2.02.2005

The people's representatives

DJ Drummond at PoliPundit is doing a survey of Congress, and is having trouble with non-responsive responses.

I had similar trouble with Senator Barbara Boxer when I wrote to oppose her attempt to block the Financial Accounting Standards Board from setting financial accounting standards. She wanted to allow multi-millionaire corporate executives to keep taking wealth from shareholders in the form of stock options without accounting for the expense in the P&L.

Boxer is known as a mental midget on Capitol Hill, but her staff must be as stupid as she is, as they responded to my e-mail as if everyone who wrote about stock options must support Boxer's ridiculous position:

Dear Mr. [Varones]:

Thank you for contacting me regarding the tax treatment [I wrote about the accounting treatment, not the tax treatment!] of employee stock options. I appreciate hearing from you on this issue and I agree with your concerns [Oh, really!?!].

As you may be aware, on April 22, 2003, the Financial Accounting Standards Board (FASB), which sets the nation's accounting standards, issued a decision to mandate that stock options be fully reported in a company's earnings report. This means that companies will be required to determine the cost of stock options given to their employees and then, in their financial statements, deduct that cost from total earnings [How novel: accounting for expenses in the P&L!]. This would occur even though offering stock options does not reduce a company's earnings [It doesn't? Please explain!].

The FASB has already imposed disclosure rules on the accounting industry that improve investor awareness without sacrificing accurate financial reporting. I believe requiring expensing is unnecessary and would have unintended, and negative, consequences. You may be pleased to know [No, I'm not pleased, and if your staff were literate they would know that!] that I introduced, along with Senator Ensign (R-NV), the Broad-based Stock Option Plan Transparency Act, S. 979. This bill would increase disclosure by requiring companies to include in their financial statements detailed and accurate information about their use of stock options. While this bill would result in even greater disclosure of stock option plans, which would enable investors, shareholders, and the public to take into account what is being offered to employees, it would not require expensing.

[... blah blah blah ... blah blah blah ...]

Again, thank you for contacting me regarding employee stock option plans. Please do not hesitate to contact me in the future about this or any issue that concerns you.

Sincerely,
Barbara Boxer
United States Senator


How can Congress represent the people if they and their staff are too illiterate to understand what the people express to them?


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