Subject: File No. S7-26-97 Date: 11/2/97 10:10 PM I am responding to the Commission's questionnaire about corporate charitable giving in my personal capacity as an individual investor. I am distressed that the Commission is participating in what I believe to be a vicious partisan political initiative. I am not aware of any prior instance in which the Commission has solicited public comment on a bill that has not even passed a single congressional committee, much less either house of Congress. Indeed, the Commission's action here (which is very different from conducting a study ordered by legislation duly enacted by Congress and signed into law by the President) is, to my knowledge, completely unprecedented. The Commission should not allow such a partisan use of its processes in the future. As the Commission is well aware, charitable giving by public corporations is an issue governed by state corporate law under well-settled and longstanding legal standards. The members of Congress who have authored the bills at issue were elected on platforms of federalism and devolution of federal authority to the states. For these representatives now to propose the federalization of the law corporate charitable giving can only be understood as the height of hypocricy (and example of power going to the heads of people after they have been elected to positions of authority in Washington). The background of these proposals, as the Commission should be aware, are studies indicating that corporations give the majority of their charitable contributions to legitimate charities, as opposed to ideological right-wing causes. (The authors of these proposals have advocating reducing the federal safety net for the poor on the theory that private charitable giving could and should replace federal benefits. The fact that they then advocate proposals such as these which would have the inevitable and intended effect of decreasing the amount of private charitable giving is further evidence of the hypocritical nature of these politicians.) The federal government has no business attempting to police matters of this sort. As a shareholder, I am well aware that charitable contributions by corporations are important to cementing the corporations' place in their communities, in creating good will among existing and potential customers, in giving incentives to employees, and in establishing good relations with state and local government officials. These decisions are well within the business judgment of corporate officers and are not a legitimate interest for corporate shareholders. By contrast, there is an area where Congress and the Commission might consider empowering shareholders. As a shareholder, I would appreciate reporting on political contributions by public corporations (including hard and soft money contributions, ballot initiative contributions, contributions to state and local politicians and parties, and expenditures to support corporate political action committees). It does bother me that public corporations may be using my money (as a shareholder) to support political causes which I do not support, and which are not integral to my investment in the company. Of course, the members of Congress who have introduced the current bills would never support such a proposal, because their political party receives disproportionate contributions from corporations, and their true interest here is partisan advantage rather than any neutral, defensible principle. I urge the Commission to oppose strongly any attempt to federalize the law of corporate charitable giving. I also urge the Commission not to allow itself and its processes to be used to support unprincipled partisan political initiatives such as these bills. The Commission has enough work to do administering the laws that have actually been passed by Congress to spend its time and resources collecting and analyzing public comments on bills which have barely even begun the legislative process. Sincerely, W. Hardy Callcott 311 Day St. San Francisco, Ca. 94131 callcotth@aol.com