Ed Perlmutter

Mr. PERLMUTTER

Mr. PERLMUTTER. I yield to my friend from North Carolina.

Mr. PERLMUTTER. Madam Chair, I yield myself such time as I may consume. This is the amendment we've been visiting about over the course of this bill. And what it does, the structure of the bill is such that it solicits, an issuer can solicit small investments via the Internet or some other mass type of media, and that solicitation then, a notification is made to the Securities and Exchange Commission. Once that notification is made, then notice of the solicitation on the Internet, this crowdfunding so to speak, is then given to each State so that the State regulators, the State enforcement authorities, are given notice of this solicitation, of this crowdfunding request for sale of securities. The amendment that Mr. McHenry and I have prepared makes sure that when the States get this notice, they can use their police powers, their enforcement authority, to make sure that the issuer, or anyone involved with the solicitation, anyone involved with this crowdfunding which is being used across the Internet, can then, the laws can be enforced to stop any kinds of fraud, defalcation of funds, embezzlement, misrepresentation, any kinds of bad acts related to the solicitation under the crowdfunding. This applies to both the issuer and the intermediaries. Anybody holding the funds will still be subject to the police powers of the State. So we maintain the States' rights for police power.

Mr. PERLMUTTER. I have an amendment at the desk.

Mr. PERLMUTTER. Reclaiming my time, I thank my friend from North Carolina. We have no opposition to this amendment. We urge its adoption. I yield back the balance of my time.

Mr. PERLMUTTER. I thank the gentlelady. I would just say to my friend from North Carolina, I appreciate the fact that this is new, but I think when we are dealing with these small investments and lots of people, just as with a charity, you'd like to know that most of it's going to the charity and not to the solicitation effort. That is why I would say this is important, so you know that it's getting to your investment and not to the sale effort. So I would support her amendment.

Mr. PERLMUTTER. I want my friend from New York to catch her breath. That's why I'm going to claim time in opposition. But I also do have a question. In 2008 when the stock market crashed, when we saw home prices drop like a rock, when people lost their jobs, we experienced over a several month period deflation--not inflation; deflation. Under the amendments, both the preceding one as well as the amendment by my friend from Arizona, when I look at it, I think, if the price goes down, this could also shrink. I yield to my friend North Carolina.

Mr. PERLMUTTER. I claim time in opposition, although I am not opposed to the amendment.

Mr. PERLMUTTER. Madam Chair, I yield myself such time as I may consume. I would like to thank my friend from North Carolina for bringing this bill forward. It is a good idea. It allows for investments to be made in smaller amounts by more people using mass kinds of solicitations through the Internet, through some other vehicle that we may not know of at this point. And that is a good step. And as we've gone through the process, we've built it into a better bill by adding in investor protections because this is something where people could be misled. There could be misrepresentations, and there has to be some penalty for that. As the amendment process goes forward today, we will build those amendments into this. Now, having said all of that, having listened to the description of the bill that preceded us about making it easier to sell securities, sell investments, sell deals to accredited investors, that's a nice step, too. Again, we need to have investor protection restrictions in there just to make sure people don't get defrauded. We just suffered through that in 2008 with the likes of Madoff and Stanford and a number of other fraudsters, con artists. We want to minimize that if we can as we try to make capital available to businesses to grow. Now, let's not make any mistake here. These are nice steps, but they're not going to put a lot of people back to work. My friend, Mr. McHenry, described the President speaking in this very Chamber about this bill, but what he was really talking about was the American Jobs Act. And the American Jobs Act is what this body needs to pass as well. We need to keep teachers on the job. We need to keep firefighters on the job. We need to put construction workers back on the job. There were complaints about the United States Senate slowing things down, blocking things. Well, today, the United States Senate, the Republicans in the United States Senate, blocked rebuilding the infrastructure of this country--the roads, the bridges, the energy system, the sewer systems, the basic things that this country needs which would put thousands and thousands of construction workers back on the job. So it would be jobs today, investments for a long time for this country. We need to keep those teachers on the job. We need to put our veterans, as they come home from Iraq and from Afghanistan, we need to make sure they have a job. That's part of the Jobs Act. That's what needs to be done today. This is a good step in capital formation. But it isn't putting people to work right away. That's what this Nation needs. This Jobs Act that the President proposed when he talked about crowdfunding, as we have been in this bill, what he was here for was to get the Jobs Act, to get these tax credits passed that would help our veterans get to work, to get our infrastructure rebuilt, to rebuild our schools and to keep teachers on the job. That's what this Nation needs. That's what this Nation wants. That's what our people expect. So I thank my friend from North Carolina for bringing this bill forward. It's a good idea. He's been willing to work with us to make it a better idea, and we thank him. We also ask him and his colleagues on the Republican side of the aisle to pass this Jobs Act today. America needs it today. With that, I yield back the balance of my time.

Mr. PERLMUTTER. I yield 3 minutes to the Congresswoman from New York (Mrs. Maloney).

Mr. PERLMUTTER. I yield myself such time as I may consume. The gentleman from New Jersey just brought something up. My friend from North Carolina is correct, and I misstated it. The intermediary is more or less the platform, the conduit. But one of its responsibilities, and this is found in 4A, section 10, is to outsource the cash management responsibilities to qualified third-party custodians such as broker-dealers or insured depository institutions, which was a concern that we were all--we all had during the committee hearing is, ``Okay. Who's holding the money? Can they be trusted? Will they release the money at the right time?'' which was what the gentleman from New Jersey was just talking about. So I thank my friend from North Carolina for reminding me of that section. Again, it's another piece of investor protection and a good idea that helps with capital formation. Again, we're trying to blend these two concepts. I would like to yield 3 minutes to the gentleman from Texas (Mr. Al Green).

Mr. PERLMUTTER. I would like to ask the Chair what time each side has remaining.

Mr. PERLMUTTER. I will reserve my comments for my time.

Mr. PERLMUTTER. The answer is yes, if my friend from New Jersey is yielding to me for a second.

Mr. PERLMUTTER. To the degree that the intermediary exists in this, they will be subject to the enforcement principles as we go through the amendments. With that, I yield 3 minutes to my other friend from North Carolina (Mr. Miller).

Mr. PERLMUTTER. I thank my friend. One other new term in the bill that we ought to have some discussion about is ``intermediary.'' Intermediary in the bill is more or less a custodian of funds. Am I correct or not? I yield to my friend.

Mr. PERLMUTTER. Madam Chair, I yield myself such time as I may consume. For the record, H.R. 2930 creates a new exemption from registration under the Securities Act of 1933 for what we call ``crowdfunding'' securities. I think the record should have a definition. Crowdfunding refers to a technique for raising money over the Internet in relatively small amounts from a large number of people. And that's the exemption that's being sought pursuant to this bill, a different way to raise money. Would the gentleman agree? I yield to my friend from North Carolina.

Mr. PERLMUTTER. Mr. Chairman, I yield myself such time as I may consume. I thank my friend from North Carolina for bringing this matter to the floor, for being the sponsor of this bill and for working with us to make this bill better. Now, as Mr. McHenry said, this is a bill that really allows money to be raised, investments to be made by people without a lot of money. They are investors who are going to make smaller investments but in a large volume. As my friend said, this isn't 1933, and this isn't 1934 when those acts were passed. But still, what we've got to remember is sales can be made on the Internet now, or this bill will ask that sales be made of securities on the Internet. Originally, it could be on the phone, it could have been by mail, and it could have been by word of mouth. But what we've got to do with this ability to raise money across the Internet is ensure that the proper protections are put into place so that those who might deceive or defraud or in some other way mislead investors who are making these investments can be policed and the laws can be enforced if, in fact, there is some type of fraudulent act. Now H.R. 2930 enables small companies and individuals to make use of Internet-based social networks to raise up to $1 million from friends, family, and other interested investors. While the bill caps both the total level of securities and the amount investors can invest, Democrats expressed strong concerns about the potential harm this new market could pose to investors. Originally, the bill provided few investor protections and no SEC or State regulatory oversight. During the committee markup of H.R. 2930, Democrats added provisions requiring crowdfunding. And ``crowdfunding'' is a term that really isn't seen in our law to date. And what it is is the sale of securities, the solicitation of investments across the Internet in small amounts. So Democrats asked that there be notice given to State regulators so that they could police the activities against wrongful conduct, deception, fraud, embezzlement, or other kinds of misdeeds. Democrats successfully added a provision to disqualify bad actors, individuals that have been convicted of either State or Federal securities law violations or other financial law violations. Democrats also requested, and the gentleman from North Carolina and the Republicans agreed, to create a regulatory framework for the crowdfunding Web sites that would provide additional disclosures, safeguards, and protections for investors who wanted to buy into one of these investments. We recently had a financial crisis that we're still continuing to dig our way out of. There were Ponzi schemes. Everybody is aware of the Madoff Ponzi scheme and others. We need to have protections for investors as businesses seek to form and develop capital. We thank the gentleman from North Carolina in working with us to place some of those investor protections into this bill. We know there will be a number of amendments that are proposed that will continue to strengthen those investor protections. We thank the gentleman from North Carolina for bringing this bill forward. I reserve the balance of my time.

Mr. PERLMUTTER. I yield 1 additional minute to the gentlelady.

Mr. PERLMUTTER

Mr. PERLMUTTER. Mr. Speaker, I rise today to recognize and applaud Dilan Ramos for receiving the Arvada Wheat Ridge Service Ambassadors for Youth award. Dilan Ramos is an 11th grader at Jefferson Senior High and received this award because his determination and hard work have allowed him to overcome adversities. The dedication demonstrated by Dilan Ramos is exemplary of the type of achievement that can be attained with hard work and perseverance. It is essential students at all levels strive to make the most of their education and develop a work ethic which will guide them for the rest of their lives. I extend my deepest congratulations to Dilan Ramos for winning the Arvada Wheat Ridge Service Ambassadors for Youth award. I have no doubt he will exhibit the same dedication and character in all his future accomplishments.

Mr. PERLMUTTER

Mr. PERLMUTTER. Mr. Speaker, I rise today to recognize and applaud Dean Rogers for receiving the Arvada Wheat Ridge Service Ambassadors for Youth award. Dean Rogers is a 8th grader at Drake Middle School and received this award because his determination and hard work have allowed him to overcome adversities. The dedication demonstrated by Dean Rogers is exemplary of the type of achievement that can be attained with hard work and perseverance. It is essential students at all levels strive to make the most of their education and develop a work ethic which will guide them for the rest of their lives. I extend my deepest congratulations to Dean Rogers for winning the Arvada Wheat Ridge Service Ambassadors for Youth award. I have no doubt he will exhibit the same dedication and character in all his future accomplishments.

Mr. PERLMUTTER

Mr. PERLMUTTER. Mr. Speaker, I rise today to recognize and applaud Destiny Bean for receiving the Arvada Wheat Ridge Service Ambassadors for Youth award. Destiny Bean is a 8th grader at Oberon Middle School and received this award because her determination and hard work have allowed her to overcome adversities. The dedication demonstrated by Destiny Bean is exemplary of the type of achievement that can be attained with hard work and perseverance. It is essential students at all levels strive to make the most of their education and develop a work ethic which will guide them for the rest of their lives. I extend my deepest congratulations to Destiny Bean for winning the Arvada Wheat Ridge Service Ambassadors for Youth award. I have no doubt she will exhibit the same dedication and character in all her future accomplishments.

Mr. PERLMUTTER

Mr. PERLMUTTER. Mr. Speaker, I rise today to recognize the members of the Rocky Mountain Arsenal Restoration Advisory Board in Colorado, who are dissolving as a board this month after more than 17 years of service to the nation. As the primary community advisory board for the U.S. Army at the Rocky Mountain Arsenal, the members have ensured that the community was informed and involved during each phase of the design, remediation and transformation of this environmental cleanup site into a premier urban national wildlife refuge. Given the importance of the task and the many years of work it required, their dedication deserves our recognition and thanks. Their work is particularly remarkable because of the unique role the site has played in the history and defense of our nation. The U.S. Army built the Rocky Mountain Arsenal following the attacks on Pearl Harbor to manufacture chemical weapons as a deterrent against the Axis Powers. After the war, the U.S. Army leased some of the facilities to Shell Chemical Co., which manufactured agricultural chemicals at the site. As the decades unfolded, the Rocky Mountain Arsenal played critical roles in allowing our nation to win the Cold War, put men into space and complete a historic demilitarization program. These achievements came at a price, however. Although the U.S. Army and Shell used accepted waste disposal methods of the time, some contamination of the structures, soil and groundwater occurred. The communities of Brighton, Commerce City and Denver, which surround the Rocky Mountain Arsenal and are represented on the Restoration Advisory Board, help forged consensus around the environmental restoration and future use of the site. Together with representatives from the U.S. Army, Shell Oil Co., U.S. Fish and Wildlife Service, Environmental Protection Agency, Colorado Department of Public Health and Environment and Tri-County Health Department, these citizens held more than 130 public meetings. They reviewed countless technical documents, shared community questions and perspectives and served as liaisons with the larger community to ensure public concerns were addressed throughout the environmental restoration program. They also provided critical support for the future use of the site as a national wildlife refuge once remedial actions were complete. Today, the Rocky Mountain Arsenal National Wildlife Refuge encompasses more than 15,000 acres and offers habitat to more than 330 wildlife species, including American bald eagles and wild bison. Just as importantly, the refuge offers exhibits to educate visitors about the historic use and legacy of the site. Now that the environmental restoration and transformation of the Rocky Mountain Arsenal is complete and the board has completed its oversight role, the Restoration Advisory Board has decided to dissolve. Please join me in thanking the members for their service and in congratulating them on a job well done.

Mr. PERLMUTTER

Mr. PERLMUTTER. Madam Speaker, the best way to reduce the debt that this country has is to put people back to work. When they are back to work, they are paying their taxes and they are not getting unemployment. We need to get everybody in this country working, and the President proposed a bill called the American Jobs Act that does just that. It focuses on innovation, American innovation and ingenuity. It focuses on education and our community colleges and our K-12, and it focuses on rebuilding this country's infrastructure: our roads, our bridges, and our energy system. But you know what happened over in the Senate yesterday; every single Republican voted against this. That bill has Republican ideas and Democratic ideas, but every single Republican voted against it. We need to put the people in this country back to work. We don't need to be playing politics about the White House 13 months out from the election. That American Jobs Act needs to be passed, and it needs to be passed right now.

Mr. PERLMUTTER

Mr. PERLMUTTER. I thank my friend from California. I would say the view from Colorado is, there's a lot of pushing and pulling back here, and I would call upon my moderate friends in the Republican Party, if there are any anymore, to stop this tomfoolery. No longer can we put the full faith and credit of the United States at risk. I mean, we do have a duty to preserve and protect our Constitution, and the full faith and credit of this country is referred to at least three times in the article about the Congress in the ``full faith and credit'' section of the Constitution and then in the 14th Amendment. We pay our debts. We pay our bills. So I'd just say that the President has proposed a solid, long-term fiscal plan. It took us 10 years to get into this financial mess from the time we had a surplus under Bill Clinton, and it will take us several years to right ourselves, but we can do it. This is America. Then as we're doing that, we really do have to focus on making sure that people who play by the rules, who are responsible and hardworking, have a shot at getting advanced in this world. The best way to do that is through a good job and through making things in America. For Democrats, really our formula is to innovate, educate, rebuild this economy, and rebuild our infrastructure. That will make this country strong, and it will make Colorado strong. We love our clean energy industry. That's a good place to start.

Mr. PERLMUTTER. I was going to say to my friend, over the course of the last 10 years we know where the debt really came from. It wasn't in early childhood education. It wasn't in national parks. It was in two tax cuts--a couple trillion dollars or more. It was in two wars--at least a couple trillion dollars. And it was in a crash on Wall Street when people were laid off and had to have some kind of assistance. Obviously, you said Arizona needed assistance--$6.4 billion and they still sold their capitol. I would yield to my friend from Connecticut because he has the chart that describes this.