Report on Goldman Sachs Annual Meeting

For more info contact: Steve Milloy, 301-258-2852, steve@feafund.com

Washington DC, April 7, 2006 – It was a good thing Tom Borelli, Peter Flaherty and Steve Milloy showed up at the Goldman Sachs annual meeting last Friday (March 31) – otherwise it would have been over in the blink of an eye.

We extended the length of the meeting to the point where our shareholder resolution and related comments dominated the meeting – as reflected in news post-meeting coverage of our efforts by the Wall Street Journal, Financial Times (UK), Reuters, Bloomberg, National Public Radio and The Independent (UK).

Meeting highlights include:

1. Borelli announced that we were withholding our vote for director from BP chairman Lord John Browne. Playing off the new BP commercials asking “What’s your carbon footprint?”, Borelli asked Lord Browne about his carbon footprint given BP’s recent 200,000 gallon oil spill on the North Slope of Alaska and last year’s explosion at a BP refinery in Texas which killed 15 workers and injured others. Borelli pointed out that Lord Browne ought to pay more attention to worker and facility safety as opposed to BP’s $100 million “green” public relations campaign that, for example, calls gasoline a “necessary evil.”
2. Milloy announced that we were withholding our vote for Hank Paulson as CEO based on unanswered questions concerning Paulson’s use of Goldman Sachs as a vehicle to promote his personal hobby (environmental activism).
3. Flaherty (of the National Legal and Policy Center) presented our shareholder resolution requesting a report on Paulson’s apparent conflict of interest concerning his ongoing chairmanship of the Nature Conservancy as well as a donation of Chilean land to an organization with links to his son and the Nature Conservancy. In a surprise move that stunned Paulson and the audience, rather than present the resolution from a microphone in the aisle of the auditorium, Flaherty climbed across a security barriers, climbed on the podium and took over the lectern from which Paulson was running the meeting. The bewildered Paulson relinquished the lectern and unhappily endured Flaherty’s 5-minute presentation of the proposal.
4. Goldman’ response to the shareholder proposal was non-responsive and superficial – in effect, “the board extensively reviewed these matters and approved them.” Goldman denied that the Nature Conservancy was involved in the land deal. Milloy pointed out that the Nature Conservancy was paid a consulting fee of $144,000 for its involvement and was an acknowledged affiliate of the land donee (Wildlife Conservation Society). Goldman did not respond.
5. The shareholder Q&A period was dominated by Borelli’s extended colloquy with Paulson about the Chilean land deal and Nature Conservancy chairmanship.

It was no surprise that we lost the shareholder vote by a wide margin – the resolution was unavoidably filed late and so was not included in Goldman’s proxy statement. Only shareholders at the meeting (primarily Goldman employees) could vote and you had to raise your hand to get a ballot. Apparently, not too many employees were willing to do in front of their boss. Management (i.e. Paulson) voted all the rest of Goldman’s outstanding shares (about 473 million) against ours (178).

We have since uncovered information about the land deal and we will continue to monitor Goldman’s environmental activities closely. We’ll be back…

###

The Free Enterprise Action Fund (FEAF) is a mutual fund seeking to provide investors with financial returns while defending and advocating for the American system of free enterprise. The FEAF owns less than one percent of the outstanding shares of Goldman Sachs.

The Free Enterprise Action Fund seeks long-term capital appreciation through investment and advocacy that promote the American system of free enterprise. An investor should consider the fund's investment objectives, risks, and charges and expenses carefully before investing or sending money. This and other important information about the Free Enterprise Action Fund can be found in the fund's prospectus. To obtain a prospectus, please call 1-800-766-3960 or visit www.FreeEnterpriseActionFund.com. Please read the prospectus carefully before investing.

Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes. The Free Enterprise Action Fund is a new fund with limited investment history and there is no guarantee that it will achieve its investment objectives.

The Free Enterprise Action Fund is advised by Action Fund Management, LLC., which receives a fee for its services, and is distributed by BISYS Fund Services Limited Partnership, which is not affiliated with Action Fund Management, LLC.