The Deseret Book — Seagull feud finally hits the press

The brewing feud I wrote about on June 27th is finally wide out in the open with the media within the past twenty-four hours. In chronological order:

Discussions on other blogs:

I'll post my personal views of the matter later today...

Bastille Day Update: I've since posted my thoughts on all the brouhaha. I'll also update this post with links to additional news stories as I become aware of them. (The first additional update being the Daily Herald link above.)

— Michael A. Cleverly

116 comments | Printer friendly version

Why I think Deseret Book chose to cut off Seagull

My thoughts on "why?"

A little over two weeks ago when I first learned (from multiple sources) that Deseret Book had announced to their employees that they were severing their relationship with Seagull Book & Tape I had mixed thoughts & feelings on the issue. Briefly some of my thoughts were:

I expected that the news would reach the media rather quickly (it can be seen as a sort of David vs. Goliath story; big bad corporate Deseret Book versus the peoples' Seagull). Frankly I'm surprised that it took fifteen days before the Salt Lake Tribune "broke" the story in the local media. I guess my humble readership doesn't extend very far. :-)

I worked for Deseret Book from 1998-2005 and built their online store (the L&F of which has since been redesigned), auctions, ticket, wholesale extranet and Nauvoo Temple Cam sites.

I got to do more than just create websites. I built the infrastructure to implement and integrate Deseret Book's Rewards Club loyalty program. When Time Out for Women began I was able to build a mobile point-of-sale system (from the ground up) that was portable, efficient, easy for volunteers to learn, and fast. I was also extensively involved with surveys and other market research (working with Cathy Chamberlain who came to Deseret Book from Wirthlin Worldwide).

For most of that time I thought I was going to be one that dying breed of people who spend their entire career (largely) with the same company. After the Internet Department was merged with the Information Systems Department, and after a series of turn over in managers, and being passed over repeatedly for promotion, I came to the conclusion that I'd reached the limit of my growth potential at Deseret Book and would need to look outside the company. It wasn't an easy decision to make, and I would consider going back if the right opportunity ever presented itself.

Que saudades.

During the years I was at Deseret Book I think it is fair to say that the retail division always viewed Seagull as a thorn in their side. When Ron Millett was CEO each major division basically did whatever they wanted. Everyone tended to live and work in their own silo (be it wholesale, retail or publishing) and the left hand often didn't know what the right hand was doing. Wholesale never cared how retail would be impacted or vice-versa.

One of Sheri Dew's many accomplishments as CEO (from my viewpoint) was her ability to increase inter-company communication (both from the top down & bottom up to between divisions) and to take a more wholistic global view of what the company is doing and needs to do.

The book industry is a tough business to be in these days. You are selling a low-priced comodity where customers are price sensitive and people are reading less and less than in the past. Many small "mom & pop" LDS bookstores have closed in the past few years. The advent of and deep discounting by national retailers has conditioned people to never pay full price for a book.

Seagull has always been Deseret Book retails nemesis. For years—at least the late '80s through the mid to late 90's—DB Retail held their noses in contempt ("we're a premeire full service bookstore! people will like our stores better!") and discounted (pun intended ;-) the threat that Seagull poised.

Collectively Deseret Book largely ignored Seagull until Seagull had grown to the point that they had taken away a major chunk of market share and had created the perception in the marketplace that Deseret Book was expensive and that they (Seagull) were affordable.

Deseret Book's price matching was instituted in an effort to stem the bleeding and to try and regain the trust that had been lost in the marketplace. Not all customers responded well—in surveys many said that they didn't like having to do the homework ahead of time to be able to know what price match to ask for. (Might as well go to Seagull since they perceived that they'd always be getting a low price there.)

Deseret Book responded to this feedback with a page out of Seagulls playbook. The revised campaign promised that Deseret Book would do the price matching homework upfront so you'd never even have to ask for it. You'd always get the lowest price—except that it would be logistically impossible to always be 100% up-to-date on the rock bottom lowest price of any book being sold in any brick & mortar store or online. And so sometimes someone would find a lower price and DB retail would honor it. And people are generally reasonable and understanding that its impossible to monitor an entire industry completely.

Really, what the "we'll do the price matching for you" had to do was match Seagull's prices. Seagull was perceived as being cheaper. Seagull mailed out regular catalogs that people would see and bring in. If Seagull's prices weren't matched the general public would view the marketing campaign as a fraud. When Deseret Book matched Seagull's discounts Seagull would often discount a little bit more deeply to stay ahead.

Naturally you'd expect this marketing campaign to increase gross sales, but if you are matching your deep-discounting competition's prices out of the chute on everything you both publish it shouldn't come as a surprise when your net margins go (way) down.

After some internal debate it was decided that there would be two different sets of retail prices, one for "competitive stores" and the other for "non-competitive stores." (I'm not joking about the "competitive" versus "non-competitive" labels. I imagine that is still how Deseret Book referrs to them internally to this day.)

The criteria for determining which stores were competitive and which weren't was fairly simple: the deciding factor was almostly exclusively whether or not there was a Seagull Book & Tape in the region.

In my opinion Deseret Book's decision was undoubtedly motivated by discounting, though I don't expect them (for legal reasons) to come out and say that. Seagull is who they have to price match. You can afford to give up 8%-10% of your wholesale business (which is what DB management told their employees on June 27th that Seagull represented) if you can reign in your discounts on the retail side (scaling back from 40%+ discounts to a mere 10%-20% will give a big boost to the bottom line). In this analysis the decision could make financial sense even if you generously assumed that no one who ever bought Deseret Book products at Seagull would switch to shopping Deseret Book.

Deseret Book does still sell some titles to Walmart who will discount them deeply, but Walmart doesn't buy anywhere near their full product line, sticking mostly to the A-titles, titles Deseret Book can expect enough volume on to be able to afford to discount deeper anyway.

I think for Deseret Book's viability as an ongoing concern, after years of losses, this was a smart business move. I'm actually impressed that they thought it through, (hopefully!) ran the numbers, and made what I'm sure was a very tough decision. That shows leadership, forward thinking, and an overall unified strategy that hasn't always been there in the past.

On the other hand I think this may be a death warrant for Seagull and it is sad to see competition being run out of the market, especially when Seagull's offense is essentially offering people lower prices. I tend to think that, in the LDS bookselling industry, Deseret Book does have a monopoly. But I imagine a court would construe the market much more broadly if Seagull were to bring an anti-trust lawsuit. (I agree with the comments on Kent Larsen's the Motley Vision blog.)

Deseret Book can't collude with Seagull to fix their prices, so instead we get silly pronouncements by DB executives to the press implying that this is all a big to-do over Seagull's lack of appreciation for Deseret Book's marketing materials. Of course that is genuinely an irritation that DB marketing has with Seagull, but that hardly seems to be a sufficient reason on its own to divorce yourself from a tenth of your entire wholesale business.

While I don't think Seagull will be able to reconcile with Deseret Book in the short term, perhaps they can take heart in knowing that Deseret Book reversed its decision not to sell to Walmart after a year or two when they realized they needed the money.

One route for Seagull to survive would be to find another company that already has a wholesale relationship with Deseret Book that would be willing to act as a middle man. Obviously a middle man is going to have to add their own overhead into the price (meaning Seagull wouldn't be able to afford such deep discounts), but then Seagull would retain access to the 50% of the products on their shelves that they are poised to lose, Deseret Book would have the wholesale business, some middle man could pocket some change, and only the customer would lose out—though perhaps not in the long run (in a sense) if it keeps both Deseret Book and Covenant in the publishing business.

Neither Deseret Book nor Seagull Book & Tape have been willing to stock Mormon's Book yet, so perhaps my loyalty should lie stictly with the various independents who do carry it. :-)

— Michael A. Cleverly

297 comments | Printer friendly version

Government endorsed Girl Power Ice Cream information

Ice Cream Cone

While listening to the local classical station (KBYU) on the way to work this morning I learned that July is National Ice Cream month and has been since Ronald Reagan designated it so in 1984.

Curious to find out a little more of the history, I decided to google .gov sites.

The top search result is to a page on that talks about the nutritional benefits of ice cream (calcium) but at the same time also entertains with some animated dancing ice cream cones (our tax dollars hard at work?).

Wanting to see if the government was telling boys the same thing about the health benefits of ice cream, I tried visiting, but as you can easily verify, the Department of Health and Human Services hasn't gotten around to creating a corresponding Boy Power website for boys yet. Hopefully former Utah Gov. Mike Leavitt will rectify this gender-based exclusion in time for NICM08. ;-)

— Michael A. Cleverly

85 comments | Printer friendly version

A couple of radio ruminations

Traffic Gridlock

A couple of radio ruminations while driving in the car this week:

  1. Why does Rozerem (a prescription drug meant to help people fall asleep quickly) have to advertise that its side effects include drowsiness? Isn't that sort of the whole idea?
  2. Why does KSL almost always say that "traffic brought to you by [advertiser]?" Why would anyone want to patronize a business if they're (apparently) claiming responsibility for this mornings gridlock?

— Michael A. Cleverly

100 comments | Printer friendly version

Nineteen missed opportunities for Congress to back away from the trough

An earmark in a Congressional appropriations bill requires that a portion of the money being allocated to a certain agency (let's say the Department of Defense) must be spent for a specific—often extremely local—purpose (say building an aquarium in some congressman's home district). Because congressmen can add an earmark to a budget bill without needing to offer up much of a justification, appropriation bills become vehicles for massive amounts of wasteful pork-barrel spending.

As the Club for Growth noted in their call for 435 blogs against pork:

It's time to blog against pork!

Thanks to Congressman Jeff Flake's 19 anti-pork amendments, we now have every House member on record regarding their positions on earmarks. Before now, House members have been able to avoid scrutiny because their pork was co-mingled with other projects and tucked into the dark corners of big spending bills. Or they were able to withstand the scrutiny because they were attacked as a whole chamber and not directly attacked themselves.

But because of Flake's amendments, they were recently forced to cast up-or-down votes on specific projects. They could no longer deflect attention.

One Utah blogger has already blogged about Representatives Bishop, Matheson & Cannon's votes.

Surprisingly Rep. Jim Matheson, a Democrat, appears to be much more fiscally responsible than either of the Republicans, Rep. Rob Bishop & Rep. Chris Cannon. Kudos to Rep. Matheson!

What started out as a quick "can you believe the kind of wasteful spending Utah's congressional delegation supported?" post has grown over the past three days into a much longer one. I've discovered and dived into the online version of the Congressional Record to read the transcripts of the debate on the House floor that preceeded each vote.

I've excerpted some of what Rep. Flake said on the floor when he offered up each of his ammendments. (And he offered more than nineteen, but many failed on voice votes.) In the process of researching these votes I've gained a real admiration for Rep. Flake and a renewed interest in the civic process. If I lived in his district in Arizona I'd definitely vote for him. As it stands I've donated $19 toward his re-election campaign today.

Read on to see where $34,669,000 of our tax dollars (let alone the interest on the added debt our children will eventually pay) are going... It'll probably be an eye opening experience; it was for me.

H.R. 5384: Making appropriations for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies

The only reason we limit it to dairy education in Iowa is to ensure that our amendment was made in order. Believe me, if there were dairy education for Arizona, I would strike that as well. We simply shouldn't have programs like this.

Let me just say, according to the Iowa State Dairy Association, the Iowa State dairy industry contributes more than $1.5 billion to the economy and provides more than 26,000 jobs. I would submit that spending $229,000 isn't going to do much to change that trend one way or another. It is simply something we shouldn't do.

— Rep. Jeff Flake (R-AZ), May 23, 2006, Congressional Record, H3105

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 92 to 325. The $229,000 will be spent as earmarked.

This is a hydroponic tomato production earmark that we are challenging here. Again, let me make the broader point, what business is it of the Federal Government to pick winners and losers in the economy, to decide that we ought to be promoting hydroponic tomato production earmarks instead of promoting the cherry tomato or grape tomato or others out there that any Member could get an earmark for? Why is it this is important and the others are not?

We as legislators have to decide how we are going to husband the Nation's resources. I would submit that when we have 10,000 earmarks a year or more and when we are growing it at a rate of 872 percent over the last 10 years, at some point, I do not know where that point is, maybe it is with hydroponic tomatoes, some point we have got to take a stand and say enough is enough. We simply cannot continue spending money like this.

Again, we are not potted plants here. We are legislators. We are here to make these decisions. I would submit that when we are spending $180,000 on hydroponic tomatoes that something has gone awry and we have lost our focus. That is what this debate is about.

— Rep. Jeff Flake (R-AZ), May 23, 2006, Congressional Record, H3110-H3111

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 90 to 328. The $180,000 will be spent as earmarked.

Again, this is another example of the Federal Government funding a program that can and is funded by the private sector. I should note here the vision of the initiative says: "By 2020, the American grape and wine industry will triple its economic impact and become the undisputed world leader in consumer value and sustainability. The target is an economic impact of $150 billion within 16 years. This is based on a conservative estimate of current annual impact of approximately $50 billion a year."

I would submit that if an industry out there has a $50 billion-a-year impact on the economy, $50 billion, then the Congress need not spend $250,000 for strategic research and a plan to enhance the grape industry's competitiveness and contribution to the U.S. economy.

— Rep. Jeff Flake (R-AZ), May 23, 2006, Congressional Record, H3114

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 87 to 328. The $100,000 will be spent as earmarked.

H.R. 5427: Making appropriations for energy and water development

I call attention to this earmark today because there is so little information available about its purpose. It appears inconsistent with the program that would fund it.

The committee report lists this earmark, for the Science Museum of Virginia, in the Biological and Environmental Research program.

My amendment would prevent funding for this purpose.

I know that some museums do scientific research, but the background research on this earmark turned up very little by the way of research being done by the Science Museum of Virginia.

As an aside, I would note that the museum will soon open a traveling exhibit on candy, sponsored by the Jelly Belly Candy Company. It does not sound like much research to me.

— Rep. Jeff Flake (R-AZ), May 24, 2006, Congressional Record, H3199

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 64 to 359. The $250,000 will be spent as earmarked.

Mr. Chairman, this is $1 million for the Juniata locomotive shop. I believe that it goes to a locomotive shop owned by Norfolk Southern. I can't know for sure, because there is no description of the earmark anywhere in the bill.

Let me read a quote from Norfolk Southern Chairman David Goode in 2005: "Thinking back to the beginning of my rail career in the late 1960s and early 1970s, rail systems were failing badly. There were strongly held beliefs that we were headed for a failed and nationalized system. In that context, you began to realize the strength of an industry that rebuilt itself, albeit with a lot of government policy help, although essentially no government money."

But now it seems that we are giving them money as well.

— Rep. Jeff Flake (R-AZ), May 24, 2006, Congressional Record, H3206

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 46 to 372. The $1,000,000 will be spent as earmarked.

H.R. 5576: Making appropriations for the Departments of Transportation, Treasury, and Housing and Urban Development, the Judiciary, District of Columbia, and independent agencies

This $500,000 is part of nearly $12 million provided to the State of California in HUD earmarks. Now, I live in the Southwest. I know the desert can get awful hot, and there is nothing better than taking a swim. But I do not know why we ought to give the Federal taxpayer a bath every time somebody wants a swimming pool.

That being said, again here, I wonder what criteria we use when these earmarks come forward. If we can say that swimming pools, city-owned swimming pools are eligible for Federal funding, then what is not eligible for Federal funding? Do the criteria mean anything in that regard? Is anything open?

— Rep. Jeff Flake (R-AZ), June 14, 2006, Congressional Record, H3925

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 61 to 365. The $500,000 will be spent as earmarked.

Again, I would ask again, we do not know, is it a facility? Is it not a facility? I guess it is planning for perhaps a facility, maybe not. Are we simply subsidizing the city of Weirton, West Virginia? Are we in the practice of subsidizing all cities who are having trouble with their budget? Where do we pick and choose?

Again, we are tasked with providing oversight. How do we provide oversight if we do not even know if we are funding a facility or not?

— Rep. Jeff Flake (R-AZ), June 14, 2006, Congressional Record, H3928

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 73 to 353. The $100,00 will be spent as earmarked.

Funding for a California community college project should be under the jurisdiction of the State, not for Congress.

— Rep. Jeff Flake (R-AZ), June 14, 2006, Congressional Record, H3929

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 58 to 368. The $500,000 will be spent as earmarked.

As I mentioned here, this is funding for the Strand Theater Arts Center, $250,000 for the conversion of the theater in Plattsburgh, New York, to a performing arts center. There are other earmarks in the bill of this type: $100,000 for the Village of Jamestown, Ohio, for building renovations to the Jamestown Opera House; $100,000 to the Metropolitan Theatre Foundation in Morgantown, West Virginia, for the construction, renovation, and buildout of facilities; $100,000 to the Houston Zoo in Houston, Texas, for the construction of the Outdoor Life Science Learning Center.

It goes on and on and on and on. Again, you have to say, where do we stop? Where do we say this is not the role of the Federal Government? Where do we say local government knows best.

We say that we know better than Federal officials and bureaucrats over in the Department of Transportation or elsewhere where to spend money, then it stands to reason that those at the local level know a lot better than we do about what to spend money on. Sometimes in these cases these are facilities that they have decided specifically not to fund, yet we are going to go ahead and fund them.

That may or may not be the case in this case. But when we are saying we know best, we are going to decide where these monies are going, whether or not it is leveraging local funds, we simply can't justify it to the Federal taxpayer.

We need to remind people again and again we have a deficit this year of somewhere between $300 billion and $500 billion, depending on how you count and what you count. We have a Federal debt approaching $8 trillion, and yet we are spending money to renovate theaters in small towns across the country.

Where do we say we have done enough? This ought to be done at the local level or it shouldn't be done at all. But how can we justify using taxpayer money at the Federal level for projects like this?

— Rep. Jeff Flake (R-AZ), June 14, 2006, Congressional Record, H3929-H3930

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 61 to 366. The $250,000 will be spent as earmarked.

H.R. 5631: Making appropriations for the Department of Defense

Mr. Chairman, when I saw this earmark, which is $1 million for research at the environmental center at Mystic Aquarium, Connecticut, I thought I was experiencing deja vu. We had a similar amendment in the Energy and Water bill just last week, or 2 weeks ago. Now we are looking at the defense bill, and the only difference is the amount of the earmark. I believe it was $400,000 then; this defense bill earmark is for $1 million. My amendment would remove this earmark from the bill.

Now, during our debate a few weeks ago on this subject, we learned that the aquarium has been in operation for over 20 years, that it is an educational and research institution with expertise in ocean environmental studies and in deep sea exploration. We learned that it provides activities and learning for boys and girls clubs. All of these are worthy activities, certainly.

We learned that the world's foremost deep sea explorer collocates his operation at the aquarium. That is Dr. Robert Ballard, I believe.

What we didn't learn was why this aquarium gets favorable treatment over aquariums in Arizona or Massachusetts or Kansas. We didn't learn what enumerated Federal function the aquarium fills. We certainly did not learn, and we haven't learned yet today, and I hope to learn in the next 5 minutes, how the aquarium contributes to the most basic and critical function of defending our country.

We just heard a great discussion about how we need to free up more funding for helmets for our military. I would suggest this is a great place to start. It is often said you can't vote for the Flake amendments because the money will simply be spent anyway by the agency. In this case the agency is the Department of Defense, and I think it would be hard to believe that they could make a case for a program less wise than this on their own, that they have something that fitters away more dollars than spending on an aquarium.

I like the Boys and Girls Club, but they aren't fighting for us and defending our country. Maybe they have programs that benefit them at this aquarium, but I would submit that it is no way to spend our defense dollars.

By voting against this amendment, you are saying that we place more value in the defense bill for funding aquariums than we do in funding defense.

Now we were trying to find out when we were researching this amendment, and we were not told much by the Appropriations Committee, so we tried to find out what this is, if it really is Connecticut, and I was told today, no, I think it is in Ohio on Lake Erie. I don't know what the aquarium does. I am anxious to learn what it does and how it contributes to defense.

In this process without a unanimous consent agreement on this bill, I am unable to ask questions and then speak later. I hope whoever is sponsoring this legislation or supporting this will please tell us how it is more vital to fund aquariums in the defense bill than funding helmets for our troops, for example, or anything else the Defense Department can do.

I would ask, please, for the sponsor of the amendment or whoever is defending it to tell us why we should be funding aquariums in the defense bill.

— Rep. Jeff Flake (R-AZ), June 20, 2006, Congressional Record, H4287

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 77 to 347. The $1,000,000 will be spent as earmarked.

With corporate sponsorship and support from the likes of Oracle, Sun Microsystems, EDS, Shell, and Texas Instruments, the JASON Foundation has very good backing. However, this earmark raises questions that apply to too many other earmarks: Why is it in the defense bill? Should it receive any earmark funding at all? Who requested it? We don't know. I to this moment do not know who requested this earmark. I am hoping the author will come and say. Has there been a hearing on the subject? What essential Federal purpose does this serve; and doubly, what defense purpose does this earmark serve?

I think the mission of the JASON Foundation is noble, but the fact that we are funding it this way with this vehicle without real transparency is very disconcerting. This is not the Labor-HHS-Education bill. And frankly, given a lack of transparency and many problems that the current earmarking process presents, I don't think that it belongs in that bill either when we have a situation where I still to this moment have no idea who authored this earmark or what else it is supposed to do. All I know is what I have read, and yet we are being asked to approve a million dollars for it.

— Rep. Jeff Flake (R-AZ), June 20, 2006, Congressional Record, H288

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 69 to 352. The $1,000,000 will be spent as earmarked.

My question is, why in the defense bill are we offering help to manufacturing companies in the Northwest? What about the Southeast or the Southwest? What about companies in Arizona or California or Colorado? Why don't they get similar treatment? How does the Federal Government decide, all right, we are going to help manufacturing companies there, but not here? Again, we are picking winners and losers here. It is not the job and should not be the job of the Federal Government.

— Rep. Jeff Flake (R-AZ), June 20, 2006, Congressional Record, H4305

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 56 to 369. The $2,500,000 will be spent as earmarked.

Mr. Chairman, the Lewis Center has hosted more than 100,000 students, teachers, and parents participating in educational activities. The center's Web site contains a wish list for funding for three log cabins for third graders, an amphitheater, a schoolhouse shed, a large water wheel for panning gold during the gold rush educational fourth grade outreach program, and similar activities to that.

Mr. Chairman, these are undoubtedly worthy educational tools. My question is this: Why are Federal tax dollars intended for our national defense being used to fund this type of institution? It seems that corporate sponsors of the center abound, including corporations like JPL, Allied Signal, Boeing, Verizon, Lucent Technologies, Lomac Information System, Mitsubishi, RFG, Rockwell Rocketdyne Aerospace. Surely these donations can keep the center in good stead.

The center has already received $3 million in earmarked funds in fiscal year 2004 and an additional $2.5 million in 2005. It looks as if the center is back for more in this bill to the tune of $4 million.

The description of the earmark in this bill provides no detail on how the $4 million is to be spent on the Lewis Center. If there is a defense angle for this earmark, I am simply not seeing it. Again, it seems as if we are debating the Labor-HHS bill at this point or some other education bill and not the defense bill. These may well be worthy programs, but should we be funding them with defense dollars?

— Rep. Jeff Flake (R-AZ), June 20, 2006, Congressional Record, H4306

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 50 to 373. The $4,000,000 will be spent as earmarked.

I am all for seeing the Missouri business sector grow as I would other States' business sectors as well, particularly Arizona. But it seems to me that American taxpayers are being asked to spend Federal defense dollars on promoting Missouri businesses rather than on the war on terror. Again, we are picking winners and losers here. I know that there are institutions in Arizona, business sectors everywhere else, that would like to get this kind of funding, $20 million, in the defense bill.

So why are we choosing one State? Why are we picking the businesses of that one State as the winners here?

I would ask the chairman of the subcommittee or the sponsor of the amendment to explain to the taxpayers and every other State outside of Missouri why we should support this earmark. Frankly, dollars in the defense bill should go to the war on terror. They ought to go to the troops. They ought to go for body armor. They ought to go for vehicles, for ammunition, for everything else we spend on defense. I do not believe they ought to go to support businesses that are simply looking for defense contracts or looking to promote business in one particular State.

— Rep. Jeff Flake (R-AZ), June 20, 2006, Congressional Record, H4308-H4309

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 62 to 363. The $20,000,000 will be spent as earmarked.

H.R. 5672: Making appropriations for Science, the Departments of State, Justice, and Commerce, and related agencies

Mr. Chairman, I am a big fan of Italian food. My district is home to a great Italian restaurant, Anzio's Landing. You can order many of your favorite dishes, good Italian bread, and there are many former New Yorkers in my district, and they know it well. But if the owner of this restaurant, whom I know well, if he approached me to get a Federal earmark to modernize his restaurant, I would have to tell him "fuhgetaboudit."

Today I am bringing this amendment to learn whether the rest of the House will agree with me on that premise. The bill before us today asks us to spend $150,000 in Federal taxpayer dollars to the Arthur Avenue Retail Market, an Italian grocery market in a neighborhood labeled Bronx's Little Italy. Over a dozen merchants currently reside in the market, including Joe Liberatore's Garden of Plenty, Peter's Meat Market and Mike's Deli, a two-generation family-owned business that sells antipasti, breads, meats, pasta, and imported cheeses. The market is also home to the La Casa Grande Tobacco Company, which offers hand-rolled cigars.

In 2004, the market received $300,000 in earmarked Federal dollars for renovations. The market received another $400,000 in Federal transportation appropriation dollars for a new parking facility in 2005. We are back.

In 1940, Mayor LaGuardia built an indoor Arthur Avenue Market to take street vendors out of the cold. This is where this originated.

In the 1980s, the merchants of the market formed a co-op and paid for renovations to that market. Now, there are long lines at the market on weekends to get great Italian bread, cheese and salami.

I would ask the sponsor of this amendment why close to $700,000 has been spent on this Italian grocery market and why another $150,000 in taxpayer funds is needed.

There is a lot of Federal prosciutto to bring back to the District, or that is, a lot of Federal prosciutto to bring back to the District for a private Italian grocery market. I think we need to slice off some of this appropriations bill. If there is a place to slice, this is certainly it.

What possible Federal purpose does this earmark serve? Does the taxpayer even get a free Italian cookie assortment? If we allow our tax money to go to this grocery market, what benefit is there for the Federal taxpayer? There are certainly plenty of private benefits, but what Federal benefit? How do we justify this?

I would argue that this is one cannoli the taxpayer doesn't want to take a bite out of.

— Rep. Jeff Flake (R-AZ), June 28, 2006, Congressional Record, H4717

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 76 to 345. The $150,000 will be spent as earmarked.

I would ask Members of this body, how would you define irony?

I define it as providing a Federal earmark money to the Bronx Council on the Arts, which is an entity that is advertising an event on its Web site called, Pay to Play.

Pay to Play, according to the Bronx Council's Web site is "a multimedia exhibition ala Abramoff, Scanlon, Cunningham, Halliburton and on and on and on." The Web site states that "artists are asked to offer a bribe to participate in the show that will be on display alongside selected work. Please note that special consideration will be given to work that addresses corruption, greed, scandal, cover-ups, failures of democracy, the transparent veneer of public interest that masks rampant self-interest, and such other things."

I am not saying the earmark for Bronx Council of the Arts fits any of these categories, but I am saying that it is sadly ironic that we are funding artistic parodies of congressional earmarking with earmarks.

— Rep. Jeff Flake (R-AZ), June 28, 2006, Congressional Record, H4720

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 74 to 343. The $300,000 will be spent as earmarked.

Aside from all other arguments that can be made against this kind of earmarking, I want to point out what appears to be a trend toward obfuscation in the language of earmarks. In drafting a limitation amendment to prevent funding to the JARI Regional Business Incubator, we used the earmark language exactly as it appears in the bill.

We then asked the Parliamentarians to review it to make sure it would be in order. We were informed that the "region business incubator" verbiage was too vague to be considered in order. So in drafting this amendment, we had no choice but to limit funding to JARI, period. The effect of this amendment would be to prohibit any funding from the bill going to the organization, whereas our initial intention was to limit the funding to the business incubator.

That is part of the problem we have here. All we have is the language in a report that is so vague or confusing that it is even difficult to draft an amendment to cover it.

Now I have no problem limiting any funding to the organization, let me tell you, but I also want to be clear that I have nothing against JARI. I wish the organization well in its efforts. I do, however, have a problem with the increasingly opaque process by which Congress hands out earmarks.

For the first half of this year, we debated ways to bring transparency to what we do here. When it comes to the earmarking process, Members have proposed a longer notice period before consideration of bills, making bills and reports more accessible, attaching Members' names to earmarks, compiling earmarks in tables, including earmarks in the text of legislation, and on and on and on. I think all these ideas are fine, and I have introduced my own proposal.

After a good deal of compromise, this House approved the Lobbying Accountability and Transparency Act last month. Yet here we are, just a few weeks later, and there has been no apparent effort to comply with the proposals that we made in the House and the entire House approved.

How can we explain this to our constituents? Was the lobbying and transparency legislation just for show? I certainly don't think it was, but it is starting to look that way to most Americans.

We need to demonstrate how serious we are about establishing transparency in Congress. We have made a strong effort, and there is nothing preventing us from making good on what we said. Waiting until this bill becomes law before we act would appear as though we are under compulsion to comply with the public demand for transparency. I think we need transparency now.

A small handful of our colleagues contend that we should not change the process until the other Chamber changes its process, that if we enact unilateral reforms in the House, we would shortchange ourselves.

Who is this about? Are we here to serve our country, the best interests of our country, or simply to look out for the interests of the House?

What are we waiting for? We are almost done with the appropriation process for the year, yet nothing has changed. Where are the names next to earmarks? Where is the transparency that we say that we want?

— Rep. Jeff Flake (R-AZ), June 28, 2006, Congressional Record, H4721

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 63 to 356. The $800,000 will be spent as earmarked.

Mr. Chairman, this amendment would prohibit $900,000 in Federal funds from being used by Fairmont State University in West Virginia for a small business initiative.

Fairmont State University is located in Fairmont, the county seat of Marion County, which has a population of 20,000 and is located in north central West Virginia. Similar to other earmarks I have challenged in this appropriations season, this earmark is vague in its description, offering no more than a general sketch of the purpose of the funding and making true oversight nearly impossible.

In addition, this is not the first earmark to benefit the school. In recent years, Fairmont State University and its partners have regularly benefited from earmarks in this appropriation bill.

For example, the 2005 Justice Department budget included a grant for nearly half a million dollars for the Fairmont State partner program looking at decoding criminal digital documents. Similarly, the 2006 SSJC appropriation bill included over $2 million in earmarks assisting the school's aviation program and aerospace curriculum.

And I guess the third time is the charm. We are likely to continue this trend in 2007 with an earmark for $900,000 for a small business development initiative.

In fact, according to some estimates, northern West Virginia has received more than $480 million in earmarks in various appropriation bills over the last 10 years.

This earmark illustrates the problem with earmarks. Year after year, we approve these vaguely described projects by the thousands. Not only do taxpayers not know how the money is being spent, the current earmark process makes those types of patterns, the same area benefiting time and time again at the taxpayers' expense, difficult if not impossible to detect.

My question is, where does it end? Where does Congress start to say enough is enough and add accountability and transparency to this runaway train that earmarks have become? If not with earmarks like this, then I do not know when.

— Rep. Jeff Flake (R-AZ), June 28, 2006, Congressional Record, H4723

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 70 to 350. The $900,000 will be spent as earmarked.

According to our research, since 1987, the Southern and Eastern Kentucky Tourism Development Association has received more than $18 million in Federal grants, loans, and earmarks. In fact, last year, in the fiscal year 2006 Science, State, Justice and Commerce appropriation bill, the Southern and Eastern Kentucky Development Association received a $3 million earmark.

Now I love traveling, as everyone here does; and I am all for seeing Kentucky tourism continue to grow. But again, here, how do we justify favoring this tourism association and not others?

We have one in Arizona. Virtually every State has one. Many regions in our State have their own tourism associations. How do we decide that one is worthy of earmarks and another one is not?

— Rep. Jeff Flake (R-AZ), June 28, 2006, Congressional Record, H4724

Results from the roll call vote on the ammendment to cut this earmark:

The ammendment was defeated by a vote of 56 to 363. The $1,000,000 will be spent as earmarked.

In summary...

Rep. Matheson did the best among the Utah delegation: fourteen yes votes (to only five noes). He voted to cut $29,169,000 out of $34,669,000 in pork (84.1%).

Coming in a mediocre second place, was Rep. Bishop with eight yes votes (and eleven noes). He voted to cut $2,890,000 out of $34,669,000 in pork (8.3%).

Embarrasingly Rep. Cannon didn't even bother to show up for ten of the nineteen votes. Of the nine votes he did bother attending he voted yes five times and no four times. He voted to cut a meager $1,510,000 out of $34,669,000 in pork (4.4%).

If it were up to me to give Utah's delegation grades in fiscal responsibility, Rep. Matheson is the only one who would get a passing grade.

Even if all nineteen of these pork projects were coming directly to Utah I'd still want my Representative to vote against them.

— Michael A. Cleverly

610 comments | Printer friendly version

-> Next month (with posts)
-> Last month (with posts)