Date: 11/18/97 12:19 PM Subject: File No. S7-26-97 / MCN Energy Group Inc. Daniel Schiffer, Esq. Senior Vice President, General Counsel and Secretary MCN Energy Group Inc. 500 Griswold Street, 10th Floor Detroit, MI 48226-3700 TELE: (313) 256-5206 FAX: (313) 965-0009 November 12, 1997 Mr. Jonathan G. Katz Secretary U.S. Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 E-Mail: questionnaire@sec.gov RE: Comments Opposing H.R. 944 and H.R. 945; File No. S7-26-97 Dear Mr. Katz: I am Senior Vice President, General Counsel and Secretary of MCN Energy Group Inc. MCN is listed on the New York Stock Exchange and reports under the Exchange Act. On October 31, 1997, MCN had 78,153,645 shares of common stock outstanding and over 58,000 shareholders. The purpose of this letter is to provide MCN's comments on the House of Representatives' proposed bills relating to charitable giving by public companies, i.e., H.R. 944 and H.R. 945. MCN opposes these proposed new bills because they will place unnecessary costs, without corresponding benefits, on public companies, will cause corporate disclosure documents to contain non-material information, and could ultimately end or significantly redirect charitable giving by such companies. H.R. 945 H.R. 945 would require public companies to convert their present charitable giving programs into large proxy-gathering bureaucracies which would act as conduits for the individual wishes of each shareholder. The cost of tracking the giving designations of each shareholder (again, over 58,000 in MCN's case) and the disbursement of what will be relatively small amounts of money to potentially thousands of individual charities would be oppressive. Despite the positive social effects of charitable giving programs, the significant costs associated with H.R. 945 could force the end to such programs. Moreover, the proposed legislation is unclear about the role of institutional shareholders who constitute a significant portion of total shareholdings. Would institutional shareholders have to institute a second tier conduit to solicit the views of their stakeholders? Many charity-oversight organizations recommend that donors make charitable contributions only to organizations which do not use excessive portions of their funding for expenditures not directly related to fulfilling their charitable purposes. In other words, if a charity uses too much of its budget for administrative overhead costs, it is inefficient and should not be supported. H.R. 945 would saddle many public companies with additional expenses equal to or greater than the current budgets of their respective charitable giving programs. Clearly, the a result would be a very inefficient way of funding worthy causes. The onus of this proposal could also extend to institutional investors, like investment companies and pension funds, which would have to assist in gathering the giving designations of tens of millions of shareholders worldwide. The organization of American public corporations is premised on the concept of representative democracy. Shareholders elect directors who in turn elect officers who have the primary duty to manage the corporation, subject to oversight by the Board. H.R. 945 ignores this structure, and for single relatively minor component of corporate expense, charitable contributions, shifts responsibility from the duly elected officers to thousands of individual shareholders, whose interest are their own, not the collective interest of the corporation. We submit this is a dangerous first step to dismantling the form of economic organization that has been both the envy of, and the model for, the rest of the world. The real-world application of H.R. 945 could significantly inhibit charitable giving programs at public companies in the United States. One hopes that such was not the sponsors' intentions. H.R. 944 Our concerns regarding the disclosure requirements of H.R. 944 are less severe than our concerns regarding H.R. 945 but are also negative. We are somewhat unsure what purposes disclosing the recipients and amounts of all charitable contributions by public companies will serve. The suggestion that educational institutions and "local" charities might be excluded from the effects of the proposed amendments by rule suggests that accurate disclosure of charitable giving in general is not the goal of the sponsors. In most instances, the aggregate amount of all charitable giving by a public company in a given year will not be material to an investor. The dollar amount of individual contributions might be so immaterial that requiring their disclosure would be silly. Finally, a requirement that each charitable contribution made by a public company be disclosed in a document such as the company's proxy statement will cause companies to limit their giving to larger contributions (to avoid an excessively long listing of immaterial information in the disclosure document) and to give only to the most middle-of-the-road charities to avoid any possible backlash orchestrated by various single-issue organizations. Summary In summary, the effects of H.R. 945 would be severe and very negative, especially given the cut-back in government social spending in recent years. Similarly, H.R. 944 will create no positive benefits and could be the death knell of many smaller charitable organizations. Please be aware that we do not believe that MCN has ever received from a shareholder a request for a listing of individual charitable contributions made by the company or a request that each shareholder be permitted to individually direct a small portion of the company's charitable giving. A better understanding of the purposes which the sponsors of these bills are attempting to serve would be helpful in developing more realistic and cost-effective approaches to reaching those goals. We hope these comments are helpful to the Commission. Please feel free to contact me if you wish to discuss any of these comments. Very Truly yours, Daniel Schiffer