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Virginia Firm Dreams Up Earmarks for Clients

On July 12, 2007, Rep. Mark Souder (R-Ind.) sent a letter to the chairman and ranking member of the House Education and Labor Committee asking that they insert language into the No Child Left Behind reauthorization bill to fund a project for at-risk youth.

He wrote that the project had been proposed by Grace College, a private evangelical college in his Congressional district, and the Ventura County (Calif.) Office of Education to match up the college’s experience in educating prisoners with the county’s expertise in reaching at-risk youth.

But the project linking two geographically distant entities was really the brainchild of Anchor Consulting, a small lobbying firm that represents both the VCOE and Grace College. The firm pitched the partnership to the clients, wrote the legislative language and drafted the letter for Souder’s signature, according to people involved in the process and documents obtained by Roll Call.

On July 13, the day after Souder’s letter was sent, Scott Wilk, Western regional manager for Virginia-based Anchor Consulting, attended a VCOE board meeting, where he described the project to the board members, several of whom were hearing about it for the first time.

Wilk said it would be a five-year program authorized for $3 million a year, and that while Grace and VCOE would have to figure out later how to distribute the responsibilities and the budget, Ventura County would get a minimum of $1 million a year from the project.

At the time, the board had no staff dedicated to the project. Yet Anchor reported that the proposal already had been endorsed by Souder and that his status as a “swing vote” on the committee made it likely it would be approved.

At the board meeting — a recording of which is available here — Wilk outlined the firm’s approach, which lobbying experts say is probably not unique, though it is rare that the public hears about it. Rather than the client coming to the lobbyist for help in obtaining funding for a project, the lobbyist creates ways to deliver federal money for the client, even for projects the client had no plan to pursue.

Instead of trying to get funding to fix weaknesses, Wilk told the board, “a lot of times what we do is we want to take your strengths, because we can sell that, get you money — and as you know all funds are fungible — and then maybe take some of that money out and go and put it to your other needs.”

He described another client, a California arts school that needed money to replace its outdated air conditioning system. Instead, Wilk said, Anchor conceived a project for the school to partner with the UCLA School of Medicine to produce AIDS-education videos for use in Africa, and got $12 million in federal money to launch the project. “They came looking for an air conditioner, now they are doing an AIDS program in Africa,” Wilk said.

Harry Henderson, the founder of Anchor Consulting, told Roll Call that Wilk was not suggesting that federal money be diverted from its intended purposes to other needs of the recipient organization. Rather, he said, if an organization is already operating a successful program, “if you can get the federal government to support it, you can take money that you were providing yourself and put it toward other needs.”

Anchor later told the VCOE that the budget for the project with Grace College was expanding to $5 million a year, with Grace taking in about $4 million of that, according to documents obtained by Roll Call. The biggest chunk of the budget would be a new, $8.5 million building on the Grace campus that would be used to host VCOE at-risk youth for four sessions of a two-week summer camp. Grace would continue to use the building throughout the year.

The at-risk youth partnership is not the first project Souder has pursued for Grace. In the omnibus appropriations bill passed by Congress in December, Souder is credited with a $195,000 earmark for “technology upgrades” on the Grace campus. With Indiana Sens. Dick Lugar (R) and Evan Bayh (D), Souder shared credit in the bill for a $1.1 million earmark for Grace College to develop an emergency services training center for the county.

While it is not unusual for religious institutions to get earmarks, Grace states on its Web site that the college “is for the evangelical Christian student for whom faith and spiritual maturity is a priority. This is why Grace is one of the few Christian colleges that requires a faith statement and spiritual life reference as a normal part of the application process.”

The freshman application to Grace College asks the applicant to “describe your relationship with Jesus Christ as Savior and Lord. Describe how and when that relationship began and the influences that are contributing to your spiritual development.”

Souder told Roll Call that while he recognizes that there is a political debate about providing taxpayer money to an evangelical college, there is no legal barrier to giving earmarks to Grace. While there would be more restrictions on providing such funding to a faith-based high school, Souder said, “we had a bipartisan agreement a number of years ago [that] at a college level it doesn’t apply.”

John Boal, chief advancement officer for Grace College, said the school is careful to follow the guidelines for faith-based organizations to ensure they are not violating any restrictions included with receipt of federal funding. “We are an institution of higher education,” Boal said, and the government is not funding religious activity at Grace.

Boal declined to discuss details of the project with Ventura County, saying “right now it is just in discussion.” But he acknowledged that Anchor Consulting came up with the idea for the project. “I wouldn’t have any trouble saying this was their idea,” he said. But Boal had previously worked in Ventura County, so he was familiar with the schools there.

He later added that since hiring Anchor in the fall of 2006, Grace has been looking for ways to expand its successful prison education program and to identify federal funding opportunities. He also said he was in discussions with the VCOE as early as May 2007.

Souder said he has worked closely with Grace in the past and knew that the college was looking for ways to expand its prison education program even before they hired Anchor. “The fact is that we had discussed this before Anchor Consulting,” he said.

Dean Kunicki, a member of the VCOE board, acknowledged that Anchor introduced Ventura County to Grace, and said the idea for a partnership grew out of a lunch between himself, Wilk and Boal.

Kunicki said he was a member of a subcommittee that had been authorized to find a lobbyist and work toward projects that might bring in federal funding. Kunicki said while it is true that the July 13 meeting was the first time other members of the board had heard of the project, that is because he had authorized Anchor to move as quickly as necessary to get the idea before Congress.

At that point, “there was no agreement between us and Grace and Anchor about the details,” Kunicki said. “We told them to go ahead and get started, if that is what they needed to do.”

Souder said his understanding was that Grace and Ventura County had been working on the proposal for several months by the time he made his request. It would not have made sense to have designed more detail for the project prior to gauging Congressional interest in moving forward, he said.

If the VCOE members who were working with Grace “got their cart before the horse” by failing to brief other members of the board, “that’s their issue,” he said.

Henderson and Wilk both defended their approach of helping clients seek funding sources they had not previously considered.

“We work with our clients to see what they are capable of doing,” Henderson said. “We like looking with our clients to find ways that they can do things that are exciting working with the federal government.”

The firm may have generated the idea for a partnership between two clients, but it would have resulted from the analysis of the interests of the individual clients, Henderson said. “We don’t come with a preconceived notion of ‘this is a project we want to do, let’s have Organization X do it,’” Henderson said.

He said the firm has regular monthly contracts with its clients and does not accept payments contingent on securing federal money.

Anchor Consulting is a 2-year-old firm, with most of the staff having experience working for Members of Congress from Indiana and California.

The Ventura County Office of Education has a board meeting scheduled for Jan. 28 to discuss a proposal to terminate the $10,000-per-month contract with Anchor Consulting, at the request of the one Democratic member of the five-person board. Kunicki said he is very happy with Anchor’s work, and he expects the county to complete the two-year contract it signed with the firm.

It is not clear when — or whether — Congress will take up the NCLB bill this year.