Advocacy | Free Enterprise Action Fund

Proxy Voter Guide for Libertarian and Conservative Shareholders Released by Free Enterprise Action Fund (Ticker: FEAOX)

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

Washington DC, April 14, 2008 - 2008 - Concerns over corporate lobbying for impending regulation of greenhouse gases dominate the 2008 Proxy Voting Guide released today by Action Fund Management, the investment adviser to the Free Enterprise Action Fund (Ticker: FEAOX), a publicly-traded mutual fund. As many publicly-owned corporations promote and lobby for a federally mandated cap-and-trade regulatory scheme as their preferred method of reducing of greenhouse gas emissions, AFM urges investors to ask corporate boards and managers whether they have performed the requisite due diligence concerning how mandatory controls of greenhouse gases may impact the U.S economy, corporate earnings and the environment.

Economic analyses conducted by various government and private organizations indicate that cap-and-trade strategies to reduce of carbon dioxide emissions would:

Increase electricity and gasoline prices;
Reduce disposable income;
Slow economic growth;
Produce little environmental benefit;
Increase government regulation;
Limit consumer choice.

In light of the significant negative economic and social impacts anticipated to result from global warming regulation, the FEAOX filed 14 shareholder proposals challenging companies to justify that their actions with respect to global warming and the environment are the best interest of shareholders.

The FEAOX calls on liberty- and financial-minded shareholders to join us and vote “FOR” the following proposals:

ALCOA belongs to the U.S. Climate Action Partnership (USCAP), which is lobbying for global warming regulation. While Alcoa hopes to get free carbon credits for past reductions in greenhouse gases, Alcoa blamed disappointing first-quarter 2008 earning on higher energy and environmental costs ─ likely outcomes from global warming regulations. Vote for “Item 3 – Shareholder Proposal Global Warming Report” at Alcoa’s annual meeting on May 8 in Pittsburgh, PA.
BANK OF AMERICA has adopted Equator Principles, voluntary guidelines for evaluating the environmental and social impacts of development projects, particularly those related to energy, in the third world. We want to know whether the Equator Principles actually produce improved environmental and social outcomes or whether they lead to a pointless sacrifice of viable sources of revenue and make Bank of America susceptible to reputational damage from accusations of “greenwashing.” Vote for “Item TBD” at Bank of America’s annual meeting on April 23 in Charlotte, NC.
CITIGROUP denied funding for as much as $100 billion or more in developing world projects through its implementation of the Equator Principles. In exchange for giving up revenue from such lending activities, we want to know whether the Equator Principles have actually produced improved environmental and social outcomes or whether they are simply an extremely expensive form of “greenwashing.” Vote for “Proposal 7 Equator Principles Report” at Citigroup’s annual meeting on April 22 in New York, NY.
CONOCOPHILLIPS belongs to the U.S. Climate Action Partnership (USCAP), which is lobbying for global warming regulation. We want to know why an oil company would support federal legislation that would reduce demand for, and stigmatize its main product, all for speculative environmental gain. Vote for “TBD Global Warming Report” at ConocoPhillips’ annual meeting on May 14 in Houston, TX.
DUPONT belongs to the U.S. Climate Action Partnership (USCAP), which is lobbying for global warming regulation. We want to know why a chemical company would support federal legislation that would increase the costs of the large amounts of energy it uses and the raw materials it consumes, and would harm its customer base by reducing economic growth. Vote for “Item 5 Stockholder Proposal on Global Warming Report” at Dupont’s annual meeting on April 30 in Wilmington, DE.
EXELON belongs to the U.S. Climate Action Partnership (USCAP), which is lobbying for global warming regulation. While Exelon hopes that it will benefit from global warming regulations due to its significant nuclear capacity, the company admits in its 2007 annual report that it may incur costs by being forced to reduce emission from its non-nuclear facilities and to pay for permits to emit greenhouse gases. While we applaud Exelon’s nuclear power capabilities, we wonder why it would lobby for regulation that would make operations more expensive and make its product more expensive for consumers without any guarantees that global warming legislation will provide for increased electricity generation from nuclear power. Vote for “Item 5 Stockholder Proposal 3: A Shareholder recommendation to Prepare a Report Showing That Exlon’s Actions to Reduce Global Warming Have Reduced Mean Global Temperature or Avoided Disasters” at Exelon’s annual meeting on April 29 in Chicago, IL.
EXXONMOBIL’s annual shareholder meeting will feature 17 shareholder proposals, most of which are from nuisance shareholders and activist investors who wish to pressure the company on a variety of environmental, labor and social issues. In the past, these nuisance shareholders have used such proposals to pressure ExxonMobil to stop opposing global warming legislation. Our proposal would compel management to modify the corporate by-laws to no longer permit nuisance shareholders to submit shareholder proposals for consideration at the annual meeting. Vote for “Item 3 - Shareholder Proposals Prohibited” at ExxonMobil’s annual meeting on May 28 in Dallas, TX.
FORD MOTOR CO. belongs to the U.S. Climate Action Partnership (USCAP), which is lobbying for global warming regulation. We want to know why an automobile manufacturer would promote federal legislation that would increase the costs of its products, reduce consumer choice and harm its customer base by reducing economic growth. Vote for “Proposal 10 - Global Warming Report” at Ford’s annual meeting on May 8 in Wilmington, DE.
FPL GROUP belongs to the U.S. Climate Action Partnership (USCAP), which is lobbying for global warming regulation. FPL’s support for global warming alarmism has caused a backlash resulting in protests surround its construction of a gas-fired power plant in South Florida. We want to know why a power company would help foment a social environment that is hostile to the generation of its primary product and would harm its customer base by reducing economic growth and increasing electricity prices. Vote for “Proposal 10 - Global Warming Report” at FPL Group’s annual meeting on May 23 in Juno Beach, FL.
GENERAL ELECTRIC belongs to the U.S. Climate Action Partnership (USCAP), which is lobbying for global warming regulation. While a small part of GE’s business involves alternative energy technologies like windmills, the company is losing revenue from the cancellation of coal-fired power plants because of global warming alarmism ─ GE sells steam turbines to coal-based electricity power plants. In addition, the vast majority of GE’s business is dependent upon the health and growth of the economy. As global warming regulation is widely anticipated to adversely impact the national and global economy, we want to know why GE is lobbying against its own earnings. Vote for “Shareholder Proposal No. 6 - Global Warming Report” at GE’s annual meeting on April 23 in Erie Pa.
GOLDMAN SACHS supports global warming regulation even though some of its major clients are coal companies that would be most penalized by these regulations. Given the company’s past conflict-of-interest controversy involving the Chilean land transactions and the widely recognized adverse economic consequences of global warming regulation, we want to make sure that Goldman has incorporated appropriate risk management assessments to its environmental business strategies. Failure to fully assess these risks could expose the company to legal liability and reputational harm and harm its customers. Vote for “Item 5 ─Shareholder Proposal Requesting a Sustainability Report” at Goldman Sachs’ annual meeting on April 10 in New York, NY.
JPMORGAN CHASE issued in 2005 an environmental policy similar to that demanded by the environmental activists, including a commitment to advocate a restrictive national policy for greenhouse gas emissions. The company agreed to settle various lawsuits, including Enron and WorldCom litigation, for billions of dollars, despite claiming the Company had meritorious defenses to the lawsuits. The Company spent at least $500 million in attorney’s fees during 2004. We want to know why the Company has not issued a policy, similar in form to its environmental policy, announcing the Company’s commitment to advocate for litigation reform that might reduce unmeritorious litigation that reduces shareholder value. Vote for “Proposal 11 - Lobbying Priorities Report” at JPMorgan Chase’s annual meeting on May 20 in New York, NY.
LEHMAN BROTHERS claims that it “is engaged in efforts to find environmentally sustainable solutions and to develop market-based solutions in response to the threat posed by climate change...” But it seems that management may be taking action based on erroneous information about global warming. Management uses the so-called “hockey stick” chart to support the notion that “the Earth’s mean temperature has risen sharply in recent decades.” But the hockey stick graph was scientifically discredited long before Lehman started referencing it. Shareholders expect that management will undertake reasonable due diligence before undertaking action with corporate assets as management action based on erroneous information may not be “sustainable” for shareholders or the environment. Vote for “Proposal 6 ─ Stockholder Proposal Relating to an Environmental Sustainability Report” at Lehman’s annual meeting on April 15 in New York, NY.
PEPSICO belongs to the U.S. Climate Action Partnership (USCAP), which is lobbying for global warming regulation. But PepsiCo, the seller of the most popular brand of bottle water, is already experiencing a backlash from global warming alarmism. The mayor of San Francisco recently banned the purchase of bottled water by the city government because plastic bottles sold to U.S. consumers “require about 47 million gallons of oil, the equivalent of one billion pounds of carbon dioxide that is released into the atmosphere.” We want to know why PepsiCo is part a group that is lobbying against its own products. Vote for “Global Warming Report (Proxy Item No. 6)” at PepsiCo’s annual meeting on May 7 in Plano, TX.

By investing in the FEAOX (http://www.FEAOX.com), individuals can participate in the global warming debate while having an opportunity to earn a financial return through ownership of a large-cap mutual fund. With a minimum investment of $2,500, individuals can join FEAOX’s effort to make CEOs justify their positions on global warming. FEAOX is available exclusively through Foreside Distribution Services L.P., (applications may be obtained at http://www.FEAOX.com/how.html), and through E*Trade Financial, Scottrade, TD Ameritrade and HSBC.

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 http://www.FEAOX.com. Please read the prospectus carefully before investing.

Mutual fund investing involves risk, including loss of principal. The Free Enterprise Action Fund is advised by Action Fund Management, LLC, which receives a fee for its services, and is distributed by Foreside Distribution Services, L.P., which is not affiliated with Action Fund Management, LLC.