Published: November 11th, 2007 06:55 AM
Last Modified: December 21st, 2007 07:53 AM
WASHINGTON -- As chairman of the House transportation committee, Alaska Congressman Don Young flew at least three times to upstate New York aboard a jet owned by Robert Congel, an ambitious shopping mall developer seeking federal highway money.
So they formally invited ideas for addressing the highway's future needs.
The winning concept, submitted by a coalition of more than three dozen Virginia and national road-building, design and engineering firms, called for doubling the size of the interstate by adding four lanes solely for toll-paying trucks along the highway's entire 325-mile Virginia segment.
What followed offers a glimpse of how much money in campaign contributions can flow to a member of Congress willing to champion a congressional earmark, especially one that might conflict with state transportation policy.
The cost of the proposed toll road, in a state with huge demands for relieving traffic congestion in northern Virginia, was a nonstarter for state officials: $8 billion to $13 billion.
So the coalition, known as STAR Solutions, turned to politics, seeking earmarked funds to jump-start the I-81 project. It was well positioned with the Republican Congress, having retained the services of lobbyist and strategist Randy DeLay, brother of former House Majority Leader Tom DeLay, R-Texas.
They also fattened the campaign wallet of the man in the best position to help them -- Alaska Congressman Don Young, chairman of the House Transportation Committee -- with more than $240,000 in campaign contributions.
Executives and their spouses from many of the 40 companies in STAR Solutions -- among them subsidiaries of Halliburton Co., Koch Industries and Ashland Oil Co. -- donated $110,000 to Young's campaign from 2002, when the group submitted its proposal, through 2005. The firms' political action committees contributed another $93,000. Koch's and Ashland's PACs gave $37,900 to Young's Midnight Sun leadership PAC.
One donor, Maura Dunn, chief operating officer of Halliburton subsidiary KBR Inc., was listed in Young's campaign finance report to the Federal Election Commission as a "homemaker."
Some of the money was collected at Young fundraisers -- at an annual golf tournament at the Robert Trent Jones Golf Club in Gainesville, Va., and at an event he hosted at the elite Homestead resort in Hot Springs, Va., whose room rates can be as much as $700 per night and which boasts three championship golf courses.
In a House-Senate conference committee in the spring of 2005, Young inserted $100 million for a pilot truck toll-lane project on I-81 in Virginia, said Keith Ashdown, chief investigator for the nonprofit group Taxpayers for Common Sense.
But there was a catch. Federal law requires states to conduct environmental studies before altering an interstate highway.
Virginia Transportation Secretary Pierce Homer said he didn't ask for an earmark for 325 miles of truck lanes. He said he phoned Young, and the congressman agreed that, if the study rejected the toll lanes, Virginia could use the money to build "climbing lanes" so that slower-moving trucks could move to the side on two dangerous, uphill sections of I-81.
The study ultimately concluded that adding four truck lanes wouldn't solve the problem, because "there would be too much space for trucks and not enough space for other vehicles," state transportation department spokeswoman Laura Southard said.
Christopher Lloyd, a representative of STAR Solutions, said that the four-lane idea was just "a concept" and that his group will work with the state on whatever solution it pursues for I-81.
As for all the campaign donations, he said executives for the group had supported Young financially "before, during and after the I-81 selection process."
In 1985, he, his partners and their families funneled $776,967 into a city council election in Poughkeepsie, N.Y., to candidates who favored his proposed shopping mall, swamping the opposition, a New York Commission on Government Integrity found. The panel later reported that Congel's Pyramid Management Co. may have broken state election laws in clearing the way to build a 1.1 million-square-foot shopping center.
A generation later, Congel had a far bigger vision when he forged a relationship with Alaska Congressman Don Young, then the powerful chairman of the House Committee on Transportation.
Congel wanted to build a glittering, $2.2 billion shopping and entertainment complex to be known as Destiny USA, which would be North America's biggest mall. Beginning in 2003, campaign finance reports show, he courted the man who controlled the federal transportation purse strings, flying Young at least three times aboard Cessna Citation X jets to Syracuse, N.Y., where Congel likes to wine and dine politicians.
Not far from there, Young, an avid hunter, got a taste of "Savannah Dhu," Congel's 5,000-acre private nature preserve. The reforested spread features a conference center, an extravagant nine-bedroom lodge and a hunting and fishing haven that its Web site touts as "an outdoorsman's paradise."
Gourmet chefs prepare the boar, elk, deer, fish and migrating waterfowl taken on the preserve, which abuts the Montezuma National Wildlife Refuge.
Young was among at least a dozen members of Congress whom Congel hosted at Savannah Dhu.
Young and Congel declined to respond to written questions about their relationship or about Young's stay at the nature preserve.
In late 2003, Congel held fundraisers for Young and at least four other transportation committee members and donated to a sixth member, since-retired New York GOP Congressman Sherwood Boehlert. Congel also channeled upward of $100,000 to New York's two Democratic senators, Charles Schumer and Hillary Clinton, both in positions to secure earmarks for state projects.
Boehlert, who recalled spending a night at Savannah Dhu before a speaking engagement, said Congel is "doing what just about everybody else who's in the business world and wants to accomplish something does. They're looking for a way to accomplish the most with the least. They're looking for every bit of governmental assistance they can get."
Young netted at least $33,000 from Congel, his family members, employees and business associates, much of it at a November 2003 Savannah Dhu fundraiser. Young also got $7,645 from Congel's Green Worlds Fund PAC, apparently so named because Congel is financing solar panels and other forms of renewable energy at his Syracuse mall with low-interest "Green Bonds" arranged by friends in Congress.
In 2005, Young helped set up a congressional briefing in which Congel and his team pitched digital construction technology for use in rebuilding the hurricane-ravaged Gulf Coast. Spurred by Republican Rep. James Walsh, who represents the Syracuse area, Young approved $5 million in the highway bill for Destiny USA to develop the digital technology further and $5 million more to redesign Interstates 81 and 690, which pass near the Destiny site.
Congel had his eye on bigger bucks: designation by Congress as a "Project of National and Regional Significance," which would have locked up tens of millions of dollars. Despite support from Walsh and New York GOP Rep. Tom Reynolds, however, Destiny USA wasn't picked.
Although last year's election relegated Young to a lower profile in the Republican minority, Congel hasn't forgotten him. Young's campaign manager, Steve Dougherty, said Congel plans to host a fundraiser for Young sometime in November.
With Young's help, Congel got millions of dollars to boost his dream of building the largest mall in North America. The veteran Republican congressman got something, too: more than $33,000 in political contributions from Congel, his family and his associates.
For Young, the Congel story was hardly unusual. Time after time in recent years, Young approved millions of dollars for highway projects for people who in turn fattened his campaign treasury.
With money pouring in from transportation interests, Young amassed $6.5 million in political contributions from 2001 to 2005. Facing weak political opposition at home, he didn't need much for his campaign. Instead, Young tapped his campaign fund to travel the country, often lavishly and in corporate jets, to meet with more developers and view their proposed highway projects.
Now Young's campaign donations are going for another purpose. He's spent nearly $450,000 on criminal defense lawyers so far this year after he learned of an FBI investigation into his relationships with political donors, who include a Florida real estate developer seeking a highway ramp near his undeveloped land.
Young has plenty of company in Congress when it comes to parlaying federal contracts and grants into campaign donations. But few have taken richer advantage of a controversial process called "earmarking."
During his six years as chairman of the Transportation and Infrastructure Committee, Young transformed the massive 2005 highway spending bill by dramatically increasing the use of earmarks, which set aside billions in federal money for pet projects.
With Young in charge, the number of earmarks more than tripled -- from 1,850 projects worth $9.35 billion in 1998 to 6,371 projects valued at $24.2 billion in 2005. Federal auditors have found that thousands of these new earmarks weren't priorities for state transportation officials.
A McClatchy Newspapers investigation has found just how lucrative Young's earmarks were:
• Of the $6.5 million in contributions that Young collected -- $5.5 million for his campaign and $1 million for his leadership political action committee, or PAC -- about 85 percent came from people who didn't live in Alaska and couldn't vote for him.
• While the number of donors who got earmarks is hard to determine, an analysis of Young's campaign finance reports show that beneficiaries of just seven earmarks with a total price of $259 million gave the veteran congressman at least $575,000. None of the projects was in Alaska.
• As hundreds of lobbyists sought to influence the massive highway-spending bill from 2003 to 2005, Young accepted at least 20 trips aboard private aircraft provided by corporations currying favor with the powerful congressman. He also stayed at such luxury hotels and resorts as the posh Four Seasons hotel in Newport Beach, Calif., MGM's five-diamond Bellagio casino in Las Vegas and the Lodge and Ranch at Chama, N.M., which offers pricey hunting and fly-fishing excursions.
Young, 74, who has been Alaska's only member of the House of Representatives for 35 years, declined to be interviewed for this story, to comment about specific earmarks or to answer questions about his political donors.
In a written statement, he said that if members of Congress didn't earmark funding, "then federal agencies (would) decide where the money is best spent in that district." He didn't say why that system would be worse than Young himself deciding the fate of projects across the country.
Young's financial relationships with those seeking specific earmarks have created some unseemly appearances. For example, dozens of transportation lobbyists fly to Alaska each year for a fundraiser, where they join Young for a day of salmon fishing.
One aspect of the pending FBI investigation centers on Young's role in securing a $10 million earmark in the $286.5 billion highway bill passed in 2005. The earmark, which was inserted in the bill after final passage by the House of Representatives and Senate, was for a study of a highway ramp sought by a Florida real estate developer. At a fundraiser while on a trip to Bonita Springs, Fla., to inspect the site, Young received more than $40,000 in donations.
The FBI also has looked into Young's connections to an indicted Wisconsin trucking executive who benefited from the provisions in the highway bill, and into his relationship with executives of Veco Corp., the Alaska oil field services company that has been Young's top source of campaign donations over the past two decades. Two top Veco officials have pleaded guilty to bribing Alaska state legislators and using company money to make illegal campaign contributions to state and federal candidates.
Young's legal problems reflect a rise in political corruption investigations by the Justice Department in recent years, which have focused on the connections between campaign contributions and the funding of pet projects through earmarks. So far, more than a dozen members of Congress have come under federal scrutiny.
Ronald Levin, a law professor at Washington University in St. Louis who has studied congressional ethics, called Young's issuance of earmarks benefiting donors who weren't his constituents "unusual" and said that it "bears scrutiny."
One question, he said, is "did he arrange favors for them because they were contributors?" Even if there's no evidence that Young exchanged legislative favors for donations, Levin said that the House ethics committee members would have to decide "whether they can identify some act or conduct on his part that sets him apart from conduct generally tolerated."
Daniel Lowenstein, a University of California, Los Angeles, law professor who's written extensively about election law, declined to comment on Young's fundraising but called the earmarks system "a serious problem" because some campaign donors "are or seem to be ... interested in very specific projects."
The surge in earmarking has been a bonanza for Alaska. Young and Republican Sen. Ted Stevens, at the time the chairman of the Senate Appropriations Committee, played central roles in landing $1 billion in earmarks for Alaska, the equivalent of about $1,500 for every man, woman and child in the state. It was the third highest amount in the nation.
Among the earmarks: $449 million for what critics have ridiculed as two "bridges to nowhere" -- one in Ketchikan and one across Knik Arm in Anchorage formally named Don Young's Way. Alaska Gov. Sarah Palin, also a Republican, last month refused to use any more money for the Ketchikan project, redirecting it for other purposes.
In his statement to McClatchy Newspapers, Young said that Alaska is "more than twice the size of Texas" and "a relatively new state that did not start building its infrastructure until World War II," while "most other states have had a few hundred years to do what we've been trying to do." He said it would have been "irresponsible" for him, as chairman, to pass over less populated states that otherwise "would be overlooked by the Washington bureaucracy."
But in the wake of a deadly interstate highway bridge collapse in Minnesota, U.S. Transportation Secretary Mary Peters said in September that Congress' "addiction to earmarks" is diverting funds urgently needed for bridge and road maintenance and to address mounting traffic congestion in big cities.
Unlike today's rules, which require House members to disclose their sponsorship of earmarks, many of the 2005 transportation earmarks were attached to the five-year spending bill in a secretive, closed-door process that left few fingerprints.
Helping move the bill along were 1,117 lobbyists who were paid tens of millions to seek earmarks on behalf of corporations, institutions and even state and local governments, says the nonprofit watchdog group Taxpayers for Common Sense. Among the lobbyists were several former Young aides.
While some congressmen and senators publicly touted earmarks to their constituents, the rationale behind many earmarks is difficult to determine. State and federal transportation officials are loath to criticize publicly those earmarks that they didn't seek for fear of angering Young and other senior legislators.
About 5,600 of the earmarks, worth $17 billion, ordered specific uses for money that states were due to receive under a formula based on size and population. In a recent audit, the U.S. Transportation Department's Office of Inspector General quoted Federal Highway Administration officials as saying that many of those earmarks went for projects "that would not have been high-priority candidates for funding" by state officials.
"They paved the legislation with political pork, ignoring real transportation needs," charged Keith Ashdown, chief investigator for Taxpayers for Common Sense. He pointed to Cincinnati's Brent Spence Bridge, which needs to be rebuilt but received only a few million dollars.
"The 150,000 people who drive over Brent Spence every day is likely to be the number of people that drive over one of the Alaska 'bridges to nowhere' in a year," Ashdown said.
More than 700 other earmarks, costing $6.9 billion, drew even bigger jeers from policy watchdogs because they didn't undergo the kind of rigorous cost-benefit analyses that states usually are required to perform to receive federal highway money.
In addition to the Florida highway ramp, Young's earmarks include:
• Two $5 million allotments benefiting Syracuse, N.Y., shopping mall developer Congel, one for a state study of transportation projects near where Congel hopes to build North America's largest mall and one to develop digital construction technology. Congel, his employees, family members and friends donated more than $33,000 to Young.
• $100 million sought by road builders from Virginia and elsewhere to kick-start a multibillion-dollar project to add four truck lanes to a 325-mile span of Interstate 81, a plan that was scaled back dramatically after an environmental review. Executives of many of the 40 companies backing the plan, their family members and political action committees gave Young $237,000.
• $32 million for five central California projects backed by Young's friend and colleague, then-Republican Congressman Richard Pombo, including a highway interchange in Pombo's hometown of Tracy, where he and his family had extensive real estate holdings. Young collected more than $34,000 at a San Jose area fundraiser in April 2004. Road builder URS Corp. helped pay for a dinner reception; Young's campaign finance report showed he reimbursed the company $845 for the cost.
Young's spokeswoman, Meredith Kenny, said recently that as chairman, the congressman traveled far and wide to view proposed highway and transit projects. "If he's going to fund a project, he wants to see it," she said.
During a standoff with the White House that delayed the transportation bill's passage by nearly two years -- Young wanted to spend more money than the administration was willing to allow -- he crisscrossed the country, often accompanied by his wife, Lu (for whom he named the highway bill SAFETEA-LU). He traveled to Arizona, Arkansas, California, Florida, New Jersey, Texas, Washington and Puerto Rico.
Between 2003 and 2005, Young rode in jets owned or leased by companies seeking earmarks. At the time, a House rule allowed congressional campaigns to reimburse the firms the equivalent of first-class airfare instead of the actual cost for the more expensive private flight.
Young's campaign aides frequently scheduled fundraisers to coincide with his visits, and the delays in passage of the highway bill allowed a second round of fundraisers in a new campaign cycle.
Young also helped Arkansas' congressional delegation procure a $72 million earmark for a highway link between Pine Bluff and a future Interstate 69. Making two trips to Arkansas -- one in each election cycle -- he collected $60,000 in January 2004 and $147,000 in March 2005.
Young also got at least $24,000 from executives of Arkansas-based Wal-Mart Stores and its PAC. Wal-Mart, which hired former Young legislative director Levon Boyagian to lobby on its behalf, benefited from a $35 million earmark for widening a road in front of its Bentonville, Ark., headquarters.
Florida Transportation Secretary Stephanie Kopelousos, whose agency opposes earmarks, said the funds usually amount to no more than seed money. States then must come up with millions of dollars to finish low-priority projects. Some cities and counties whose projects were rejected in the resulting budget squeeze then hire their own lobbyists to push for congressional earmarks, she said.
Ronald Utt, a Heritage Foundation scholar who has studied wasteful spending in transportation bills, said many earmarked projects are of such low priority that billions of dollars in earmarked money has gone unused.
Until the late 1990s, the U.S. Transportation Department issued reports listing earmarks that were never used, he said, but that practice was ended because Congress didn't want the results known.
"What they were finding was that about half the earmarks that were authorized by Congress were never done," Utt said, calling that a logical conclusion. "Usually the reason you have an earmark is that these are projects that would never get done under normal circumstances."
Among earmarks' chief defenders is the House committee's new Democratic chairman, Jim Oberstar of Minnesota, who waited 40 years as a congressional aide and congressman for his turn in the chairman's seat. Oberstar believes that ending earmarks wouldn't remove politics from the process, but only cede to state governors and transportation commissioners decisions over how to spend federal tax dollars, an aide said.
A number of fiscal conservatives in Congress are pushing for reforms to rein in earmarking, and President Bush has used his veto power to protest earmarks, which he says reflect a lack of "fiscal discipline."
But outlawing them will be tough, as exemplified by the attitude of City Commissioner Ben Nelson of Bonita Springs, Fla., who supported Young's controversial earmark for a highway ramp study. Nelson said he wouldn't "pass moral judgment on the way the process works" in Congress.
"The city of Bonita Springs is supportive of the earmark," he said, "regardless of how 'dirty' it is."
Greg Gordon is a reporter in the Washington bureau of McClatchy Newspapers, and Erika Bolstad covers Alaska issues from Washington for McClatchy and the Daily News. E-mail them at ggordon@mcclatchydc.com and ebolstad@adn.com
SOME PROJECTS YOUNG HELPED
IN VIRGINIA: Road builders and others pushing a multibillion-dollar truck highway project gave Rep. Don Young more than $230,000 in campaign contributions. Young supported spending $100 million to kick-start the project.
IN SYRACUSE, N.Y.: More than $33,000 in campaign contributions came to Young from a real estate developer, his family and friends. Young supported $10 million in federal spending to benefit the developer, including paying for a traffic study where he hopes to build North America's largest mall.
IN ARKANSAS: More than $200,000 came to Young from Arkansas fundraisers and Arkansas-based Wal-Mart executives. Young helped fund a $72 million highway project between Pine Bluff and a planned interstate, and $35 million for widening a road leading to Wal-Mart's Bentonville headquarters.
IN FLORIDA: Developers met with Young and donated more than $40,000. Young earmarked $10 million to study an offramp.
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