[Congressional Record (Bound Edition), Volume 155 (2009), Part 15]
[Senate]
[Pages 20379-20382]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    HOUSE DEFENSE BILL AND EARMARKS

  Mr. McCAIN. Mr. President, I rise to talk for a few minutes about the 
actions taken by the House of Representatives yesterday when they 
passed the Defense appropriations bill. It is not a small piece of 
legislation. It provides $636 billion for defense, and it avoided one 
veto fight by stripping out funding for advanced procurement of the F-
22 fighter jet, but it chose to ignore veto threats over funding for an 
alternative engine for the F-35 Joint Strike Fighter and the VH-71--
incredibly, the VH-71 Presidential helicopter. The House bill provides 
$560 million to continue pursuing an alternative engine and $485 
million for continuation of the VH-71 helicopter. The VH-71 helicopter 
is the Presidential helicopter, which Secretary Gates has, I think very 
accurately, derided as one of the most outrageous examples of 
overspending for any system the Defense Department has ever acquired. 
The bill also provides $674 million for three C-17 cargo aircraft, not 
requested in the administration's budget. It has been determined time 
after time that there is no need for additional C-17 aircraft.
  So what did they do in return for continuation of things like a 
Presidential helicopter that costs more than a 747 and all of these 
other porkbarrel projects? Well, the House bill reduces funding by $1.9 
billion for our request for MRAPs--for MRAPs, the vehicles that are 
protecting young men and women who are fighting in Iraq and 
Afghanistan. They reduce the number from what the administration thinks 
we need--5,244--to 2,000. It is remarkable.
  But what I really wanted to talk about for a minute is the 1,100 
earmarks totaling $2.8 billion. Of those, 540, totaling $1.3 billion, 
are slated to go to specific private companies without competition. 
Remarkable--$1.3 billion. You know, the bill may have language saying 
funding should be competed, but in reality it is not the case when a 
specific company is identified in report language.
  Also incredibly, there are 70 earmarks in the bill for former clients 
of the PMA Group--the people whose offices have been raided and shut 
down. It is currently under investigation by both the Justice 
Department and the House ethics committee.
  Concerning earmark reform, President Obama said:

       Earmarks must have a legitimate and worthy public purpose. 
     Earmarks that Members do seek must be aired on those Members' 
     web sites in advance, so the public and press can examine 
     them and judge their merits for themselves. Each earmark must 
     be open to scrutiny at public hearings, where Members will 
     have to justify their expense to the taxpayer.

  None of that has happened. The earmarks in the House fail woefully in 
meeting scrutiny at public hearings. As Representative Jeff Flake--a 
man of great courage and of incredible integrity--so rightfully pointed 
out when he addressed the earmarks in the bill:

       These earmarks receive scant scrutiny by the House 
     Appropriations Committee. The committee's markup of the bill 
     lasted all of

[[Page 20380]]

     18 minutes. Given the way this bill has been earmarked, you'd 
     never know that serious ethical questions have been raised 
     about this process. Simply put, Members of Congress should 
     not have the ability to award no-bid contracts. Even worse, 
     many times the recipients of these earmarks are campaign 
     contributors. The practice has created an ethical cloud over 
     Congress, and it needs to end.

  Congressman Flake talked about the ethical cloud over Congress. We 
know about PMA. Every day, there is a new story about one of these 
earmarks. I would like to cite two quick examples.
  Mr. President, I ask unanimous consent to have printed in the Record 
an article headlined ``nextgov,'' entitled ``Software company won 
earmarked funds for work on military health records,'' and the other 
article from Politico entitled ``Exclusive: Earmark critic steered cash 
to blimp research.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                     [From NextGov, July 29, 2009]

   Software Company Won Earmarked Funds for Work on Military Health 
                                Records

                            (By Bob Brewin)

       Adara Networks, the company that is the subject of a 
     Defense Department employee's allegations that it received 
     important software code in advance of winning a sole-source 
     contract to provide hardware and software for a new military 
     electronic health record system, has only between 20 and 50 
     employees and revenues of $8 million a year, according to 
     online records. But the company has powerful friends in 
     Washington.
       Sen. Thad Cochran, R-Miss., inserted earmarks in the fiscal 
     2008 and 2009 Defense appropriations measures funding work by 
     Adara on Defense health record systems. He also has a pending 
     earmark for Adara in the 2010 Defense appropriations bill.
       According to the Center for Responsive Politics, Adara has 
     paid $240,000 in lobbying fees to Gage LLC, a consulting and 
     government affairs firm whose partners include former Sen. 
     Conrad Burns, R-Mont. The firm is headed by Burns' former 
     chief of staff, Leo A. Giacometto.
       The bulk of the fees, $160,000, went to Gage last year, 
     making Adara one of the company's biggest sources of revenue 
     in 2008. The Adara lobbying tab from Gage last year matched 
     the fee paid to the lobbying firm by VeriSign, an Internet 
     security company that had revenues of $255 million in the 
     first quarter of this year.
       According to a database of federal contract awards, Adara 
     won Defense contracts valued at $7.2 million in 2007 and 
     $13.7 million in 2008.
       Cochran's earmarks steered $4 million to Adara last year 
     for work on what was described as a ``next-generation 
     networking electronic medical records project'' and $1.1 
     million in 2009 for the Strategic/Tactical Resource 
     Interoperability Kinetic Environment (STRIKE) project. 
     Cochran has sought $10 million in Adara funding for the 
     STRIKE project in the 2010 Defense appropriations bill, which 
     is pending in the Senate.
       The STRIKE project, according to Cochran's office, is 
     designed to help the Defense Department solve problems of 
     interoperability, scalability, performance and security in 
     its medical information technology systems.
       Internal Military Health System briefings show that Adara's 
     NPX routers, which the company says are capable of moving 
     data around faster than rival products, sit at the heart of 
     the new Military Health System electronic record 
     architecture. The routers serve as a bridge between Defense's 
     AHLTA electronic health record system, the Clinical Data 
     Repository that stores more than 9 million military health 
     records, and VA's electronic health record system.
       An internal e-mail NextGov obtained shows that the Military 
     Health System tapped Adara to provide software as well as 
     hardware for a new enterprise architecture, including a means 
     of exchanging data and a graphical user interface to view 
     medical records.
       In that e-mail, Maj. Frank Tucker, chief of product 
     development for the Defense Health Information Management 
     System at MHS, charged he was directed to provide Adara with 
     software source code and documentation, which he viewed as 
     unethical, because this would give the company a leg-up in 
     any competition.
       Tucker alleged Adara was awarded a sole-source contract by 
     the Military Health System, but did not specify the 
     contract's value.
       Adara has not returned calls seeking comment from NextGov 
     for the past three days. Cochran's office did not respond to 
     a request for comment placed Wednesday.
                                  ____


                     [From Politico, July 30, 2009]

        Exclusive: Earmark Critic Steered Cash to Blimp Research

                          (By John Bresnahan)

       Rep. Pete Sessions--the chief of the Republicans' campaign 
     arm in the House--says on his website that earmarks have 
     become ``a symbol of a broken Washington to the American 
     people.''
       Yet in 2008, Sessions himself steered a $1.6 million 
     earmark for dirigible research to an Illinois company whose 
     president acknowledges having no experience in government 
     contracting, let alone in building blimps.
       What the company did have: the help of Adrian Plesha, a 
     former Sessions aide with a criminal record who has made more 
     than $446,000 lobbying on its behalf.
       Sessions spokeswoman Emily Davis defends the airship 
     project as a worthwhile use of federal funds and says it 
     could eventually lead to thousands of new jobs in Sessions's 
     Dallas-area district.
       But the company that received the earmarked funds, Jim G. 
     Ferguson & Associates, is based in the suburbs of Chicago, 
     with another office in San Antonio--nearly 300 miles from 
     Dallas. And while Sessions used a Dallas address for the 
     company when he submitted his earmark request to the House 
     Appropriations Committee last year, one of the two men who 
     control the company says that address is merely the home of 
     one of his close friends.
       Jim G. Ferguson IV--the younger half of the father-son team 
     behind Jim G. Ferguson & Associates--told POLITICO that he 
     and his father are trying to build an airship with a ``high 
     fineness ratio'' that can be used in both military and 
     civilian applications.
       Fineness ratio is the technical term for the relationship 
     between an airship's length and its diameter; the higher the 
     fineness ratio, the longer and more slender the airship is. A 
     blimp with a very high fineness ratio could fly faster and be 
     able to stay aloft longer--the holy grail for airship 
     designers during the past century.
       Yet Ferguson acknowledged that neither he nor his father 
     has a background in the defense or aviation industries, nor 
     any engineering or research expertise.
       A search of publicly available records shows no history of 
     the Fergusons ever being involved with the airship industry 
     other than their attendance at a February 2005 Pentagon 
     conference on the subject.
       Jim G. Ferguson IV said in an interview that he and his 
     father ``were business people'' and had acquired the patents 
     for building an advanced airship prototype. He said that the 
     two men are playing a supervisory role in the project and 
     ``have obtained world-class experts to work for us.''
       According to a statement that Sessions included in the 
     Congressional Record last September, slightly more than half 
     of the $1.6 million earmark was to go toward research and 
     engineering costs. The remainder was for overhead and 
     administrative costs.
       ``This particular project is focused on study and analysis 
     of the high fineness ratio multimission airship for 
     implementation and deployment in support of the persistent 
     [Defense Department] wide shortfall in intelligence, 
     surveillance and reconnaissance capability,'' Ferguson said 
     in a statement.
       The elder Ferguson declined to talk with POLITICO. His son 
     would not provide details on his professional career but did 
     say that he first came to Washington in 1991 to work in the 
     Transportation Department under Secretary Samuel Skinner. He 
     then did advance work for the White House when Skinner became 
     White House chief of staff under President George H. W. Bush.
       On Federal Election Commission forms, Ferguson's occupation 
     has been listed at various times as lobbyist, rancher or 
     self-employed investor. When asked about his activities since 
     the first Bush administration, Ferguson said he was ``just 
     working, doing a bunch of different stuff.''
       He has also donated money to Sessions and other 
     Republicans. FEC records show that Ferguson contributed 
     $5,000 to Sessions's leadership PAC in October 2007. Overall, 
     Ferguson and his father have given $18,500 to GOP lawmakers 
     over the past six years.
       Ferguson declined to describe his relationship with Plesha.
       ``I've known him for a long time,'' Ferguson said. ``As you 
     know, [Washington] is a small town.''
       Likewise, Plesha would not comment about his work with the 
     Fergusons or about any interactions he may have had with 
     Sessions or his office concerning the earmark.
       ``As a policy, I never discuss anything regarding my 
     clients other than what is already publicly available or 
     required to be disclosed by law--especially for a client such 
     as this where their technology is very much sought after by 
     the larger defense and corporate shipping firms,'' Plesha 
     said in a statement provided to POLITICO.
       In 1997--before going to work for Sessions--Plesha was 
     arrested for illegal possession of a handgun in Washington, 
     after he shot a man who was burglarizing his apartment, 
     according to court documents. Plesha claimed he had acted in 
     self-defense, but the burglar said Plesha shot him three 
     times in the back as he was running away. Plesha pled guilty 
     to the handgun charge, was sentenced to 18 months' probation 
     and ordered to do 120 hours of community service.
       Within a year, he was working as a campaign manager for 
     Republican House candidate Charles Ball, who was running 
     against then-Rep. Ellen Tauscher (D-Calif.).
       In that campaign, the FEC has said that Plesha created a 
     fake Democratic committee to attack Tauscher. The FEC said 
     the committee sent out 40,000 letters and made 10,000

[[Page 20381]]

     phone calls to Democratic voters in Tauscher's district just 
     prior to the 1998 midterm elections suggesting that 
     Democratic Rep. George Miller was opposing Tauscher's 
     reelection.
       But Miller was, in fact, backing Tauscher. The FEC launched 
     an investigation. And in a 2004 news release, the FEC said 
     that Plesha had not only ``authorized and distributed the 
     fabricated letters and calls'' but also ``knowingly made 
     false statements to the FEC'' about them, ``denying 
     involvement in or knowledge of this scheme.''
       According to the FEC and court documents, Plesha pled 
     guilty to lying to investigators in the case. He was fined 
     $5,000, placed on three years' probation and ordered to do an 
     additional 160 hours of community service, according to 
     federal court documents. He also entered into a 
     ``conciliation agreement,'' under which he was to pay a 
     $60,000 civil penalty, the FEC said.
       Lobbying disclosure records show that, beginning in 
     November 2005, Ferguson and Plesha lobbied on behalf of 
     Sphere Communications, a division of NEC Corp., the Japanese 
     telecommunications giant. Plesha also worked for a time for a 
     San Francisco-based defense contractor whose employees, FEC 
     records show, had contributed heavily to Sessions and his 
     PAC.
       By 2006, lobbying disclosure forms show that Plesha was 
     working for the Fergusons. The records show that he collected 
     $51,400 in fees from the Fergusons during the last six months 
     of 2006; nearly $292,000 more in 2007; and $64,500 in 2008.
       The records show that the Fergusons are, by far, Plesha's 
     most lucrative lobbying clients.
       Sessions's office said Plesha wasn't given any special 
     access to his former boss.
       ``His role is clear: He and his client presented a position 
     (i.e., briefing) to the congressman and his staff,'' said a 
     Sessions aide. ``As with any project request, Congressman 
     Sessions evaluates the merits of the project and accordingly 
     makes a decision to either support or decline the request. 
     Based on the project's represented merits, . . . Sessions 
     decided to submit the request to the Appropriations Committee 
     for its review and determination.''
       And the Texas Republican still believes in the project, his 
     staff said.
       ``Based on briefings that Congressman Sessions and his 
     staff have received, projected applications of the technology 
     include military surveillance, fuel-efficient military cargo 
     transportation (especially into areas without adequate 
     infrastructure) and missile defense,'' Davis, the 
     congressman's spokeswoman, said in a statement.
       Davis also noted that Sessions has supported a moratorium 
     on all earmarks since the start of the 111th Congress, after 
     the earmark for the Fergusons was approved.

  Mr. McCAIN. Quoting from the first article:

       Adara Networks, the company that is the subject of a 
     Defense Department employee's allegations that it received 
     important software code in advance of winning the sole-source 
     contract to provide hardware and software for a new military 
     electronic health record system, has only between 20 and 50 
     employees and revenues of $8 million a year. But the company 
     has powerful friends in Washington. Senator Thad Cochran . . 
     . inserted earmarks in the fiscal 2008 and 2009 Defense 
     appropriations measures funding work by Adara on Defense 
     health record systems. He also has a pending earmark for 
     Adara in the 2010 Defense appropriations bill.
       According to the Center for Responsive Politics, Adara has 
     paid $240,000 in lobbying fees to Gage LLC, a consulting and 
     government affairs firm whose partners include former Senator 
     Conrad Burns, R-Montana. The firm is headed by Burns' former 
     Chief of Staff, Leo A. Giacometto. The bulk of the fees, 
     $160,000, went to Gage last year, making Adara one of the 
     company's biggest sources of revenue in 2008. The Adara 
     lobbying tab from Gage last year matched the fee paid to the 
     lobbying firm by VeriSign, an Internet security company that 
     had revenues of $255 million in the first quarter of this 
     year.
       According to a database of Federal contract awards, Adara 
     won defense contracts valued at $7.2 million in 2007 and 
     $13.7 million in 2008. Cochran's earmarks steered $4 million 
     to Adara last year for work on what was described as a 
     ``next-generation networking electronic medical records 
     project'' and $1.1 million in 2009 for the Strategic/Tactical 
     Resource Interoperability Kinetic Environment Project. 
     Cochran has sought $10 million in Adara funding for the 
     STRIKE project in 2010.
       An internal e-mail NextGov obtained shows that the military 
     health system tapped Adara to provide software as well as 
     hardware for a new enterprise architecture, including a means 
     of exchanging data and a graphical user interface to view 
     medical records. In that e-mail, Major Frank Tucker, chief of 
     product development for the Defense Health Information 
     Management System at MHS, charged he was directed to provide 
     Adara with software source code and documentation, which he 
     viewed as unethical because this would give the company a leg 
     up in any competition. Tucker alleged Adara was awarded a 
     sole-source contract by the Military Health System, but did 
     not specify the contract's value.

  There should be a full investigation of that.
  Quoting from the Politico story:

       Representative Pete Sessions, the chief of the Republicans' 
     campaign arm in the House, says on his Web site that earmarks 
     have become ``a symbol of a broken Washington to the American 
     people.'' Yet in 2008, Sessions himself steered a $1.6 
     million earmark for dirigible research to an Illinois company 
     whose president acknowledges having no experience in 
     government contracting, let alone in building blimps. What 
     the company did have: the help of Adrian Plesha, a former 
     Sessions aide with a criminal record who has made more than 
     $446,000 lobbying on its behalf.
       But the company that received the earmarked funds, Jim G. 
     Ferguson & Associates, is based in the suburbs of Chicago, 
     with another office in San Antonio--nearly 300 miles from 
     Dallas. And while Sessions used a Dallas address for the 
     company when he submitted his earmark request to the House 
     Appropriations Committee last year, one of the two men who 
     control the company says that address is merely the home of 
     one of his close friends.
       . . . Ferguson acknowledged that neither he nor his father 
     has a background in the defense or aviation industries, nor 
     any engineering or research expertise.

  Finally, it goes on:

     . . . more than half of the $1.6 million earmark was to go 
     toward research and engineering costs. The remainder was for 
     overhead and administrative costs.

  This is the result--and there are myriad examples--of this earmarking 
which goes on and on in this year's Defense appropriations bill from 
the House, and there will be more from the Senate. There are 1,102 
earmarks. We can't do that. We have to stop. The American people are 
very tired of it.
  Let me remind my colleagues again about PMA, of which there are some 
70 earmarks. The PMA Group was a DC lobbying firm with deep ties to 
Capitol Hill and a reputation for securing lucrative earmarks for its 
clients, especially defense earmarks. It boasted more than $15 million 
in revenue last year. PMA Group clients reportedly received $300 
million in defense earmarks for fiscal year 2008 and $317 million for 
fiscal year 2009. PMA Group and its clients spread around a lot of 
campaign contributions in an attempt to curry favor with lawmakers. 
According to one report, the firm had been credited with $1.8 million 
in contributions since 2001, and that is just the members of the 
Defense Appropriations Committee.
  Last November, the Federal Bureau of Investigation raided PMA's 
offices and the home of its founder, Paul Magliocchetti. According to 
news reports, prosecutors were initially focused on whether Mr. 
Magliocchetti used a Florida wine steward and a golf club executive as 
a front to funnel illegal donations to lawmakers. The Washington Post 
examined campaign contributions reportedly given by employees of the 
PMA Group and found listed in donor records ``several people who were 
not registered lobbyists and did not work for the lobbying firm,'' 
including a 75-year-old California man who had never even heard of the 
firm.
  Since then the Department of Justice has raided the offices of a 
number of PMA clients and their business partners. One former PMA 
client is accused of giving kickbacks to an ex-Air Force contracting 
official. A Federal grand jury reportedly subpoenaed records from one 
U.S. Representative's congressional and campaign offices, and the FBI 
is interviewing his staffers.
  It upsets my colleagues when I talk about corruption in earmarking. I 
know it is very painful. I do not question the integrity of any of my 
colleagues. But when something like this PMA situation goes on, the 
stories are myriad of this influence of special interests at a time 
where we have nearly 10 percent unemployment in the United States of 
America, people not able to stay in their homes, people not being able 
to keep their jobs. If it was ever unacceptable, which it always was, 
it certainly is unacceptable now.
  At some point, the Defense appropriations bill will come to the floor 
of the Senate. If it is anything like the Defense appropriations bill 
the House of Representatives passed yesterday, we are going to have a 
long process because we have to bring this practice to an end.

[[Page 20382]]

  During the campaign, the President of the United States said we would 
review every appropriation line by line and do away with those that 
were unnecessary and unwanted and a waste of the taxpayers' dollars. 
There is no greater opportunity than there is now.
  I appreciate the President's involvement in ending production of the 
F-22, his involvement in saying the alternate engine is unsustainable 
for the F-35--continued billions of dollars of funding. But the 
earmarks are also billions of dollars of waste of the taxpayers' 
dollars. The earmarks are what bred corruption and the reason we have 
former Members of Congress residing in Federal prison. It has to be 
stopped. No contract should be allowed on a noncompetitive basis to be 
appropriated by the Congress of the United States.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, it is my understanding we are in a period of 
morning business.
  The PRESIDING OFFICER. That is correct.

                          ____________________