sense, a nonprofit that has criticized earmarking, called the new limits important but compared them to “squeezing a balloon.” Without more comprehensive restraints, he said, the money flow could simply move to new pathways.

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