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(Senate - May 24, 2012)

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[Page S3620]
From the Congressional Record Online through the Government Publishing Office []


  Ms. SNOWE. Mr. President, this week is National Small Business Week, 
which is a time to celebrate the entrepreneurial spirit behind American 
enterprise. But, as I was reminded by a piece that was published 
recently in the Wall Street Journal, it is also a time to remember how 
government can better serve the small businesses in America. In today's 
economy, the Nation needs an effective regulatory environment that 
allows small business to grow and create jobs while keeping our 
families and environment safe. I ask unanimous consent to have this 
article printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

              [From the Wall Street Journal, May 22, 2012]

   The Red Tape Diaries--One Small Business Owner's Struggle Against 

                         (By Nicholas N. Owens)

       This week is National Small Business Week, a time to 
     celebrate the ingenuity of entrepreneurs--and to consider how 
     government can provide better service to the small 
     enterprises that form the backbone of American industry.
       Consider the Environmental Protection Agency official who 
     described his agency's work as akin to crucifixion. In a Web 
     video from 2010 that recently came to light, Al Armendariz 
     likened regulatory enforcement to the Roman imperial practice 
     of crucifying people to serve as an example to others: 
     soldiers would go to ``a town somewhere, they'd find the 
     first five guys they saw, and they'd crucify them,'' he 
     explained. ``And then, you know, that town was really easy to 
     manage for the next few years.''
       Mr. Armendariz's point was that making examples of certain 
     businesses or industries would serve as a deterrent to ensure 
     compliance. But the way he illustrated his point provoked 
     outrage, and within days he had resigned from the agency--
     proving again that the journalist Michael Kinsley was right 
     to say that a ``gaffe'' in Washington is when someone 
     accidentally tells the truth.
       I know first-hand that Mr. Armendariz's view is a truthful 
     representation of how many regulators view their function. 
     While serving as the Small Business Administration's (SBA) 
     national ombudsman from 2006 to 2009, I worked with small 
     business owners who believed they were falling victim to 
     unfair or excessive regulatory enforcement. All too often, I 
     saw federal regulators take a stridently adversarial stance 
     toward the industries they oversee.
       In 2007, for example, I was contacted by Rob Latham, who 
     runs a small Internet sales company in Greenville, S.C. Mr. 
     Latham started his business in 2005 and was prepared to work 
     hard to make it succeed.
       He wasn't prepared for how easily a run-in with federal 
     regulators could bring him to the brink of ruin. That's what 
     happened in 2007 after he found himself embroiled in a 
     months-long dispute with the EPA over a shipment of engines 
     he had imported.
       The issue came down to labeling. Although the product Mr. 
     Latham was importing met the EPA's environmental standards, 
     regulators ordered the shipment seized because it contained 
     labels that could be removed with a razor blade. (In other 
     words, they were somewhat vulnerable to damage or tampering.) 
     Mr. Latham thought the dispute could be easily resolved but 
     was surprised by the EPA's intransigence--its dedication to 
     junking his entire shipment--when he tried to work with them.
       Mr. Latham wasn't ignorant of the regulations that governed 
     his business--quite the opposite. He had carefully studied 
     the rules that governed the products he was importing, and he 
     thought he had taken all appropriate steps to ensure 
     compliance. But as a small business owner with no in-house 
     legal team, he had little idea how complicated the 
     bureaucratic process would be.
       He met with regulators in Washington to resolve the issue 
     but found that they doubled down on their position, becoming 
     hostile and aggressive.
       That's when he reached out to my office. Hearing of his 
     plight, I contacted the EPA on his behalf and started working 
     with regulators to resolve the case. Soon thereafter, the 
     regulators relented and allowed Mr. Latham's imports to move 
     forward--but only after he paid a substantial penalty of 
     $10,000, an apparent tribute to the regulators to allow them 
     to save face.
       The story ends happily: Once the EPA dispute was resolved, 
     Mr. Latham's business grew swiftly. Today his company boasts 
     three warehouses and more than 20 employees.
       But had Mr. Latham not connected with my office, he might 
     have lost his business. It's frightening to think what other 
     small business owners encounter in similar situations. What 
     about those who don't know where to turn, or who aren't lucky 
     enough to stumble across the right advice or the right 
       As of 2008, small businesses faced an annual regulatory 
     cost of $10,585 per employee, according to an SBA regulatory 
     impact study published two years ago.
       So was Rob Latham crucified? That's too strong a word, 
     because it's likely he wasn't specifically targeted--he was 
     simply caught up in a web of red tape and bureaucracy, and 
     the regulators had little interest in helping him get through 
     the impasse. His struggle is a case study in why we need a 
     regulatory regime that's fair, accountable and allows our 
     economy to grow again.