Mike Fitzpatrick Tariff Bills to Benefit Donors
In early May, Rep. Mike Fitzpatrick (R-Pa.) introduced 12 bills to suspend importation duties on chemicals such as Isoviolanthrone Crude Dry Presscake and 4-Sulfo-1,8-naphthalic anhydride potassium salt.
The obscure names and dense bill text, which would amend the Harmonized Tariff Schedule, might leave casual observers perplexed. But according to disclosure forms, eight of the 12 proposals had something in common: They would benefit United Color Manufacturing Inc., a dyes and pigments firm in Fitzpatrick’s district.
Thomas Nowakowski, the president of the company, said the “low six figure” monetary value of the duty suspensions is critical for his company to stay competitive with rivals in India, China and Mexico.
But Nowakowski and his family have also been generous campaign donors to Fitzpatrick and the Republican Party, giving the Pennsylvania Republican more than $26,000 since 2002 and more than $150,000 to Republican candidates and party organizations during that time.
On March 30, about one month before Fitzpatrick introduced the eight bills, Nowakowski, his wife, Carmella, and his son Thomas Jr. donated $5,500 to Fitzpatrick.
Despite the coincidental timing, the campaign donations are not evidence of impropriety or quid pro quo. Fitzpatrick’s office and Nowakowski said the donations were not related to Fitzpatrick’s introduction of the eight bills.
But as House Republicans debate whether to count tariff suspension bills as earmarks under House rules, critics of the provisions say the Fitzpatrick example raises exactly the sort of questions that got earmarks banned in the House in the first place.
“Anything that appears to be provided in exchange for donations does raise questions and certainly doesn’t improve Congress’ popularity,” said Thomas Schatz, president of government watchdog group Citizens Against Government Waste.
Since the House Ways and Means Committee published a list of 1,300 miscellaneous tariff proposals on its website Thursday, some conservatives have pushed back.
Sen. Jim DeMint (R-S.C.) wrote an article today for National Review Online urging that Republicans not stray from the party’s earmark ban that specifically addressed “tariff earmark[s].”
On Friday, an analysis by Heritage Action for America showed that the vast majority of the 1,300 proposals benefit 10 or fewer companies, making them banned “earmarks” under House rules.
United Color Manufacturing, which employs about 40 people at two Pennsylvania locations, imports various chemicals to produce dyes and pigments that are then used by downstream manufacturers.
“A lot of our competition comes from China, comes from India, comes from Mexico. And basically, the rules and regulations are less over there. The wages are less over there,” Nowakowski said.
For many of the chemicals the company imports, there is a 6 percent to 7 percent duty, which Fitzpatrick’s bills would suspend temporarily. “It makes us more competitive globally against cheaper competition, which I would think everyone would want,” Nowakowski added.
United Color Manufacturing first proposed the duty suspensions to Sen. Bob Casey (D-Pa.), who has introduced the Senate companions to Fitzpatrick’s bills. Nowakowski has not donated to Casey, and Senate Democrats have not adopted a pledge to eliminate tariff suspensions and other earmarks in authorization bills. They have agreed to eliminate earmarks in spending bills, however.
“Senator Casey introduced these bills to help level the playing field for Pennsylvania manufacturers. These companies face unfair global competition. … This company is sustaining Pennsylvania jobs and the Senator wants to make sure they have the tools they need to grow and retain their workforce,” Casey spokeswoman April Mellody said in an email.
Regarding the donations to Fitzpatrick on March 30, Nowakowski said he and his wife did not actually attend a fundraiser held that day because of a church event. “My son represented us,” Nowakowski said, adding that “to the best of my knowledge,” his son did not discuss the tariff bills at the fundraiser.
The donations had nothing to do with Fitzpatrick proposing the bills, Nowakowski said.
Athan Koutsiouroumbas, Fitzpatrick’s chief of staff, said the bills are “about sustaining and creating jobs in the weakest economic recovery on record.”
“Any domestic competitor of the tariff exemption requestor can take advantage of the exemption. Furthermore, there is a public vetting process which allows companies that can produce the materials domestically to object to the tariff exemption,” Koutsiouroumbas said.
Ways and Means Chairman Dave Camp is pushing for legislation that would incorporate many proposals like Fitzpatrick’s into a larger bill. The Michigan Republican has set off a debate within the Republican Conference over whether the limited tariff proposals should count as earmarks.
Appropriations Chairman Hal Rogers (R-Ky.) has argued that the proposals are clear violations of House rules. For appropriators, the issue is fairness: They are not permitted to provide spending earmarks in appropriations bills.
Camp argues that the tariff proposals aren’t technically earmarks because they are available to anyone who wants to import the type of goods designated by the legislation.
The miscellaneous tariff bill process “specifically requires Members disclose whether the benefits of the provisions are broadly available and therefore not earmarks,” Ways and Means spokeswoman Sarah Swinehart said. Regarding Fitzpatrick’s tariff proposals, Swinehart said: “There isn’t a process in town that comes close to the scrutiny MTBs receive. Each bill must be able to stand on its own merits.”