Small-busi­ness bill clears Se­nate hur­dle

Bi­par­ti­san­ship pre­vails af­ter amend­ments are de­feated

The Washington Times Daily - - Politics - BY SEAN LENGELL

A House Re­pub­li­can leg­isla­tive pack­age aimed at eas­ing se­cu­ri­ties reg­u­la­tions for small busi­nesses passed a key test vote in the Se­nate on Wed­nes­day, clear­ing a path for one of the first sig­nif­i­cant bi­par­ti­san bills to pass Congress this year.

The Demo­crat-con­trolled Se­nate voted 76-22 to end de­bate on the so­called Jobs Act and pro­ceed to a final vote Thurs­day. The mea­sure is ex­pected to pass, though not be­fore Democrats try a final time to make changes.

On Tues­day, the Se­nate voted down two Demo­cratic amend­ments: a sub­sti­tute ver­sion of the bill in­tended to beef up in­vestor pro­tec­tions and a pro­vi­sion to ex­tend the life of the fed­eral Ex­portIm­port Bank.

Be­fore Thurs­day’s final-pas­sage vote, the Se­nate will take up two more Demo­cratic amend­ments re­gard­ing in­vestor pro­tec­tions and trans­parency. Ap­proval would send the bill back to the House for fur­ther con­sid­er­a­tion.

“The bill is im­per­fect, and that per­haps is an un­der­state­ment,” said Se­nate Ma­jor­ity Leader Harry Reid, Ne­vada Demo­crat. “Those two amend­ments are not go­ing to make this bill per­fect, but it’s go­ing to make the bill a lot bet­ter.”

The House pack­age in­cludes six bills, three of which pre­vi­ously passed the cham­ber with wide bi­par­ti­san sup­port but stalled in the Se­nate. House GOP lead­ers repack­aged the mea­sures, and the bun­dle eas­ily passed the House ear­lier this month.

The Jobs Act is de­signed to re­duce bu­reau­cratic red tape by eas­ing some Se­cu­ri­ties and Ex­change Com­mis­sion reg­u­la­tions, giv­ing small busi­nesses bet­ter ac­cess to cap­i­tal.

One of the bills would make it eas­ier for small busi­nesses to go public by in­creas­ing the of­fer­ing thresh­old for com­pa­nies ex­empted from SEC reg­is­tra­tion to $50 mil­lion from $5 mil­lion. The mea­sure ini­tially passed the House in Novem­ber by a vote of 421-1.

“This [pack­age] is ex­actly the kind of thing Amer­i­cans have been ask­ing for — greater free­dom and flex­i­bil­ity,” said Se­nate Mi­nor­ity Leader Mitch McCon­nell, Ken­tucky Re­pub­li­can. “That’s one of the rea­sons it’s had such over­whelm­ing bi­par­ti­san sup­port.”

No Re­pub­li­can sen­a­tors voted against the pack­age.

If the Jobs Act passes the Se­nate, it will be a vic­tory for House Re­pub­li­can lead­ers, who crafted the mea­sure to re­but Pres­i­dent Obama’s claims that their party hasn’t done enough to help small busi­nesses and en­trepreneurs.

But sev­eral Se­nate Democrats say the bill doesn’t do enough to pro­tect in­vestors and small busi­nesses from fraud.

“Its flaws are deeply wor­ri­some. It threat­ens to dampen in­vest­ment, and there­fore dampen job growth,” said Sen. Carl Levin, Michi­gan Demo­crat. “Un­less we pro­tect in­vestors, they will not in­vest in our econ­omy.”

The White House sup­ports the House pack­age, though it also backs Se­nate Demo­cratic ef­forts to strengthen in­vestor safe­guards.

A noted sci­en­tist who held sen­si­tive po­si­tions in the U.S. gov­ern­ment, de­vel­oped state-of-the-art de­fense and space pro­grams, and worked at the White House was sen­tenced Wed­nes­day to 13 years in prison for at­tempted es­pi­onage, con­spir­acy to de­fraud the U.S. and tax eva­sion.

Ste­wart D. Nozette, 54, who also worked as a sci­en­tist for the de­part­ments of En­ergy and De­fense and NASA, pleaded guilty in Septem­ber to pro­vid­ing clas­si­fied in­for­ma­tion to a per­son he be­lieved to be an Is­raeli in­tel­li­gence of­fi­cer. He also pleaded guilty in Jan­uary 2009 to fraud and tax charges stem­ming from more than $265,000 in false gov­ern­ment claims.

The sen­tence was handed down by U.S. Dis­trict Judge Paul L. Fried­man, who also or­dered that Nozette pay $217,000 to the gov­ern­ment agen­cies he de­frauded.

“Ste­wart Nozette’s greed ex­ceeded his loy­alty to our coun­try,” said Ron­ald C. Machen Jr., U.S. at­tor­ney for the Dis­trict of Columbia. “He wasted his tal­ent and ru­ined his rep­u­ta­tion by agree­ing to sell na­tional se­crets to some­one he be­lieved was a for­eign agent. His time in prison will pro­vide him am­ple op­por­tu­nity to re­flect on his decision to be­tray the United States.”

The Jus­tice Depart­ment said Nozette has been in cus­tody since his Oct. 19, 2009, ar­rest on es­pi­onage charges while await­ing sen­tenc­ing for fraud and tax eva­sion. FBI agents ar­rested Nozette af­ter an un­der­cover op­er­a­tion in which he pro­vided clas­si­fied ma­te­ri­als on three oc­ca­sions. The in­dict­ment does not claim that the gov­ern­ment of Is­rael or any­one act­ing on its be­half com­mit­ted any crimes.

The depart­ment said Nozette ad­mit­ted that, from 2000 through 2006, he used the Al­liance for Com­pet­i­tive Tech­nol­ogy (ACT), a non­profit group he or­ga­nized in March 1990, to de­fraud the U.S. Naval Re­search Lab­o­ra­tory in Washington, the De­fense Ad­vanced Re­search Projects Agency in Ar­ling­ton, and NASA’S God­dard Space Flight Cen­ter in Green­belt by pre­sent­ing more than $265,000 in fraud­u­lent re­im­burse­ment claims, most of which were paid.

He also ad­mit­ted that, from 2001 through 2005, he evaded more than $200,000 in fed­eral taxes. In ad­di­tion, he ad­mit­ted us­ing ACT, an en­tity ex­empt from tax­a­tion be­cause of its non­profit sta­tus, to re­ceive in­come and to pay per­sonal ex­penses, such as mort­gages, au­to­mo­bile loans and other items.

The Jus­tice Depart­ment said the ACT in­ves­ti­ga­tion led agents to sus­pect that Nozette — who held a topse­cret se­cu­rity clear­ance and had fre­quent ac­cess to clas­si­fied doc­u­ments — had mis­used gov­ern­ment in­for­ma­tion.

On Sept. 3, 2009, the depart­ment said Nozette was con­tacted by tele­phone by a per­son pur­port­ing to be an Is­raeli in­tel­li­gence of­fi­cer from the Mos­sad, but who was, in fact, an un­der­cover FBI em­ployee.

That same day, Nozette in­formed the un­der­cover em­ployee he had clear­ances “all the way to top se­cret” and that any­thing “the U.S. has done in space I’ve seen.” The depart­ment said he stated he would pro­vide clas­si­fied in­for­ma­tion for money and a for­eign pass­port to a coun­try with­out ex­tra­di­tion to the United States.

A se­ries of con­tacts fol­lowed over the next sev­eral weeks, in­clud­ing meet­ings in which Nozette took $10,000 in cash left by the FBI at pre­ar­ranged drop-off sites, the depart­ment said. Nozette handed over se­cret and top-se­cret doc­u­ments that in­cluded in­for­ma­tion on satel­lites, early-warn­ing sys­tems, de­fense and re­tal­ia­tory strate­gies, and com­mu­ni­ca­tions in­tel­li­gence in­for­ma­tion.

The depart­ment said Nozette and the un­der­cover em­ployee met for the final time on Oct. 19, 2009, at the Mayflower Ho­tel, dur­ing which Nozette pushed for larger pay­ments for the se­crets he was dis­clos­ing. He re­port­edly said, “I gave you even in this first run, some of the most clas­si­fied in­for­ma­tion that there is ... I’ve sort of crossed the Ru­bi­con.”

“Ste­wart Nozette be­trayed his coun­try and the trust that was placed in him by at­tempt­ing to sell some of Amer­ica’s most closely guarded se­crets for profit,” said Lisa Monaco, as­sis­tant at­tor­ney gen­eral for na­tional se­cu­rity. “To­day, he re­ceived the jus­tice he de­serves.”

Nozette was on the now-de­funct Na­tional Space Coun­cil, part of the Ex­ec­u­tive Of­fice of the Pres­i­dent, un­der Pres­i­dent Ge­orge H.W. Bush.

“This [pack­age] is ex­actly the kind of thing Amer­i­cans have been ask­ing for — greater free­dom and flex­i­bil­ity,” said Se­nate Mi­nor­ity Leader Mitch Mccon­nell. “That’s one of the rea­sons it’s had such over­whelm­ing bi­par­ti­san sup­port.”

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