Sept. 8 (Bloomberg) -- Senator Richard Shelby of Alabama has steered at least $50 million over the past decade, including $10 million approved by the Senate yesterday, to military projects benefiting a company owned by one of his largest campaign contributors.

Shelby, a senior Republican on the Appropriations Committee, has inserted the funds into legislation at the request of Huntsville-based COLSA Corp., a privately held space-and missile- defense company. Its owner, Francisco J. Collazo, has known Shelby for 20 years and has contributed more than $400,000 to his campaigns and committees since hiring a former Shelby aide as a lobbyist in 1996.

The $468 billion defense-appropriations measure the Senate approved yesterday included a Shelby-sponsored $10 million addition for a computer missile-simulation center that was requested by COLSA.

Shelby's requests for COLSA illustrate the convergence of powerful political and business interests in the minutiae of the appropriations process. Lawmakers routinely and anonymously slip pet projects, known as ``earmarks,'' into the multibillion-dollar spending measures Congress passes each year.

The process, while legal, has become controversial because it allows funding for projects to be approved without debate or individual votes. ``Campaign contributors making millions off the fine print of this bill is business as usual,'' said Keith Ashdown, vice president of Taxpayers for Common Sense, a nonprofit group in Washington that tracks budget issues.

``Few people know what's in this bill, and the rest of us are flying blind,'' he said of the defense measure.

Not Affected

The Senate attempted to curb earmarks this spring after former Representative Randy ``Duke'' Cunningham, a California Republican, confessed last November to pushing projects in return for $2.4 million in bribes. The spending supported by Shelby isn't affected by the curb, which applies only to non-federal projects; many earmarks are for projects at federal facilities.

Shelby, who defends Congress's prerogative to add and delete from the president's budget proposals, said in a Sept. 5 interview that he didn't recall specific funding requests from Collazo or COLSA.

Katie Boyd, a spokeswoman for the senator, said later that lobbyists for the company had asked Shelby's office for help. She said it would be difficult to estimate how much the COLSA- requested earmarks amounted to over the years.

Adding Jobs

Shelby, 72, said he sought the funding to add jobs in his state, not because of Collazo's donations. He said he supported the project ``because of what it did and where it was located, and not who ran it.''

The senator said he has never pushed a constituent's request that the military opposed. ``I would never be foolish enough to advocate funding for a project that made no sense,'' he said. ``Personally, I don't care who gets the business.''

Collazo, 75, declined a request for an interview. COLSA President J. Allen Sullivan Jr., a retired Army major general, said the company had requested funding from Shelby's office that resulted in contracts of about $50 million since 1999, about six percent of the company's revenue.

Sullivan said Collazo is a generous donor to charity and political causes and provided a list showing that Collazo has given twice as much to charity in the past six years as the nearly $688,000 he has given to politicians.

Hard to Spot

Like most earmarks, the funds requested by COLSA aren't easy to spot in the reports that accompany appropriations legislation. They appear as line items in charts under research-and- development projects with labels such as ``Advanced Research Center.''

The $10 million Shelby added for COLSA in the 2007 measure is designated for ``Missile Aero-propulsion Computer System Modernization.'' Boyd, Shelby's spokeswoman, said the money would be used to enhance missile-test simulation facilities at Redstone Arsenal in Huntsville.

In the fiscal year that ended Sept. 30, the latest for which figures are available, COLSA had $107 million in federal contracts, up from $46 million for 1999, according to government procurement figures compiled by Eagle Eye Publishers Inc., a Fairfax, Virginia, company that tracks federal spending.

COLSA's Sullivan said 95 percent of the company's contracts were won through competition, including those that qualified for a government ``set-aside'' program for small businesses.

A Huntsville Garage

Collazo, an Army veteran and native of Puerto Rico, started COLSA in the garage of his Huntsville home in 1980. In the company's early years, he made use of a Small Business Administration program for the disadvantaged to become a subcontractor to larger contractors.

Collazo's first donation to Shelby was in 1986, when the senator, who switched parties in 1994, was still a Democrat. The businessman also became a regular donor to Alabama Republican Senator Jeff Sessions and Huntsville's Democratic representative, Robert Cramer.

Shelby's support for the Advanced Research Center, which is located next door to COLSA's headquarters, goes back at least 10 years. In a November 1995 press release, the senator announced he had secured $30 million for the program. He added another $20 million to the budget request for the research center over the next three years.

Former Shelby Aide

In 1996, Collazo hired G. Stewart Hall, a former Shelby aide, to lobby for research, development and engineering funding in defense measures. In September 1998, Alabama records show Collazo gave $50,000 and Hall $25,000 to Shelby's state political action committee on the same day. Collazo gave another $50,000 to the PAC a month later. Hall, who made $240,000 lobbying for COLSA two years ago, declined to comment.

In early 1999, COLSA received a contract to operate, maintain and provide engineering support for the center. Since then, that contract has produced $224 million in revenue for the company, according to federal procurement data.

Collazo's holding company gave $100,000 donations to two national Republican campaign committees in 2000 and 2001, and he gave Shelby's state PAC three $100,000 donations between June 2001 and September 2002, according to campaign-finance reports.

In May 2002, Shelby wrote a 25-page letter to an Appropriations subcommittee making 106 requests, totaling more than $500 million, for the 2003 defense-spending measure. The first item on the list was $20.4 million for the center. That October, Shelby announced Congress had funded the entire amount.

In 2004, Shelby asked for $21.3 million and got $15 million for a ``Hypersonic Army Missile Technology'' project at the center -- another COLSA request, according to the company.

Computer Hardware

Sullivan said $115 million of the $224 million from the research-center support contract was used to buy computer hardware, on which the company didn't make a profit. He also said that only 77 of the center's 827 workers are COLSA employees, showing that the project benefits the region.

Shelby, in the interview, said he had no problem with suggestions that earmark sponsors be publicly identified, and is willing to defend all his funding requests on the Senate floor.

Congress, he added, has the right and duty to amend any president's budget request. That power has ``been in the Constitution from the beginning,'' he said, adding that he has asked other lawmakers whether they wanted to surrender it. ``I don't,'' he said.

To contact the reporters on this story: Charles Babcock in Washington at cbabcock1@bloomberg.net;

Last Updated: September 8, 2006 10:55 EDT