POLAR FLEECED….Alaska’s Ted Stevens has long been one of the most mockable of senators, a guy whose main goal in life seems to be little more than shoveling as much money as possible to his state. And he’s good at it. In fact, unlike other senators, who mainly specialize in garden variety pork like roads and army bases, Stevens has hit on an ingenious new system: funnel other states’ pork through native Alaskan front companies via loopholes in federal contracting laws. Benjamin Wallace-Wells explains in the current issue of the Monthly:
There’s no natural reason why an out-of-the way place like Anchorage?a place so far from the American mainland that Russia appears on the local TV station’s weather maps, but not Seattle?should have become a center of the government contracting industry. Native corporations, however, were holding some valuable cards. The combination of their sole-source contracting exemption and status as minority-owned firms gave them an advantage over competitors, a benefit that [contract guru Mike] Brown leveraged. He began modestly with base management subcontracts, hiring smart project managers he knew from the contracting world to run them. ?Running base services isn’t rocket science,? Brown told me.
But there were problems. Brown found that he couldn’t find enough Eskimos with management experience to run even these simple projects. By law, minority-owned corporations and their subsidiaries are required to actually have a minority as CEO. Brown had an ace up his sleeve: Like CEOs of many of the native organizations, he had a tight relationship with Stevens and was able to get the senator on the phone. Stevens soon got his colleagues to pass legislation exempting native companies from the minority CEO rule. Then Chugach grew too big to qualify for programs favoring small businesses; Stevens lobbied for and passed an amendment letting native corporations retain their small business status regardless of how large they become. And when Chugach began to approach the nine-year limit for a single company’s participation in the small business program, Stevens won yet another statutory break allowing Alaskan native firms to create endless new subsidiaries so that the parent firm could have indefinite access to contracts.
Ingenious? Sure. Corrupt? Quite possibly. A blueprint for the future? Definitely:
Many in the GOP leadership view it as a model for the kind of federal government they would like to see more of. It is a privatized system that circumvents the civil service, enriches politically-connected corporations, provides a trickle of money to the poor, and secures Republican power. For some conservatives, in other words, the Eskimo loophole is not a failed experiment in social engineering. It is the future.
Read the whole thing. It’s a fascinating story of politics in the era of the modern Republican party.
