WASHINGTON » House Democratic leaders said yesterday they will ban the much-criticized practice of using annual spending bills to direct pet projects to private companies that often return the favor with campaign contributions.

Rep. David Obey, D-Wis., chairman of the Appropriations panel, told reporters he hopes the step will mean 1,000 fewer earmarks and break the link between campaign contributions and earmarks that has sparked intense criticism and resulted in ethics investigations of several lawmakers.

But the move sparked strong opposition from Hawaii's Daniel Inouye, chairman of the Senate Appropriations Committee, a long-standing defender of earmarking. Inouye issued a tartly worded defense of the current system, saying, “;It does not make sense to discriminate against for-profit organizations.”;

The election-year step comes after the ethics committee investigated seven members of a Pentagon spending panel for rewarding earmarks to companies whose executives and hired lobbyists showered them with campaign cash. The panel found no linkage and absolved the lawmakers.

The subject of earmarks has through the years brought criticism of Congress that's often generated by wasteful spending such as the $200 million-plus “;bridge to nowhere”; in Alaska that was supposed to connect an island with a population of just 50 or so to the mainland. But among congressional watchdogs, the more odious element has been the pay-to-play culture in which campaign cash flows from earmark beneficiaries into the coffers of lawmakers.

“;For-profit earmarks are really where the rubber meets the road as far as corruption,”; said Steve Ellis of Taxpayers for Common Sense, a Washington-based watchdog group that has been critical of earmarking.

The most commonly accepted definition of an earmark is a specific project that's not requested by the president but inserted into one of the annual spending bills by a member of Congress. They come in countless varieties, like grants to police departments, improvements to military bases, renovations to historic buildings and grants for home-district colleges.

Critics say earmarks for private companies amount to no-bid contracts for firms. Last year President Barack Obama called such projects “;the single most corrupting element in this practice.”;

The new edict is aimed at for-profit entities, especially those who are seeking to tap into the Pentagon's $600 billion-plus budget. Most companies hire lobbyists to navigate the process, and it's common for both company executives and the hired lobbyist to give campaign cash to lawmakers who sponsor their earmarks.

Inouye, showing little inclination to follow the House's lead, said, “;it's no secret”; that companies hire lobbyists and make campaign contributions.

“;That is how most of them make the Congress aware of their products and services,”; he said. “;All lobbyists file disclosure reports. These contributions are all fully disclosed and available for all to see on the Internet.”;