PENTAGON BUDGET'S STEALTH SPENDING

Lawmakers Slip In Special-Interest Items

A new beneficiary of federal defense spending is a small Illinois
company that produces neither weapons nor widgets. It makes chewing
gum.

"Stay Alert" is a caffeinated gum so potent each stick supposedly
packs the power of a hearty cup of coffee. Why is the military
interested? Well, it seems the gum could be an aid in re-energizing
sleep-deprived troops.

So goes the reasoning from the office of Rep. J. Dennis Hastert
(R-Ill.), who at the last minute quietly slipped in $250,000 in
research funds to study the potential defense uses of Stay Alert. It
is one of at least 30 items that appear for the first time in the fine
print of the $250 billion defense spending bill Congress has sent to
President Clinton.

Congressional aides sarcastically call such 11th-hour funding
additions "virgin births." These are items not included in the
president's budget request or in the bills approved by the House and
Senate. Instead, they miraculously appear in the final throes of
congressional budget conferences, in which House and Senate members
hammer out the differences in their versions.

They show up -- eventually -- in virtually every spending measure.
This week, Congress and the administration are negotiating an omnibus
spending bill to keep the government open. But behind the scenes,
members and lobbyists are maneuvering to add about 100 extra
special-interest provisions to the bill.

Sen. Lauch Faircloth (R-N.C.) wants $10 million for tobacco export
promotions. Senate Majority Leader Trent Lott (R-Miss.) and his
colleague Thad Cochran (R-Miss.) want $385 million in extra export
credits for Russia to help American poultry producers.

The administration hopes to tack on another $8 million to fund Iraqi
opposition groups. And Sen. Frank R. Lautenberg (D-N.J.) is trying to
help drug companies win extensions for their patents. One big
potential winner is Schering-Plough Inc., maker of a $1 billion-a-year
allergy drug, Claritin.

For veteran budget watchers, deciphering the facts behind such late
additions is a challenge. They often appear in amounts so small no one
would notice, written in language so obscure no one would understand.
It sometimes takes rigorous investigation to pin the money to a
specific company and sponsor, even more to find out the real reasons
behind them.

The late additions are less subject to public scrutiny and debate.
Lawrence Korb, an assistant secretary of defense in the Reagan
administration, said the last-minute additions are even worse than the
ones that make their way into earlier versions of the bill "in the
sense that nobody can do anything about them."

Korb, now a vice president of the Council on Foreign Relations in New
York, said the House and Senate appropriations committees "wait until
the end and then jam them in so some do-gooder doesn't yell and
embarrass everyone."

Members seeking late favors have to appeal for backing to a colleague
on the appropriations subcommittees. These members then ask the
committee leadership to insert special provisions. Usually, the items
require no formal vote but are handled in private conferences and then
included as line items in the final appropriations report. The chewing
gum money first appeared as a single line in the final report adding
funding for "pharmacokinetics research." It turns out, officials said,
that the money is destined for a doctor at Walter Reed Army Institute
of Research who will study the effects of Stay Alert on soldiers.

It also turns out that Stay Alert is a new product of Amurol
Confections Co. of Yorkville, Ill. -- Hastert's hometown.

Hastert spokesman Pete Jeffries said the money was added late because
Amurol officials didn't approach the congressman until the House
defense appropriation already had passed. He said the Army
enthusiastically backed the addition.

For the company's part, "we were thrilled," said Amurol official Janet
Sweeney. "We didn't have the money in our budget for that kind of research."

Col. Gregory Belenky, the psychiatrist who runs the Army's sleep
deprivation program, said Amurol approached him this summer, and when
he expressed interest, asked what it would cost to test the new gum.
He said he thought the company would foot the bill and was unaware it
went to Hastert, seeking to have taxpayers pick up the tab.

When an Amurol official called him recently to inform him that
$250,000 was in the bill for the gum research, Belenky said his
reaction was: "Wow, what money?"

"We searched the Congressional Record and couldn't find squat," he
said. Only then did he learn the item was listed as "pharmacokinetics
research."

In this year's defense spending bill, millions of dollars more were
added late in the game to help other specific private businesses --
makers of electronic locks, finely pulverized coal, automotive
transmissions and a vacuum-pressure system to prevent oil spills.

One $7.5 million addition to this year's bill was slipped in by
committee aides simply to make up for earlier "earmarks" for members'
special projects.

Sen. Ted Stevens (R-Alaska), chairman of the Senate Appropriations
Committee, sponsored a $2.4 million late addition for a device called
the American Underpressure System, a product pushed by San Diego
businessman Mo Husain, the patent holder.

Husain said in an interview that he has been trying for years to get
the U.S. Coast Guard to recognize his idea for preventing leaks on
existing oil tankers by using vacuum pressure.

He won a Pentagon research contract to test the idea years ago, he
said. But the Coast Guard has opposed it. "We think it needs more
engineering work," a Coast Guard official said.

After he missed his chance to get money in other bills, Husain said,
Stevens came to his aid. A footnote in the report directs the Navy to
send money to the Maritime Administration to complete tests of "the
potential interim solution . . . such as the 'American Underpressure
System.' "

J.D. Hamilton, chief executive of lockmaker Mas-Hamilton Group in
Lexington, Ky., has had help from his state's congressional delegation
for years in getting federal business for his company. It began years
ago with a directive to retrofit Pentagon safes storing classified
documents with his electronic locks, the only ones that meet
government specifications. Defense Department records show the
Pentagon has spent more than $50 million to install 121,568
Mas-Hamilton locks in its facilities.

Now, with the help of Rep. Harold Rogers (R-Ky.), a member of the
House Appropriations Committee, $5 million was added to the defense
spending bill during conference deliberations to start expanding the
lock retrofit to defense contractors as well.

Rogers's spokeswoman, Susan Zimmerman, said the earmark is necessary
to "fill a critical national security need. . . . Just because
[funding] doesn't make it into the budget request doesn't mean there's
not a security need."

Hamilton said there is a separate new earmark for his firm, for $2
million, in the Energy Department spending bill. Congress ordered a
study that requires the agency to start changing about 7,000 locks
used to protect classified materials.

Officials at the Allison Transmission Division of General Motors in
Indianapolis called on their congressional delegation, too, in recent
weeks. They did so after learning the Army was considering a German
firm to develop a possible new transmission for the Crusader
self-propelled howitzer.

Allison spokeswoman Patzetta Trice said some of the firm's 4,000
employees began writing their elected representatives after Labor Day
in an effort to help Allison win a chance at the business. Allison had
lost the earlier competition for the transmission work to General
Electric Co.

Rep. Peter J. Visclosky (D-Ind.), a member of the House Appropriations
national security subcommittee, came to the company's rescue. A $4
million add-on for research and development on an "alternative
transmission" made its first appearance in the fine print of the
conference report.

Rep. Paul E. Kanjorski (D-Pa.), whose district is in the center of the
slumping anthracite coal industry, said he is trying to help his state
and district with a $4 million addition to Navy research that showed
up for the first time in the final bill.

It is intended to fund a consortium of universities developing new
technologies to "micronize," or grind up coal to sizes that are "below
dust," as he put it.

He said he has been following the research to find "better and higher
uses for coal" for years and decided the money was needed to bring
together the schools, which he would not name. The provision was added
late, he said, because he was looking to see whether the funding might
fit better in another spending bill.

Even former members have been actively pushing last-minute funding.
Former senator Dennis DeConcini (D-Ariz.), now a Washington lobbyist,
worked on getting $4 million added in the conference under Air Force
research for "Terabit."

That turns out to be high technology research for transmitting one
trillion bits of data on fiber-optic cable pioneered by a California
client, Research & Development Laboratories, whose officials have
contributed money to members of the House and Senate defense
appropriations subcommittees.

DeConcini said an earmark for the project was in the bill last year.
"It was supposed to be in this year, too," he said, "but it fell
through the cracks."

Checked-by: Patrick Henry