Hawaii companies that have contributed to Inouye’s campaign to receive earmarks he sponsors

Firms that donate to Inouye receive his earmarks

HONOLULU — A team led by a small Hawaii company was competing to design a new generation of military transport ships when Navy officials dropped it from contention in late 2007. The reason: the team’s entry didn’t meet the Navy’s criteria.

Not all was lost for Navatek Ltd., however. The Honolulu firm had a powerful ally in Washington D.C. — U.S. Sen. Daniel Inouye.

Since 1997, executives of Navatek and its parent firm, the privately owned Pacific Marine, have contributed more than $29,000 to Inouye’s campaign coffers, most of it since 2003.

And now, the eight-term Hawaii Democrat is trying to direct $2.2 million in taxpayer money to the company to finance a model of an amphibious vehicle that was a vital component of the entry the Navy rejected.

It’s all part of a pattern for the powerful chairman of the Senate Appropriations Committee, the jubilantly self-proclaimed “No. 1 earmarks guy” in the nation.

In the Senate version of the fiscal year 2010 defense appropriations bill, which Inouye was instrumental in drafting, he is sponsoring almost three-dozen provisions that would spend more than $200 million on projects in Hawaii that the Pentagon generally does not want, an Associated Press analysis of federal election reports has found.

The contributions were contained in a Federal Election Commission database that dates back to 1976.

Of the $200 million, more than $25 million would flow to Hawaii-based firms whose employees have given more than $102,000 to his campaigns since 1997. Another $33 million is intended for larger, more well-known companies, such as Boeing and Lockheed Martin, whose political action committees have contributed $114,000 to Inouye’s political war chest since 1997.

Such contributions are not illegal or uncommon. And Inouye has long been applauded in Hawaii for bringing federal dollars back home. But congressional watchdogs say the donations and earmarks are questionable.

“I think what that shows you is, at the very least, there’s the appearance of a quid pro quo between campaign contributions and then how decisions are made to allocate taxpayer resources,” said Mandy Smithberger of the Project on Government Oversight, a nonpartisan watchdog group in Washington D.C.

Inouye refused repeated interview requests, and his staff would not disclose how the earmarks were justified. In a brief statement, he said congressional earmarks comprise a tiny percentage of overall federal spending and his benefit military personnel, small businesses and Hawaii’s economy.

“The congressional funding initiatives that I support are necessary and thoroughly vetted by my staff and colleagues,” he added.

But many of Inouye’s earmarks exemplify how Congress targets spending, said Steve Ellis of Taxpayers for Common Sense, another watchdog group in Washington D.C. “Decisions are not being made on project merit but on political muscle, and certainly Sen. Inouye … has more political muscle than just about anybody,” he said.

Last January, Inouye took over the appropriations committee, where he wields tremendous influence over the expenditure of hundreds of billions of federal dollars. He also has long been either chairman of or a high-ranking Democrat on its defense subcommittee. At 85, Inouye is seeking a ninth six-year term next year.

During his 46 years in the Senate, he has sponsored hundreds of targeted provisions in every corner of federal spending. Such practices have been heavily criticized by Ellis and others as contributing to a “pay to play” culture in the nation’s capitol.

Nonetheless, Inouye remains exultant about his role in the earmarking process.

“It may please you or it may not please you,” the senator told Big Island business leaders in August. “I’m the No. 1 earmarks guy in the U.S. Congress.”

No significant challengers have emerged to his re-election race next year. Still, Inouye raised more than $3.8 million and held more than $3 million in his war chest by Sept. 30, according to Federal Election Commission reports. Contributors flock to him in part because he chairs an influential congressional committee, said University of Hawaii political scientist Neal Milner.

“People will want to contribute to him whether he has $1 in (his campaign account) or $1 million,” Milner said.

Earlier this year, Inouye requested 46 earmarks worth nearly $331 million in the defense appropriations measure that his subcommittee handled, according to Taxpayers for Common Sense.

That was pared to 35 earmarks worth $207.5 million in the bill the full Senate passed recently, according to an Inouye press release. Two of those provisions, at $5 million apiece, are for Honolulu-based Oceanit:

— The High Accuracy Network Determination System is a “relatively low-cost” network of telescopes that give the Air Force more accurate space tracking data, according to documents from Inouye’s office.

— Multiple-Target Tracking Optical Sensor-Array Technology would improve data from missile defense systems. It would “fill a critical gap” in such technologies, the documents say. The earmark was co-sponsored by Sen. Daniel Akaka, D-Hawaii.

Like virtually all earmarks, neither of Oceanit’s projects were included in budgets the White House submitted to Congress in recent years.

“It tells you it didn’t pass the smell test in the budget review, and that the advocates are going through the back door into the defense budget,” said Winslow Wheeler, a former congressional aide who now is with the Center for Defense Information, a Washington D.C. think tank.

The AP analysis found the first donations from Oceanit officials were made in 1997. Since then, they have given Inouye $26,700, including almost $11,000 from Chief Executive Patrick Sullivan, $9,000 from Chief Operating Officer Jan Sullivan and $3,900 from senior aerospace engineer Christopher Sullivan. It could not be determined whether the Sullivans are related.

Patrick Sullivan and Oceanit spokesman Ian Kitajima did not respond to e-mail and telephone requests for comment.

Navatek’s case is similar. Its team and three other groups of companies entered a mid-decade Office of Naval Research competition to develop a new concept in which seaborne transports deliver heavy combat vehicles. A component of the Navatek team’s entry were smaller vehicles called Captive Air Amphibious Transports.

Navatek’s team was dropped in late 2007 after the competition’s first phase because it failed to meet ONR’s criteria, said Richard Carlin, the agency’s director of sea warfare and weapons.

He said ONR remains interested in the company’s technology that allows boats to lift portions of their hulls above the water, and the firm was given a $600,000 research contract that ended last year.

Employees of Pacific Marine and Navatek have contributed $16,300 to Inouye since 1997, including $9,800 from CEO Steve Loui. Neither Loui nor Vice President Michael Schmicker responded to e-mail and telephone requests for comment.

Inouye’s $2.2 million request for Navatek would finance a half-scale model of its amphibious transport.

The eventual winner of the ONR competition also will build a scale model of the vessels it designed, Carlin said. But Navatek’s transports cannot re-enter the competition, he said.

His agency will manage Navatek’s earmark project if Congress tells it to, Carlin said. But he added, “We don’t support any earmarks. We support only the president’s budget.”