10.05.2008
By Dan Christensen
The Miami Herald

Congressman Lincoln Diaz-Balart has procured millions in federal funding to benefit a small Miami-Dade defense-contracting group that has donated tens of thousands of dollars to his political campaign and that of his brother, fellow U.S. Rep. Mario Diaz-Balart.

Medley contractors Locust USA and Mark Two Engineering began contributing to the Diaz-Balarts’ campaigns and political action committees in 2001, the year Locust secured its first small defense contract. Through this year, those contributions totaled more than $67,000.

Locust was awarded $20.8 million in Pentagon research and development contracts from 2001-2007, federal contracting records show.

At least 44 percent, $9.2 million, came through Congressional earmarks sponsored by Lincoln Diaz-Balart, The Miami Herald found. The largest — $3.7 million — came in 2006.

”My work on behalf of Locust USA is meant to add jobs to our local economy by putting our community at the forefront of military technology development,” Diaz-Balart wrote in reply to Herald questions.

`NO RELATIONSHIP’

Campaign spokesman Carlos Curbelo said there’s ”no relationship” between the earmarks and political contributions. “We have a very strong firewall between our campaign and the government office.”

Locust and Mark Two, established in the late 1990s, operate out of the same modest warehouse in the 8300 block of NW 74th Ave. They’ve worked together to develop futuristic technologies, including small, high-speed turbine engines for unmanned aerial vehicles (UAVs), missiles and power generators.

Diaz-Balart’s office confirmed he sponsored the $9.2 million in earmarks for Locust to develop ”heavy fuel-burning engines” for UAVs for the Army. He also helped push another recent earmark likely to raise the total over $10 million.

Earmarks are inserted into spending bills by legislators to direct funds to specific projects or organizations.

The federal Office of Management and Budget has questioned earmarks, in general, saying they ”circumvent” executive branch authority and the competitive allocation process.

Earmarks have surfaced as an issue in the presidential campaign this year, with candidates calling for an ending or curtailing of them. Two years ago, earmarks were at the heart of scandals involving lawmakers and lobbyists like Jack Abramoff. A public outcry led to limited anti-pork reforms.

Diaz-Balart is far from the only member of Congress to issue earmarks. So far this year, he ranks 12th of 25 Florida U.S. Representatives in earmarks, with $10 million, according to an analysis compiled for The Herald by Keith Ashdown at Taxpayers for Common Sense, a non-partisan watchdog group.

The runaway leader is Republican Congressman C.W. ”Bill” Young of St. Petersburg, with $134 million.

In South Florida, Democrat Kendrick Meek issued $19 million, Republican Ileana Ros-Lehtinen $10.8 million, Democrat Debbie Wasserman Schultz $9.7 million, Democrat Robert Wexler $4.2 million, Democrat Alcee Hastings $3.9 million, Republican Mario Diaz-Balart $3.6 million and Democrat Ron Klein $2.55 million, the analysis found.

”He’s not a big earmarker, but the interesting part is that he’s decided to make this private company a priority,” Ashdown said of Diaz-Balart. “A company that’s giving him money.”

Locust President Enrique J. Enriquez declined interview requests.

Diaz-Balart began to help Locust obtain funding in 2002.

LETTER TO THE EDITOR

Enriquez cited that early assistance in an Aug. 19, 2002 letter to the editor in The Herald that praised Diaz-Balart for obtaining millions of dollars in UAV funding for “an obscure little company in his district.”

”By bringing this technology to the attention of leaders in Washington and the armed forces, Diaz-Balart has procured millions from Congress to accelerate our development,” Enriquez wrote.

By then, Enriquez and his partners — William Box, chairman of the board of both companies, and Greg Murphy — their wives, and company lawyer Lawrence Felder had contributed $17,000 to the Diaz-Balart brothers’ campaigns. Nine days later, they gave another $1,500.

Box said he learned of the 2006 earmark only when Enriquez handed him a copy of the Congressional Record.

‘He said, `Look, we got an earmark,’ ” Box recalled.

Diaz-Balart and his staff have visited the offices of Locust and Mark Two at least four times for tours and photo opportunities.

Several years ago, Diaz-Balart arranged and members of his staff attended an introductory meeting between Enriquez and the then chairman of a pair of armed services subcommittees, former Rep. Curt Weldon, R-Pa. Enriquez later testified twice before Weldon committees.

The Herald and Taxpayers for Common Sense — which keeps earmarks databases, and reviewed them at the newspaper’s request — identified three defense earmarks that Locust got between 2004 and 2006.

EVEN FLOW OF MONEY

Locust and Mark Two money flowed evenly to the Diaz-Balarts as those earmarks were enacted. Between 2003 and 2006, their campaigns and joint leadership PAC, Democracy Believers, received $41,000.

The total of all Locust and Mark Two political contributions since 2000: $192,000. All but $500 went to Republicans, including $70,000 to Florida Attorney General Bill McCollum’s House and Senate campaigns.

Locust and Mark Two are privately held, and don’t disclose sales figures. Box said Mark Two has about 100 employees.

Locust gets contracts directly from the federal government, but also subcontracts with large defense firms like Honeywell. Mark Two subcontracts with Locust and others, said Box, who is chairman of the board of both companies.

Customers include not just the Army, but NASA and the Defense Advanced Research Projects Agency. For NASA, Mark Two recently helped develop a small furnace for the next Mars Rover that will be used to detect signs of life, Box said.

In 2004, National Defense magazine reported that Locust was working on a power source for a robotic exoskeleton that would turn soldiers into supermen who could lift and tote hundreds of pounds of equipment.

The Defense Contract Management Agency, which monitors contractor performance for the Pentagon, ”has conducted no reviews or audits for Locust,” a spokeswoman said Friday.

Box, 61, is the principal investor in the two companies.

DRIVE FOR EARMARKS

Enriquez, 50, is a former Star Wars satellite project manager for Rolls Royce in Miami who until recently ran operations at both companies, including the drive for earmarks, Box said.

On March 19, Diaz-Balart sponsored another earmark for Locust on the same Army project.

”I certify that this project does not have a direct and foreseeable effect on the pecuniary interests of me or my spouse,” Diaz-Balart wrote the House Appropriations Committee.

The $2 million earmark became law late last month. Sen. Debbie Stabenow, a Michigan Democrat, co-sponsored and Locust will split that money with another private company from Michigan.

This is not the first time Lincoln Diaz-Balart’s Congressional actions have benefited a campaign donor.

THE KEY BACKERS

In June, The Miami Herald reported that the Diaz-Balart brothers were among the key backers of a House bill that would broaden insurance coverage for prosthetic devices.

Executives and political action committees tied to Hanger Orthopedic Group, a Maryland prosthetics maker, contributed more than $10,000 to the Diaz-Balart brothers’ campaigns in the weeks before they co-sponsored a prosthetics parity bill last March.

Lincoln and Mario Diaz-Balart say they backed the bill because it will help those who can’t afford to pay for a needed artificial limb.

The Diaz-Balarts, both Republicans, are locked in reelection races on the Nov. 4 ballot.

Lincoln faces former Hialeah Mayor Raul Martinez, and Mario is being challenged by former Miami-Dade Democratic party chief Joe Garcia.

Lincoln has questioned Martinez’ work as a paid consultant seeking government business — questioning whether he should have been registering as a paid lobbyist for firms seeking business in Miami, Miami-Dade County and Hialeah. Martinez said he never lobbied.