Letter to SEC Chairman Christopher Cox on Proposed Shareholder Access Rule

Americans for the Preservation of Liberty joined 28 other national public policy organizations in sending a letter to Securities and Exchange Commission Chairman Christopher Cox regarding a proposed new shareholder access rule.

The letter explains the issue pretty well. If you agree, please consider sending a letter of your own to Chairman Cox to the address listed on the letter.

Coalition Letter to SEC Chairman Christopher Cox on Proposed Shareholder Access Rule

February 7, 2007

The Honorable Christopher Cox
Chairman, Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549

Dear Chairman Cox,

In American Federation of State, County, and Municipal Employees Pension Plan v. AIG, the Second Circuit Court of Appeals asked the Securities and Exchange Commission to clarify its rules for the exclusion of shareholder proposals related to an election. In the process of clarifying the commission’s rules, we urge you to reject any measure that would allow shareholders to nominate their own directors in company proxy materials.

Forcing companies to let certain investors nominate directors on company proxies would let special interests gain seats on corporate boards and/or use the threat of director nomination to push through agendas that advance their own political interests but destroy shareholder value.

Through pension funds, labor unions and other anti-market interest groups have significant stakes in major corporations as well as entrepreneurial new firms. A shareholder access rule would allow them and other activists to achieve through the board nomination process what they have been unable to accomplish through the political process.

Unions would use this leverage to win card check and neutrality agreements, allowing them to unionize companies without secret ballot elections. They could also put pressure not only on the companies they have stakes in but also their partners and suppliers.

The implications go far beyond unions. Everything on the anti-market political wish list from Kyoto-like carbon restrictions, to auto emissions standards, to prescription drug price controls, to animal rights activism, to interfering with defense contractors to advance foreign policy objectives would be possible.

These initiatives, whatever their merits, belong in the political arena, not in corporate boardrooms where the focus should be on maximizing shareholder value.

Dissident shareholders can and do mount proxy fights to challenge company-nominated slates of directors, but they do so by distributing their own proxy materials at their own expense. This helps to encourage nominations of directors dedicated to improving the bottom line for all shareholders, rather than promoting the interests of a specific group.

The listing standards for both NASDAQ and the NYSE already require that boards be composed of a majority of independent directors, who themselves comprise the search committee for new directors.

For these reasons we urge you to stand up to the special interest pressure pushing for shareholder access and allow existing state laws to govern director nomination and election.

Sincerely,

Gary Palmer
President
Alabama Policy Institute

Patricia Callahan
President
American Association of Small Property Owners

Lori Roman
Executive Director
American Legislative Exchange Council

Ryan Ellis
Executive Director
Alliance for Worker Freedom

Daniel Clifton
Executive Director
American Shareholders Association

David Keene
Chairman
American Conservative Union

Mark Chmura
Executive Director
Americans for the Preservation of Liberty

Tim Phillips
President
Americans for Prosperity

Grover Norquist
President
Americans for Tax Reform

Andrew F. Quinlan
President
Center for Freedom and Prosperity

Jim Backlin
Vice President for Legislative Affairs
Christian Coalition of America

Terrence Scanlon
President
Capital Research Center

Chuck Muth
President
Citizen Outreach Project

Tom Schatz
President
Council for Citizens Against Government Waste

John Berlau
Director, Center for Entrepreneurship
Competitive Enterprise Institute

Fred Smith
President
Competitive Enterprise Institute

Jim Boulet
Executive Director
English First

Paul Weyrich
Chairman and CEO
Free Congress Foundation

Steve Milloy
Investment Adviser
Free Enterprise Action Fund

Walt Harvey
Director, Property Rights Coalition
Grassroot Institute of Hawaii

Richard Rowland
President
Grassroot Institute of Hawaii

Tom Giovanetti
President
Institute for Policy Innovation

Don Racheter
Moderator
Iowa Wednesday Group

William Fine
Executive Director
National Alliance for Worker and Employer Rights

Amy Ridenour
President
National Center for Public Policy Research

Lewis Uhler
President
National Tax Limitation Committee

Stephen Mosher
President
Population Research Institute

William Greene
President
RightMarch.com

Charles Baird
Director
The Smith Center at California State University

cc: Commissioner Paul Atkins
Commissioner Roel Campos
Commissioner Kathleen Casey
Commissioner Annette Nazareth

Headscratcher

A Virginia environmentalist apparently believes that the fact she pays taxes entitles her to take away the property rights of her neighbors.

Or something like that.

On Illegal Aliens and Credit Cards

Here's the real reason Bank of America wants to give credit cards to illegal aliens.

Students for Saving Social Security Petition

Count Us In!, a project of Students for Saving Social Security, is collecting signatures online for a petition to keep Social Security personal accounts in the 2008 budget.

The group says:

Join us in signing the petition to keep Social Security choice in the budget. The President’s budget for the 2008 year include crucial funding that will empower millions of Americans to save for their own retirement. Sadly, many Washington politicians would rather raise your taxes than trust you with your own money. So join us...

Senator Max Baucus, Chairman of the Senate Finance Committee, [has said] personal accounts are off the table. We need to let him know that our generation deserves a chance to save for our own retirement!

Go here for more information, or to sign the petition.

Hat tip: Social Security Choice blog.

Guard the Freedoms We Have

In America, the freedom of parents to educate their own children is recognized under the law.

In Germany, parents aren't so lucky.

"Shareholder Access": Holy Grail of the Left

John Berlau asks: Will the left overrun U.S. companies?

The issue is "shareholder access." John explains:

While most of the right is closely scrutinizing the concoction of liberal legislation of the new Congress, a more immediate threat to conservative policies may be brewing at a regulatory agency about a mile away from Capitol Hill.

Through letters, e-mails and personal visits, activists of the left are swarming the Securities and Exchange Commission, the powerful agency that supervises the U.S. stock market. A court ruling that requires the SEC to clarify its rules on company proxies is being used to push the agency to enact policies that would give unions and other liberal pressure groups an enormous lever of power over U.S. companies.

These groups are pushing for what they call “shareholder access” in the elections of publicly-held companies’ boards of directors. They want the SEC to force companies to include directors nominated by specific groups of shareholders on the company voting proxies that are mailed out to all shareholders. Advocates of “shareholder access”—and their champions in the press -- say this would empower U.S. shareholders against corporate management. The entity that filed the lawsuit that forced the SEC to reconsider this issue, a large government employees’ union called the American Federation of State County and Municipal Employees (AFSCME), has called shareholder access rules the “holy grail of corporate governance.”

But who this type of rule would mostly empower would be unions such as AFSCME, the AFL-CIO and other pressure groups. Through the pension funds that unions directly run as well as the state and local government employee pensions that unions and other liberal activists have influence over, the left has control over a large number of shares in America’s public companies.

Many activists are planning to use this new “shareholder” power as a lever to force U.S. companies to bow to their various wish lists—on everything from union demands to animal rights to boycotts of Israel. As Larry Ribstein, professor of law at University of Illinois and widely read business blogger has put it, “This isn’t about shareholder ‘democracy,’ but about shifting power from powerful managers to powerful shareholders (i.e. unions) who are even less likely to champion the interest of shareholders generally.”

Observers say SEC Chairman Chris Cox, a former GOP House member from California, is under tremendous pressure from the media and new congressional committee heads, such as House Financial Services Chairman Barney Frank (D.-Mass.), to give in to the demands of activists such as the AFL-CIO. And while Cox was justly praised for fighting for important conservative principles in Congress, conservative experts are troubled by the fact that he is reportedly searching for consensus with the two Democrats on the five-member SEC, and that he has not publicly taken “shareholder access” proposals of liberal groups off the table.

That’s why conservatives say Cox needs to be reminded what is really behind the push of some of these groups. The danger is not just that left-wing groups will get their own candidates on the boards of directors. It’s that board members will strike deals with the left in return for activists’ informal agreements not to nominate opposing candidates. Jay Falk, president of SRI World Group, which advises pension funds on “socially responsible” investing, admitted gleefully that enhanced “shareholder democracy” would be used to enact the agenda of the left. He recently told the website Social Funds, “The strengthening of shareholder democracy this year promises to further empower investors to address governance issues such as out-of-control executive pay as well as environmental and social issues such as climate change.”

Even now—without “shareholder access”—the public pension managers and union bosses haven’t been shy about asserting union and other social priorities that would reduce returns for their own pensioners as well as other shareholders...

Read it all here.

ERA Dead for 28 Years; Liberals Fail to Notice

An effort is being made to revive the Equal Rights Amendment, approved by Congress and sent to the states for ratification in 1972.

For readers to young to remember the ERA, "1972" is not a typo.

Say what you will about lefties, they never give up. Most people recall the ERA as an amendment famously killed after a grassroots effort, in large part organized by Phyllis Schlafly of Eagle Forum, successfully explained to lawmakers that the ERA was far more radical than mainstream Americans realized.

Those who now ask states to ratify the dead amendment proposal are ignoring the fact that the 1972 amendment had to be ratified by 38 states within seven years to be ratified and become part of the Constitution.

That means the proposed ERA amendment expired 28 years ago, but backers are 1) pretending the expiration date did not exist, 2) are pretending five states that rescinded their ratifications did not do so, 3) are ignoring the fact that the U.S. Supreme Court has ruled the amendment dead, dead, dead, and 4) ignoring the repeatedly-expressed will of their fellow citizens.

National Right to Life has the details on current efforts to revive the ERA; Eagle Forum (naturally) explains the history of the whole thing. The latter document is a particularly interesting read for those who (erroneously) think grassroots Americans are powerless to affect the future of our nation. They sure did in this case, even if the left still won't admit it.

End Earmarks Now

It's time to stop hiding the truth about earmarks from the public, says an editorial in the Washington Examiner:

Official Washington is playing three-card monte with taxpayers on earmark reform. Among those shuffling the cards are Republicans and Democrats, elected and appointed officials and career bureaucrats. The aim of this con game is to keep taxpayers from seeing what is really happening on earmarks - those spending measures anonymously inserted into bills and legislative reports by members of Congress to benefit friends, families and special interests without a public vote on the merits.

President Bush, Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi and assorted others are all shuffling the earmark reform cards and making it difficult for taxpayers to keep track of the situation...

We agree. Earmark reform -- preferably in the form of banning them entirely -- would be a victory for accountable and transparent government as well as fiscal prudence.

Refuting Megatruths

UnCorrelated looks at what it calls "the Climate Goebbels." Worth a read.

Sample sentence: "The megatruth is a concept so clearly true, that it shouldn't be obfuscated with inconvenient facts and contradictions that might prevent someone from embracing it."

The Dictatorship in South America

The Encyclopedia Britannica blog doesn't mince words when it comes to Hugo Chavez:

It’s happening again. Another human has succeeded in combining a personal vision of the truly good and just society with the authority to attempt to create it, in the process telling several million other humans precisely how they should live. This time it’s in South America - Hugo Chávez, president of Venezuela, was granted the power to set aside the country’s constitution and rule by decree for a period of 18 months. The news reports I saw did not comment on whether his powers would include the power to extend his term, but few dictators in history have stepped aside willingly at any time, much less on a date set by mere statute.

The enabling law was passed by the National Assembly, which met in an open plaza in downtown Caracas for the purpose, turning the exercise into a piece of public theater with far too many historical echoes. The president of the Assembly was quoted as declaring “Fatherland, socialism or death!” More echoes. The punctuation and therefore the meaning of her call to arms are open to question. Are there three options or only two? That is, is it Fatherland OR socialism OR death, or is it Fatherland: Socialism OR death? And what is left for those citizens, if any, who find all three distasteful?

Her sloganeering was topped, however, by an explanation from the vice president, who said “Of course, we want to install a dictatorship, the dictatorship of a true democracy.” Anyone who can say that with a straight face belongs in the DSM IV Hall of Fame.

So Venezuela joins North Korea and Zimbabwe as nations where currently the law and the conduct of daily life are shaped by the ignorance and bigotry of a single person. And it takes its place in the long, sad train of Paradises on Earth that so disfigured the 20th century. Exact numbers, even rough numbers, are impossible to obtain, but authoritative guesses put the cost of that century’s experiments in Utopia at upward of a hundred million deaths...

Read it all here.