It’s a real estate developer’s sugar-plum dream: a mega-shopping mall complete with 10 Broadway-style theaters, an indoor river, a Tuscan village and a 39-story luxury hotel sheathed in green solar panels shaped like giant blades of grass. Plus as much as $1 billion in government-backed financing, thanks in part to Sen. Hillary Rodham Clinton.
Not everyone thinks the plan, known as Destiny USA and still in the early bulldozer stage, is a good idea. Many on the Syracuse City Council consider its tax breaks a waste of public money. Others fear it could damage the struggling downtown area. Others question whether all its dazzling features will ever be built.
One thing is clear, however: Destiny is a classic example of how New York’s junior senator has embraced old-fashioned pork-barrel politics, first to build power in the state, then to extend it nationwide as she becomes a leading candidate for the Democratic presidential nomination.
And to fuel her rise, Clinton has relied on the controversial funding device known as “earmarking.” The earmarks enabled her to win favor with important constituents, many of whom provided financial support for her campaigns.
In the case of Destiny, she teamed up with other New York lawmakers to secure federal backing for the private investment project. And she collected tens of thousands of dollars in campaign contributions from the developer and others associated with the project.
Nor does the Syracuse project stand alone. From the beginning of her Senate career, Clinton saw earmarks -- which enable lawmakers to bypass the normal budget process and insert narrowly drafted spending provisions directly into legislation -- as a key to funneling aid to a depressed area and building political power among normally Republican-leaning voters.
Since taking office in 2001, Clinton has delivered $500 million worth of earmarks that have specifically benefited 59 corporations. About 64% of those corporations provided funds to her campaigns through donations made by employees, executives, board members or lobbyists, a review by the Los Angeles Times shows.
All told, Clinton has earmarked more than $2.3 billion in federal appropriations for projects in her state since her election to the Senate, much of it for public works projects funded in conjunction with fellow Democratic Sen. Charles E. Schumer and others in the New York congressional delegation.
A different scale
Clinton is not the biggest earmarker in Congress; senior congressional leaders and members of the appropriations committees can and do write many more such provisions into the huge spending bills they draft. But Clinton does significantly more earmarking than most others with her relatively low level of seniority.
Clinton’s staff said she used the earmark privilege effectively for her constituents and denied any connection between her legislative action and campaign contributions.
Her record stands in contrast with others in the Senate seeking the presidency, particularly John McCain (R-Ariz.) and Barack Obama (D-Ill.). McCain, who has long opposed earmarks, does not write them. Obama has used the device, but now declines to earmark funds for private companies; he uses earmarks only to secure funds for government projects such as road building and hospital construction. Other senators seeking the presidency provide earmarks to home-state constituents and collect donations from recipients of the federal largesse. But The Times review found that Clinton does it on a different scale.
For example, in the appropriations bills that have passed the Senate so far this year, Clinton earmarked 216 separate projects for a total of $236.6 million. Christopher J. Dodd (D-Conn.) secured $112.8 million; Obama earmarked $90.4 million, and Joseph R. Biden Jr. (D-Del.) earmarked projects totaling $70.8 million.
Since Clinton arrived in the Senate, she has collected in excess of $1 million from earmark beneficiaries and their associates.
“This pattern shows that Clinton has made aggressive use of the pay-to-play earmark game,” said Keith Ashdown, research director for the Taxpayers for Common Sense, a nonpartisan research organization in Washington.
The practice of congressional earmarking has a long history. But in recent years, its use has skyrocketed, and earmarking has emerged at the center of high-profile scandals, including the one that sent former Rep. Randy “Duke” Cunningham of Rancho Santa Fe and former lobbyist Jack Abramoff, both Republicans, to prison. Those scandals involved earmarks that led to the personal enrichment of lawmakers. There is no evidence of that in Clinton’s case.
Because of the scandals, the practice of earmarking has become the subject of a heated debate among politicians, watchdog groups and good-government advocates.
Critics of earmarking object that it remains a relatively closed process that adds billions in spending directives, often over the objection of the president and Cabinet departments.
Democrats made earmark reform a priority when they took over Congress in January. The Senate passed rules making it easier to identify the authors of the once-secretive practice.
Clinton supported those basic reforms, but she and other Democratic senators running for president balked at a proposal by Obama that would have required members to disclose their proposed earmark requests, not just those that were enacted into law.
Clinton aides said she ranked high on the Senate earmark list because she made a deliberate, early decision to use the practice to help economically stagnant upstate New York. She believes in earmarks, aides say, as a way of efficiently helping her constituents and challenging priorities set by executive branch bureaucrats.
“Hillary Clinton wanted to master earmarking and be master of the internal as well as the external game of politics,” said one New Yorker who advised Clinton after her election, speaking on condition of anonymity because he was not authorized to discuss her political activities.
“She came to Washington admiring Chuck Schumer for his ability to deliver, particularly for upstate New York. Since then, both of them have been in a kind of competition, working the system furiously,” the former advisor said.
Because of her perch on the Senate Armed Services Committee, Clinton has been able to earmark $1.4 billion for defense contractors in New York state since she arrived in the Senate, including $140 million this year, according to Taxpayers for Common Sense. Her record of home-state defense earmarking on that panel is second only to that of Sen. Carl Levin (D-Mich.), who is chairman of the committee and has served in the Senate since 1979.
Clinton has raised more than $270,000 for her campaigns from defense companies with New York operations that have received federal money with her help.
Reform advocates such as McCain have been particularly critical of military earmarks, saying they allow lawmakers to replace defense priorities with personal, parochial and electoral priorities.
“The system is corrupt,” McCain said at a recent campaign stop in California. “To think anything else ignores the way in which it has spiraled out of control. . . . It is disgraceful and it has got to stop.”
Clinton spokesman Philippe Reines defends the New York senator’s additions to military spending bills.
“These defense earmarks bolster our national and homeland security, and provide our brave men and women in uniform with the resources they need to achieve their mission while keeping them safe,” Reines said.
Clinton has delivered multimillion-dollar defense earmarks to a company making improvements to bomb racks for B1 fighter jets; to a small Buffalo-area firm that provides anticorrosive coating to military vehicles; and to the Manhattan-based New School University for a defense mapping project. Individuals associated with these entities have donated to her campaign.
New School, which received $1.6 million in this year’s defense budget and $6 million previously, is particularly well-connected. Its president, former Sen. Bob Kerrey (D-Neb.), is campaigning for Clinton in Iowa. Three school trustees are among Clinton’s most prominent backers, having each raised at least $100,000 for her campaign. A former trustee is Norman Hsu, who was indicted on fraud charges last week. After Hsu’s criminal past was revealed last summer, Clinton returned $850,000 he raised for her.
All about ‘green’
Clinton also has pushed for money in a variety of nondefense bills. In Destiny’s case, Clinton helped rally support and beat back opposition to the earmarks, on which Schumer and the local congressman, Republican James T. Walsh, took the lead.
Together, they secured special funding that benefited the project in two ways. One, included in a 2005 transportation bill, provided $5 million in funding to promote access to Destiny, though that money has not yet been spent, Destiny officials say.
Clinton also helped give the project federal aid from a specially authorized program that promotes “green” construction. Destiny has already begun to use some $200 million of the $1 billion in federal bonding authority it received in return for agreeing to build and operate the project to high standards of energy efficiency.
Destiny is one of a handful of malls that requested the special $2-billion green bond earmark, which remains controversial even among environmental activists. If the mall projects proceed according to plan, the anticipated cost to the Treasury Department, which helps administer the program, would be $231 million, said Ashdown of the taxpayers research group.
In addition to solar power, the completed Destiny development is committed to embracing recycling and wind power and to avoiding fossil fuels. Because the Syracuse construction site sits on land that was once home to oil tanks, the project is considered an example of environmental rehabilitation.
Clinton backers say that she made use of this and many other earmarks as a way of speeding help to municipalities in upstate New York, an area that has lost residents and has become economically stagnant.
Syracuse has seen its population drop to 147,000 in 2000, from 221,000 in 1950, and it has lost thousands of high-paying jobs. It is also in a relatively isolated region, a four-hour drive from New York City’s metropolitan area.
Because of its isolation and its loss of industrial jobs, critics question whether the giant shopping and entertainment project makes financial sense and merits public subsidies.
Syracuse City Councilwoman Stephanie A. Miner is a leading skeptic. She had extensive conversations with Clinton detailing her doubts but she says she was unable to convince the senator that government support for Destiny is a bad idea. Miner, who is backing Clinton’s presidential bid, calls the project loaded with “incredibly fanciful ideas.”
And she calls the government backing “corporate welfare.”
Destiny’s chief executive, Michael J. Lorenz, says the project is already offering high-wage employment opportunities and has paid $100 million in fees to local governments. He said he believed that the environmentally friendly retail and entertainment center would attract visitors from long distances.
“We think there is an opportunity to bring more of those to upstate New York. . . . With a little bit of vision you can see how this area can be transformed,” Lorenz said.
He predicted the complex would become the nation’s leading “consumer destination,” drawing shoppers from all over the eastern United States. It will “attract more people, more profitably than anything ever built,” reads the promotional literature.
Lorenz’s boss, Destiny owner Robert J. Congel, is a Republican who raised more than $200,000 for President Bush’s reelection in 2004. He and his family have given $8,000 to Republican presidential candidate Mitt Romney this year. Congel has given occasionally to Democrats, often to those in a position to help his business ventures.
Congel, his family and associates affiliated with his development have donated $40,000 to Clinton’s state and national campaigns since she first ran for office in 1999.
In May, Congel co-hosted a Syracuse fundraiser for her, an event said to have raised an additional $50,000. Lobbying firms hired by Congel in connection with Destiny and other ventures also donated more than $200,000 to various Clinton campaign funds, records show.
Lorenz says that Congel began giving to Clinton before her election to the Senate and that he did so because he got to know and genuinely like the Clintons.
With the exception of McCain, the presidential candidates who are members of the Senate all raised campaign funds from earmark beneficiaries, though none came close to Clinton. Obama, for example, received $10,000 from trustees of the Shedd Aquarium in Chicago, for which he secured a federal grant.
But Obama also earned a reputation as a reformer, teaming up with the Senate’s most vociferous earmark foe, Sen. Tom Coburn (R-Okla.), to push legislation that would make earmark data more readily available to the public. And he currently declines to back any earmarks that benefit individual private companies, in part because he is concerned about the scandals that have linked legislative success with donations.
Clinton spokesman Reines said there was no connection between her earmarks and her campaign contributions. “One thing has nothing to do with the other,” he said.
Among other Democratic presidential candidates who serve in the Senate, there is a correlation between donations and earmarks for private entities, though none of the contenders have been as consistent as Clinton.
Of the two former congressional members in the presidential race, Democrat John Edwards of North Carolina made regular use of earmarks during his six years in the Senate, according to Ashdown. Edwards has since become an outspoken advocate for earmark reform; Republican Fred Thompson of Tennessee also wrote earmarks, though the practice was less common in the mid-1990s, when he was in the Senate.
Clinton’s notable earmark activity is not explained solely by the fact that she represents a populous state. The extent of her earmarking far outstrips that of Sen. Barbara Boxer (D-Calif.), for example, who represents a larger state. Boxer secured $79 million in earmarks this year, according to the taxpayers group.
Like all presidential candidates, Clinton places a premium on bundlers, people who use their networks of friends and associates to raise large sums of money. Clinton singles out people who raise $100,000 or more as “Hillraisers.”
At least eight Hillraisers are affiliated with recipients of her earmarks. One is James Flaws, chief financial officer of one of New York’s major employers, Corning Inc. Once heavy GOP donors, Corning employees have given Clinton $236,000 since 1999, including $106,000 for her presidential campaign.
“The system is broken,” said lobbyist George Hochbrueckner, a Clinton backer and former New York congressman, who represents several companies that have received earmarks with Clinton’s help. “Until it is fixed, you have got get good people elected and they’ve got to play by the rules. Right now the rules allow exactly what Hillary is doing.”
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Following the pork
Among presidential candidates who are serving in the Senate, Hillary Rodham Clinton was the most frequent user of “earmarks,” which enable lawmakers to bypass the budget process and insert narrowly drafted spending provisions into legislation to provide funding for a company, project or institution. The figures are for this year.
Sen. Hillary Clinton
Number of earmarks: 216
Amount (in millions): $236.6
Sen. Christopher Dodd
Number of earmarks: 73
Amount (in millions): $112.8*
Sen. Barack Obama
Number of earmarks: 49
Amount (in millions): $90.4
Sen. Joseph Biden
Number of earmarks: 64
Amount (in millions): $70.8
Sen. John McCain
Number of earmarks: 0
Amount (in millions): n/a
* Dodd’s total does not include spending for submarine construction backed by senators from five states.
Note: Based on data from Taxpayers for Common Sense using 12 appropriations bills that passed the Senate this year. Not all bills have been completed and signed into law. Figures do not include appropriations requested by the Bush administration that received Senate approval.
Source: Taxpayers for Common Sense