Re: HOMESTEAD: Fwd: Update on chat w/ King of Sen. Corzine's office

[Mbindnerdc@aol.com]

ESAP is a good term for investment without control, as one must be a SAP to 
invest money in such a way if one is given a choice.


In a message dated Thu, 6 Dec 2001  6:54:17 PM Eastern Standard Time, Norman 
Kurland <thirdway@cesj.org> writes:

> 
> 
> I totally agree with Vic Thorpe that employee stock ownership without employee
> participation in control is a sham. It is not really an employee
> stock "ownership" plan, but rather only an employee stock "accumulation"
> plan. The first is an ESOP. The second should be called an
> "ESAP" and given less beneficial tax and capital credit treatment.
> In fact, the current effort on Capitol Hill to reduce the percentage of
> company stock held by an employee retirement trust to 10% (which would
> have killed the ESOP in 1974 but for Russell Long's intervention) might
> be a good way to distinguish ESAPs from ESOPs (which should continue to
> be allowed to be invested 100% in company stock where employees are given
> first-class shareholder rights.
> 
> An even better way to ensure governance rights from the bottom-up is
> to allow workers to set up a Capital Homestead Account at their local banks,
> where they and each member of their family can receive annually low-cost,
> self-liquidating and insured capital credit (monetized under Section 13
> of the Federal Reserve Act) to invest in full-dividend, full voting power
> shares issued by the companies for which a member of the family works.
> This would mean that corporate executives would have to come to the workers
> for the money, rather than have ownership rights trickling from the top-down.
> This could also be woven in a new, more democratic approach for saving
> the Social Security System from going over the cliff, while avoiding the
> Wall Street speculator's model of privatization. (Click on 
>http://www.cesj.org/homestead/reforms/other/savingsocialsecurity-nkhtml
> or go to How
> to Save the Social Security System for an out-of-the-box plan that
> would provide each citizen from birth with non-recourse credit of $3,000
> each year, which would provide that person with a retirement income of
> $30,000 in annual dividends based on an accumulation of $200,000, plus
> $750,000 in second incomes from dividends during the years of accumulation.)
> 
> I suggest that, from some experience, that when COG invests time to
> persuade Congress to advance the cause of employee ownership, go with a
> bold approach, one that can excite the imagination of ambitious legislators,
> not tokenistic requests.
> 
> Norm Kurland
> 
> Center for Economic and Social Justice
> 
> Web site: http://www.cesj.org
> 
> Vic Thorpe wrote:
> <span   class=960212513-06122001>Deb,</span><span 
>class=960212513-06122001>Noting
> the reference in your copy letter to the Enron stock situation, here is
> one summary report of the situation that has hit employees' 401K and other
> arrangements. It is a scandal of corporate governance and underlines
> the need for employees to have a defining say over what happens to their
> own money - rather than allow company managements, or pension fund managers,
> to treat their employees future income as if it were a corporate slush
> fund. It is the best argument against employee stock ownership without
> employee participation in its control that I can think of.</span><span   
>class=960212513-06122001>Vic</span>
> 
> -----Original
> Message-----
> 
> From: owner-homestead@cog.kent.edu
> [mailto:owner-homestead@cog.kent.edu]On Behalf Of Deborah Groban
> Olson
> 
> Sent: 05 December 2001 23:17
> 
> To: Homestead
> 
> Subject: HOMESTEAD: Fwd: Update
> on chat w/ King of Sen. Corzine's office
> 
> 
> Dear Homesteaders:
> 
> <X-TAB></X-TAB>Attached is a portion of the email I sent Gene Fisher
> of Congresswoman Carolyn Cheeks-Kilpatrick's office regarding the Fair
> Exchange (SQPQ) proposals I have been working on at his request. Based
> on my discussions with him and Senator Levin's staff, I was asked to send
> the proposals to Senator Corzine who drafted the Airline Bailout bill 
>proposals
> on equity compensation for the government. I would appreciate your thoughts
> on how to craft these proposals to meet the needs of the policy makers
> as expressed by them. The actual requested language I sent to Fisher and
> King are in my last posting to Homestead addressed to David Ackerman
> of the ESOP Association Legislative and Regulatory Committee.
> 
> Deb
> Date: Wed, 05 Dec 2001 18:06:43 -0500
> 
> From: Deborah Groban Olson <dgo@esoplaw.com>
> 
> Subject: Update on chat w/ King of Sen. Corzine's office
> 
> Dear Gene:
> 
> <X-TAB></X-TAB>Today I spoke with Bruce King of Sen. Corzine’s office.
> He understands the idea that global hegemony is moving from nation states
> to corporations and why that is a problem for democracy. He is willing
> to look at proposals. He is not interested in pushing stock ownership right
> now when the market is down. He feels that now is a bad time to push ESOPs
> because so many people, including employees, lost their shirts in Enron
> stock, etc. (I think he said that employees were obliged to own stock at
> Enron.)
> 
> <X-TAB></X-TAB>He also thinks that if the government gets reimbursed
> by corporations for government investments, all taxpayers benefit. I think
> that is true on the macro level. However, it is dependent on how
> the government, at any particular time, allocates those funds. An equity
> stake to the government doesn't do enough to build a second stream of income
> for citizens or give them voting rights in the increasingly powerful 
>corporations.
> 
> <X-TAB></X-TAB>Now , when global companies are needy and coming to the
> US government to invest in them, is an opportunity to get US citizens a
> needed financial stake in the global economy. This investment stream of
> income will be increasingly important in for all US citizens in the near
> future. Now that the Social Security Fund is expected to be underfunded
> in 15 years and both technology and globalization are decreasing
> the number of US jobs needed to produce goods sold in the US, wage income,
> social security insurance or individual development accounts will not be
> an adequate source of sustenance for an increasing number of Americans.
> Perhaps the forum in which to join this issue is not employee ownership,
> but instead social security, unemployment or trade.
> 
> <X-TAB></X-TAB>Congress should not miss out on this opportunity. During
> the next stock market upturn, the companies will not need government help.
> During the following downturn the process of corporate hegemony will likely
> have progressed.
> 
> <X-TAB></X-TAB>Bruce King is willing to look at more proposals, but
> he wants the draft proposal to have more timely political resonance that
> does not smell of underwater stock options, and devalued ESOP stock.
> 
> <X-TAB></X-TAB>Do you have any reaction to:
> 
> <X-TAB></X-TAB>1) The proposals I sent in the email to King.
> 
> <X-TAB></X-TAB>2) These comments on King's reaction.
> 
> <X-TAB></X-TAB>3) How to frame the issue to make it politically attractive?
> 
> 
> 
> Many thanks for your time and interest.
> 
> Deb Olson
> 
> 
> 
> Deborah Groban Olson
> 
> Attorney at Law
> 
> of counsel to
> 
> Jackier, Gould, Bean, Upfal & Eizelman, P.C.
> 
> 1021 Nottingham Road
> 
> Grosse Pointe Park, MI
> 
> Phone:(313) 331-7821
> 
> Fax: (313) 331-2567
> 
> Email: dgo@esoplaw.com
> 
> Web site: www.esoplaw.com
> for information on employee ownership, equity compensation, and capital
> strategies, www.jackiergould.com
> for information on general business law practice.
> 
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