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July 26, 2006

Taylor banks on earmarks in his race for reelection

By Elana Schor

The Hill

The surge in congressional earmarks has become a potent campaign issue for incumbents with notorious spending habits, but Rep. Charles Taylor (R-N.C.) is trying to use a nonprofit group in his district to turn pork into political gold.

The tax-exempt Education and Research Consortium of the Western Carolinas (ERC) began in 1999 when Taylor assembled the presidents of four colleges in his district to plan a long-term strategy for attracting high-tech jobs to a region previously dependent on manufacturing.

Taylor, an influential House appropriations cardinal, “pledged to work toward $100 million of funding which would be a part of achieving that goal” for the ERC, the group’s website states.

Taylor has delivered. In just one 2006 appropriations bill, ERC-linked schools received $2 million for an astronomical research center, $1 million for a computer engineering program and $1 million with no strings attached, according to a tally by nonpartisan Taxpayers for Common Sense.

Another Taylor earmark sent $2.8 million to the National Climatic Data Center, where the ERC operates a fiber-optic network and ERC board member Max Lennon manages the thriving business of interpreting weather data.

While the ERC continues to bill itself as a partnership of college presidents, two of its 2004 directors were businessmen involved in higher education: Jack Cecil, a land developer and member of the University of North Carolina’s board of governors, and Lennon, a past president of two Tar Heel State schools who now runs Education and Research Services (ERS), a nonprofit group spun off from the ERC.

Another senior appropriator, Rep. Alan Mollohan (D-W.Va.), became the target of a federal investigation this spring for his use of federal earmarks to benefit nonprofit groups in his district. But while ERC directors have helped Taylor’s campaigns — Cecil, Lennon and their families have given $11,400 since 2001 — Taylor’s personal wealth has not jumped like Mollohan’s since he helped form the earmark-rich nonprofits.

John C. Hunter, a past president of Taylor’s Blue Ridge Savings Bank, is the ERC’s executive director and highest-paid employee. In an interview this month about a Russian study program created by Taylor earmarks, Hunter said the lawmaker attends “at least one” ERC board meeting every year to keep tabs on his brainchild.

“He’s interested in what we do,” Hunter said. “If he’s got a program like this Russian program, if he’s going to try to do something in terms of appropriations, obviously we try to figure out, well, how’s this going to be run?”

Taylor’s well-funded Democratic opponent, former Washington Redskins quarterback Heath Shuler, rapped the Republican in the media for funding the Russian program, which The Hill first reported last week. “Shouldn’t we ensure every American can attend college before we use taxpayer money to send foreigners to college?” Shuler asked Taylor.

But Shuler’s decision to hammer Taylor for his prolific earmarking could backfire with voters, political analyst and professor Larry Sabato said.

“Earmarks have helped many a congressman in a competitive district get reelected under adverse political conditions,” said Sabato, director of the University of Virginia’s Center for Politics. “People are grateful. It creates jobs, generates additional dollars. … All those people who benefit from earmarks are going to realize the payday may stop if Taylor gets defeated.”

The offices of Taylor, the ERC and the ERS did not return calls seeking comment on the groups’ activities. But Taylor’s response to Shuler’s initial criticism of the Russian program pointed to the local clout his earmarks generate, citing a laudatory editorial in the Asheville Citizen-Times.

In a May letter to the editor of that paper, Taylor’s chief of staff, Sean Dalton, positioned the lawmaker as an heir to Sens. Robert Byrd (D-W.Va.) and Ted Stevens (R-Alaska), lawmakers of legendary prowess in siphoning money from Washington to their states. “Congressman Taylor will never apologize for bringing federal dollars back home,” Dalton wrote.

Taylor also touted his involvement with the ERC as a factor behind his vote last week against the U.S.-Oman Free Trade Agreement, issuing a statement suggesting that lopsided trade deals “only undermine these efforts” to use the ERC to attract more high-tech jobs to his district.

Shuler maintains a four-percentage-point lead over Taylor, according to a July 10 poll by nonpartisan Public Policy Polling. The two were separated by an identical margin in a May poll of likely voters in the district.

The ERC and ERS define themselves as 501(c)3 groups for tax purposes. Most 501(c)3 groups receive some percentage of their revenue from “public support,” the Internal Revenue Service term for tax-deductible contributions from individuals. Such groups “are supposed to receive at least one-third of their support from the general public,” according to a primer from the Department of Agriculture’s Community Development division.

Both of the Taylor-linked nonprofits got 100 percent of their 2004 revenue from government grants, according to tax returns. The ERC declared a $12.3 million take in 2004, and the ERS declared a $474,000 take. Lennon earned $114,000 as ERS president that year, more than half of ERS’s total program-services expenses.

The ERS began in 2003 as a subsidiary of the ERC, according to articles of incorporation filed with the North Carolina secretary of state. Two days after Election Day 2004, when Taylor beat Democrat Patsy Keever by five percentage points, the ERS revised its charter to state that “the corporation will not have members.”

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