Correspondence to chair schapiro regarding matter 11 06336-foia fee waiver reponse-official copy
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Correspondence to chair schapiro regarding matter 11 06336-foia fee waiver reponse-official copy

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Correspondence to chair schapiro regarding matter 11 06336-foia fee waiver reponse-official copy Correspondence to chair schapiro regarding matter 11 06336-foia fee waiver reponse-official copy Document Transcript

  • May 26, 2011 Freedom of Information Act AppealMs. Mary Schapiro, ChairmanU.S. Securities and Exchange CommissionWashington, DC 20549Dear Chairman Shapiro: I am writing in regards to the ways and means the U.S. Securities and ExchangeCommission (the “Commission”) governs and manages matters relating to Freedom ofInformation Act processing and the Commission’s Ethics Compliance system. It is of the privateand public right to understand the operations and activities of the Commission with respects tohonoring the Code of Ethics and maintaining Ethics Compliance. It is incumbent upon the Commission to maintain an adequately designed and effectiveEthics Compliance system to assure that employees disclose “waste, fraud, abuse, and corruptionto appropriate authorities.”1 In that spirit, I kindly ask that you use your discretion andjudgment in assuring the prompt and timely closure of the enclosed matter2 further relating torecommendations made to the Commission regarding the Whistleblower Provisions of Section 21Fof the Securities Exchange Act of 1934 on May 1, 20113 and amended on May 5, 20114. Thank youfor your cooperation and attention to this matter.Sincerely,Michael BrozzettiChairman, Business Integrity Alliance 51 § 2635.101 Basic obligation of public service. Reference (11)2 Freedom of Information Act Request No. 11-06336-FOIA per U.S. SEC records.3 Comment Regarding File No. S7-33-10: http://www.sec.gov/comments/s7-33-10/s73310-308.pdf4 Comment Regarding File No. S7-33-10: http://www.sec.gov/comments/s7-33-10/s73310-309.pdf5 Publically Available Certification and Acknowledgement to the Business Integrity Alliance Code:http://www.thebia.co/pdf/The%20BIA%20Code_Acknowledged_brozzetti.pdf 1
  • May 25, 2011MATTER: SEC-FOIA-REQUEST-#002 (SEC Request Number 11-06336-FOIA)Dear Mr. Siford, This correspondence is concerning your letter dated May 24, 2011. In regard to my Freedom ofInformation Act request received in your office on May 3, 2011 requesting a summary of all reportedincidents and opinions, including concurring and dissenting opinions, as well as orders, made inconnection with the adjudication of matters relating to the Canon of Ethics, the Standards of EthicalConduct for Employees of the Executive Branch and other Related Statutory Authorities (collectively the“Code of Ethics”) from 2006 to Present. In addition, I sought for each Commission official andemployee, a signed acknowledgment to the Code of Ethics. Your letter indicated that based on yourreview of my letter, and the applicable fee waiver criteria, you denied the fee waiver request based on itnot providing substantive information relating to any of the six (6) factors relevant to public interestdisclosures. You further indicated in your letter that the 20-business day timeframe could not be met “dueto the need to search for and collect the requested records from field facilities or other establishments thatare separate from this office.” Without undue delay, please take into consideration the following reasonswhy disclosing basic information related to the Commission Ethics Compliance system, an importantbasis for public trust, is in the greater public interest thus qualifying for a grant in waiver of fees.1) Whether the subject matter of the requested records concerns the operations or activities of the Federal government; a) The subject matter is relevant to the public concern of the operations or activities of the Federal government based on Section § 2635.101 Basic obligation of public service. (a) Public service is a public trust. Each employee has a responsibility to the United States Government and its citizens to place loyalty to the Constitution, laws and ethical principles above private gain. To ensure that every citizen can have complete confidence in the integrity of the Federal Government, each employee shall respect and adhere to the principles of ethical conduct set forth in this section, as well as the implementing standards contained in this part and in supplemental agency regulations.2) Whether the requested records are meaningfully informative on those operations or activities so that their disclosure would likely contribute to increased public understanding of specific operations or activities of the government; a) The requested records are meaningfully informative on those Public Trust operations or activities so that their disclosure would likely contribute to increased public understanding of specific operations or activities of the government, including but not limited to the U.S. SEC Ethics 2
  • Compliance system, which is a fundamental basis, and arguably the most important aspect of a well-documented, thorough, and robust internal compliance system6. b) The requested records disclosure would likely contribute to increased public understanding of specific operations or activities of the government, specifically the adequacy of design and operational effectiveness of the U.S. SEC’s Ethics Compliance system, in consideration of the role of the U.S. SEC Ethics Official as defined within § 2635.102(c) Definitions. i) Agency ethics official refers to the designated agency ethics official or to the alternate designated agency ethics official, referred to in §2638.202(b) of this chapter, and to any deputy ethics official, described in §2638.204 of this chapter, who has been delegated authority to assist in carrying out the responsibilities of the designated agency ethics official. ii) Mr. David Becker affirmed, “The Commission’s mission starts with an uncompromising commitment to the highest ethical standards,” in a press release announcing Ms. Shira Pavis Minton as the new Ethics Counsel in the Office of the General Counsel On August 5, 2010. On March 3, 2011, Representative Darrell Issa (R-CA) and Senator Charles Grassley (R-IA) sent a letter7 to the Securities and Exchange Commission’s Chairman Mary Schapiro raising question to the handling of the Madoff matter with respects to high-ranking Commission officials’ ethics compliance.3) Whether disclosure will contribute to the understanding of the public at large, rather than the understanding of the requester or a narrow segment of interested persons; and a) The requested disclosure will contribute to the understanding of the public at large, rather than the understanding of the requestor or a narrow segment of interested person by requestor promise to disclose all relevant summary information and findings to the public-at-large no later than 12 months via a publicly accessible website. With respects to the U.S. SEC Ethics Compliance system and requested records, it should also be considered that the Commission might use these requested records to create a searchable index of records available to appropriate government agents and agencies and Public, at Commission expense, as an assurance policy to safeguard the right to Public Trust. According to Mr. William Lenox, former U.S. SEC Ethics Counsel8 : i) “Public office is a public trust. The concept of ’trust’ is based on the fiduciary principle, very important in the U.S. legal system, but not known in some countries. The principle is that one owes a greater duty to someone else than to himself. This concept, applied to Government employees, recognizes that favoring private interests, either those of the public employee himself or those of any other person or organization, over the public good, that is, of all the citizens, violates the purpose and spirit of public office.”6 See page 34 of Proposed Rules for Implementing the Whistleblower Provisions of Section 21F of the Securities Exchange Act of 1934(http://www.sec.gov/rules/proposed/2010/34-63237.pdf)7 http://www.scribd.com/doc/50169442/2011-03-03-DEI-Grassley-to-Schapiro-SEC-Becker-Due-3-7-OCR8 William Lenox. OUTLINE OF RULES OF ETHICS FOR EMPLOYEES AND OFFICIALS OF A SECURITIES REGULATORY AGENCY. April2006. 3
  • ii) “The actual level of ethical behavior in an institution is in large part a function of the culture of that particular institution. Where the top officials set an example of doing the right thing, the agency as a whole will be more ethical from top to bottom. By contrast, where the leadership cuts ethical corners, no code or other set of rules will really be effective. [emphasis added.]”4. Whether disclosure would contribute significantly to public understanding of the governmental operations or activities. a) The requested disclosure would contribute significantly to public understanding of the operations or activities of the government, including but not limited to, the design and effectiveness of the U.S. SEC Ethics Compliance system which is fundamental in governing all other aspects of the operations and activities in support of the Commission’s mission to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”5. Whether disclosure would further any commercial interests of the requester a) The disclosure would likely further any commercial interests 9of the requester in the accomplishment of the mission to advocate and advance practices supporting the principles of integrity, transparency, accountability, and risk governance to the private and public sector.6. Whether the public interest in disclosure is greater than the requesters commercial interest under 17 CFR § 200.80 (e)(4)(ii). a) The public interest in disclosure is greater than the requester’s commercial interest based on the premise that the Commission has a basic obligation to public service to maintain a valid and robust internal compliance system, including a fit Ethics Compliance system, with respects to Public Trust. Should your opinion still conclude in a denial of a fee waiver, I would kindly ask that you providea detailed explanation to the reasoning and facts relevant to denying this request for fee waiver, as itrelates to the aforementioned six (6) factors. If your opinion remains dissenting to grant a fee waiver,kindly provide me a written Commission definition of what constitutes a “robust internal compliance”system that warrants a Public Trust. Thank you for your cooperation and attention to this matter. Time isof the Essence.Sincerely,Michael Brozzetti9 Michael Brozzetti is an American Citizen, Taxpayer, and Entrpereneur. He is the President of Boundless LLC, an expert internal auditing and governance firm andis Chairman of the Business Integrity Alliance™ which is a joint venture between zEthics, Inc. and Boundless LLC missioned to advocate and advance the practicessupporting the principles of integrity, transparency, accountability, and risk oversight. Michael Brozzetti is a Certified Internal Auditor® Learning System trainingpartner with the Institute of Internal Auditors, Villanova University, and the Holmes Corporation. Michael Brozzetti is currently under consideration for the zEthics,Inc. Board of Directors and Chief Learning Officer for Global Governance Grid IT. Michael has no material holdings in the Capital Markets. 4
  • VIA E-MAILFrom: Michael Brozzetti Chairman, Business Integrity Alliance 3513 Bowman Street Philadelphia, Pennsylvania E-mail address: mike(at)boundlessllc.comTo: Ms. Mary Schapiro Chairman U.S. SEC schapirom@sec.govCC: Ms. Elizabeth Murphy (please request Mr. William Lenox) U.S. SEC Secretary murphye@sec.gov Mr. David Becker U.S. SEC General Attorney beckerd@sec.gov (E-Mail action report failure on May 26, 2011) Mr. William Lenox U.S. SEC Supervisory Attorney General lenoxw@sec.gov Mr. Mark Siford, Attorney-Adviser U.S. SEC Office of FOIA and Records Management Services (OFRMS) sifordm@sec.gov Mr. H. David Kotz, Inspector General U.S. SEC Office of the Inspector General (OIG) kotzd@sec.gov Ms. Shira Pavis Minton, Ethics Counsel U.S. SEC General Counsel mintons@sec.gov Mr. Hudson Hollister Committee on Oversight and Government Reform U.S. House of Representatives Hudson.Hollister@mail.house.gov Mr. Chris Lucas Committee on the Judiciary U.S. Senate Chris_Lucas@judiciary-rep.senate.gov Mr. Mark Rome, American Entrepreneur zEthics, Inc. mrome(at)zethics.comVIA REGULAR MAIL ATTN: FOIA/Privacy Act Office of the Securities and Exchange Commission Station Place 100 F Street NE, Mail Stop 2736 Washington, D.C. 20549 No e-mail provided ATTN: SEC Office of General Counsel Securities and Exchange Commission Station Place 100 F Street NE, Mail Stop 9612 Washington, D.C. 20549 5