Rep. Hal Rogers: One Member Who Never Lost His Appetite for Pork (Part II)

David Williams

June 1, 2012

(This is the second part in a two-part series on Rep. Hal Rogers [R-Ky.].  Yesterday’s  blog exposed Rep. Rogers and his back door earmarks through the Department of Defense) Yesterday, the Taxpayers Protection Alliance (read blog here) showed that Rep. Hal Rogers (R-Ky.) has found ways to funnel projects into his district despite Congress’ earmark ban.  While the word “earmark” may have been struck from Washington’s vocabulary, it doesn’t mean the practice of “earmarking” money to a member’s district has ended.  Like the military drip pan example from yesterday, this one also involves a company in Rogers’ district, this time a uranium enrichment plant.  The United States Enrichment Corp. (USEC) has two facilities (one in Kentucky and one in Ohio) that were on the brink of failure without further government funding.  To that end, as Energy and Environment News (subscription required) reported, USEC itself freely admitted to the Department of Energy (DOE) that it “was considering halting its enrichment operations at the plant later this year because it doesn’t have enough commercial business to warrant operations…” [Emphasis added].

The source of funding for a uranium enrichment facility may not attract much interest, but the issue deserves much attention and concern.  At the heart of the matter is an attempt by Rep. Rogers to save roughly 1,200 jobs in his district by securing additional federal funding for the beleaguered plant.  While he justifies his request by citing national security concerns, in reality these federal dollars will be used for commercialization for a product that the market – by the company’s own admission – has not demonstrated a need for at this time. 

Fortunately, some members correctly identified this action for what it is – a $150 million backdoor “earmark” included in the National Defense Authorization Act. Rep. Ed Markey (D-MA) appropriately noted that the “USEC [the company that owns plants] is supposed to stand for United States Enrichment Corporation, but it has become the United States Earmark Corporation.”  He continued by noting that there is “simply no reason to bail out this near-bankrupt company.” 

As a recent article in USA Today explained that, “The provision in the defense programs bill doesn’t name USEC and therefore isn’t an earmark under new House rules barring members from steering pork to their districts. But it does make the money available for ‘domestic national-security-related enrichment technologies,’ and USEC subsidiary United States Enrichment Corp. is the sole American-owned provider of enriched uranium to the government.”

Similar to the example from earlier this week, the provision that pertains to uranium enrichment uses language that narrowly defines the type of company that is able to enter the bidding process.  The wording is crafted in such a way to ensure that only one company can compete for the contract.  Additionally, the lack of competition in a bidding process inevitably leads to inflation and higher prices.  Absent competitive bidding, there’s no reason a company should work to offer the best service or product at the lowest price possible.  This leaves the purchaser – in this case the government – vulnerable to price inflation and mediocre products.  But apparently by some members’ calculations, it’s a worthy sacrifice – waste of money – if it means protecting jobs in their district.

Earlier this year, Rogers drafted a bill to secure funding for the USEC plants. 

After his initial legislative attempts fizzled, Rogers and other members of the Kentucky and Ohio delegations (chief among them Sen. Rand Paul and Speaker of the House John Boehner) met with Energy Secretary Chu to plead their case to keep the doors of the enrichment facilities open.  The DOE is currently considering approval of a $2 billion loan guarantee for the company.  At best it’s ironic that while these members were busy chastising DOE’s loan guarantees to companies like Solyndra, it appears that they have no problem with the $2 billion one that would benefit their states. 

A recent piece from The Washington Post included a quote from Rep. Pearce where he astutely observed, “No one would consider providing Solyndra more federally backed loans, so why should USEC be any different?”  The best summary of this whole debacle came in a letter Rep. Markey and Rep. Pearce sent to Reps. Upton and Waxman.  In their letter they wrote, “Commercialization of taxpayer funded earmarks will not result in the successful commercialization of USEC’s domestic uranium enrichment technology.  Allocating federal funds will simply throw away hundreds of millions in scare taxpayer dollars, on top of the hundreds of millions in bailouts USEC has already burned through.”

Rep. Hal Rogers and his secretive earmarks is a stark reminder that even with an earmark moratorium, taxpayers should never let down their guard.  Earmarking won’t truly stop until the halls of Congress are filled with members who truly believe in a fiscally responsible government.