From: William Livingston [vitalith@earthlink.net]
Sent: Wednesday, February 05, 2003 8:25 AM
To: Rule-Comments
Subject: File No. 33-8150.wp (s7-45-02)

Mr. Chairman and Honorable Commissioners:

Your release on this rule of Jan. 23, 2003 indicated you seek comment because of
"the significance and complexity of the issues involved." Truth be told, there
is no connection between the significance of the issue, which is very great, and
its complexity, which is very small. It will help to pause for another bird's
eye view to get your bearings.

The original purpose of 33-8150 was to flag material violations prior to the
fact of material damage for the purpose of its prevention - preemptive
whistleblowing. In the almanac wisdom of B. Franklin, "A trillion saved is a
trillion earned." The pursuit of this worthy societal goal can distinguish no
difference between responsible corporate governance and running a successful
complex project. You are not breaking new ground. There are no uncertainties.
There are clear lessons learned and validated critical success factors. The
choice to succeed or fail the compelling purpose is yours.

Fortunately, your critics published here have so far confined themselves to
peripheral features and have not obstructed the essential process in the rule.
It is critical at this stage to close the control loop for reaching that goal.
Meeting the end obligation, damage prevention, will not abide part-way measures.
All methodology is circular. The cycle begins with reliable detection, which is
easy using the right index, and circulates around through the steps of
evaluation and remedy where the task repeats again at the comparison of actual
activity to a reference standard. As long as this proven regulating cycle for
method is operational, perfection in the parts is not necessary. Neither the
"ladder" arrangement nor the withdrawal decibels are important. You only have to
monitor for process loop circulation. Avoid details. If the goal-seeking cycle
is robust, it will repair itself. If the circuit is opened, it will immediately
snap back to what you have today. There are fundamental engineering principles
that apply to any system, flesh or metal, which make this behavior so.

The application itself will tell you automatically and clearly when you get the
loop right. The star spangled flag of success flaps vigorously when the control
cycle for method is working. The roar in the distance will be incessant. If
things go silent, you will know the loop has been severed. Your adversaries face
the same challenge in reverse. Unless a way can be found to sever the control
loop for method, an inherently stable and resilient condition, their cause is
lost.

Your remaining task is to design and provide, in the rule, a mechanism for
keeping the method regulator current with technological advances. You well know
that relations in commerce are infected through and through with the disease of
short-sighted motives. The great advantage of tort law these days is developed
precisely because the standard of care used by plaintiff, which is pure method
technology, is defined anew case by case while the defendant is mired stationary
in business as usual. Your cycle time is far too long to manage by established
policy. Don't even bother.

The need for regulation by method is urgent. The precursors to another watchdog
disaster are everywhere. Until the class of Enron graduated, commerce kept in
responsible balance with society by paying up for the damage caused through
inappropriate application of business as usual. This "tax" on the habitual scorn
for the Standard of Care and Diligence (SoCaD), faithfully imposed by tort law,
was paid as a routine budget item (liability insurance). The contract granted by
society stated, in effect, "Persist in inappropriate selection of methods, if
you must, as long as you pay for the consequences attending your choice."

True to its calling, in 2002 commerce quietly and unilaterally dropped its
liability insurance. The social contract has been broken and society at large
(our client) is unaware of the exposure already dumped in its lap. While the
choice of our Doctors to practice without malpractice insurance makes the front
page of the local newspapers, the choice of our businesses to do the same thing
does not. Now that bankruptcy has become the default management strategy, there
is no longer a budgeted, convenient accumulation of insurance money to
compensate plaintiff and pay fines.

When commerce chose bankruptcy as the weapon to neutralize tort, it shed any
residual concern about regulators. The next wave of corporate calamities is
already in incubation, plain to see and ridiculously easy to verify. The new hit
to your 401K account will eclipse the wreckage caused by the class of Enron. The
problem we professionals now face is deciding what to do with the acquired
knowledge of the new menace to social stability. You, like me, are now facing
the exact dilemma you are trying to resolve with 33-8150. As professional
watchdogs, how do you appropriately and safely warn society? If your rule
doesn't work here and now, the sentinel acting long after your 401K money is
gone, will once again be tort.

Since the new Part 205 breaks the ice on regulating by method, long overdue,
there will be plenty of excitement. Governance by method standards is
intrinsically a hot-button issue. It is the supreme undiscussable. You can test
for the hostile passions surrounding this topic anywhere for yourself.
Intelligent process selection is so laced with irrational aggression that for
seventy odd years, you have worked every other category of distraction to avoid
it. The record of that very costly expedient speaks for itself. Benchmarking
only by historical artifacts, prophecy and morals does not work.

The extreme aversion to methodology as operational benchmark is on exhibit here
and now. The demonstration of principle in this submittal began by informing you
that mature generic method technology exists to render corporate governance
infallible. It is my sworn duty as a licensed professional engineer to relay
this fact (protect the public health, safety and welfare). There can be no
doubts. This capability is manifest every day in the phenomenal success of
plaintiff's bar. The perfection in reliability is inherited from the complete,
rigorous and scrutable connection to natural law. With the attribute of
infallibility so ready for the taking, your paralysis to follow up on this lead
reveals the cultural blind spot. To avoid acknowledging this cardinal
capability, which you intuitively suspect is viable, dereliction of duty and
denial of mission is no deterrent.

The ethical conduct of any individual is easily subverted by the larger fear of
appearing to be disloyal. Challenges to established habits of action strike at
the core of obedience to authority. "Yours is not to question why. Yours is but
to do or die" collides head on with "Failure is not an option." The flight from
knowledge about better methods is so common an abrogation of personal
responsibility, civil law frequently has to unfurl its doctrine of deliberate
ignorance. There is no reason to feel particular guilt for smashing into the
willful blindness doctrine. When it comes to appropriate selection of method,
everyone does.

It remains the duty of the professional to choose the line of greatest advantage
instead of yielding in the direction of least resistance. Regulating in terms of
operations purges sentiment. It is a ruthless process. Oliver W. Holmes, Jr.
noted a century ago "A man acts at his peril always, and wholly irrespective of
the state of his consciousness upon the matter. The law takes no account of the
infinite varieties of temperament, intellect and moral shortcomings. If the
manifest acts and omissions are such as the law requires, it is wholly
indifferent to the internal phenomena of conscience." Tort law learned early on
to ignore records of accounting, safe harbors for forward looking statements,
and fuss over ethics and to focus instead on acts and omissions. Intelligence is
as intelligence does.

The opportunity you provided to comment on the design of this rule is much
appreciated. You have made it convenient for licensed professionals, such as
myself, to electronically document the discharge of our duty.


William L. Livingston, P.E.