Tea Party Favorite Blasts Lugar on $165k Fed Subsidies

John Ransom
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Posted: Sep 14, 2011 12:01 AM

US Senate candidate and Indiana State Treasurer Richard Mourdock blasted US Senator from Indiana, Richard Lugar, the incumbent Republican he’s trying to unseat, over farm subsidy payments that Lugar received from 1995 to 2010.

The record shows that Lugar has a long history of rent-seeking from the US government even while singing the praises of free markets.

Mourdock, the presumed Tea Party favorite, according to Greg Fettig head of Tea Party-centric Hoosiers for Conservative Senate, is Treasurer of one of the few states operating in the black this year. But still, he faces an uphill battle to oust the quintessential “establishment” Republican in Lugar.  

According to records compiled by the Farm Subsidy database, Lugar received $165,687 in farm subsidies during a decade and half in the Senate, including the six years he spent as chairman of the Senate Agricultural Committee, from 1995 to 2001.

“As part of his month long visit to Indiana in August,” Mourdock told Townhall Finance “Senator Dick Lugar on multiple occasions spoke of eliminating subsidies for sugar growers, yet he remained completely silent about the fact, according to farm.ewg.org, that he has been personally receiving farm payments from the federal government on wheat, corn and soy beans for many years on acres he owns in Indiana.”

“It comes back to the protection of a very few [sugar] growers who have had a hammerlock on [prices], and they are not unique. I’m opposed to subsidies in general,” Lugar told Chicago’s Public Radio station WBEZ about sugar subsidies.

He’s opposed to subsidies “in general,” but not specifically when it comes to subsidies for sugar’s direct competitor in the United States, corn, which Lugar just happens to grow. Or soybeans.  

You know? Coincidentally.

Lugar is chairman of Lugar Stock Farm, Inc. which according to Lugar is a 600 acre “active corn, soybean, and hardwood tree farm in Marion County, Indiana.” Lugar enjoyed an income of $197,342 in 2010 according to financial disclosures he made as a member of the Senate. He has a net worth of $2.5 million.

If one subtracts out his Senate salary of $174,000 per year, plus farm subsidy payments of about $7,000 for 2010, Lugar Stock Farms netted less than $17,000 assuming no other income. In some years, Lugar’s payments from the federal government through farm subsidies have reached as high as $19,400.

His net worth and his income would look much lower without the subsidies.

Lately the Lugar campaign has been floating the idea that Mourdock- who received some stock in a private company that makes natural gas from coal in lieu of payment as a consultant- has a conflict of interest because, by way of his stock ownership, he could benefit from so-called climate change legislation.

A compliant mainstream media promptly took up the Lugar line with the Associated Press trumpeting: Mourdock could benefit from climate regulations, in 20 point headlines.

But stock or no stock, Mourdock has been out front saying he doesn’t support climate change legislation, as the Associated Press even admits, buried deep in their story:

Mourdock, a geologist from coal-rich southwest Indiana, campaigned heartily against climate change legislation in 2009, delivering a speech to the tea-party affiliated Americans for Prosperity and writing a letter to the editor published in newspapers across the state. Then controlled by Democrats, the House passed the bill, but it went nowhere in the Senate.

But to prove that Mourdock really isn’t a Tea Party conservative, the Associated Press trotted out a policy wonk from the left-wing’s Common Cause, whose board members include former Clintonista, now socialist economist Robert Reich, to question whether Mourdock really supports the Tea Party.   

Mourdock's situation is not a traditional conflict of interest in the sense of him benefiting from policies he's pushing, but it does raise questions of where his allegiances stand: with the tea party philosophy or with his stock portfolio, said Julia Vaughn, spokeswoman for Common Cause Indiana, a public interest group.

Not traditional conflict of interest, you know, like the one Lugar has.  

Nonsense says Tea Party leader Fettig, who put together a coalition of grassroots groups to vet candidates.

“Mourdock has been very upfront with us. He’s been a solid conservative,” says Fettig, who thinks that time in the system has corrupted Lugar.

“Lugar planted 200 acres of trees on his farm that has no house on it in order to get carbon credits from the Chicago Climate Exchange at a time that legislation was before the Congress. What else can I say?”

In 2006, Indiana University and Purdue University jointly announced via a Lugar press release that Lugar’s farm had joined Al Gore’s Chicago Climate Exchange (CCE).

“I am pleased to announce that the Lugar Stock Farm has enrolled as an offset provider in the Chicago Climate Exchange,” said Lugar at the time.

In order for Lugar to have benefited however from membership in CCE, Congress needed to provide the regulatory framework through so-called Cap and Tax regulations. At the height of trading, carbon credits were fetching as much as $7.50 per metric ton of carbon. Lugar estimated that his farm would be eligible for about 3400 metric tons of carbon capture credit or $25,000 at peak value.   

Throughout the debate on Cap and Tax Lugar played coy with voters and the media on how he would vote, saying at times that carbon was a serious problem, but then admitting that Cap and Tax would likely hurt the coal industry in Indiana.  

Ultimately he voted against moving the bill to a final vote in the Senate. And the CCE died shortly after that. Without a federal mandate the climate exchange was bound to die.

But Lugar was singing a different song when he joined the CCE.

The Chicago Climate Exchange is providing an innovative means of involving American businesses and citizens in the effort to protect the environment.  Our nation's leading companies are buying and trading units of carbon as a way to reduce their impact on climate change.  I am hopeful that the economic opportunities provided by the Exchange will enhance the incentives farmers already have to participate in the sequestration of carbon.

He was hoping the government would enhance those incentives too.

For Lugar, it’s the same old song and dance.  


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