Why does this water keep flowing around my hand?

The NY Times has a story today about for-profit companies that are still managing to get earmarks from sympathetic members of Congress, despite a formal ban on such activities.  How?  They set up nonprofits, which are exempt from the ban:

Just one day after leaders of the House of Representatives announced a ban on earmarks to profit-making companies, Victoria Kurtz, the vice president for marketing of a small Ohio defense contracting firm, hit on a creative way around it.

To keep the taxpayer money flowing, Ms. Kurtz incorporated what she called the Great Lakes Research Center, a nonprofit organization that just happened to specialize in the same kind of work performed by her own company — and at the same address.

Now, the center — which intends to sell the Pentagon small hollow metal spheres for body armor that the Defense Department has so far declined to buy in large quantities and may never use — has $10.4 million in new earmark requests from Representative Marcy Kaptur, Democrat of Ohio.

I suppose this is another great example of the difficulty of regulating the flow of federal money.  Although I can't help thinking that this is less an indictment of the earmark ban and more an indictment of the rules governing nonprofit corporations.  I mean, if the leaders of a for-profit company can set up a nonprofit and have federal funds for it go to benefit the for-profit company, that kind of makes a mockery of the whole "nonprofit" idea, doesn't it?