ASHEVILLE, N.C. -- Charles Taylor, wealthy businessman and banker, owns at least 14,000 acres of prime land in western North Carolina. He's also the local congressman. So when he steers federal dollars to his district, sometimes he helps himself, too.
Last year, Mr. Taylor added $11.4 million to a big federal transportation bill to widen U.S. Highway 19, the main road through Maggie Valley, a rural resort town in the Great Smoky Mountains. His companies own thousands of acres near the highway there and had already developed a subdivision called Maggie Valley Leisure Estates.
Mr. Taylor also got $3.8 million in federal funds for a park now being built in downtown Asheville with fountains, tree-shaded terraces and an open-air stage. It's directly in front of the Blue Ridge Savings Bank, flagship of his financial empire. He is among the richest congressmen with assets of at least $72 million, records show.
The Republican lawmaker is one of at least a half-dozen House members whose public actions in directing special-interest spending known as earmarks have also benefited their private interests or those of business partners, according to congressional, corporate and real-estate records. Among them is a senior Democrat, Rep. Alan Mollohan of West Virginia.
The lawmakers say they're working to help their districts, not themselves. "I fight for the priorities set by our local governments, universities and economic development organizations, not based on what will be of benefit to me," Mr. Taylor says.
But the growth of earmarks and the secrecy that shrouds the practice inevitably raises questions of self-dealing. Earmarking has been at the center of the influence-peddling and corruption probes that have shaken public confidence in Congress this year. The practice also played a central role in the case against former Rep. Randy "Duke" Cunningham. The California Republican was imprisoned after pleading guilty to accepting $2.4 million in bribes from defense firms in exchange for earmarks and other favors.
The growth of earmarking points to a shift in the way Congress works. Most federal spending originates in requests by departments and agencies. The Transportation Department might seek funds to build a highway interchange, for example, or the Pentagon might ask for new tanks. The spending proposals are then put into legislation which must win approval by Congress.
Earmarks are different because lawmakers can directly insert them into spending bills, often without public scrutiny. Many lobbyists and corporations have discovered in recent years that one of the fastest ways to get the spending they desire is to approach an individual lawmaker of either party on the House or Senate appropriation panel about an earmark. That has fed the growth in earmarks to an estimated $47.4 billion last year from $19.5 billion a decade earlier, according to the Congressional Research Service.
Earmarks range from pet projects -- such as Mr. Taylor's $500,000 earmark to help build a Teapot Museum in Sparta, N.C. -- to billion-dollar cargo-aircraft contracts that weren't sought by the Pentagon but are funded to keep jobs in a lawmaker's district. In California, Rep. Gary Miller steered $1.28 million to widen a road near an upscale shopping center he helped develop. The center is expected to include a Target store and 120 residential units. His business partner was Lewis Group, one of the nation's largest builders and a big contributor to his political campaign.
Federal prosecutors in Washington, Los Angeles and San Diego are looking closely at earmarking in the wake of the Cunningham case. At least four congressmen, including Rep. Jerry Lewis, a Republican from California who is chairman of the House Appropriations Committee, are being investigated for their role in earmarking or ties to lobbyists specializing in earmarks, people close to the inquiries say. Each lawmaker has denied impropriety. Mr. Taylor isn't known to be a target of any investigation.
Prosecuting these cases will be difficult because an earmark only becomes illegal if the legislator is clearly acting in exchange for money or to promote his private business interests. Under the prevailing interpretation of the constitutional separation of powers, most congressional correspondence and deliberations are out of reach of prosecutors.
Mr. Taylor, 65 years old, grew up in Brevard, N.C., where he still lives. He has long had an interest in real estate. He tells friends that he saved his pay as a grocery bagger in high school to buy his first piece of land. He was elected to the North Carolina General Assembly right out of law school and served there from 1966 to 1972. He then went into the family business, running Blue Ridge Savings, and continued to buy up land.
Mr. Taylor was elected to the U.S. House of Representatives in 1990 and focused on winning a seat on the Appropriations Committee because, he said, the local Veterans Administration hospital was in poor shape and needed federal help. He now chairs the powerful subcommittee on the interior, which approves tens of billions of dollars in federal spending every year. One wall of his House office is covered with framed political cartoons attacking his record on the environment and his support for logging. He boasts of being the only registered forester in Congress.
This fall, Mr. Taylor is battling to hold on to his seat against Democrat Heath Shuler, a former Washington Redskins quarterback. Mr. Shuler has advocated fiscal responsibility and attacked Mr. Taylor's "irresponsible" earmarking. His campaign has also questioned why some of Mr. Taylor's earmarks funded Russian exchange students or lower-priority highway projects.
Mr. Taylor says using his clout to bring federal money to his district is nothing to apologize for. He warns that the largess might dry up if Mr. Shuler, a political novice, is elected. "Before I won a seat on the Appropriations Committee, folks in our region had spent decades being ignored by their own federal and state government. We're not going back to that," he says through a spokesman. "A freshman isn't at the table, he isn't in the room, he doesn't even know where the room is where decisions are made."
Among those receiving funding from earmarks sponsored by Mr. Taylor are nonprofit groups that he helped create and that are run by business partners and supporters. The largest of these, the Education and Research Consortium of the Western Carolinas, has received more than $30 million from Mr. Taylor's earmarks in recent years, according to the consortium's Web site. The consortium is run by a former top executive of his bank, who is Mr. Taylor's nephew. Several of the nonprofits list addresses in the Art Deco tower in Asheville's central Pack Square, where Mr. Taylor's own business ventures are based. Mr. Taylor's aides say the consortium has helped draw businesses to Asheville by funding high-speed Internet access for schools and industry.
In Maggie Valley, where Mr. Taylor earmarked funds for highway improvement, his companies own thousands of acres of mountain land bounded by U.S. Highway 19 and the famed Blue Ridge Parkway, which he has also supported with earmarks for guardrails and acquisition of buffer land. Earlier this year, he helped secure a $6.75 million federally guaranteed rural-development loan to reopen a mountaintop amusement park there called Ghost Town in the Sky. The park's owners were longtime campaign contributors to Mr. Taylor. He says he got the loan to create jobs in the valley.
Another Taylor earmark in last year's transportation bill steers $4.8 million to widen parts of U.S. Highway 64, a winding mountain road that runs near tracts of timberland that Mr. Taylor's companies own in Transylvania County, near the South Carolina state line.
"Every one of Congressman Taylor's earmarks in the last transportation bill was for a project near property that either he or one of his companies owns," says Erich Zimmermann, who studied the bill's special-interest spending for the nonpartisan Washington group Taxpayers for Common Sense. "The pattern is pretty clear."
Mr. Taylor doesn't agree. "The millions in highway-improvement funding I've been successful in bringing to western North Carolina are for the benefit of our region -- period," he says. While spending on mountain roads "may be grist for the attack mill," he says, it is what people in the state really need -- not "mega-roads" built by bureaucrats.
Nevertheless, Mr. Taylor's earmarks have made some Republicans wary. The North Carolina Conservative, a monthly publication based in Linville, N.C., has run a series of columns critical of the congressman by Ann Ryder, of Mars Hill, N.C. She and a neighbor, Wanda Bradley, both longtime Republicans, have scoured county courthouses for deeds and tax records to describe the labyrinth of companies Mr. Taylor created for his landholdings.
County tax records show that Mr. Taylor, his family and various holding companies and partnerships own more than 14,337 acres in six counties, making him one of the state's largest landholders. He also is involved in commercial development projects and owned an Asheville site that became a shopping center anchored by a Wal-Mart.
Mr. Taylor and his partners also are investors in a mountaintop resort called Wolf Ridge, where hundreds of ski chalets are being built for sale to wealthy second-home buyers. Out-of-staters are drawn by breathtaking views, a heated pool, a steakhouse and the convenience of a nearby airport with a 3,500-foot runway suitable for private jets. Construction crews are carving the runway out of a ridge, their dynamite blasts echoing across the valley.
Mr. Taylor wrote a letter to the North Carolina Department of Natural Resources asking that the agency approve a sewage waste-water permit for Wolf Ridge and sister projects. He clipped his congressional business card to the letter. Mr. Taylor says he wrote it because of the many new jobs the project would bring.
Mr. Taylor has a role in many other commercial projects through Blue Ridge Savings Bank. He also owns a majority stake in Russia's Bank Ivanovo, where his partner is a former KGB officer.
While many House and Senate members invest in real estate or have business interests, few have such extensive holdings in their home district. House ethics rules say that being a congressman should be a full-time job, and they warn against any appearance of using one's public position to benefit personal business interests.
Real-estate investing has made other lawmakers wealthy in recent years as well. Rep. Mollohan, the West Virginia Democrat whose earmarks are now under federal investigation, has become a multimillionaire in recent years through real-estate investments. As reported in page-one stories in The Wall Street Journal on April 7 and April 25, Mr. Mollohan's partners in these deals included earmark recipients and a former federal contractor.
Rep. Miller, the Southern California Republican who steered earmarks to the road next to a shopping center in which he had an interest, is an active buyer and seller of real estate in and around his district. He has sold property worth at least $11 million in the past year, according to his disclosure forms, and his net worth is estimated to be twice that. (Lawmakers are required to disclose only ranges of income and assets, so precise figures aren't usually available.)
Rep. Miller also inserted a provision in a transportation bill forcing the closure of the Rialto, Calif., municipal airport, over the objections of the Federal Aviation Administration. The airport, a vast expanse of cracked blacktop and scrubland that is home to a flying school and forest-fire-watch patrols, boasts spectacular views of snowcapped mountains in the distance and direct access to a new interstate highway. The Lewis Group, Rep. Miller's business partner, is negotiating to buy the site and build 2,000 luxury homes there, as reported by the Hill, a Capitol Hill newspaper.
Rep. Miller defends his business ties and 30-year friendship with the Lewis family and says there was "no quid pro quo" in the campaign contributions. An aide to the congressman says local governments were "very supportive" of the airport closure. As for the road next to the shopping center, he says in a news release that he supported its improvement because it will cut congestion. An aide said yesterday that his ownership interest in the project ended before the road construction began.
Congress has done little to police itself, although lawmakers enacted an internal rule last month requiring members to sign their names to some earmarks. Mr. Taylor voted in favor of the measure, saying members should be willing to stand up for earmarks. He called such spending "absolutely essential" to rural areas of the country.
Mr. Taylor also said that eliminating earmarks entirely wouldn't save money. "The same tax dollars would be spent," he said through a spokesman. "The decisions about where and how much would just be left to unelected bureaucrats."
The measure has big loopholes and exempts appropriations bills the House already has passed this year. Because it is an internal House rule, not a law, it will expire when the current congressional session ends in a few weeks.
