updated 3/10/2010 4:48:45 PM ET 2010-03-10T21:48:45

House Democratic leaders announced Wednesday that they will ban the much-criticized practice of using annual spending bills to direct pet projects to companies that often return the favor with campaign contributions.

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Rep. David Obey, D-Wis., chairman of the Appropriations panel, told reporters that he hopes the step will mean 1,000 fewer earmarks and break the linkage between campaign contributions and earmarks that has sparked intense criticism and resulted in ethics probes of several lawmakers.

But the move sparked strong opposition from Senate Appropriations panel chair Daniel Inouye, D-Hawaii, his Senate counterpart and a long-standing defender of earmarking. He issued a tartly worded response defending the current system and calling Obey's move "quizzical."

The election-year step comes after the ethics committee investigated seven members of a Pentagon spending panel for rewarding earmarks to companies whose executives and hired lobbyists showered them with campaign cash. The panel found no linkage and absolved the lawmakers.

Republicans, meanwhile, are weighing giving up earmarks altogether in an appeal to voters frustrated with Washington's free-spending ways.

Pay-to-play
The subject of earmarks has over the years brought criticism of Congress that's often generated by wasteful earmarks such as the $200-million-plus "bridge to nowhere" in Alaska that was supposed to connect an island with a population of just 50 or so to the mainland. But among congressional watchdogs the more odious element has been the pay-to-play culture in which campaign cash flows from earmark beneficiaries into the coffers of lawmakers.

"For-profit earmarks are really where the rubber meets the road as far as corruption," said Steve Ellis of Taxpayers for Common Sense, a Washington-based watchdog group that has been critical of earmarking.

The most commonly accepted definition of an earmark is a specific project that's not requested by the president but inserted into one of the annual spending bills by a member of Congress. They come in countless varieties, like grants to police departments, improvements to military bases, renovations to historic buildings and research grants for home-district colleges.

But at issue in the new edict are earmarks aimed at for-profit entities, especially those who are seeking to tap into the Pentagon's $600 billion-plus budget. Many if not most of such companies hire lobbyists to navigate the process and it's common for both company executives and the hired lobbyist to give campaign cash to lawmakers that sponsor their earmarks.

Critics said that the ethics committee turned a blind eye to a corrupt system when dismissing an investigation that the seven lawmakers broke House rules when funneling earmarks to a lobbying firm that was some blatant in tying campaign contributions from firm lobbyists and their clients to winning earmarks.

Critics said the ethics committee report was a whitewash.

"Simply because a member sponsors an earmark for an entity that also happens to be a campaign contributor does not, on these two facts alone, support a claim that a member's actions are being influenced by campaign contributions," the ethics panel found.

"It's just ridiculous on its face," Ellis countered

Video: Graham, Schumer discuss earmarks

Scandals abound
The moratorium on earmarks to corporations and for-profit companies comes as a series of scandals has hurt Democrats politically. Rep. Charles Rangel was admonished by the ethics committee late last month over corporate-funded trips — with more serious charges still pending — while the resignation of former Rep. Eric Massa, D-N.Y., after sexual harassment allegations has also harmed the Democrats' political standing.

Last year's defense appropriations bill contained 1,720 earmarks worth $4.2 billion, according to Taxpayers for Common Sense, which constructs a database using disclosures required under rules put in place when Democrats took over Congress.

These much-praised disclosure rules in fact made it easier to draw links between contributors and earmarks, reforms noted by Inouye when defending Congress' right to earmark.

"Many, if not most, for-profit and nonprofit entities lobby for themselves or employ lobbyists. That is how most of them make the Congress aware of their products and services," Inouye said. "It is no secret that many of these individuals make political contributions. All lobbyists file disclosure reports. These contributions are all fully disclosed and available for all to see on the Internet."

The potential move by Republicans to unilaterally drop earmarks revives a campaign by GOP Leader John Boehner of Ohio to wean his party off earmarks. He lost that fight in 2008 when seeking to win back the House, and most Republicans — even some die-hard conservatives — ask for earmarks.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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