Goldman Sachs gets $3 Million Earmark

From Politico:

A mining company owned by Goldman Sachs and two private equity funds is in line to get a $3 million earmark for work at a rare earth elements mine in Mountain Pass, Calif. — raising questions as to why Congress would take on some of the risk for a bailed-out investment giant that’s already making a profit.

Molycorp Minerals’s open-pit mine is one of the world’s richest sources of elements that are used in the production of powerful magnets for precision-guided missiles and smart bombs, handheld communication devices, wind turbines and hybrid cars.

Rep. Jerry Lewis (R-Calif.) inserted the earmark for the mine into the House Defense appropriations bill, and backers say it’s a legitimate national security concern. The military needs rare earth elements, and China — which is rich in them — has threatened to cut off exports.

But some government watchdogs question whether taxpayers should be asked to prop up a project that is already funded by wealthy investors who expect to make a profit.

“It’s probably good business, and we probably don’t need to subsidize it,” said Ryan Alexander, president of the nonpartisan Taxpayers for Common Sense.

Moreover, Alexander said, if getting the elements from the mine is really a national security issue, then the funding request would have come through the Department of Defense — and not through a lawmaker’s earmark.

“If this is critical to national security, and the private equity firms that own Molycorp can’t find another $3 million to meet the needs of the Mountain Pass mine, there still is no excuse for this being an earmark,” Alexander said. “DOD can request programmatic funding so those funds are weighed against other security priorities rather than being singled out by one member of the House Appropriations Committee.”

Lewis, the top Republican appropriator in the House, insists that both the project and the government backing are necessary.

“The United States has some of the most extensive deposits of these minerals in the world, but the cost of production has made it difficult to attract private investment,” said Lewis’s spokesman, Jim Specht. “The $3 million from the Department of Defense will jump-start this investment, as well as provide a clear signal that domestic production of rare earth metals is a national security priority.”

Despite Obama promise, it's business as usual in Washington:

Sen. Thad Cochran's most recent reelection campaign collected more than $10,000 from University of Southern Mississippi professors and staff members, including three who work at the school's center for research on polymers. To a defense spending bill slated to be on the Senate floor Tuesday, the Mississippi Republican has added $10.8 million in military grants earmarked for the school's polymer research.

Cochran, the ranking Republican on the Appropriations subcommittee on defense, also added $12 million in earmarked spending for Raytheon Corp., whose officials have contributed $10,000 to his campaign since 2007. He earmarked nearly $6 million in military funding for Circadence Corp., whose officers -- including a former Cochran campaign aide -- contributed $10,000 in the same period.

In total, the spending bill for 2010 includes $132 million for Cochran's campaign donors, helping to make him the sponsor of more earmarked military spending than any other senator this year, according to an analysis by the nonprofit group Taxpayers for Common Sense.

Cochran says his proposals are based only on "national security interests," not campaign cash. But in providing money for projects that the Defense Department says it did not request and does not want, he has joined a host of other senators on both sides of the aisle. The proposed $636 billion Senate bill includes $2.65 billion in earmarks.