From: Richard D. Foley [rerailer@earthlink.net] Sent: Friday, June 13, 2003 11:06 AM To: rule-comments@sec.gov Subject: Re: S7-10-03 Re: S7-10-03 Possible Changes to Proxy Rules Date: June 13, 2003 From: Richard D. Foley 6040 N. Camino Arturo Tucson, AZ 85718 Rerailer@earthlink.net www.ourunion.org www.votepal.com To: Mr. Jonathan G. Katz, Secretary U.S. Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 VIA EMAIL rule-comments@sec.gov Dear Mr. Katz: Attached in a Microsoft Word file format are the properly formatted body of my comments. Pasted below are the same comments, but they may be reformatted by the process of email. S7-10-03 "Shoot the Dog" By Richard D. Foley © 2003 Comments for the SEC On its 2003 Review of the proxy system and corporate governance The United States of America is in the gravest danger since 1776. The enemy we face is not some ragged collection of suicide terrorists with only the power to wound. Rather, this enemy possesses the power to destroy our nation. It is the enemy democracy has always faced. It is the runaway collective greed of individuals able to willfully suspend their disbelief in the cumulative effect of their collective wrongdoing. The assault is on the trustworthiness of our economic, judicial and governmental systems. Without a shared perception and belief of trust and fairness, these systems and all their components deflate in value. Our most powerful weapons have always been our rule of law, fair markets, fidelity to the principles of honesty, and country before self. President Dwight Eisenhower warned us of the consequences we would face as a nation if we traded principle for profit. Now, at the beginning of the 21st century we are reaping the bitter fruits of an infected harvest. Slowly, we exchanged our duty as citizens to participate in the maintenance of law and ethical behavior. We exchanged our duty and freedoms for a bowl of false promises of superior leadership, superior expertise and superior social and economic security. We now have a country where the greatest thieves in the history of mankind stand beyond the reach of justice. The treasure of millions of families; trillions of dollars of hard earned savings have disappeared into the private coffers of brigands. The guardians of accuracy have become corrupt and ensnared in an expanding cesspool of financial wrongdoing. Our guardians of the law have distorted and twisted its power against the best hopes of the nation. We face a Gordian Knot of statutes, jurisdictions, precedents and responsibility so multi layered as to deny any true justice. We know that duty has been betrayed. We know evidence has been destroyed. Prosecution has become ineffective. If the law does hold them responsible, the consequence is postponed, diluted or reduced. In the place of justice, there is settlement and meaningless fines to ultimately be siphoned from the taxpayer’s pocket. This dog of corporate accountability, proxy and corporate governance system is infectious, contaminated and rotten to the bone. We don’t need to reform it. We don’t need to study it for another six decades. It is time to shoot the dog. We need an entirely new system. Eliminate all the paper. Remove all the intermediaries. Put everything on the Internet. And, I do mean everything! Put all the accounting and books of corporations on the Internet. Update the accounting no less than once a week. Put all voting, election and participation in corporate governance on the Internet. Excommunicate the very word "proxy" from the English language. Any party who wants a paper copy of any document will have to print it from the company’s Internet web site for themselves. Make shareholder participation in voting mandatory. If a shareholder can’t take the time or make the effort to vote their shares on the company shareholder’s web site, then their stock will be sold, their money returned, and they should be prohibited from owning voting stock of any kind. All directors should be elected annually. Make cumulative voting mandatory. Assure secret balloting. Allow as many candidates for election as there are shareholders willing to complete the nominating process. The corporation should bear the costs of producing and running the web site. The individual candidate should pay for campaign costs. For each dollar they would spend, they must contribute a dollar to the campaign costs of their opponents. These same rules will apply for incumbent candidates or candidates nominated by an incumbent board. The names and all contact information of shareholder proposalists, nominators, and nominees to appear on the company web site. The right of shareholders to call special meetings should be required in all companies. Simple majority voting should be the rule, no super majority requirements should ever be allowed. Poison pills and any other such barriers to accountability should be outlawed. There should not be any stock with less than full rights of ownership. No barrier should ever be allowed which prohibit or inhibit shareholders from the full exercise of their ownership rights. Drown the mangy cat of preemption of free speech practiced in the name of the false god Disclosure. If the company fails to disclose everything, even the full details of any settlement they may make, then that company is to be executed. In other words, the company’s right to exist is revoked; its assets sold, all its employees fired, and all its former officers prohibited from ever again holding any managerial position in any company. Either, all employees, all customers and all investors row at the same cadence, in the same direction, or the boat is to be sunk with the loss of all hands and passengers. It is time for the Federal government to stop pussy footing around with mountains of cutie-pie worded rules and regulations. It is time to remove from the states any vestige of corporate governance law. It is time for a single, simple, open, honest system that is obeyed and honored nation wide. We must begin to look at the big picture of what the malevolent malefactors of malfeasance and their handmaidens of enablers have done to our economic ship of state. It is time for a new hull. It is time to lay a new, straight keel. Do it soon, or we may not have the chance to do it at all. Will we exist in a corpocracy? Or will we live in a democracy with corporate accountability? Is this country to be ruled by the law or is it to be a jungle of competition where only the powerful eat and all others be but meat? Richard D. Foley 6040 N. Camino Arturo Tucson, AZ 85718 Rerailer@earthlink.net www.ourunion.org www.votepal.com Richard Foley was a co-founder and Chairman of the American Employees Stock Ownership Association, a Chapter Chair for Southern Arizona for the United Shareholders Association, expert witness before the House Committee on Telecommunication and Finance, recognized as the first shareholder to ever win a proxy contest in the history of Corporate America (May 1988), the first employee shareholder to conduct a contested election to the board of directors of a major American corporation, co-founder and Chairman The Ownership Union and most recently May 2003 a opposition candidate for contested election at Alaska Air Group, Inc.