Press Releases

Today, members of the House New Democratic Coalition (NDC) expressed concern with a controversial proposal for expensing employee stock options released by the Federal Accounting Standards Board (FASB).   The proposal will likely lead to the gross overvaluation of employee stock options and corresponding investor confusion, having a chilling effect on broad-based employee stock option plans.  

“Stock options make possible extraordinary awards for ordinary Americans,” stated NDC co-chair Ron Kind (D-WI).   “They provide rank and file employees with a stake in ownership of a company, driving productivity and innovation.  The FASB proposal will hurt many small businesses, especially high-tech firms, that offer stock options to their employees and will likely destroy the partnership culture of distributing stock options to workers.”

“Stock options are an important part of the strategy for many innovative companies - both start-ups and mature firms - seeking to compete, grow and hire workers," said NDC Co-Chair Adam Smith. "At a time when economic growth is paramount for the public and policymakers alike, FASB's proposal has the potential to harm both companies and workers.”

The absence of a reliable valuation model, one that takes into account the unique qualities of employee stock option plans, under the FASB proposal will result in the overvaluation of stock options, compromising the accuracy of financial statements and distorting information available to investors and shareholders.  

“It is important to note that since there is no reliable method for measuring the value of stock options, this proposal brings with it no associated benefits in terms of greater visibility or information available to shareholders,” continued Smith.  “This proposal is especially troubling to me since it threatens to reduce the availability of stock options to rank-and-file workers - options have given employees a real stake in their companies and I fear that such opportunities could be a thing of the past.”

“This issue cuts to the heart of job creation, economic growth and competitiveness,” Rep. Anna Eshoo (D-CA) said. “Broad-based stock option plans for rank-and-file employees are a critical tool in helping small start-ups to mature into medium and large-size companies. Yet, if FASB’s proposal is put into effect, it will result in the elimination of most broad-based stock option plans, doing away with a powerful tool for attracting talented workers and promoting employee ownership.”

Legislation introduced in Congress, H.R. 3574, the Stock Option Accounting Reform Act, would require the Securities and Exchange Commission to study the impact of the FASB proposal before it goes into effect.

Today U.S. Rep. Adam Smith (WA-09) and U.S. Rep. Rick Larsen (WA-02) participated in a classified Strategic Policy Forum, “Masked Dragon,” that brought together 14 Members of Congress, senior military and Executive Branch leaders, and selected state and local officials. The handpicked group examined the complexity and difficulty involved in responding to a series of escalating crises on the Korean Peninsula at a time of ongoing military operations and overseas deployment of U.S. Armed Forces. “Masked Dragon” sought to understand the full range of policy options available to the U.S. and their associated consequences in order to stem proliferation of nuclear weapons and their corresponding delivery methods.

Smith and Larsen represent Washington state congressional districts that made it especially important to participate in a strategy session on North Korea.

“The crisis simulation exercise that I participated in today gave me the opportunity to work with people from a variety of departments and specialties and to seriously discuss the implications of any escalations in a strategically important region of the world,” said Smith. “As a member of the International Relations committee and the sub-committee on Asian/Pacific affairs, it is important for me to have a good understanding of the potential crises that can develop in this region and today’s exercise put into perspective the strategic importance of our military assets in Washington state.”

"I have repeatedly stressed the fact that Washington state’s military assets are critical to our national security,” Larsen said. “Exercise ‘Masked Dragon’ underlined the necessity of having forces that are well placed to meet potential threats like North Korea.”

“Being prepared for a national security crisis means thinking about the unthinkable,” Larsen urged. “In any national security crisis, dozens of agencies have to make quick, coordinated decisions.  Today’s crisis simulation allowed me to better understand that decision-making process and to explore response actions and consequences.”

The Secretary of Defense initiated the Strategic Policy Forum program in March 2002 at the National Defense University located at Fort McNair, Washington, D.C. “Masked Dragon” was the sixth event held with Members of Congress and senior executive branch decision makers. Previous exercises focused on port and transportation security and bioterrorism.

The simulations featured a realistic National Security setting, with participants such as the Department of Defense, Department of Homeland Security, the State Department, the National Intelligence Council, the U.S. Agency for International Development.

Smith and Larsen serve on the House Armed Services Committee. Smith also serves on the House International Relations Committee.


Congressman Adam Smith (D-Tacoma) is pleased to announce today a law enforcement grant for the city of Lakewood. The U.S. Department of Justice Office of Community Oriented Policing Services (COPS) announced a grant to the city of Lakewood of $375,000.  These funds would cover the salary and benefits of three new school resource officers (SROs) over the next three years who will be assigned to a school as their community policing area. COPS also provides school safety training for the officers and an administrator from the school where the officers will be assigned.

“This grant is good news not only for the schools but also for the City of Lakewood who will be able to hire three new police officers with these much needed funds,” Smith said. “I have seen first hand the true benefits the local schools receive by having this extra security. 

An SRO’s presence on campus deters crime and violence and provides immediate response to occurrences that cannot be prevented. Many SROs also participate in classroom instruction on state and local laws, substance abuse, and driver education, or become involved in extracurricular activities that enable them to serve as a role model for students who might not otherwise have positive interactions with law enforcement.


The House Transportation Committee yesterday completed its mark-up of HR 3550, the Transportation Equity Act: A Legacy for Users, better known as the TEA-LU.  This measure reauthorizes federal surface transportation assistance for state and local governments.  When it was reported out of committee, the measure included language authorizing $14 million in projects that would go directly to the 9th District, due to the efforts by Congressman Smith.  Smith requested many quality projects be included in the TEA-LU bill and he was happy to see that 10 were included in the final bill.  The measure now heads to the full House of Representatives for a vote.  

“Investment in our infrastructure is critical to the continued growth of our economy,” said Smith. “By creating these opportunities in the Puget Sound region, we are creating jobs and improving the ability to move products and people in our area making it more productive and economically feasible to do business here.”

The following is a list of projects secured for the Ninth District:

State Route 167 - $2.5 million

Creates a new freeway from State Route 509 (Port of Tacoma) to State Route 161 (Puyallup)

Cross Base Highway - $1.5 million

Creates a new highway from I-5 to State Route 7 located between Fort Lewis and McChord AFB

Yelm 510/507 - $2.5 million

Creates an alternative route to two existing state highways that bisect Yelm, Washington

Renton 405/167 - $2 million

Rebuilds State Route 167 and the I-405 interchange and adds additional lanes to relieve congestion

Tukwila Urban Access - $1 million

Addresses necessary improvements to Southcenter Parkway in Tukwila to relieve congestion

Burien State Route 518 - $1 million

Creates interchange improvements and the addition of one travel lane on a portion of the corridor

Port of Tacoma Road - $500,000

Constructs a second left turn lane from westbound Pacific Highway to Port of Tacoma Road

Tacoma Lincoln Avenue - $1 million

Elevates Lincoln Avenue by constructing a viaduct over existing railroad lines

Valley Avenue/70th Avenue - $1 million

Widens both 70th and Valley avenues in Pierce County

Kent Willis UP Tracks - $1 million

Provides grade separation at the existing railroad tracks at the UP tracks

Today, the European Commission dealt a blow to technological innovation in its antitrust ruling against Microsoft. Headquartered in Washington state, Microsoft is a leader in job creation and economic growth in the Puget Sound region and today’s ruling will negatively impact on the economy there.  Congressman Adam Smith released a statement expressing his disappointment that efforts to settle this case have failed.

“Today’s ruling by the European Commission is based on protectionist policy, not on sound economic principles.  This ruling is an unprecedented action on an American company and it will force Microsoft to disclose to its European competitors its most valuable intellectual property assets, thus severely reducing the impact of research and development, which has helped to fuel our nation’s gains in technological innovation in recent years.

The Commission’s ruling also requires Microsoft to develop and distribute a substandard version of its popular Windows program: a version which all software code used to play audio and video has been removed. To have a government entity force a private company to spend millions of dollars designing, manufacturing and selling a product that is inferior is not only fiscally irresponsible but is simply preposterous.  There is no conceivable basis to believe that forcing Microsoft to offer a degraded operating system will promote competition in the European Union.  Rather, this form of government intervention will hurt innovation by tarnishing one of the world’s most recognizable and reliable computer operating systems.

Microsoft worked hard to reach an agreement that would address the European Commission’s concerns, proposing a settlement offer last week that would have offered far more choices and benefits to European consumers. I would urge the Departments of State, Justice and Commerce to encourage their European counterparts to resolve this case in a matter that does not harm U.S. workers, particularly those in the Puget Sound region, U.S. consumers and the American IT industry.”