Sen. Robert Menendez, D-N.J., is using obscure tariff waivers in the nation’s capital to aid large chemical and pharmaceutical manufacturers with high-dollar political muscle back home.
A member of the Senate Finance Committee, Menendez has introduced 118 bills to exempt specific products from normal import duties. That is almost twice as many as anyone else on the committee, which controls the fate of what are known as “Miscellaneous Tariff Bills” or MTBs.
The MTBs eliminate or substantially reduce levies domestic companies must pay to import a foreign-made product that is not produced in the U.S.
The committee’s chairman, Sen. Max Baucus, D-Mont., introduced a dozen MTBs, most aimed at small companies in his state that have not spent money on lobbyists or campaign contributions.
Senate Republicans on the committee, locked in an internal squabble over whether the bills violate the congressional ban on special-interest earmarks, introduced no MTBs.
On the House side, 11 Republicans on the House Ways and Means Committee introduced 105 MTBs before the deadline expired last month. Eleven other 11 Republicans on the committee sponsored no MTBs.
Among the Democrats on Ways and Means, four sponsored 42 MTBs, while 11 sponsored none.
The numbers come from the lists of MTBs posted last month on the official web sites of the two committees, which are the repositories through which all of the proposed measures must pass.
These MTBs are the latest battle over congressional earmarks, which were temporarily banned by both chambers in 2010. Included in that moratorium is any tariff waiver that benefits 10 or fewer entities.
Advocates say the bills benefit domestic manufacturers by cutting costs of raw materials, and that they do not violate the earmark ban because any company can import the product.
Critics argue that virtually all of the bills benefit a single importer, and that the way they are passed favors big companies that employ lobbyists and make campaign contributions.
More than 2,000 MTBs were introduced this year, 1,270 in the House and 792 in the Senate, according to the committee lists. Senate committee members sponsored 312 MTBs; House committee members 147. See the accompanying chart for the complete list.
The 118 bills sponsored by Menendez put him second only to Sen. Robert Casey, D-Pa., among members of Congress who introduced MTBs. Casey is not a member of the Finance Committee. The value of each bill’s waived tariffs will be determined later this year by the International Trade Commission (ITC).
Pharmaceutical giants Bayer and Johnson & Johnson would each benefit significantly from multiple bills Menendez sponsored, according to disclosure statements he is required to file. So would a half-dozen chemical manufacturers.
All of the companies have major facilities in New Jersey. Bayer HealthCare, for instance, last year selected the state for its new east coast headquarters.
Several of the companies also are political powerhouses. Bayer has spent $22.9 million in federal lobbying since 2009, according to disclosure reports, which do not specify how much of that was spent on MTBs.
The company also donated $819,966 to congressional candidates through its political action committee in that time, including $8,000 to Menendez.
Johnson & Johnson’s PAC has donated $1.9 million to federal candidates since 2009, according to the Federal Election Commission. Menendez got $10,000 of it.
Other donations from the Johnson & Johnson PAC in the last three years include $60,000 each to the Democratic Senatorial Campaign Committee (DSCC), the Democratic Congressional Campaign Committee (DCCC) and the National Republican Senatorial Committee (RNSC). It also donated $60,000 to the National Republican Congressional Committee. Johnson & Johnson has spent $33.8 million on federal lobbying since 2009.
Menendez was chairman of the DSCC during the 2010 campaign cycle.
“The Senator’s policy was to support all NJ companies who were qualified, so that each would have a chance to have their request reviewed,” Menendez spokesman, Trickia Enright, told The Washington Examiner.
“These companies — large and small — collectively employ tens of thousands of New Jerseyans. The Senator supports changes to the process, but until those changes are in place, he will continue to work to make sure no New Jersey companies are disadvantaged,” she said.
Casey has raised $11,000 since 2009 from two corporations that benefit from the MTBs he has sponsored, according to federal disclosure statements. Of that, $10,000 came from Bayer’s PAC.
Bayer and its subsidiaries are the biggest beneficiaries of Casey bills with 33 measures split between Bayer Crop Science and Bayer Material Science LLC. Bayer’s U.S. headquarters is in Pittsburgh.
Casey received $1,000 from E.I. du Pont de Nemours & Co., an international chemical company with multiple facilities in Pennsylvania.
The Baucus bills would help several Montana-based companies, including Sun Mountain Sports in Missoula.
Sun Mountain was importing finished golf bags from China and paying the tariff of 17.6 percent, said Ping Lin, the company’s director of global sourcing and supply.
Then Baucus got an MTB for the importation of component parts used in bags assembled at the Sun Mountain plant in Missoula, she said.
That resulted in about 70 new jobs producing the hundreds of thousands of finished bags Sun Mountain makes every year, Lin said. Without the tariff waiver, the company would still be importing the finished bags from China, she said.
“It’s a win for the U.S.,” Lin said. “People get more jobs. Another win for us is to cut down the cost, for us to gain more market share.”
None of the companies that import goods specified in Baucus MTBs made political donations or reported federal lobbying expenses in the last three years. Baucus declined to comment.
Senators Jim DeMint, R-SC, and Claire McCaskill, D-MO, have introduced MTB reform legislation that would enable companies to go directly to the ITC instead of members of Congress.
Mark Flatten is a member of The Washington Examiner’s special reporting team and can be reached at [email protected]. Jennifer Peebles is the newspaper’s data editor and can be reached at [email protected].
