Influential Federal Judge Belittles ESOPs and Employee Ownership
These two documents, Posner quote (.pdf) and Treasury Department letter, are vivid examples that there is a growing climate among national leaders that ESOPs are no good, or as an optional interpretation, not worth straightforward endorsement.
The scathing attack by a prominent Federal Judge, whose views influence not only other Federal judges, but also elected officials, their staffs, journalist, TV pundits, and bloggers speaks for itself.
The letter from Deputy Assistant Secretary Robert Carroll needs a little interpretation. President Ronald Reagan and his Treasury Department strongly endorsed ESOPs and positive ESOP law was enacted; President George H.W. Bush and his Treasury Department stood with Congressional allies and together they stopped major anti-ESOP legislation; President Bill Clinton signed the S ESOP law, and even when his Treasury Department recommended curtailing the S ESOP benefit, President Clinton and the Treasury Department went on record spelling out support overall for ESOPs and employee ownership.
Now we see the Treasury Department answer a letter about ESOPs from a Congressman that does not express support for employee ownership much less ESOPs. (The Treasury Department letter does express support of “ownership,” “savings,” and “financial security” – well yes, we all like apple pie too.)
(Mr. Carroll’s letter was obtained from public records. Congressman Goodlatte (R-VA) is a strong supporter of ESOPs.
Does The ESOP Association have a plan to counter the growing negatism towards ESOPs?
The answer is yes.
The plan overall is to persuade men and women in Congress to declare that they are for ESOPs and employee ownership, and to make that declaration be public, and clear.
By endorsing pro-ESOP legislation S. 1319/H.R. 3111, a Member of Congress is taking a stand for ESOPs, so that when tax reform efforts begin in earnest, and ESOP critics try to push negative ESOPs proposals, men and women of Congress will say, “No – I support ESOPs and employee ownership, and I want to expand employee ownership, and help existing ESOP companies.”
Help your ESOP community tell National leaders the positive ESOP story compared to the clap trap in the Judge’s opinion.
How? It is all set forth at www.esopassociation.org, click on the government affairs link at the top of the page and choose the Advocacy Kit.
Or call , e-mail, fax, or write to learn more about the negative winds beginning to blow against ESOPs, and the Association plans to build the defenses to weather any on coming storm.
CALL – 202/293-2971
EMAIL – esop@esopassociation.org
FAX – 202/293-7568
WRITE – The ESOP Association, 1726 M Street, NW, Suite 501, Washington, DC 20036