Company Name: Wells Fargo & Co.
Public Availability Date: February 11, 2004Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
APPENDIX 3
STAFF REPLY LETTER [INQUIRY LETTER]
VIA EXPRESS MAIL December 26, 2003 Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
450 Fifth Street, N. W.
Washington, D.C. 20549 Re: Wells Fargo & CompanyStockholder Proposal Submitted by the International
Brotherhood of Teamsters General Fund Ladies and Gentlemen:
Pursuant to Rule 14a-8(j) of the Securities Exchange Act of 1934, as amended
(the "Act"), Wells Fargo & Company ("Wells Fargo") hereby gives notice of its
intention to omit from its proxy statement and form of proxy for the Wells Fargo
2004 annual meeting of stockholders (collectively, the "2004 Proxy Materials"),
in reliance on Rule 14a-8(i)(3) and (10), a proposal (the "Proposal") submitted
by the International Brotherhood of Teamsters General Fund (the "Fund"). Wells
Fargo does not expect to file its definitive 2003 Proxy Materials pursuant to
Rule 14a-6(b) of the Act before March 16, 2003. On November 14, 2004, Wells Fargo received the Proposal and a related Statement
of Support (the "Supporting Statement") from the Fund. In summary, the Proposal
requests that Wells Fargo prepare an annual report disclosing its policies on
political contributions made with corporate funds, and publish this report to
stockholders either by posting it on its website or otherwise providing it to
stockholders. The Proposal also requests that Wells Fargo also prepare and
publish semi-annually a separate report detailing the amount of contributions
made with corporate funds to the date of each report, the business reason for
such contribution, and the names of Wells Fargo personnel participating in the
contribution decision. The text of the Proposal and the related Supporting
Statement are attached to this letter as Exhibit A. As used in this letter, the
term "Proposal" means collectively, the Proposal and Supporting Statement.
After Wells Fargo received the Proposal, Ms. Diane P. Lilly, Senior Vice
President, Government Relations for Wells Fargo, requested Mr. William N. Kelly,
its Government Relations Senior Director, to contact Ms. Jennifer O'Dell,
Teamsters Corporate Governance Advisor for the Fund, about the Proposal. In his
telephone call, Mr. Kelly informed Ms. O'Dell that Wells Fargo did not use
corporate funds for political contributions to the persons and entities
enumerated in the Proposalnamely, "political candidates, political parties,
political committees and other political entities organized and operating under
26 USC Section 527." All political contributions were made only through Wells
Fargo Political Action Committees funded exclusively by employee personal
contributions (the "Employee PACs"). He also advised Ms. O'Dell that the
specific contribution cited in the Supporting Statement for the Proposal
("$60,000 contributed by Wells Fargo in the 2002 election cycle") reported by
the Center for Responsive Politics ("CRP") as having been contributed to "major
party committees and congressional campaign dinners," was in fact a contribution
made by Spencer F. Eccles, an officer and employee of Wells Fargo, with his
personal funds, and that the report by the CRP was incorrect. Mr. Kelly further
informed Ms. O'Dell that, although Wells Fargo's policy against using corporate
funds for political contributions of the type described in the Proposal had not
been formally published, Wells Fargo was willing to publish this policy on the
Corporate Governance link on its website (www.wellsfargo.com).
He provided Ms. O'Dell, via e-mail, a draft copy of Wells Fargo's policy
regarding political contributions. Mr. Kelly formally requested that the Fund
withdraw the Proposal for the reason that the Proposal was either not necessary,
since Wells Fargo's stated policy was to not use corporate funds for political
contributions as described in the Proposal, or that based on Wells Fargo's
willingness to provide stockholders with a copy of this policy on its website,
that it will have substantially implemented the Proposal prior to the 2004
annual meeting. After reviewing the draft Policy, Ms. O'Dell declined, on behalf of the Fund, to
withdraw the Proposal. In further discussions with Mr. Kelly and the
undersigned, Ms. O'Dell did not articulate any specific reason for the Fund's
decision not to withdraw. To date, the Fund has not explained why Wells Fargo's
proposed policy with respect to political contributions did not fully respond to
the issues raised by the Proposal. Ms. O'Dell did acknowledge that the specific
statement regarding the $60,000 contribution was incorrect and expressed the
Fund's willingness to remove the misstatement. While Wells Fargo has indicated
its ongoing willingness to discuss with Fund officials why the Proposal is
unnecessary, in light of the anticipated filing date of its definitive 2004
proxy materials (on or about March 16, 2004) and the filing deadline set forth
in Rule 14a-8(j), Wells Fargo was required to pursue this matter by a formal
notice to the Securities and Exchange Commission (the "Commission") pursuant to
that rule of Wells Fargo's intent to omit the Proposal from such proxy
materials. Accordingly, Wells Fargo hereby notifies the Commission that it intends to omit
the Proposal from its 2004 proxy materials pursuant to Rule 14a-8(j). We
respectfully request confirmation that the staff of the Division of Corporation
Finance (the "Staff") of the Commission will not recommend enforcement action if
Wells Fargo omits the Proposal from such Proxy Materials. Wells Fargo intends to omit the Proposal on the grounds and for the reasons
stated below. (1) The Proposal may be omitted under Rule 14a-8(i)(10) because it has been, or
will be prior to the 2004 annual meeting, substantially implemented. As
confirmed in the supporting letter to the Commission from Ms. Diane P. Lilly
attached hereto as Exhibit B, it is Wells Fargo's stated policy that Wells Fargo
does not make contributions to candidates in political election campaigns using
corporate funds. All contributions on behalf of Wells Fargo to candidates for
public office and related political entities are made through Wells Fargo
Employee PACs funded solely by employee contributions. These contributions are
reported to relevant federal, state and local election reporting offices.
However, in light of the Proposal, and in order to advise stockholders of its
policy (the "Contributions Policy"), Wells Fargo has advised the Fund that, at
the earliest practicable date, and in any event prior to the 2004 annual
meeting, that Wells Fargo will post the following statement on the "About Wells
Fargo-Corporate Governance" link on its website, www.wellsfargo.com:
"WELLS FARGO POLITICAL CONTRIBUTIONS POLICY
All contributions on behalf of Wells Fargo to candidates for public office and
related political entities are made through Wells Fargo PACs. These PACs are
funded solely by employee contributions. All contributions to election campaigns
made through Wells Fargo PACs are reported to relevant federal, state and local
election reporting offices." As indicated in Ms. Lilly's supporting letter, in some cases, individual Wells
Fargo affiliates may use funds allocated to their marketing or other business
budgets to support state and local ballot initiatives, such as school or other
bonding measures, primarily because such initiatives are of interest to the
community in which that particular affiliate does business or may affect a
specific aspect of its business. This support may be in the form of a
contribution to the local chambers of commerce involved in the initiative. Wells
Fargo is not required by applicable election law to track these contributions as
political contributions. Consequently, these contributions do not relate to
"donations to political candidates, political parties, political committees and
other political entities organized and operating under 26 USC Section 527" that
are the explicit focus of the disclosure to stockholders requested by of the
Teamsters' proposal. The final Contributions Policy has therefore been revised
slightly from the draft presented to the Fund to eliminate the inapplicable
reference to ballot measures. Upon the posting of the Contributions Policy prior to the 2004 annual meeting,
Wells Fargo will have specifically implemented Paragraph 1 of the Proposal,
which requests that Wells Fargo publish a report, updated annually, disclosing
its policies for political contributions made with corporate funds. In the event
its Contributions Policy changes, an appropriate updating statement will be
included on Wells Fargo's website. In light of Wells Fargo's stated
Contributions Policy, Paragraph 2 of the Proposal is moot, since there are no
contributions to report. If, as a condition to the Staff's concurrence that
Wells Fargo may omit the Proposal pursuant to Rule 14a-8(i)(10), Wells Fargo is
willing to also include on its website a statement that, in accordance with the
Contributions Policy, no contributions to political candidates were made in 2003
from corporate funds. Subject to meeting any technical programming requirements,
Wells Fargo expects to publish its Contributions Policy in early 2004, but in
any event will publish it prior to the 2004 Annual Meeting.
In light of the foregoing, it is clear that the issues raised by the Proposal
are effectively moot and thus not appropriate for stockholder action, since
Wells Fargo does not engage in the contribution activities that are the subject
of the Proposal. Wells Fargo has agreed to, as requested by the Proposal, to
publish its Contributions Policy on its website to memorialize its stated
practices. Accordingly, the Proposal has been substantially implemented and
Wells Fargo may omit it pursuant to Rule 14a-8(i)(10). (2) The Proposal may be omitted under Rule 14a-8(i)(3), or must be timely
modified, because it contains materially false or misleading statements. In
light of the discussion above with respect to the Wells Fargo's Contributions
Policy, the entire premise of the Proposal and the arguments presented in the
Supporting Statement are materially misleading, since Wells Fargo does not use
corporate funds for contributions to political campaigns for elections or to
entities within the seope of 26 USC Section 527 that is the stated focus of the
Proposal, and has so advised the Fund. Even given the general misleading nature
of the Proposal, the Proposal contains a number of material misstatements that
warrant omission of the Proposal in its entirety. In the alternative, and in the
event the Staff does not concur that Wells Fargo may omit the Proposal in its
entirety pursuant to Rule 14a-8(i)(3), such statements should be deleted
completely, or at a minimum, the Proposal should be subjected to a detailed and
extensive editing in order to bring it into compliance with the Commission's
proxy rules. In its Supporting Statement, the Fund states, among other things, that "[c]urrently,
Wells Fargo is not required to disclose political contributions made with
corporate funds. Company executives exercise unbridled discretion over the use
of corporate resources for political purposes." This is patently misleading for
two reasons. First, even assuming Wells Fargo's policy permitted contributions
to political candidates, applicable law requires Wells Fargo to report all such
contributions. However, as stated by Ms. Lilly in her supporting letter, all
contributions on behalf of Wells Fargo to candidates for public office and
related political entities are made through Wells Fargo Employee PACs funded
solely by employee contributions. These contributions are reported to relevant
federal, state and local election reporting offices, and are available from
public sources and a number of websites maintained by political contribution
monitoring groups. Secondly, since Wells Fargo corporate executives have no
authority to deviate from the Contribution Policy, they do not in fact have
"unbridled discretion over the use of corporate resources for political
purposes." Furthermore, as evidence that Wells Fargo executives have "unbridled discretion
over the use of corporate resources for political purposes", the Fund cites the
following example in its Supporting Statement: That is the case with the $60,000 contributed by Wells Fargo in the 2002
election cycle. The Center for Responsive Politics, a leading campaign finance
watchdog organization reported, that Wells Fargo's money went to major party
committees and congressional campaign dinners. However, shareholders do not know
whether that is the full extent of Wells Fargo's contributions.
We have confirmed that the contribution referred in the sentence quoted above
was a contribution made by Spencer Eccles, who is an officer and employee of
Wells Fargo, from his personal funds. (See Ms. Lilly's letter.) As is required
by law, individuals who make contributions using personal funds must disclose
the name of their employer. This information can be, and in the case of Mr.
Eccles' personal contribution was erroneously reported by CRP as a contribution
by Wells Fargo. Ms. O'Dell, on behalf of the Fund, recently acknowledged that
the statement quoted above is inaccurate and has indicated the Fund's
willingness to remove it from the Supporting Statement. In light of the very
recent nature of our conversation on this point, the Fund presumably has not yet
had an opportunity to prepare, and consequently Wells Fargo has not yet received
a revised proposal showing this change. Accordingly, in light of the notice
requirements of Rule 14a-8(j), Wells Fargo is obligated to file this letter with
the Commission to preserve its rights to omit the Proposal in its entirety
pursuant to Rule 14a-8(i)(3), or, in the alternative, if the Fund ultimately
does not provide us with a revised Proposal on a timely basis, to assert that
the material misstatements in the Proposal must be corrected by the Fund before
Wells Fargo would be required to include the Proposal in its 2004 Proxy
Materials. Based upon the foregoing, we hereby respectfully request a response from the
Staff that it will not recommend enforcement action to the Commission if Wells
Fargo omits the Proposal from the 2004 Proxy Materials for one or more of the
reasons stated herein. In the event the Staff does not concur that the Proposal
may be omitted in its entirety, we respectfully request that the Staff require
the Fund to revise the Proposal to eliminate all materially false or misleading
statements and to submit a revised Proposal to Wells Fargo on or before March
11, 2004, the scheduled printing date for its 2004 Proxy Materials.
We are aware that Rule 14a-8(j) provides that a company is required to notify
the Commission of its intent to omit a stockholder proposal no later than 80
calendar days prior to the date it files its definitive proxy materials. As
stated above, Wells Fargo expects to file its definitive 2004 Proxy Materials on
or about March 16, 2004 and to commence mailing as of that filing date. This
filing date was selected so that stockholders will have adequate time prior to
April 27, 2004, the date of our 2004 annual meeting, to review these proxy
materials before voting by proxy or in person at the annual meeting. Based on
this filing date, Wells Fargo's notice should have been filed with the
Commission by Saturday, December 27, 2003, a day on which the Commission is not
open to receive such filings. Wells Fargo acknowledges that, assuming the
Commission's expected receipt of this notice occurs on December 29, 2004, it
will have actually filed its notice with the Commission 78 days prior to the
date we expect to file our definitive proxy materials. However, Rule 14a-8(j)
allows the Staff to permit such filing later the 80-day deadline stated in the
rule, if the company demonstrates good cause for missing the deadline.
Wells Fargo believes that good cause exists for the Staff o permit the filing of
this notice after the 80-day deadline. First, Wells Fargo was in discussions
with the Fund with respect to the Proposal until December 23, 2003. The Fund had
already informally agreed to correct certain misstatements in the Proposal, but
there was insufficient time prior to the 80-day filing deadline to memorialize
this agreement. We also remained hopeful that we would ultimately reach
agreement with the Fund to withdraw the entire Proposal in light of our
Contributions Policy. We therefore delayed sending in our Rule 14a-8(j) notice
to the Commission in the hope it would not be necessary. Because a revised
Proposal, based on our discussions with the Fund has not yet been received by
us, or an agreement to withdraw the Proposal reached with the Fund, Wells Fargo
ultimately decided to submit this notice in order to fully preserve our rights
under Rule 14a-8. Secondly, Wells Fargo had advised the Fund that it would file
a notice of its intent to omit the Proposal if an agreement to withdraw the
Proposal could not be reached. Consequently, the Fund was on notice of our
intention, will have adequate time (78 days) to respond to this notice if it
desires, and is not prejudiced by the two-day delay. Finally, the dates
following December 23, 2004 (the date of Wells Fargo's last attempt to contact
the Fund's representative and the date on which it became apparent that this
notice would be necessary) included the two days of the Christmas holiday
(December 24 and 25) and a weekend, when staff were absent and/or offices
closed. Consequently, this notice is being filed with the Commission on the
earliest practicable business day following these dates. Based on the foregoing
arguments, we respectfully request that the Staff permit filing of this notice
two days after the 80-day deadline set forth in Rule 14a-8(j). Alternatively, if
the Staff does not concur, Wells Fargo will delay filing and mailing of its 2004
proxy materials to a date sufficient to permit the expiration of the full 80-day
period specified in the Rule. In accordance with Rule 14a-8(j), six additional copies of this letter are
enclosed. Please acknowledge receipt of this letter and its enclosures by
stamping the enclosed receipt and returning it to the undersigned in the return
envelope provided. By copy of this letter, Wells Fargo is also notifying the
Fund of its intention to omit the Proposal from the 2003 Proxy Materials. Should
the Staff desire any additional information in support of Wells Fargo's
position, we would appreciate an opportunity to confer with the Staff concerning
these matters. If the Staff has any questions about, or wishes to discuss any
aspect of this request, please contact the undersigned at 612/667-2367.
Very truly yours, /s/
Mary E. Schaffner
Senior Counsel MES:mja cc: C. Thomas Keegel
General Secretary-Treasurer
International Brother of Teamsters Ms. Jennifer O'Dell
Teamsters Corporate Governance Advisor
International Brother of Teamsters
William N. Kelly
Government Relations Senior Director
Wells Fargo & Company Enclosures [APPENDIX 1]
EXHIBIT A RESOLVED: That the shareholders of Wells Fargo Corporation ("Wells Fargo" or
"Company") hereby request that the Company prepare and submit to the
shareholders of the Company: 1. A report, updated annually. disclosing its policies for political
contributions (both direct and indirect) made with corporate funds. The reports
shall include, but not be limited to, contributions and donations to political
candidates, political parties, political committees and other political entities
organized and operating under 26 USC Sec. 527. This report shall be disclosed to
shareholders through the Company's web site or to shareholders in published
form. 2. A semi-annual report of political contributions, disclosing monetary and
non-monetary contributions to candidates, parties, political committees and
other organizations and individuals described in paragraph 1. This report shall
contain the following information: a. An accounting of the Company's funds contributed or donated to any of the
persons described above; b. A business rationale for each of the Company's political contributions or
donations; and c. Identification of the person or persons in the Company who participated in
making the decisions to contribute or donate. STATEMENT OF SUPPORT: As long-term shareholders of Wells Fargo, we support
policies that apply transparency and accountability to corporate political
giving. In our view, such disclosure is consistent with public policy in regard
to public company disclosure. Currently, Wells Fargo is not required to disclose political contributions made
with corporate funds. Company executives exercise unbridled discretion over the
use of corporate resources for political purposes. They make decisions
unilaterally and without a stated business rationale for such donations.
The result is that shareholders are unaware of how and why the Company chooses
to make corporate contributions end the political ends being furthered by the
gift of corporate funds. Company officials may, in fact, be funding groups and
candidates whose agendas are antithetical to the interests of it, its
shareholders, and its stakeholders. That is the case with the $60,000 contributed by Wells Fargo in the 2002
election cycle. The Center for Responsive Politics, a leading campaign finance
watchdog organization reported, that the Company's money went to major party
committees and congressional campaign dinners. However, shareholders do not know
whether that is the full extent of the Company's contributions. According to
press reports, some companies make substantial contributions that are not
generally known to the public to political committees associated with certain
political figures. Those committees, in turn, use the company's money in ways
that could pose reputational problems and legal risks for the company.
Absent a system of accountability, corporate executives will be free to use the
Company's assets for political objectives not shared by and may be inimical to
the interests of shareholders. There is currently no single source of
information providing disclosure to the Company's shareholders on this issue.
That is why we urge your support FOR this critical governance reform. [APPENDIX 2]
EXHIBIT B December 23, 2003 Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
450 Fifth Street, N. W.
Washington, D.C. 20549 Re: Wells Fargo & CompanyStockholder Proposal Relating to Political
Contributions Submitted by the International Brotherhood of Teamsters General
Fund (the "Teamsters") Ladies and Gentlemen:
This letter is being provided in support of the no-action request letter being
submitted to the Securities and Exchange Commission (the "Commission") by Mary
E. Schaffner, Esq., Senior Counsel, Wells Fargo & Company, with respect to the
above stockholder proposal and supporting statement for inclusion in Wells
Fargo's 2004 proxy materials. I am Senior Vice President, Government Relations,
of Wells Fargo. In that capacity, I am responsible for overseeing, and thus am
familiar with, the policies relating to, and activities by Wells Fargo in
connection with governmental and political matters at the federal, state, and
local levels, including without limitation, any election campaign matters
involving individual candidates for office and other political entities.
The Teamsters assert in their supporting statement for their proposal that Wells
Fargo executives exercise "unbridled discretion" over the use of corporate
resources for political purposes and that stockholders are unaware of the
rationale of the purposes for which these contributions are made. As explained
below, this statement, as well as the specific contribution cited as evidence of
such executives' alleged discretion, is untrue and thus materially misleading to
stockholders. Furthermore, Wells Fargo believes that it has, or will have prior
to the 2004 annual meeting, substantially implemented the Teamsters proposal by
disclosing its policy not to use corporate funds to support political candidates
or political entities involved in election campaigns. In support of its assertion that Wells Fargo executives have total discretion
over the use of corporate resources for political purposes, the Teamsters state
as follows: That is the case with the $60,000 contributed by Wells Fargo in the 2002
election cycle. The Center for Responsive Politics, a leading campaign finance
watchdog organization reported, that the Company's money went to major party
committees and congressional campaign dinners. However, shareholders do not know
whether that is the full extent of the Company's contributions.
We have confirmed that the contribution referred in the sentence quoted above
was a contribution made by Spencer Eccles, who is an employee of Wells Fargo,
from his personal funds. As is required by law, individuals who make
contributions using personal funds must disclose the name of their employer.
This information can be, and in the case of Mr. Eccles' personal contribution
was, erroneously reported by the Center for Responsive Politics as a
contribution by Wells Fargo. More importantly, as stated by Ms. Schaffner in her no-action request letter, it
is Wells Fargo's stated policy that Wells Fargo does not make contributions to
candidates in political election campaigns using corporate funds. All
contributions on behalf of Wells Fargo to candidates for public office and
related political entities are made through Wells Fargo Political Action
Committees (PACs) funded solely by employee contributions and are reported to
relevant federal, state and local election reporting offices. Wells Fargo has
provided the Teamsters with a copy of its policy and stated its willingness to
post it on Wells Fargo's public Corporate Governance website.
In some cases, individual Wells Fargo affiliates may use funds allocated to
their marketing or other business budgets to support state and local ballot
initiatives, such as school or other bonding measures, primarily because such
initiatives are of interest to the community in which that particular affiliate
does business or may affect a specific aspect of its business. This support may
be in the form of a contribution to the local chambers of commerce involved in
the initiative. Wells Fargo is not required by applicable election law to track
these contributions as political contributions. Consequently, these
contributions do not relate to contributions to political campaigns for
elections or involve entities within the scope of 26 USC Section 527 that is the
stated focus of the Teamsters' proposal. Consequently, in light of the information provided in this letter, I
respectfully request that the Commission concur with Wells Fargo's request that
it take no action if Wells Fargo does not include the Teamsters' proposal in its
2004 proxy materials, or at minimum, require the Teamsters' to amend its
proposal to remove the materially misleading information described above.
Very truly yours, /s/
Diane P. Lilly
Senior Vice President,
Government Relations cc: Laurel A. Holschuh
Senior Vice President and Secretary [INQUIRY LETTER]
January 27, 2004 Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 RE: Request for No-Action by Wells Fargo & Co., Inc. on the Shareholder Proposal
Submitted by the International Brotherhood of Teamsters General Fund for
Inclusion in the 2004 Wells Fargo Proxy Materials. Dear Ladies and Gentlemen:
We are in receipt of a letter sent to you by Ms. Mary E. Schaffner, ("Ms.
Schaffner" or "Counsel") Senior Counsel of Wells Fargo & Co. ("Wells Fargo" or
"the Company"), dated December 26, 2003. In that letter, Counsel gives notice of
the Company's intent to exclude the International Brotherhood of Teamsters
General Fund's ("Fund" or "the Proponent") shareholder proposal from Wells
Fargo's proxy materials for 2004. In accordance with Rule 14a-8(j), enclosed are six (6) copies of this letter and
its exhibits. The Fund's proposal requesting the Company to report to shareholders regarding
(1) the Company's policy on political contributions, and (2) specific
contributions to candidates, parties, political committees and other
organizations organized under 26 U.S.C. §527 is a legitimate issue for
shareholder's consideration and must be included in the Company's 2004 Proxy
Materials. Counsel relies on Rule 14a-8(j)(i)(10), claiming that the proposal has been or
will be prior to the 2004 annual meeting of stockholders, substantially
implemented and Rule 14a-8(i)(3) claiming the proposal contains false and
misleading statements and, therefore, can rightfully be excluded from the
Company's 2004 Proxy materials. The Proponent respectfully disagrees.
ARGUMENT As an initial matter, the company's letter should be rejected because it is
untimely. Rule 14a-8(j) requires a company to notify the SEC of its intent to
omit a shareholder proposal no later than 80 calendar days prior to the date it
files its definitive proxy materials. Wells Fargo admits that it failed to
notify the Commission in a timely manner of its intent to exclude the Fund's
shareholder proposal from its 2004 Proxy Materials. Counsel's no-action request
states, "Wells Fargo's notice should have been filed with the Commission by
Saturday, December 27, 2003." The Company had ample time to file its intent to exclude the Fund's shareholder
proposal and Counsel was aware of the date on which the Company planned to file
with the Commission its definitive proxy statement. The "good cause" that the
Company points to for missing the deadline is that the request would have been
due to the Commission on "a day on which the Commission is not open to receive
such filings." Further, Counsel argues that because it was in discussions with the Proponent to
edit the proposal in a way that was mutually agreeable to both parties before
the expiration of the 80-day deadline, that the Proponent is partially to blame
for Counsel missing the deadline. The Teamster Affiliates Pension Plan (TAPP) and the Teamsters General Fund filed
dozens of shareholder proposals each year on a variety of corporate governance
issues. Of these proposals, many are due on weekends or federal holidays when
the Commission is closed. However, our Funds are still expected to submit
proposals in a timely manner without exemptions for holidays or weekends.
In the course of filing proposals, there is often contact between the Proponent
and the Company so that the two parties can discuss shareholder concerns and the
substance of the proposed resolution. In this case Counsel reached out to the
Proponent in an effort to reach mutually agreeable language for the proposal.
However, at no time did the Proponent suggest or encourage Counsel to miss the
deadline to file for no-action relief. Further, Counsel's attempt to use "off
the record" conversations with the Proponent in the Company's no-action request
to discredit the legitimacy of the proposal demonstrates Counsel's disingenuous
effort to address shareholder concerns. In fact, Counsel's actions threaten to
discourage or chill conversation between the two parties and alternatively have
the potential of increasing the number of no-action requests that the Division
receives. Therefore, the Proponent believes that the Company did not meet the SEC's
standard for "good cause" and Counsel's request for a waiver of Rule 14a-8(j)
should be denied. In the alternative, if the Commission disagrees with the Proponent's contention
that the Company is time barred from filing a no-action request with the SEC
under Rule 14a-8(j), the Proponent is prepared to contest the remaining grounds
for exclusion that Counsel argues in the no-action request.
1. The Proposal May be Included in the Company's 2004 Proxy materials Under Rule
14a-8(i)(10), Because it has not Been, or Will be Prior to the 2004 Annual
Meeting of Shareholders Substantially Implemented. Counsel argues that the Proposal has been or will have been substantially
implemented by the date of the 2004 Annual Meeting of Shareholders because the
Company proposes to post the following statement on the Company's website:
Wells Fargo Political Contributions Policy
All Contributions on behalf of Wells Fargo to Candidates for public office and
related political entities are made through Wells Fargo PACs. These PACs are
funded solely by employee contributions. All contributions to election campaigns
made through Wells Fargo PACs are reported to relevant federal, state and local
reporting offices. This policy does not come near to providing the same notice and disclosure to
shareholders that is embodied in the shareholder proposal. Proponent does not
object, however, to making clear in the Proposal's supporting statement that
Wells Fargo is subject to federal law, rules of the Municipal Securities
Rulemaking Board and state-law fiduciary duties, which constrain the Company's
ability to make certain kinds of political contributions. The Proponent is also
amenable to clarifying that the disclosure requirements referenced in the
supporting statement relate specifically to disclosure to shareholders, not any
disclosure to government agencies mandated by law or rule.
2. The Proposal May be Included in the Company's 2004 Proxy Materials Under Rule
14a-8(i)(3) Because it Does not Contain False or Misleading Statements.
Although Proponent believes that the proposal as currently stated does not
contain any false or misleading statement, Proponent is willing in the spirit of
compromise, to revise the supporting statement. The Proponent believes that the
following revisions would cure the concerns that Counsel advances in her
no-action request: |[NCCDEF] |[UCA1] |[TDC4,MP1,QL,VU,I.6] |[TCC4,MP1,QL,VU]
|[XT] |[ST]|[LC5]|[RS2]CURRENT STATEMENT |[TA]REVISED STATEMENT
|[ST]|[LC5]|[RS4]``Currently Wells Fargo is not required to disclose political
contributions made with corporate funds.'' |[TA]``Currently there is no
requirement that Wells Fargo disclose to its shareholders political
contributions made with corporate funds.'' |[ST]|[LC5]``Company executives
exercise unbridled discretion over the use of corporate resources for political
purposes.'' |[TA]``Company executives exercise significant discretion over the
use of corporate resources for political purposes, subject to the general
fiduciary duties and legal requirements governing certain kinds of
contributions.'' |[ST]|[LC5]``They make decisions unilaterally and without a
stated business rationale for such donations.'' |[TA]``They are not required to
provide shareholders with a business justification for such donations.'' |[ET]
Counsel also argues that the first two sentences of the fourth paragraph of the
supporting statement should be deleted because it would be false and misleading
to shareholders. In the spirit of compromise, the Proponent is willing to accept
the request of Counsel. CONCLUSION Counsel's arguments for exclusion of the Fund's shareholder proposal from the
2004 Proxy Materials clearly do not meet the standard for SEC no-action. In the
spirit of compromise, the Proponent is willing to alter the supporting statement
to the shareholder proposal as outlined in the argument above. Please see
herein, EXHIBIT A. The SEC's primary mission "is to protect investors and maintain the integrity of
the securities markets." The Proponent urges the SEC to protect Wells Fargo &
Co. shareholders who support increased disclosure of the Company's political
contributions, and by extension, protect all shareholders who take an interest
in corporate governance, by denying the Company's request for no-action.
Based on the foregoing analysis, the Proponent respectfully requests that the
Division take action to enforce inclusion of its proposal in Wells Fargo & Co.'s
2004 Proxy Materials. Sincerely, /s/
C. Thomas Keegel
General Secretary-Treasurer CTK/jo
Enclosures [APPENDIX 3]
EXHIBT A RESOLVED: That the shareholders of Wells Fargo Corporation ("Wells Fargo" or
"Company") hereby request that the Company prepare and submit to the
shareholders of the Company: 1. A report, updated annually, disclosing its policies for political
contributions (both direct and indirect) made with corporate funds. The reports
shall include, but not be limited to, contributions and donations to political
candidates, political parties, political committees and other political entities
organized and operating under 26 USC Sec. 527. This report shall be disclosed to
shareholders through the Company's web site or to shareholders in published
form. 2. A semi-annual report of political contributions, disclosing monetary and
non-monetary contributions to candidates, parties, political committees and
other organizations and individuals described in paragraph 1. This report shall
contain the following information: a. An accounting of the Company's funds contributed or donated to any of the
persons described above; b. A business rationale for each of the Company's political contributions or
donations; and c. Identification of the person or persons in the Company who participated in
making the decisions to contribute or donate. STATEMENT OF SUPPORT: As long-term shareholders of Wells Fargo, we support
policies that apply transparency and accountability to corporate political
giving. In our view, such disclosure is consistent with public policy in regard
to public company disclosure. Currently, there is no requirement that Wells Fargo disclose to its shareholders
political contributions made with corporate funds. Company executives exercise
significant discretion over the use of corporate resources for political
purposes, subject to the general fiduciary duties and legal requirements
governing certain kinds of contributions. They are not required to provide
shareholders with a business justification for such donations.
The result is that shareholders are unaware of how and why the Company chooses
to make corporate contributions and the political ends being furthered by the
gift of corporate funds. Company officials may, in fact, be funding groups and
candidates whose agendas are antithetical to the interests of it, its
shareholders, and its stakeholders. According to press reports, some companies make substantial contributions that
are not generally known to the public to political committees associated with
certain political figures. Those committees, in turn, use the company's money in
ways that could pose reputational problems and legal risks for the company.
Absent a system of accountability, corporate executives will be free to use the
Company's assets for political objectives not shared by and may be inimical to
the interests of shareholders. There is currently no single source of
information providing disclosure to the Company's shareholders on this issue.
That is why we urge your support FOR this critical governance reform.
[STAFF REPLY LETTER]
February 11, 2004 Response of the Office of Chief Counsel Division of Corporation Finance
Re: Wells Fargo & Company
Incoming letter dated December 26, 2003 The proposal requests that Wells Fargo prepare a report, updated annually,
disclosing its policies for political contributions and prepare a semi-annual
report disclosing monetary and non-monetary political contributions.
We are unable to concur in your view that Wells Fargo may omit the entire
proposal under rule 14a-8(i)(3). There appears to be some basis for your view,
however, that portions of the supporting statement may be materially false and
misleading under rule 14a-9. In our view, the proponent must:
delete the sentence that begins "Currently, Wells Fargo is not ..." and ends
"... made with corporate funds";
delete the word "unbridled" from the sentence that begins "Company executives
exercise ..." and ends "... for political purposes"; and
delete the discussion that begins "That is the case with the $60,000 ..." and
ends "... the Company's contributions." Accordingly, unless the proponent provides Wells Fargo with a proposal and
supporting statement revised in this manner, within seven calendar days after
receiving this letter, we will not recommend enforcement action to the
commission if Wells Fargo omits only these portions of the supporting statement
from its proxy materials in reliance on rule 14a-8(i)(3). We are unable to concur in your view that Wells Fargo may omit the entire
proposal under rule 14a-8(i)(10). Accordingly, we do not believe that Wells
Fargo may omit the proposal from its proxy materials in reliance on rule
14a-8(i)(10). We note that Wells Fargo did not file its statement of objections to including
the proposal at least 80 days before the date on which it will file definitive
proxy materials as required by rule 14a-8(j)(1). Noting the circumstances of the
delay, we do not waive the 80-day requirement. Sincerely,
/s/ Lesli L. Sheppard-Warren
Attorney-Advisor
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