From: Larry S. Dohrs [newgroundinvestment@yahoo.com]
Sent: Friday, November 22, 2002 5:07 PM
To: rule-comments@sec.gov
Subject: File No. S7-36-02


Dear Mr. Katz,

Please add me to the list of Americans supporting your
proposed rules on proxy voting by mutual fund managers.  
The company for whom I work as Vice-President, Newground
Investment Services in Seattle, has many clients who 
want and need this increased transparency and disclosure
from fund managers.

If mutual fund managers know that their own customers are
scrutinizing managers’ votes on issues of board 
independence, auditor independence or predatory lending,
will they vote more thoughtfully, conscientiously and 
seriously?  It is fair to assume that they will.  They will
be less likely to support management routinely, and we will

likely see fewer disasters like Enron, Adelphia and
WorldCom, where the executive circle runs rampant over 
investor interests.

Many or most investors own mutual funds as a primary
vehicle for achieving their financial goals.  The funds own

shares in publicly traded companies, and in turn the fund
managers vote these shares to elect directors, approve 
auditors, and guide the company on other matters of
corporate governance. The SEC has already established that 
proxy voting is a fiduciary duty to be exercised in the
best interests of shareholders.  To support this principle,
full 
disclosure of a fund’s proxy voting policies, procedures
and voting record is an absolute necessity.

Practical application of the SEC proposed rules has already
been routine for several years at some funds.  Domini 
Social Investments disclosed its proxy voting guidelines to
fund shareholders ten years ago, and has been publicly 
disclosing its actual proxy votes on its web site since
1999.  The California Public Employees’ Retirement System 
(CalPERS) became the first public retirement system to
disclose its votes later that year.  Since then, other fund

managers and institutions have started disclosing their
proxy votes, including the Calvert Group, Pax World Funds, 
and the University of Wisconsin.

Many individual investors support the SEC proposal because
it enables them to see clearly whether fund managers 
are upholding their fiduciary duty to act in investors’
interest, or whether they are perhaps engaging in
duplicitous 
behavior to please companies and win lucrative contracts or
directorships.  In light of the ongoing spate of scandals, 
the old rules of "Trust us, we’re the experts" no longer
apply.

Many managers of large funds and institutional investors
were taken by surprise by the SEC’s unanimous 
September 19 vote.  But they are now quietly attempting to
block adoption of the SEC’s proposal on proxy voting 
disclosure.  While they prefer backroom lobbying to public
debate, they have given three broad reasons why "the 
public" would be ill served by transparency: First, they
claim the rules would be expensive.  Second, they (rather 
audaciously) suggest that the proposals would violate the
"democratic principle of secret ballots."  Third, they say 
that their customers, ordinary investors or retirees,
simply don’t care.

The cost assertion doesn’t hold much water, given that some
competitors in the mutual fund and institutional 
investment marketplaces already provide disclosure while
stating publicly that the process is neither burdensome nor

costly.

The claim that disclosure of proxy voting policies and
records would undermine the principle of secret ballots is 
simply ludicrous.  It is tantamount to our elected
representatives telling us that they need to keep their
legislative 
policies and votes secret, in the interest of democracy. 
Fund managers have a fiduciary duty to act in the interests
of 
their investors, just as elected representatives have a
duty to serve their constituents.  In fact, it is entirely
consistent 
with democratic principles to disclose policies and votes
to those whom the law identifies as the beneficiaries of 
those policies and votes.  Fiduciaries, like politicians,
need to stand behind their votes, and accept the
consequences 
from the market or the electorate.

Sincerely,

Larry S. Dohrs

=====
Larry S. Dohrs, Vice President
Newground Investment Services
206-522-1944
LDohrs@Newground.net
www.Newground.net

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