Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
SCHOOL OF LAW
PUBLIC LAW & LEGAL THEORY RESEARCH PAPER SERIES
WORKING PAPER NO. 10-84
Jeremy Waldron
December 2010
Electronic copy available at: http://ssrn.com/abstract=1708113
LQGLYLGXDOPHPEHUVLQWKH8QLWHG6WDWHV7UXHWKHUHZDVRSSRVLWLRQWRLWLQ
WKHHYDQJHOLFDOFRPPXQLW\$UHFHQW3HZVXUYH\VXJJHVWVWKDWRIZKLWH
HYDQJHOLFDOVEHOLHYHWKDWWRUWXUHLVVRPHWLPHVMXVWLILHGFRPSDUHGZLWK
RIWKHJHQHUDOSRSXODWLRQ$QGVRPHRIWKHUHVSRQVHVWRLW²DQGWRVLPLODU
VWDWHPHQWVE\'DYLG*XVKHH8QLYHUVLW\3URIHVVRUDQG3URIHVVRURI
&KULVWLDQ(WKLFVDW0HUFHU8QLYHUVLW\DQGDOHDGLQJILJXUHLQWKH
RUJDQL]DWLRQWKDWGUHZXSWKH'HFODUDWLRQ²LQGLFDWHWKHGHSWKRIWKH
DQWDJRQLVP+HUHLVZKDWRQHRI*XVKHH¶VFULWLFVVDLG
,QP\RSLQLRQWKHGHEDWHDQG*XVKHH
VFRPPLWWHHDUHZDVWHVRIWLPH
,SUHIHUWRGHDOZLWKWKLQJVWKDWDUHLPSRUWDQWOLNHWKH86WRUWXULQJWR
GHDWKPLOOLRQXQERUQEDELHVDQQXDOO\,FDQ
WVSHDNIRUWKH/RUG
EXW,EHOLHYH+HLVPRUHFRQFHUQHGRYHUDERUWLRQWKDQ+HLVDERXW
GXQNLQJPXUGHUHUVWHUURULVWVLQZDWHU
7ZR6HWVRI&RQFHUQVDERXW5HOLJLRXV,QWHUYHQWLRQV
<RX¶OOEHKDSS\WRKHDUWKDW,DPQRWJRLQJWRWU\WRVRUWRXWWKDWLVVXH²
ZKLFKLVWKHJUHDWHUDERPLQDWLRQLQWKHH\HVRIWKH/RUGWRUWXUHRUDERUWLRQ"
,QVWHDG,ZDQWWRDVNDERXWWKHJHQHUDOFKDUDFWHURIWKLVVRUWRIUHOLJLRXV
LQWHUYHQWLRQLQSROLWLFV,ZDQWWRWDONDERXWWKHHWKLFVRIPDNLQJWKHVH
LQWHUYHQWLRQVDQGWKHHWKLFVRIUHVSRQGLQJWRWKHP2IFRXUVHSHRSOHDUH
IUHHWRVD\ZKDWHYHUWKH\OLNHEXWWKHHWKLFVRIUHVSRQVHLVDQLQWHUHVWLQJ
TXHVWLRQ
,QSDUWLFXODU+RZVKRXOGWKRVHZKRGRQRWVKDUHWKHIDLWKRIWKH
DXWKRUVRIWKHVHLQWHUYHQWLRQVUHVSRQGWRWKHP"6KRXOGWKH\EHRIIHQGHG"
6KRXOGWKH\EHVFDUHG"$UHWKH\HQWLWOHGWRFRQGHPQWKHPDVLQDSSURSULDWH
LQWKHSROLWLFVRIDPXOWLIDLWKVRFLHW\ZKRVHSROLWLFDOV\VWHPFODLPVWR
&LWH
7KHIROORZLQJDUHSRVWHGRQWKHZHEVLWHRI$VVRFLDWHG%DSWLVW3UHVVUHVSRQGLQJWRDQDUWLFOHE\
*XVKHHHQWLWOHG³$&KULVWLDQ
VODPHQWRYHUWKH3HZWRUWXUHSROO´
3RVWLQJE\³'U-´0D\DW
KWWSZZZDESQHZVFRPLQGH[SKS"RSWLRQ FRPBFRQWHQW WDVN YLHZ LG ,WHPLG
$QRWKHUVDLGWKLV³,SUD\IRUSHDFHLQWKHZRUOGDQGIRURXUOHDGHUVWRPDNHWKHULJKW
GHFLVLRQVEDVHGRQ>*RG¶V@ZLOO%XW,GRQ
WSUHWHQGWRFDUHDERXWLQGLYLGXDOWHUURULVWVZKRZRXOG
NLOOPHDQGP\IDPLO\LIWKH\KDGWKHFKDQFH7RKHOOZLWKWKHP«,I\RXDUHLPSOLFLWLQDFULPH
DJDLQVWPHRUP\FRXQWU\,ZHKDYHWKHULJKWWRSRNH\RXUIUHDNLQJH\HVRXWLILWVDYHVOLYHV
(QRXJKRIWKLVZRUWKOHVVGLDWULEHIURPZHDNPLQGHGIRROVWKDWFDUHPRUHDERXWLGHRORJ\WKHQ
ZKDWKDSSHQVWRRXUFKLOGUHQDQGJUDQGFKLOGUHQ´3RVWLQJE\³UREEHU´0D\DW
KWWSZZZDESQHZVFRPLQGH[SKS"RSWLRQ FRPBFRQWHQW WDVN YLHZ LG ,WHPLG
Electronic copy available at: http://ssrn.com/abstract=1708113
UHVSHFWDZDOORIVHSDUDWLRQEHWZHHQFKXUFKDQGVWDWH"6KRXOGWKH\WU\WR
DQVZHUWKHP"2UVKRXOGWKH\MXVWSROLWHO\LJQRUHWKHPDVVRPXFK
EDFNJURXQGQRLVHRUVXSHUVWLWLRXVJLEEHULVK"
,FKRVHWKHLQWHUYHQWLRQRI'DYLG*XVKHHDQGKLVFRPPLWWHHRI
FHQWULVWHYDQJHOLFDOVIRUDQXPEHURIUHDVRQV2QHLVWREURDGHQRXUVHQVHRI
WKHNLQGVRIWRSLFVWRZKLFKUHOLJLRXVLQWHUYHQWLRQVDUHGLUHFWHGEH\RQGWKH
XVXDOVXVSHFWVDERUWLRQJD\ULJKWVDQGELRHWKLFV
6HFRQGO\,ZDQWUHPLQGXVWKDWWKHUHDUHVXFKWKLQJVDVFHQWULVW
HYDQJHOLFDOVHYDQJHOLFDO&KULVWLDQLW\LVQRWMXVWWKHUHOLJLRXVULJKW0XFKRI
ZKDWLVVDLGLQWKHSRSXODUSUHVVDERXW&KULVWLDQSROLWLFDOLQWHUYHQWLRQV
IRFXVHVVSHFLILFDOO\RQWKHWKUHDWWKDWFRPHVIURP&KULVWLDQFRQVHUYDWLYHV,
KDYHLQPLQGWKHFRQFHUQVH[SUHVVHGLQERRNVOLNH.HYLQ3KLOOLS¶V$PHULFDQ
7KHRFUDF\DQG&KULV+HGJHV¶ERRN$PHULFDQ)DVFLVWV7KH&KULVWLDQ5LJKW
DQGWKH:DURQ$PHULFD7KHVHDXWKRUVWKLQNZHDUHIDFHGZLWKWKH
SURVSHFWRIDVRUWRI&KULVWLDQ7DOLEDQLQ$PHULFDLQVSLUHGE\GUHDPVRI
ZKDWLVVRPHWLPHVFDOOHG³GRPLQLRQLVP´±WKHGHOLEHUDWHDWWHPSWWR
UHFRQVWUXFWJRYHUQPHQWLQWKLVFRXQWU\VRWKDWLWLVEDVHGRQ&KULVWLDQ
ELEOLFDOSULQFLSOHVDQGDGPLQLVWHUHGE\SHRSOHRIIDLWK+HGJHVDQG3KLOLSV
EHOLHYH²SHUKDSVZLWKJRRGUHDVRQ²WKDWWKHVHLQWHUYHQWLRQVDUHDPHQDFH
WRWKHFRQVWLWXWLRQDORUGHURIWKH8QLWHG6WDWHV
1RZLWLVIDLUWRSRLQWRXWWKDW'DYLG*XVKHHDQGKLVFRDXWKRUV
GLVDYRZDQ\DLPRIWKLVVRUW³7KHDXWKRUVDQGVLJQDWRULHV>RIWKLV
VWDWHPHQW@´WKH\VD\³DUHHYDQJHOLFDO&KULVWLDQVDQGFLWL]HQVRIWKH8QLWHG
6WDWHV«$VFLWL]HQVZHEULQJRXU&KULVWLDQFRQYLFWLRQVWREHDURQWKHPRVW
LPSRUWDQWPDWWHUVWKDWDULVHLQWKHOLIHRIRXUGHPRFUDF\´7KH\VD\WKH\
DUHDJLWDWLQJDVDQ\JRRGFLWL]HQLVHQWLWOHGWRGRIRUDFKDQJHLQWKHODZV
DQGWKDWHYHQLIWKH\DUHQRWVXFFHVVIXOWKHUHLVVXUHO\QRWKLQJZURQJZLWK
WKHLUEHDULQJZLWQHVVWRWKHGHOLYHUDQFHVRIWKHLUIDLWKRQWKLVLPSRUWDQW
.(9,13+,/,36$0(5,&$17+(2&5$&<7+(3(5,/$1'32/,7,&62)5$',&$/5(/,*,212,/
$1'%2552:('021(<,17+(67&(1785<9LNLQJ&+5,6+('*(6$0(5,&$1
)$6&,6767+(&+5,67,$15,*+7$1'7+(:$521$0(5,&$)UHH3UHVV6HHDOVR
0,&+(//(*2/'%(5*.,1*'20&20,1*7+(5,6(2)&+5,67,$11$7,21$/,60::
1RUWRQ
)RUDGLVFXVVLRQDQGFULWLTXHRIGRPLQLRQLVPVHH.LPEHUO\-&RRN$ERUWLRQ&DSLWDO
3XQLVKPHQWDQGWKH3ROLWLFVRI³*RG
V:LOO´:,//,$0 0$5<%,//2)576-2851$/DW
6HHDOVR%58&( $%$5521+($9(121($57+"7+(62&,$/$1'
32/,7,&$/ $*(1'$62)'20,1,217+(2/2*<
(9$1*(/,&$/'(&/$5$7,21$*$,167725785(7KH\VD\WKDWWKH\DUHDJLWDWLQJDVDQ\
JRRGFLWL]HQLVQHWLWOHGWRGR
PDWWHU3URIHVVRU*XVKHHFRQFHGHVWKDW³PXFKRIWKHUKHWRULFRIWKH
HYDQJHOLFDOULJKWUHIOHFWVDQRVWDOJLDIRUDOHVVUHOLJLRXVO\«SOXUDOLVWLFDJH
ZKHQVSHFLILFDOO\&KULVWLDQSUDFWLFHVGRPLQDWHG$PHULFDQSXEOLFOLIHLQD
ZD\WKDWLVQRZLPSRVVLEOHDQG>KHVD\V@VKRXOGEHLPSRVVLEOHXQGHURXU
FRQVWLWXWLRQDOV\VWHP´+HVD\V³>:@HPXVWIUDQNO\DFNQRZOHGJHWKH
ZD\VLQZKLFKRXURZQEHKDYLRUDQGUKHWRULFKDVHYRNHGDOHJLWLPDWHIHDU
DPRQJRXUIHOORZFLWL]HQV«DQGUHIRUPRXUSXEOLFUKHWRULFDQGSROLWLFDO
SUDFWLFHDFFRUGLQJO\´
,WDNHWKHVHDVVXUDQFHVDWIDFHYDOXHDQG,UHVSHFW*XVKHH¶V
SRVLWLRQ²WKDWVRORQJDVWKHUHLVGXHUHFRJQLWLRQRIWKHPXOWLIDLWKDQG
VHFXODUDVSHFWVRIRXUVRFLHW\DQGGXHUHFRJQLWLRQRIWKHFRQVWLWXWLRQDO
VWUXFWXUHWKDWUHVSRQGVWRWKDWWKHUHLVQRSDUWLFXODUUHDVRQIRUFKXUFKSHRSOH
WRUHIUDLQIURPSDUWLFLSDWLRQLQSXEOLFOLIHRQWKHEDVLVRIWKHLUYDOXHV
SURYLGHGWKLVLVDFFRPSDQLHGE\DZLOOLQJQHVV³WRJUDQWDOOFLWL]HQVRIHYHU\
ZRUOGYLHZDQGPRUDOFRQYLFWLRQWKHOHJLWLPDF\RIWKHLURZQIDLWKEDVHG
SDUWLFLSDWLRQLQ$PHULFDQSXEOLFOLIH´
6WLOOWKHUHLVPRUHWREHVDLGRQWKLVLVVXH6RPHSHRSOHLQWKHZLGHU
FRPPXQLW\DUHFRQFHUQHGWKDWLQWHUYHQWLRQVRIWKLVNLQGLQSROLWLFVDUHE\
WKHLUYHU\QDWXUHLPSOLFLWO\WKHRFUDWLFZKHWKHUWKLVLVSDUWRIDQ\RQH¶V
SDUWLFXODUDJHQGDRUQRW7KH\ZLOOVD\\RXFDQQRWXQGHUVWDQGZKDWLV
EHLQJVDLGLQWKHVHLQWHUYHQWLRQVZLWKRXWJUDVSLQJWKHORJLFRIUHOLJLRXV
DXWKRULW\WKDWXQGHUOLHVLWDQGWKDWORJLFWKLVLVSUREOHPDWLFHYHQZKHQ
SHRSOHKDYHJLYHQJRRGIDLWKDVVXUDQFHVDVWRWKHLUUHVSHFWIRUWKH
FRQVWLWXWLRQDOSULQFLSOHWKDWVHSDUDWHVFKXUFKDQGVWDWH:KHQHYDQJHOLFDOV²
HYHQFHQWULVWHYDQJHOLFDOV²VD\WKDWWKH\³ORQJWRREH\WKHPRUDOGHPDQGV
RIRXUIDLWKDVDUWLFXODWHGLQWKH6FULSWXUHV´ZKHQWKH\VD\WKDWWKH\VHHNWR
VHUYH-HVXV&KULVW³ZKRDORQHLV/RUGRIRXUOLYHVRIWKHFKXUFKRIRXU
QDWLRQDQGRIWKHZRUOG´DQGZKHQWKH\VD\DOOWKLVQRWMXVWDVSDUWRIWKHLU
SHUVRQDO&KULVWLDQJURZWKEXWWRFKDUDFWHUL]HFODLPVWKDWWKH\PDNHDQG
FKDQJHVWKH\GHPDQGLQODZDQGH[HFXWLYHSUDFWLFHZKHQWKH\VD\DOOWKLV
³:HFDOOIRUWKHOHJLVODWLYHRUMXGLFLDOUHYHUVDORIWKRVHH[HFXWLYHDQGOHJLVODWLYHSURYLVLRQVWKDW
YLRODWHWKHPRUDODQGOHJDOVWDQGDUGVDUWLFXODWHGLQWKLVGHFODUDWLRQ«:HNQRZWKDWZHPD\QRW
DOZD\VVXFFHHGLQVKDSLQJWKHODZVDQGSROLFLHVRIWKH8QLWHG6WDWHVLQWKHZD\ZHEHOLHYHWKH\
VKRXOGEHVKDSHG%XWZHPXVWRQDOORFFDVLRQVDWWHPSWWREHDUIDLWKIXO&KULVWLDQPRUDO
ZLWQHVV´,ELGGDQG,KDYHUHYHUVHGWKHRULJLQDORUGHURIWKHVHSDVVDJHVLQWKH
'HFODUDWLRQ
'$9,'3*86+((7+()8785(2))$,7+,1 $0(5,&$132/,7,&67+(38%/,&:,71(662)
7+((9$1*(/,&$/&(17(5%D\ORU8QLYHUVLW\3UHVVS
,GHPP\HPSKDVLV
,GHP
WKHQPD\EH²WKLVLVZKDW,ZDQWWRFRQVLGHU²PD\EHWKHUHLVURRPIRU
FRQFHUQDERXWLPSOLFLWWKHRFUDF\
)RULVQ¶WLWWKHSRVLWLRQRIWKHDXWKRUVRIWKH(YDQJHOLFDO'HFODUDWLRQ
WKDWWKH8QLWHG6WDWHVVKRXOGQRWWRUWXUHEHFDXVH-HVXVLV/RUGRUWKDWZH
VKRXOGQRWWRUWXUHEHFDXVHWKHWKLVLVZKDW6FULSWXUHUHTXLUHV"6XUHO\WKLV
UHDVRQLQJSUHVXSSRVHVWKDWZHVKRXOGEHJRYHUQHGE\ZKDWHYHU-HVXV
UHTXLUHVRUE\ZKDWHYHUVFULSWXUHGHPDQGV"
6R,ZDQWWRFRQVLGHUWKLVLVVXHRILPSOLFLWWKHRFUDF\DQGVHHZKHWKHU
WKHUHLVDQ\WKLQJWRLWDQGZKHWKHUWKHUHLVDQ\WKLQJUHDVRQDEOHWKDWFDQEH
VDLGLQUHVSRQVHE\WKRVHZKRRIIHUWKHVHVRUWVRIFRQWULEXWLRQVWRSXEOLF
GHEDWH
,ZDQWWRSXUVXHWKLVDOVRLQOLJKWRIVRPHFRQFHUQVDERXWFLYLOLW\
3HRSOHVD\WKDWWKHUHLVVRPHWKLQJLQKHUHQWO\LQDSSURSULDWHDERXWDGGXFLQJ
UHDVRQVIRURQH¶VSROLWLFDOSRVLWLRQWKDWPDNHQRVHQVHWRDQGIDLOWRUHVRQDWH
ZLWKODUJHVHFWLRQVRIWKHSXEOLF)RUH[DPSOHWKH(YDQJHOLFDO'HFODUDWLRQ
VD\VWKLVDERXWWRUWXUH
7KHLQFDUQDWLRQ«UHYHDOVD*RGZKRLV«GHHSO\PRYHGE\WKH
EURNHQQHVVRIFUHDWLRQ«DP\VWHULRXVEULGJLQJRIWKHJDSEHWZHHQ
*RGDQGKXPDQLW\+HQFHIRUWKWKHKXPDQH[SHULHQFHLQLWVMR\VDQG
VRUURZVLVLQVFULEHGXSRQWKHYHU\3HUVRQRI*RG«>7@KH+RO\6SLULW
SDUWLFLSDWHVLQKXPDQSDWKRVZLWKJURDQVDQGVLJKVWRRGHHSIRU
ZRUGV7KHFULHVRIWKHWRUWXUHGDUHLQDYHU\UHDOVHQVH«WKHFULHV
RIWKH6SLULW
,WVRXQGVZRQGHUIXODQGIRU&KULVWLDQVLWDZDNHQVDFRQQHFWLRQZLWKVRPH
WKHGHHSHVWHOHPHQWVRIRXUIDLWK%XWWRSHRSOHRIRWKHUIDLWKV²-HZVIRU
H[DPSOHRU0XVOLPVZKRGRQRWDFFHSWWKHFHQWUDOGRFWULQHRIWKH
,QFDUQDWLRQOHWDORQHWKH+RO\6SLULWDVWKHWKLUGSHUVRQRIDWULXQH*RG²LW
ZLOOPDNHOLWWOHVHQVH$QGWRVHFXODUQRQEHOLHYHUVLWVRXQGVOLNH
VXSHUVWLWLRXVJLEEHULVK$QGSHRSOHLQDQ\RUDOORIWKHVHFDWHJRULHVPD\VD\
³:KDWVRUWRIEDVLVLVWKDWWRHQJDJHZLWKRQH¶VIHOORZFLWL]HQV"+RZFDQ
WKLVSRVVLEO\EHUHJDUGHGDVDFRQWULEXWLRQWRUHVSHFWIXOGLDORJXHLQRXU
SROLWLFDOFRPPXQLW\"´6R,ZDQWWRFRQVLGHUWKLVOLQHRIFRQFHUQDVZHOO
%RWKVHWVRIFRQFHUQV²FLYLOLW\DQGLPSOLFLWWKHRFUDF\²FDQEHIRXQG
LQWKHDUJXPHQWVDERXWSXEOLFUHDVRQSXWIRUZDUGE\WKHODWHDQGJUHDW
SKLORVRSKHU-RKQ5DZOV,PHDQWKHDUJXPHQWV5DZOVPDNHVLQKLVERRN
«ZKLFK²WREHIDLU²LVQRWDWDOOWKHVDPHDVFU\SWRWKHRFUDF\
(9$1*(/,&$/'(&/$5$7,21$*$,167725785(
3ROLWLFDO/LEHUDOLVPZKHUHKHWULHGWRVKRZWKDWSXEOLFMXVWLILFDWLRQLQRXU
SROLWLFDOV\VWHPFDQQRWGHSHQGXSRQSUHPLVHVVKDUHGRQO\E\VRPHVHFWLRQV
RIWKHSXEOLFRUXSRQGRFWULQHVLQWHOOLJLEOHWRVRPHFLWL]HQVEXWQRWRWKHUV
6RIRULQVWDQFHLIZHDUHWRVXVWDLQDQDEVROXWHSURKLELWLRQRQWRUWXUH²
ZKHWKHUXQGHUWKHDXVSLFHVRIWKH(LJKWK$PHQGPHQWRURXUYDULRXVWUHDW\
FRPPLWPHQWV²LWFDQQRWSXEOLFO\EHEDVHGRQVRPHSUHPLVHVXFKDV
³>W@RUWXUHYLRODWHVWKHLQWULQVLFGLJQLW\RIWKHKXPDQEHLQJPDGHLQWKH
LPDJHRI*RG´EHFDXVHWKDWLVDFRPPLWPHQWWKDWPDQ\PHPEHUVRIRXU
VRFLHW\FDQQRWVKDUH,WPD\UHSUHVHQWWKHXOWLPDWHWUXWKDERXWWRUWXUHLQWKH
H\HVRI*XVKHHDQGKLVDVVRFLDWHVEXWDFFRUGLQJWR5DZOVLQDODWHUZRUN
³>W@KH]HDOWRHPERG\WKHZKROHWUXWKLQSROLWLFVLVLQFRPSDWLEOHZLWKDQLGHD
RISXEOLFUHDVRQWKDWEHORQJVZLWKGHPRFUDWLFFLWL]HQVKLS´&HQWULVW
HYDQJHOLFDOVDUHXVLQJWKHSROLWLFDOSRZHUWKH\KDYH²HYHQLILWLVRQO\WKH
SRZHURIYRLFHDQGYRWH²WRFDOOIRUODZVWREHDPHQGHGSHRSOHWREH
SURVHFXWHGDQGKRPHODQGVHFXULW\SROLF\WREHPRGLILHGRQWKHEDVLVRID
GRFWULQHWKDWPDQ\IHOORZFLWL]HQVGRQ¶WVKDUHDGRFWULQHWKDWLVQHLWKHU
DFFHSWDEOHQRUSHUKDSVHYHQLQWHOOLJLEOHWRWKHP$QGWKDWZRQ¶WGRVD\V
5DZOV³>7@WKHLGHDORIFLWL]HQVKLSLPSRVHVD«GXW\«WREHDEOHWR
H[SODLQWRRQHDQRWKHUKRZWKHSULQFLSOHVDQGSROLFLHVWKH\DGYRFDWHDQG
YRWHIRUFDQEHVXSSRUWHGE\WKHSROLWLFDOYDOXHVRISXEOLFUHDVRQ´
7KH5DZOVLDQSRVLWLRQFRPELQHVERWKRIWKHFRQFHUQV,KDYH
DUWLFXODWHGWKHFRQFHUQDERXWFLYLOLW\DQGWKHFRQFHUQDERXWWKHRFUDF\+H
WKLQNVLWLVLPSRUWDQWIRUXVWRHQJDJHZLWKRQHDQRWKHULQWKHSXEOLFVTXDUH
LQDZD\WKDWLVPXWXDOO\UHVSHFWIXO$Q\WKLQJ,RIIHUDVDFRQWULEXWLRQPXVW
EHRIIHUHGDVVRPHWKLQJIRURWKHUVWRJUDVSFRQVLGHUDQGHQJDJHZLWK%XW
VLQFH,NQRZZHDOOKDYHGLIIHUHQWUHOLJLRXVDQGSKLORVRSKLFDOFRQYLFWLRQV
RIIHULQJVRPHWKLQJZKLFKGUDZVGHHSO\RQP\RZQUHOLJLRXVIDLWKGRHVQRW
VDWLVI\WKLVUHTXLUHPHQW,PLJKWWDONDERXWWKHLPDJHRI*RGRUWKHFULHVRI
WKH+RO\6SLULWEXWWKHQRQ&KULVWLDQRUVHFXODULQGLYLGXDOV,DPDGGUHVVLQJ
ZLWKZKRP,DPERXQGWRJHWKHULQFRPPRQFLWL]HQVKLSZLOOQRWEHDEOHWR
5DZOV³,QGLVFXVVLQJFRQVWLWXWLRQDOHVVHQWLDOVDQGPDWWHUVRIEDVLFMXVWLFHZHDUHQRWWRDSSHDO
WRFRPSUHKHQVLYHUHOLJLRXVRUSKLORVRSKLFDOGRFWULQHV±WRZKDWZHDVLQGLYLGXDOVRUPHPEHUVRI
DVVRFLDWLRQVVHHDVWKHZKROHWUXWK´-2+15$:/632/,7,&$//,%(5$/,60SS
5$:/632/,7,&$//,%(5$/,60/HFWXUH9,SSII
XQGHUWKH*HQHYD&RQYHQWLRQVWKH&RQYHQWLRQDJDLQVW7RUWXUHRUWKH,QWHUQDWLRQDO&RYHQDQWRQ&LYLO
DQG3ROLWLFDO5LJKWV
*86+(()8785(2))$,7+S
5$:/6/$:2)3(23/(6SS
5$:/632/,7,&$//,%(5$/,60P\HPSKDVLV
PDNHDQ\VHQVHRIWKLVWDON$FFRUGLQJO\LIP\YLHZSUHYDLOVLQSXEOLF
GHFLVLRQPDNLQJLWZLOOQRWEHEHFDXVHWKHVHRWKHUVZHUHFRQYLQFHGRUHYHQ
KDGDUHDORSSRUWXQLW\WREHFRQYLQFHG0\YLHZ¶VSUHYDLOLQJZLOOEHVLPSO\
DIDFWDERXWP\DVFHQGDQF\RUWKHDVFHQGDQF\RIWKHUHOLJLRXVIDFWLRQWR
ZKLFK,EHORQJ$QGWKDWLVZKHUHWKHZRUU\DERXWLPSOLFLWWKHRFUDF\
FRPHVLQ
,WKLQNLWLVLPSRUWDQWKRZHYHUWRVHHWKHVHFRQFHUQVQRWMXVWLQ
5DZOVLDQOLJKW7KHZRUULHVDERXWLPSOLFLWWKHRFUDF\DQGWKHFLYLF
LQWHOOLJLELOLW\UHVRQDWHDPRQJPDQ\SHRSOHZKRKDYHQHYHUKHDUGRI5DZOV¶V
³RULJLQDOSRVLWLRQ´,ZLOOUHIHUIURPWLPHWRWLPHWRKLVVSHFLILF
IRUPXODWLRQVSDUWLFXODUO\DWWKHHQGRIWKHOHFWXUHEXWLQDWWHPSWLQJWR
DQVZHUWKHVHFRQFHUQV,VKDOOWU\WRFDVWWKHQHWPRUHZLGHO\
/HWPHDFNQRZOHGJHXSIURQWWZRRWKHUSRLQWV)LUVWDVPDQ\RI\RX
ZLOONQRZ,DPV\PSDWKHWLFWRWKHSRVLWLRQWDNHQLQWKH³(YDQJHOLFDO
'HFODUDWLRQDJDLQVW7RUWXUH´,KDYHZULWWHQHOVHZKHUHLQIDYRURIDQ
DEVROXWHOHJDOSURKLELWLRQRQWRUWXUH6HFRQGO\DVDSUDFWLFLQJ
(SLVFRSDOLDQ,DPQRWP\VHOILQLWLDOO\UHSHOOHGE\WKHVSHFLILFDOO\&KULVWLDQ
FKDUDFWHURIWKLVLQWHUYHQWLRQ,KDYHZULWWHQDOLWWOHDERXWWKHUHOLJLRXVYLHZ
RIWRUWXUHLQDSLHFHSXEOLVKHGLQ7KHRORJ\7RGD\WKLVZLOOEHDFKDSWHURI
P\IRUWKFRPLQJERRNRQ7RUWXUH7HUURUDQG7UDGHRIIVIURP2[IRUG
8QLYHUVLW\3UHVVVRPHWLPHDWWKHHQGRIWKH6XPPHUDQG,LPDJLQHWKDW
VRPHRIZKDW,VD\LQWKDWDUWLFOHPLJKWHOLFLWVLPLODUFRQFHUQV3HRSOHPLJKW
VD\WRPH:K\DUH\RXWU\LQJWRIRLVW\RXUUHOLJLRXVYLHZRQWKHUHVWRIXV"
:K\GR\RXWKLQNLWLVDSSURSULDWHWRDGGUHVVWKHSROLWLFDOFRPPXQLW\LQ
WHUPVWKDWPDQ\RILWVPHPEHUVGRQ¶WXQGHUVWDQG",ZLOOWU\WRDQVZHUWKHVH
FRQFHUQVEXW,JXHVV\RX¶OOKDYHWRGLVFRXQWDFHUWDLQDPRXQWRIZKDW,VD\
DVEHLQJPRWLYDWHGE\WKHSDUWLFXODUGRJVWKDW,KDYHLQWKLVILJKW
7KH:RUU\DERXW,PSOLFLW7KHRFUDF\
/HW¶VEHJLQZLWKWKHFRQFHUQDERXWLPSOLFLWWKHRFUDF\,KDYHQRSUREOHP
DFFHSWLQJDWIDFHYDOXHWKHDVVXUDQFHE\WKHDXWKRUVRIWKH(YDQJHOLFDO
'HFODUDWLRQRQ7RUWXUHWKDWLWLVQRWLQWHQGHGDVWKHWKLQHQGRIDGRPLQLRQLVW
7KLVSDUDJUDSKLVDGDSWHGIURP:DOGURQ3XEOLF5HDVRQDQGµ-XVWLILFDWLRQ¶LQWKH&RXUWURRP
-2851$/2)/$:3+,/2623+<$1'&8/785(S
,KDYHZULWWHQVSHFLILFDOO\DERXW5DZOV¶VDSSURDFKWRWKHVHPDWWHUVHOVHZKHUHVHHLELG
:DOGURQ7RUWXUHDQG3RVLWLYH/DZ-XULVSUXGHQFHIRUWKH:KLWH+RXVH&2/80%,$/$:
5(9,(:
:DOGURQ:KDW&DQ&KULVWLDQ7HDFKLQJ$GGWRWKH'HEDWHDERXW7RUWXUH"7+(2/2*<
72'$<
ZHGJH6WLOODV,VDLGDPRPHQWDJRLVLWQRWWKHFDVHWKDWWKH'HFODUDWLRQ
PDNHVVHQVHRQO\DJDLQVWDEDFNJURXQGRIUHOLJLRXVDXWKRULW\"&KULVWLDQLW\
FRQGHPQVWRUWXUHWKDWVHHPVWREHWKHPHVVDJHRI*XVKHH¶VLQWHUYHQWLRQ
$QGWKDWVRXQGVDVWKRXJKKHLVSURFHHGLQJRQWKHLPSOLFLWDVVXPSWLRQWKDW
LWLVDOULJKWIRUUHOLJLRXVDXWKRULW\WRDVVXPHDUROHLQRXUSROLWLFVDQGWREH
GHFLVLYHLQGHWHUPLQLQJVRPHHOHPHQWVRIRXUODZDQGSXEOLFSROLF\
:HOO,WKLQNZHKDYHWRSURFHHGFDUHIXOO\$XWKRULW\DVDQ\SROLWLFDO
SKLORVRSKHUZLOOWHOO\RXLVDYHU\VOLSSHU\FRQFHSW7RSURSHUO\HYDOXDWH
WKLVFRQFHUQZHQHHGWRIRFXVLQRQWKLVLGHDRIUHOLJLRXVDXWKRULW\DQGGRD
OLWWOHELWRIDQDO\VLV
$ILUVWLPSRUWDQWGLVWLQFWLRQLVEHWZHHQSUDFWLFDODXWKRULW\DQG
WKHRUHWLFDODXWKRULW\
7KHRUHWLFDODXWKRULW\LVDPDWWHURIH[SHUWLVH3DXO.UXJPDQLVDQ
DXWKRULW\RQHFRQRPLFVKHLVLQFRPSDUDEO\PRUHTXDOLILHGRQWKLVVXEMHFW
WKDQ,DPDQG,ZRXOGGRZHOOWRSD\DWWHQWLRQWRKLVZULWLQJVDERXWWKH
ILQDQFLDOFULVLVWKDQWRWU\WRILJXUHLWRXWIRUP\VHOI%XWKHLVQRWP\UXOHU
.UXJPDQKDVQRSUDFWLFDODXWKRULW\WRUHTXLUHDQ\RQHWRGRDQ\WKLQJRUHYHQ
WRUHTXLUHWKHPWREHOLHYHDQ\WKLQJ+LVDXWKRULW\LQWKHVHPDWWHUVGRHVQRW
LPSRVHDQ\GXW\7KDWZRXOGEHSUDFWLFDODXWKRULW\WKHVRUWRIDXWKRULW\WKDW
WKHOHJLVODWXUHKDVRUDMXGJH0D\EH.UXJPDQKDGSUDFWLFDODXWKRULW\RYHU
KLVVWDIIZKHQKHZDVD3URIHVVRUDW3ULQFHWRQLIZDVKHDGRIGHSDUWPHQW
PD\EHKHKDGGHFDQDODXWKRULW\RYHUKLVFROOHDJXHV¶SD\RUWHDFKLQJORDGV
$QGLQWKDWFDVHPD\EHKLVWKHRUHWLFDODXWKRULW\ZDVDUHDVRQIRUKLVKDYLQJ
WKDWULJKWWRUXOHWKHGHSDUWPHQW6WLOOWKHWZRWKLQJVDUHQRWWKHVDPH
0DQ\SHRSOHKHUHWRGD\DUHDXWKRULWLHVRQODZHWKLFVDQGUHOLJLRQ
%XWDJDLQWKH\DUHWKHRUHWLFDODXWKRULWLHVWKLVLVWKHLUH[SHUWLVH7KDW
LOOXVWUDWHVDQLQWHUHVWLQJSRLQWWKHRUHWLFDODXWKRULW\FDQEHDXWKRULW\LQ
UHJDUGWRSUDFWLFDOPDWWHUV%XWWKDWGRHVQ¶WPDNHLWSUDFWLFDODXWKRULW\
6RPHRQHFDQEHDQDXWKRULW\LQHWKLFVZLWKRXWLWEHLQJWKHFDVHWKDWKLV
FRPPDQGVRUGHFODUDWLRQVLPSRVHGXWLHVRQWKHUHVWRIXV
1RZWKHFRQFHUQDERXWWKHRFUDF\LVDFRQFHUQDERXWSUDFWLFDO
DXWKRULW\LWFDQ¶WSRVVLEO\EHDFRQFHUQDERXWWKHRUHWLFDODXWKRULW\7KHUHDO
ZRUU\LVWKDWWKHFKXUFKOHDGHUVPLJKWEHFRPHRXUUXOHUVQRWWKDWWKH\PLJKW
EHUHJDUGHGDVH[SHUWVRQULJKWDQGZURQJ
%XWZKDWVRUWRIDXWKRULW\LIDQ\LVDSSHDOHGWRZKHQD&KULVWLDQ
EHOLHYHUPDNHVDQLQWHUYHQWLRQLQSROLWLFV",JXHVVVRPHWLPHVLWLVWKH
DXWKRULW\RIDFKXUFK$QGVRPHWLPHVWKDWLVSUDFWLFDODXWKRULW\7KH5RPDQ
&DWKROLFFKXUFKUHTXLUHVLWVPHPEHUVWRUHIUDLQIURPVXSSRUWLQJOHJDOL]HG
DERUWLRQIRUH[DPSOHDQGLIWKH\DUHDFWLYHLQSXEOLFOLIHLWUHTXLUHVWKHP
WREHDUZLWQHVVWRWKHZURQJQHVVRIWKHODZVDQGSUHFHGHQWVSHUPLWWLQJ
DERUWLRQ7KHFKXUFKHYHQPDNHVWKUHDWVDJDLQVWWKRVHZKRIDLOWRIROORZ
WKHVHFRPPDQGPHQWVDQGRFFDVLRQDOO\WULHVWRFDUU\WKHPRXW²IRUH[DPSOH
E\GHQ\LQJRIIHQGHUVWKHEHQHILWRIWKHVDFUDPHQWV1RZVLQFHWKHHDUO\
¶VZHKDYHEHHQLQWKHWKURHVRIDJUHDWQDWLRQDOGHEDWHDERXWDERUWLRQ
$QGLIVRPHRQHZHUHWRRIIHUDVDFRQWULEXWLRQWRWKDWGHEDWHWKDWDERUWLRQ
VKRXOGEHPDGHLOOHJDORQFHDJDLQEHFDXVHWKH3RSHKDVGHQRXQFHGLWWKHQ
,DJUHHWKDWWKDWZRXOGJLYHULVHWRDFRQFHUQDERXWWKHRFUDF\EHFDXVHLW
ZRXOGEHSUHGLFDWHGRQWKHDVVXPSWLRQWKDWWKHSUDFWLFDODXWKRULW\RIWKH
5RPDQ&DWKROLFFKXUFKLVDQDSSURSULDWHJURXQGIRUPDNLQJDFKDQJHLQWKH
ODZ
,QIDFWPRVWUHOLJLRXVLQWHUYHQWLRQVRQDERUWLRQDUHQRWRIWKLVNLQG
7KH\VD\DERUWLRQVKRXOGEHSURKLELWHGEHFDXVHLWLVZURQJ7KH\GUDZRQ
WKHWHDFKLQJVRIWKHLUFKXUFKWRXQGHUVWDQGDQGH[SODLQLWVZURQJQHVVEXW
WKH\GUDZRQWKDWDVWKHRUHWLFDODXWKRULW\LHDVDKHULWDJHRIGHHSWKLQNLQJ
DERXWWKHPDWWHUWKDWFDQLQIRUPWKHLURZQWKLQNLQJDQGWKHLURZQ
FRQFOXVLRQV,WLVPXFKWKHVDPHZLWK3DXO.UXJPDQ,GUDZRQKLV
WKHRUHWLFDODXWKRULW\IRUP\RZQSROLWLFDOYLHZVDQGLI,HYHUKDGWKH
WHPHULW\WRZULWHDQRSHGSLHFHRQHFRQRPLFV,KRSH,ZRXOGKDYHWKHJRRG
VHQVHWRFKHFNLWRXWDJDLQVW.UXJPDQ¶VYLHZVEHIRUHFRPPLWWLQJSXEOLFO\WR
P\RZQGDIWLGHDV
7KHSRLQWLVWKDWWKHUHLVQRWKLQJLPSOLFLWO\WKHRFUDWLFDERXWGUDZLQJ
XSRQWKHRUHWLFDODXWKRULW\VRIDUDVWKHEHDULQJRIUHOLJLRXVSULQFLSOHVRQ
SXEOLFSROLF\LVFRQFHUQHG-XVWDV,FDQGUDZRQ.UXJPDQ¶VH[SHUWLVH
ZLWKRXWFRPPLWWLQJP\VHOIWRDQ\WKLQJUHPRWHO\OLNHWKH3ODWRQLF
SURSRVLWLRQWKDWH[SHUWHFRQRPLVWVVKRXOGUXOHVR,FDQGUDZRQWKH
DUJXPHQWVWKDW,ILQGLQDQHQF\FOLFDOWRVXSSOHPHQWHQULFKDQGGHHSHQP\
RZQWKLQNLQJRQMXVWLFHKXPDQGLJQLW\DQGWKHLVVXHVVXUURXQGLQJDERUWLRQ
ZLWKRXWFRPPLWWLQJP\VHOIWRWKHYLHZWKDWWKH3RSHZKRDXWKRUHGWKH
HQF\FOLFDOKDVWKHULJKWWRUXOHLQRXUVRFLHW\
,WKLQNSHRSOHPLVVWKLVEHFDXVHRIDVLOO\DVVXPSWLRQWKDWWKHUHLVQR
VXFKWKLQJDVH[SHUWLVHLQWKHJUHDWPRUDODQGSROLWLFDOLVVXHVWKDWZHIDFH²
WKDWLWLVXOWLPDWHO\MXVWDPDWWHURI³YDOXHV´DQGWKDWWKHUHIRUHDQ\DXWKRULW\
WKHUHLVLQWKHDUHDPXVWEHWKHVRUWRIDXWKRULW\WKDWSXUSRUWVWRLPSRVH
YDOXHVXSRQXVDVDPDWWHURIUXOHUDWKHUWKDQDLGLQJXVDVDQLQWHOOHFWXDO
JXLGHLQUHDFKLQJRXURZQFRQFOXVLRQV
&HUWDLQO\,FDQVHHQRH[HUFLVHRISUDFWLFDODXWKRULW\LQYROYHGLQRU
SUHVXSSRVHGE\WKH(YDQJHOLFDO'HFODUDWLRQRQ7RUWXUH)DUIURPEHLQJ
LPSRVHGE\DFKXUFKWKH'HFODUDWLRQZDVSURSRVHGWRDFKXUFKERG\IRULWV
DGRSWLRQDQGDOOWKDWLWVDGRSWLRQE\WKH%RDUGRIWKH1DWLRQDO$VVRFLDWLRQ
RI(YDQJHOLFDOVPHDQWZDVWKDWWKLVRUJDQL]DWLRQGHFODUHGLWVVXEVFULSWLRQWR
WKHSRVLWLRQH[SUHVVHGLQWKH'HFODUDWLRQDQGPDGHLWDYDLODEOHIRU
FRQVLGHUDWLRQE\LWVPHPEHUV,WVSUHVHQWDWLRQLQWKHSXEOLFUHDOPZDVPRUH
LQWKHVSLULWRI³&RQVLGHUWKLV«´WKDQLQWKHVSLULWRI³7KLVLVZKDWZHVD\
\RXDUHQRZUHTXLUHGWREHOLHYHDQGGR´
:KDWDERXWWKHDXWKRULW\FODLPVLPSOLFLWLQWKH'HFODUDWLRQ¶VELEOLFDO
TXRWDWLRQV"2UWKHFODLPWKDW-HVXVLV/RUG"+RZVKRXOGZHWKLQNDERXW
WKDWLQUHODWLRQWRWKHDQDO\VLV,KDYHMXVWJLYHQ"
:HOORQHWKLQJLVWRDFNQRZOHGJHWKDWDWWKLVSRLQWZHDUHGHDOLQJ
ZLWKVXEVWDQWLYHGRFWULQHVDERXWWKHVRXUFHVRISROLWLFDOPRUDOLW\WKDWPD\EH
KDUGIRUQRQEHOLHYHUVWRDFFHSWRUHYHQHYDOXDWH,ZLOOKDYHDORWPRUHWR
VD\DERXWWKDWLQDPRPHQWXQGHUWKHKHDGLQJRIFLYLFLQWHOOLJLELOLW\%XW
WKHVHFODLPVGRQRWLQWKHPVHOYHVLQWLPDWHWKHVRUWRIUHJLPHFKDQJHWKDWD
FODLPWRSUDFWLFDODXWKRULW\E\DFKXUFKZRXOGLPSO\7RWDONDERXWWKH
DXWKRULW\RIWKH%LEOHLV,JXHVVWRDFFRUGWKHRUHWLFDODXWKRULW\WRLWRULWV
DXWKRUV7KHDVVXPSWLRQLVWKDWPRVWRIXVZRXOGGREHWWHUWRIROORZZKDWLV
VDLGLQWKLVDQFLHQWERRN²WRWDNHLWVLPDJHU\SDUDEOHVSURSKHFLHV
H[DPSOHVSVDOPVDQGWHDFKLQJVWRKHDUW²WKDQWRWU\ILJXULQJRXWPRUDOLW\
ZLWKRXWLW7KDWFODLPPD\QRWEHDVSHUVXDVLYHWRPDQ\SHRSOHDVLWXVHGWR
EH,WPD\QRWEHDVSHUVXDVLYHDVWKHDQDORJRXVFODLPWKDWZHZRXOGGR
EHWWHUWRUHDG3DXO.UXJPDQ¶VERRNVRQHFRQRPLFVWKDQWRWU\WRILJXUH
HFRQRPLFVRXWIRURXUVHOYHV%LEOLFDODXWKRULW\VHHPVZHLUGWRPDQ\SHRSOH
LQDZD\WKDWWKH.UXJPDQFODLPGRHVQ¶WHYHQIRUWKRVHFRQVHUYDWLYHVZKR
GLVDJUHHZLWK.UXJPDQ¶VHFRQRPLFVDQGVSLWRQKLVERRNV6WLOO,PDLQWDLQ
WKDWDFODLPRIELEOLFDODXWKRULW\LVDFODLPXOWLPDWHO\RIWKHVDPHVRUW²WR
EHHYDOXDWHGLQURXJKO\WKHVDPHVRUWRIZD\
,QIDFWPDQ\RIWKHUHOLJLRXVLQWHUYHQWLRQVWKDWSHRSOHDUHFRQFHUQHG
DERXWDUHQRWVFULSWXUDOO\EDVHGDWDOORUDWOHDVWQRWGLUHFWO\6RPHVXUHO\
DUHDVZKHQDELEOHSDVVDJHIURP/HYLWLFXVRUZKHUHYHULVFLWHGWR
RSSRVHJD\ULJKWVRUVDPHVH[PDUULDJH2QPDQ\RWKHULVVXHVKRZHYHU
ZKHUHWKHUHOLJLRXVGLPHQVLRQLVHTXDOO\SURPLQHQWWKHUHLVQDU\FKDSWHURU
YHUVHWREHVHHQ5HOLJLRXVRSSRQHQWVRIDERUWLRQKDYHWRVFUDEEOHDURXQG
TXLWHXQFRQYLQFLQJO\WRILQGVFULSWXUHWRVXSSRUWWKHLUSRVLWLRQ7KH%LEOH
VLPSO\GRHVQ¶WWDNHDYLHZRQDERUWLRQXQOHVV\RXSURMHFWSUROLIHVHQWLPQHWV
YHU\KHDYLO\EDFNLQWRVWDWHPHQWVOLNH³7KRXDUWP\*RGIURPP\PRWKHU
V
³$V&KULVWLDQVZHORQJWRREH\WKHPRUDOGHPDQGVRIRXUIDLWKDVDUWLFXODWHGLQWKH6FULSWXUHV:HVHHN
WRVHUYH-HVXV&KULVWZKRDORQHLV/RUGRIRXUOLYHV«RIRXUQDWLRQDQGRIWKHZRUOG´
(J/HYLWLFXV
6HHHJ(QF\FOLFDO(YDQJHOLXP9LWDHDYDLODEOHDWKWWSZZZFDWKROLF
SDJHVFRPGRFXPHQWVHYDQJHOLXPBYLWDHSGI
EHOO\´7KHDUJXPHQWDJDLQVWDERUWLRQVXFKDVLWLVLVPDLQO\DQDWXUDOODZ
DUJXPHQWEDVHGRQWKHDSSDUHQWFRQWLQXLW\RIIRHWDOGHYHORSPHQWDQGLWLV
SHUIHFWO\LQWHOOLJLEOHWRDVHFXODUPRUDOVHQVLELOLW\WKRXJKQRGRXEW
XQFRQYLQFLQJWRPDQ\7KHUHOLJLRXVDVSHFWLVMXVWWKHGLVFLSOLQHG
LQVLVWHQFHRQWDNLQJWKHFRQWLQXLW\RIKXPDQOLIHERWKLQDQGRXWVLGHWKH
ZRPEVHULRXVO\LQOLJKWRIZKDWELEOLFDOIDLWKGRHVWHOOXVDERXWWKH
SUHFLRXVQHVVRIKXPDQOLIHJHQHUDOO\
$QGVLPLODUO\IRUWKH(YDQJHOLFDO'HFODUDWLRQRQ7RUWXUH7KHUHLVQR
/HYLWLFXVOLNHSDVVDJHLQWKH%LEOHSURKLELWLQJWRUWXUH:KDWWKHUHLVLQWKH
'HFODUDWLRQLVDQDUJXPHQWWKDWSURFHHGVWRWKHZURQJQHVVRIWRUWXUHIURP
IDLWKEDVHGFRQFHUQVIRUWKHOLIHDQGGLJQLW\RIHYHQWKHPRVWGHVSLVHGDQG
YXOQHUDEOH7KHSUHPLVHVRIWKDWDUJXPHQWDUHELEOLFDO²PDQFUHDWHGLQWKH
LPDJHRI*RG*RG¶VFRQFHUQIRU³WKHOHDVWRIWKHVHP\EUHWKUHQ´²EXWWKHLU
PRUDOSURPLQHQFHDULVHVIURPDQLPSOLFLWXQGHUVWDQGLQJRIWKHLUXWWHU
FHQWUDOLW\LQWKHIDLWKWKURXJKFHQWXULHVRIUHIOHFWLRQXSRQWKHFDQRQLFDO
YHUVHVLQ*HQHVLVRULQ0DWWKHZ¶V*RVSHOWKDWILUVWDUWLFXODWHWKHVHSUHPLVHV
6WLOOWKHUHLVPRUHWREHVDLG7KHDXWKRUVRIWKH(YDQJHOLFDO
'HFODUDWLRQVD\WKDW-HVXVLV/RUGRIWKHZRUOG,JXHVV,FRXOGNHHSRQ
VD\LQJDERXWWKLVZKDW,KDYHEHHQVD\LQJVRIDU²WKDWWKHLPSOLFLWDXWKRULW\
FODLPLVVWLOODQDORJRXVWRWKHWKHRUHWLFDODXWKRULW\RI3DXO.UXJPDQ-HVXV
ZDVDJUHDWPRUDOWHDFKHUQRGRXEW%XWOHW¶VEHKRQHVWDQ\FODLPDERXW
-HVXVEHLQJ/RUGWUDQVFHQGVWKLVFDWHJRU\RIWKHRUHWLFDODXWKRULW\DPRQJ
KXPDQV+RZHYHU,WKLQNLWDOVRWUDQVFHQGVDQ\SODXVLEOHFODLPDERXW
SUDFWLFDOSROLWLFDODXWKRULW\DVZHOO2QHFDQFHUWDLQO\EHOLHYHWKDW-HVXVLV
/RUGDQGWKDWZHVKRXOGIROORZ+LVVD\LQJVDVWKH:RUGRI*RG²ZLWKRXW
EHOLHYLQJWKDWWKLVPDNHVDQ\GLIIHUHQFHWRWKHFRQVWLWXWLRQDOV\VWHPRI
DXWKRULW\LQWKH8QLWHG6WDWHV)RUWKHVRUWRILQVLJKWWKDW*XVKHHDQGRWKHUV
GUDZIURPWKHH[HUFLVHRI-HVXV¶DXWKRULW\DV/RUGRIWKHZRUOG²IRU
H[DPSOHKLVVD\LQJWKDWRQWKH/DVW'D\RXUQDWLRQZLOOEHMXGJHGDVWRKRZ
ZHWUHDWHGWKHOHDVWDQGPRVWGHVSLFDEOHFDSWLYHLQSULVRQDVLIWKDWFDSWLYH
KDGEHHQ-HVXVKLPVHOI²JRHVRQO\WRWKHTXHVWLRQRIZKDWRXUDFWLRQVDQG
SROLF\VKRXOGEHQRWWRWKHTXHVWLRQRIZKRDPRQJXVVKRXOGKDYHSRZHUWR
VHWQDWLRQDOSULRULWLHV
5HPHPEHUZHDUHQRWGHDOLQJ\HWZLWKWKHFRQFHUQWKDWFODLPVOLNH
WKLVPDNHQRVHQVHWRDODUJHVHFWLRQRIWKHSRSXODWLRQDQGWKDWLWLVWKHUHIRUH
XQFLYLODQGLQDSSURSULDWHWREDVHSROLF\FODLPVXSRQWKHP7KDWFRPSODLQW
KDV\HWWREHDQVZHUHG:KDW,DPWU\LQJWRFOHDURXWRIWKHZD\LVWKH
3VDOPV.-9
0DWWKHZ
FRQFHUQWKDWE\DFFHGLQJWRWKHPRUDOIRUFHRIUHOLJLRXVSURSRVLWLRQVZHDUH
WKHUHE\VXEMHFWLQJRXUVHOYHVWRDVRUWRIWKHRFUDWLFUXOH7KDW,KDYHDUJXHG
GRHVQRWIROORZ
7KHDXWKRUVRIWKH'HFODUDWLRQVD\WKDWQRWZLWKVWDQGLQJWKHLUSULGHDV
JRRGFLWL]HQVRIWKLVUHSXEOLFWKH\ORQJWRREH\WKHGHPDQGVRIWKHLUIDLWK
7RDFDUHOHVVHDUWKDWPD\VRXQGRIIHQVLYHO\WKHRFUDWLF$PRUHDFFXUDWH
YLHZLVWKDWLW¶VRQDSDUZLWKVD\LQJ³1RWZLWKVWDQGLQJRXUSULGHDVJRRG
FLWL]HQVRIWKLVUHSXEOLFZHORQJWRREH\WKHGHPDQGVRIPRUDOLW\´,WLVQR
PRUHRIIHQVLYHWKDQWKDWQRPRUHDXWKRULWDULDQLQDEDGSROLWLFDOVHQVH,W
LVGLVWLQJXLVKHGRQO\IURPWKHDQDORJRXVPRUDOUHVROYHE\ZKDWLQWKHH\HV
RIPDQ\SHRSOHDUHWKHZHLUGEHOLHIV&KULVWLDQVKROGDERXWWKHVRXUFHVRI
PRUDOLQVLJKW
$GGUHVVLQJ5HOLJLRXV7DONWR1RQ%HOLHYHUV
7KHUHDOLVVXHLVQRWWKHRFUDF\LWLVLQWHOOLJLELOLW\7KH(YDQJHOLFDO
'HFODUDWLRQRQ7RUWXUHDQGRWKHUVLPLODUGRFXPHQWV²,WKLQNIRULQVWDQFH
RIWKH&DWKROLF%LVKRSV¶SDVWRUDOOHWWHURQVRFLDOMXVWLFH²DUH
DGGUHVVHGWRWKHQDWLRQDVDZKROH6RZKDWGRWKHDXWKRUVWKLQNWKDWWKH\
DUHGRLQJVRIDUDVWKHLUHQJDJHPHQWZLWKQRQEHOLHYHUVLVFRQFHUQHG"+RZ
FDQWKH\UHDVRQDEO\H[SHFWWKHVHGHFODUDWLRQV²ZLWKWKHLUWDONRIWKH+RO\
*KRVWWKHLPDJHRI*RGDQGWKHSUHVHQFHRI&KULVWLQHYHU\QHHG\SHUVRQ²
WREHWKHEDVLVRIDUHVSHFWIXOSROLWLFDOFRQYHUVDWLRQZLWKWKRVHZKRGRQRW
KDYHZKDWLWWDNHVWRPDNHVHQVHRIWKHVHLGHDV"6RIDUDVWKDWDXGLHQFHLV
FRQFHUQHGWKH\PLJKWDVZHOOVSHDNLQ/DWLQVRPHRIWKHPGRRUWDONDERXW
0LGGOH(DUWKLQWKHYRLFHVRIHOYHVDQGSL[LHV
2QWKHVHJURXQGVWKHVXJJHVWLRQKDVEHHQKHDUGLQUHFHQW\HDUVWKDW
SHRSOHRIIDLWKVKRXOGUHIUDLQIURPSDUWLFLSDWLQJLQSXEOLFGHEDWHLQWHUPV
WKDWUHIOHFWWKHLUUHOLJLRXVFRPPLWPHQWV,IZHDUHQRWWRWXUQGHPRFUDWLF
1DWLRQDO&RQIHUHQFHRI&DWKROLF%LVKRSV(FRQRPLF-XVWLFHIRU$OODYDLODEOHRQOLQHDW
KWWSXVFFERUJVGZSLQWHUQDWLRQDO(FRQRPLF-XVWLFHIRU$OOSGI7KHWRQHFRQWHQWRIWKDW
LQWHUYHQWLRQFDQEHJDWKHUHGIURPSDVVDJHVOLNHWKLV
$OOPHPEHUVRIVRFLHW\KDYHDVSHFLDOREOLJDWLRQWRWKHSRRUDQGYXOQHUDEOH)URPWKH
6FULSWXUHVDQGFKXUFKWHDFKLQJZHOHDUQWKDWWKHMXVWLFHRIDVRFLHW\LVWHVWHGE\WKH
WUHDWPHQWRIWKHSRRU,QWKH/DVW-XGJPHQWVRGUDPDWLFDOO\GHVFULEHGLQ6W0DWWKHZ
V
*RVSHOZHDUHWROGWKDWZHZLOOEHMXGJHGDFFRUGLQJWRKRZZHUHVSRQGWRWKHKXQJU\
WKHWKLUVW\WKHQDNHGWKHVWUDQJHU$VIROORZHUVRI&KULVWZHDUHFKDOOHQJHGWRPDNHD
IXQGDPHQWDOµRSWLRQIRUWKHSRRU¶±WRVSHDNIRUWKHYRLFHOHVVWRGHIHQGWKHGHIHQVHOHVV
WRDVVHVVOLIHVW\OHVSROLFLHVDQGVRFLDOLQVWLWXWLRQVLQWHUPVRIWKHLULPSDFWRQWKHSRRU
)RUVRPHGLVFXVVLRQVHH:DOGURQ5HOLJLRXV&RQWULEXWLRQVWR3ROLWLFDO'HOLEHUDWLRQ6$1
',(*2/$:5(9,(:
SROLWLFVLQWRD%DEHORIPXWXDOO\LQFRPSUHKHQVLEOHDVVHUWLRQVPD\EHZH
VKRXOGVHDUFKIRUDFRPPRQYRFDEXODU\DQGDVHWRISUHPLVHVWKDWZHFDQDOO
FRQYHUJHRQLQSROLWLFDOGLDORJXH6ROHW¶VFRQVLGHUWKLVFRQFHUQ
7KHILUVWWKLQJLVWKDWLQDGGUHVVLQJWKHVHPDWWHUVZHPXVWEHZDUHRI
H[DJJHUDWLQJWKHGHOLEHUDWLYHFKDUDFWHURIPRGHUQSROLWLFV,GHDOO\ZH
LPDJLQHFLWL]HQVRIIHULQJDOOWKHLUSROLWLFDOVWDWHPHQWVDVFRQWULEXWLRQVWR
FRQYHUVDWLRQZLWKHDFKRQHLQWHQGHGWRJLYHHYHU\RQHHOVHLQWKHSROLW\
VRPHWKLQJWRWKLQNDERXWVRPHWKLQJZKLFKPD\PDNHDGLIIHUHQFHWKURXJK
UHDVRQDQGEULQJDERXWDSDUWLDORUDZKROHVDOHPRGLILFDWLRQRIWKHRWKHU
SHUVRQ¶VYLHZV
%XWZHPXVWQRWQHJOHFWRWKHUIXQFWLRQV²RWKHUUHVSHFWDEOH
IXQFWLRQV²ZKLFKDSROLWLFDOVWDWHPHQWPD\VHUYH6RPHRQHZKRVD\V³$OO
KXPDQVZKRDUHPLVWUHDWHGRUWRUPHQWHGDUH«DUHE\-HVXV¶GHILQLWLRQRXU
QHLJKERUV«>,@QWKHPDQGWKURXJKWKHPZHHQFRXQWHU*RGKLPVHOI´PD\
EHWU\LQJWRFRQYLQFHKLVIHOORZFLWL]HQVWRVXSSRUWDSROLF\RIKXPDQLW\%XW
KHPD\DOVRWKLQNRIKLPVHOIDVVLPSO\EHDULQJZLWQHVVWRDSDUWLFXODUYLHZ
RIZKDWWRUWXUHLQYROYHVDVSHHFKDFWZKLFKLVFRPPXQLFDWLYHRQO\WRWKH
H[WHQWWKDWLWWULHVWRFRQYH\HYHQWRQRQEHOLHYHUVWKHVHULRXVQHVVDQGWKH
KLJKVWDNHVWKDWWKHVSHDNHUVHHVDVERXQGXSZLWKWKHLVVXH+HPD\EH
ZDUQLQJWKHPWKHEHVWZD\KHFDQRIWKHVHULRXVQHVVRIWKHLVVXHDVKHVHHV
LW,QDVLPLODUPRGHWKHVSHDNHUPD\EHMXVWWU\LQJWRH[SODLQKLPVHOIDQG
WKHSROLWLFDOVWDQGKHKDVWDNHQWKHYRWHVKHKDVFDVWHWFQRWLQDQ\ZD\
WKDWLVLQWHQGHGWREHSHUVXDVLYHQHFHVVDULO\EXWWRFRQYH\WRKLVIHOORZ
FLWL]HQVLQFDVHWKH\DUHLQWHUHVWHGWKHVRUWRIYLHZKHLVKROGLQJ2UKH
PD\EHDGGUHVVLQJKLVRZQFRPPXQLW\RIEHOLHYHUVUDOO\LQJWKHPZLWKKLV
UKHWRULFOHW¶VQRWSUHWHQGWKDW&KULVWLDQVDUHWKHRQO\SHRSOHLQPRGHUQ
SROLWLFVZKRSUHDFKWRWKHFKRLU²RUWU\LQJWRDZDNHQWKHPWRVRPHWKLQJ
ZKLFKKHWKLQNVIROORZVIURPZKDWWKH\DOUHDG\EHOLHYH$OOWKHVHDUH
UHVSHFWDEOHVSHHFKDFWVLQSROLWLFV
&LWHWR6XQVWHLQHWFRQGHOLEHUDWLYHGHPRFUDF\
&LWHWR'HFODUDWLRQ
7KLQNRI:LOOLDP/OR\G*DUULVRQ¶VFKDUDFWHUL]DWLRQRIWKH86&RQVWLWXWLRQLQDV³D
FRYHQDQWZLWKGHDWKDQGDQDJUHHPHQWZLWKKHOO´2QHGLGQ¶WKDYHWREHDOLWHUDOEHOLHYHULQ
KHOOILUHWRVHHWKHVHULRXVQHVVRIWKHZDUQLQJKHZDVJLYLQJFRQFHUQLQJWKHVODYHU\FODXVHV
5DZOVDFNQRZOHGJHVWKLVLQ7+(/$:2)3(23/(6SZKHUHKHPHQWLRQVIRUPVRI
GLVFRXUVHWKDWGRQRW³H[SUHVV>@DIRUPRISXEOLFUHDVRQLQJ2QHLVGHFODUDWLRQKHUHZHHDFK
GHFODUHRXURZQFRPSUHKHQVLYHGRFWULQHUHOLJLRXVRUQRQUHOLJLRXV7KLVZHGRQRWH[SHFWRWKHUV
WRVKDUH´
6RIDUVRJRRG%XWVXSSRVHWKHVWDWHPHQWLVWREHMXGJHGDVDIRUPRI
HQJDJHPHQWZLWKRWKHUPLQGVDQGRWKHUSHRSOH¶VYLHZV,VWKHHQJDJHPHQW
RIQRQEHOLHYHUVZLWKVRPHWKLQJOLNHWKH(YDQJHOLFDO'HFODUDWLRQQHFHVVDULO\
DGLDORJXHRIWKHGHDI"7ZRSKLORVRSKLFDOPLVFRQFHSWLRQVPD\PDNHLW
VHHPVR
7KHILUVWLVWKHPLVFRQFHSWLRQWKDWPXWXDOXQGHUVWDQGLQJLVDQDOORU
QRWKLQJEXVLQHVV7KRPDV1DJHOLQDQLQIOXHQWLDOSDSHUHQWLWOHG³0RUDO
&RQIOLFWDQG3ROLWLFDO/HJLWLPDF\´FKDUDFWHUL]HVWKHHWKLFVRIFRQWULEXWLQJWR
SXEOLFMXVWLILFDWLRQLQWKLVZD\
>,@WPXVWEHSRVVLEOHWRSUHVHQWWRRWKHUVWKHEDVLVRI\RXURZQEHOLHIV
VRWKDWRQFH\RXKDYHGRQHVRWKH\KDYHZKDW\RXKDYHDQGFDQ
DUULYHDWDMXGJPHQWRQWKHVDPHEDVLV
0D\EHWKLVZRUNVDVDQDVSLUDWLRQRUDVDOLPLWLGHDEXWLWIDLOVWR
FKDUDFWHUL]HPRVWHSLVRGHVRIPXWXDOXQGHUVWDQGLQJ%HVLGHVWKHVKHHU
VRUGLGIDFWVRILPSDWLHQFHDQGGLVWUDFWLRQDQGLPSHUIHFWKHDULQJDQG
FRPSUHKHQVLRQWKHUHLVDOVRWKHKHUPHQHXWLFSRLQWWKDWZKDW,JDWKHUKDV
EHHQVDLGE\\RXUXWWHUDQFHLVDOZD\VVRPHWKLQJORFDWHGDQGKDYLQJ
VLJQLILFDQFHZLWKLQP\VHWRIEHOLHIVDQGDVVXFKLWFDQQHYHUH[DFWO\EHP\
KDYLQJZKDW\RXKDYH:HUHDVRQZLWKHDFKRWKHUQRWDVLGHQWLFDOVHDUFK
HQJLQHVWUDZOLQJWKURXJKDQDUUD\RILGHQWLFDOSURSRVLWLRQVEXWDVEHLQJV
ZKRFRPHDWSXEOLFLVVXHVIURPVOLJKWO\GLIIHUHQWDQJOHVDQGH[SHULHQFH
ZKRVHUHDVRQLQJZLWKRQHDQRWKHULQYROYHVWKHXVHRISURSRVLWLRQVWKDW²
HYHQLIWKH\FDQEHLGHQWLILHGDEVWUDFWO\ZLWKRQHDQRWKHU²DUHERXQGWR
KDYHDQGLISHRSOHNQRZWKHLUEXVLQHVVDUHFDOFXODWHGWRKDYHDVOLJKWO\
GLIIHUHQWLPSDFWRQWKHDXGLHQFHWKDQWKHRQHWKH\KDYHDOUHDG\KDGRQWKH
VSHDNHUDQGDVOLJKWO\GLIIHUHQWLPSDFWRQRQHDXGLHQFHWKDQRQDQRWKHU
7KDWLVKRZSHUVXDVLRQDQGOHDUQLQJWDNHSODFHDQGWKHVWXG\RIWKDWLVQRW
MXVWORJLFEXWUKHWRULFLQRQHRIWKHPRUHDWWUDFWLYHVHQVHVRIWKDWZRUG
$VHFRQGSKLORVRSKLFDOPLVWDNHLVWRDVVXPHWKDWFRPPXQLFDWLRQLV
UHDOO\SRVVLEOHRQO\EHWZHHQSHUVRQVZKRVKDUHDFRPPRQIUDPHZRUNRI
FRQFHSWV7KLVLVDEDVLVRQZKLFKSHRSOHRIWHQH[SUHVVVNHSWLFLVPDERXW
1DJHO0RUDO&RQIOLFW 3ROLWLFDO/HJLWLPDF\3+,/26 38%/,& $))$,56DW
1DJHOEHOLHYHVWKLV³LVQRWSRVVLEOHLISDUWRIWKHVRXUFHRI\RXUFRQYLFWLRQLVSHUVRQDO
IDLWKRUUHYHODWLRQ²EHFDXVHWRUHSRUW\RXUIDLWKRUUHYHODWLRQWRVRPHRQHHOVHLVQRWWRJLYHKLP
ZKDW\RXKDYHDV\RXGRZKHQ\RXVKRZKLP\RXUHYLGHQFHRUJLYHKLP\RXUDUJXPHQWV´
5DZOVRQEXUGHQVRIMXGJPHQWLQ3/
6RPHWLPHVLWLVVDLGIROORZLQJ:LWWJHQVWHLQWKDWWKLVVKDULQJRIFRQFHSWVLVSRVVLEOHRQO\
DPRQJSHRSOHZKRVKDUHFHUWDLQMXGJPHQWV6HH/8':,*:,77*(167(,13+,/2623+,&$/
,19(67,*$7,2167KLUGHGLWLRQWUDQV*(0$QVFRPEH%ODFNZHOOSH,I
WKHSRVVLELOLW\RIFRPPXQLFDWLRQEHWZHHQGLIIHUHQWFXOWXUHV&XOWXUHVWKH\
VD\DUHLQFRPPHQVXUDEOHWKH\DUHRULHQWHGWRVXFKGLIIHUHQWYDOXHVDQG
WKH\HPERG\VXFKDGLYHUVLW\RIZRUOGYLHZVWKDWLWLVLPSRVVLEOHWREULQJ
WKHPLQWRFRPPXQLFDWLYHUHODWLRQZLWKRQHDQRWKHU,KDYHORQJKDG
GRXEWVDERXWWKLVYLHZQXUWXUHGSUREDEO\E\KDYLQJOLVWHQHGDWDQ
LPSUHVVLRQDEOHDJHWRDOHFWXUHE\.DUO3RSSHUHQWLWOHG³7KH0\WKRIWKH
)UDPHZRUN´/LNH3RSSHU,WKLQNZHVKRXOGQRWXQGHUHVWLPDWHWKHDELOLW\
RIKXPDQVIURPGLVSDUDWHEDFNJURXQGVWRWDONZLWKRQHDQRWKHUWROHDUQ
IURPRQHDQRWKHUHYHQZKHQWKH\GRQ¶WDSSHDUWRVKDUHDQ\FRQFHSWVRU
GHILQLWLRQVRUHYHQZKHQLWDSSHDUVWRDQRXWVLGHUWKDWWKHH[DQWHSURVSHFWV
IRUWKHHQFRXQWHUDUHKRSHOHVV+XPDQVDUHHQRUPRXVO\FXULRXVDERXWHDFK
RWKHU¶VLGHDVDQGUHDVRQVDQGZKHQWKH\ZDQWWREHWKH\DUHUHVRXUFHIXOLQ
ODQJXDJHLVWREHDPHDQVRIFRPPXQLFDWLRQWKHUHPXVWEHDJUHHPHQWQRWRQO\LQGHILQLWLRQVEXW
DOVRTXHHUDVWKLVPD\VRXQGLQMXGJPHQWV
6HHWKHGLVFXVVLRQLQ6WHSKHQ/XNHV/LEHUDOVDQG&DQQLEDOV
.$5/3233(57+(0<7+2)7+()5$0(:25.,1'()(16(2)6&,(1&($1'5$7,21$/,7<
HGLWHGE\0$1RWWXUQR5RXWOHGJH+HUHLVWKHZD\3RSSHUVXPPDUL]HVWKHP\WKWKDW
KHZDQWVWRFULWLFL]H³$UDWLRQDODQGIUXLWIXOGLVFXVVLRQLVLPSRVVLEOHXQOHVVWKHSDUWLFLSDQWVVKDUH
DFRPPRQIUDPHZRUNRIEDVLFDVVXPSWLRQVRUDWOHDVWXQOHVVWKH\KDYHDJUHHGRQVXFKD
IUDPHZRUNIRUWKHSXUSRVHRIWKHGLVFXVVLRQ´,ELGSS
3RSSHUDOVRDWWDFNHGWKHYLHZ³WKDWEHIRUHGLVFXVVLRQZHVKRXOGDJUHHRQRXUYRFDEXODU\±
SHUKDSVE\GHILQLQJRXUWHUPV,ELGS+LVDUJXPHQWDJDLQVWWKLVSRVLWLRQKDVEHHQ
FRQVLVWHQWVLQFH7KH2SHQ6RFLHW\7KHUHKHZURWHWKDW>W@KHSUREOHPRIGHILQLWLRQVDQGRIWKH
PHDQLQJRIWHUPV
KDVEHHQDQLQH[KDXVWLEOHVRXUFHRIFRQIXVLRQDQGLWLVWKHVRXUFHKH
VD\VRIDOOWKDWYHUEDODQGHPSW\VFKRODVWLFLVPWKDWKDXQWVQRWRQO\WKH0LGGOH$JHVEXWRXU
RZQFRQWHPSRUDU\SKLORVRSK\23(162&,(7<$1',76(1(0,(6%RRNS,QKLVDWWDFNRQ
$ULVWRWOHDQHVVHQWLDOLVPLQ7KH2SHQ6RFLHW\KHGHQRXQFHGWKHYLHZWKDWGHILQLWLRQVZHUHIUXLWIXO
IRUVFLHQFH'HILQLWLRQVGRQRWFRQWDLQDQ\NQRZOHGJHKHDUJXHGWKH\DUHVLPSO\VKRUWKDQG
ODEHOVLQWURGXFHGLQRUGHUWRFXWDORQJVWRU\VKRUW>7@KHVFLHQWLILFYLHZRIWKHGHILQLWLRQ
$
SXSS\LVD\RXQJGRJ
ZRXOGEHWKDWLWLVDQDQVZHUWRKHTXHVWLRQ
:KDWVKDOOZHFDOOD\RXQJ
GRJ"
UDWKHUWKDQDQDQVZHUWRWKHTXHVWLRQ
:KDWLVDSXSS\"
6RWKRVHZKRGRQRWVKDUH
GHILQLWLRQVODFNDWPRVWRQO\DFRPPRQVHWRIDEEUHYLDWLRQV7KDWPD\EHLQFRQYHQLHQWDV
ZKHQRQHSDUW\WRWKHGLDORJXHLVXVLQJZKDWLWWKLQNVRIDVDEEUHYLDWLRQVZKLFKDUHQRWIDPLOLDU
WRWKHSDUW\RQWKHRWKHUVLGH,WPD\PDNHGLVFXVVLRQODERULRXV%XWLWLVKDUGO\LQVXSHUDEOH1R
GRXEWGHILQLWLRQVDUHXVHIXOFRQVLGHU3RSSHUVD\VWKHH[WUHPHGLIILFXOWLHVWKDWZRXOGDULVHLID
EDFWHULRORJLVWZKHQHYHUKHVSRNHRIDFHUWDLQVWUDLQRIEDFWHULDKDGWRUHSHDWLWVZKROH
GHVFULSWLRQLQFOXGLQJWKHPHWKRGVRIG\HLQJHWFE\ZKLFKLWLVGLVWLQJXLVKHGIURPDQXPEHURI
VLPLODUVSHFLHV%XWWKH\DGGQRWKLQJVXEVWDQWLDOWRWKHVWRUHKRXVHRINQRZOHGJHRU
RSLQLRQWKH\DGGRQO\WRLWVPDQDJHDELOLW\,Q3RSSHU
VYLHZTXHVWLRQVOLNH:KDWLVHQHUJ\"RU
:KDWLVDQDWRP"DUHQHYHULPSRUWDQWIRUSK\VLFV7KHVFLHQWLVWZLOODWWDFKLPSRUWDQFHWRD
TXHVWLRQOLNH
+RZFDQWKHHQHUJ\RIWKHVXQEHPDGHXVHIXO"
RU
8QGHUZKDWFRQGLWLRQVGRHV
DQDWRPUDGLDWHOLJKW"
$QGWRWKRVHSKLORVRSKHUVZKRWHOOKLPWKDWEHIRUHKDYLQJDQVZHUHGWKH
ZKDWLVTXHVWLRQKHFDQQRWKRSHWRJLYHH[DFWDQVZHUVWRDQ\RIWKHKRZTXHVWLRQVKHZLOO
UHSO\LIDWDOOE\SRLQWLQJRXWKRZPXFKKHSUHIHUVWKHPRGHVWGHJUHHRIH[DFWQHVVZKLFKKHFDQ
DFKLHYHE\KLVPHWKRGVWRWKHSUHWHQWLRXVPXGGOHZKLFKWKH\KDYHDFKLHYHGE\WKHLUV`
OLVWHQLQJDQGXQGHUVWDQGLQJDFURVVZKDWDSSHDUWREHEDUULHUVRI
LQFRPSUHKHQVLELOLW\RIWHQIDUEH\RQGZKDWSKLORVRSKHUVDQGWKHRULVWVRI
FXOWXUHJLYHWKHPFUHGLWIRU
,QDQ\FDVHWKHLVVXHWKDWZHDUHGHDOLQJZLWKLVQRW
LQFRPPHQVXUDELOLW\EHWZHHQFXOWXUHVEXWPXWXDOLQWHOOLJLELOLW\RULWV
RSSRVLWHZLWKLQDJLYHQFXOWXUH²QDPHO\WKHPXOWLIDFHWHGFRQIOLFWHG
FXOWXUHRIPRGHUQ$PHULFD:HDUHDVNLQJZKHWKHUEHOLHYHUVDQGQRQ
EHOLHYHUVLQWKLVFRXQWU\KDYHHQRXJKLQFRPPRQWREHDEOHWRXQGHUVWDQG
RQHDQRWKHU$QGKHUHLWVHHPVWRPHWKDWWKHRSSRQHQWVRIUHOLJLRXV
LQWHUYHQWLRQVVLPSO\XQGHUHVWLPDWHWKHSURVSHFWVIRUPXWXDOLQWHOOLJLELOLW\
DQGPLVUHSUHVHQWWKHVRXUFHVRIPLVXQGHUVWDQGLQJ
,WZRXOGEHIDFLOHWRSRLQWRXWILUVWWKDWWKHUHLVLQIDFWDQHQRUPRXV
SURSRUWLRQRIWKH$PHULFDQSRSXODWLRQFRPPLWWHGWRUHOLJLRXVEHOLHILQVRPH
IRUPRUDQRWKHU7RWKHPWKHFRQFHSWLRQVFRQYH\HGLQWKH(YDQJHOLFDO
'HFODUDWLRQZLOOEHSHUIHFWO\IDPLOLDUWKRXJKQRGRXEWFKDOOHQJLQJLQWKH
ZD\WKDWDQ\WKHRORJLFDOFRQFHSWLRQLVFKDOOHQJLQJ$PRQJWKRVHZKR
PDLQWDLQDVHFXODURUDWKHLVWSRVWXUHDJRRGQXPEHURIWKHPKDYHKDGEXW
KDYHVLQFHUHQRXQFHGUHOLJLRXVEHOLHIVRWKDWVRPHRIWKHVHPDWHULDOVZLOO
KDUGO\EHDOLHQHYHQWKRXJKWKH\GRQ¶WZDQWWREHWKRXJKWRIQRZDVFDSDEOH
RIXQGHUVWDQGLQJWKHP)RUWKRVHZKRKDYHKDGQRUHOLJLRXVXSEULQJLQJRU
KDYHFRPSOHWHO\IRUJRWWHQZKDWWKH\OHDUQHGWKHUHDUHLPPHQVHOLEUDULHVRI
ERRNVDQGFXOWXUDOREMHFWVLQRXUFLYLOL]DWLRQWKDWUHVRQDWHZLWKWKLVRXU
PXVHXPVDUHIXOORIWKHPWKHVKHOYHVRIRXUERRNVWRUHVJURDQXQGHUWKHLU
ZHLJKWPDQ\RIRXUJUHDWXQLYHUVLWLHVKDYHIDFXOWLHVRIWKHRORJ\UHOLJLRXV
VWXG\RUGLYLQLW\DQGPRVWVHFXODUSHRSOHKDYHUHOLJLRXVIULHQGV
2IFRXUVHWKLVVWXIILVQRWHDV\WKHRORJ\LVDGLIILFXOWVXEMHFWDQGLW
PD\VHHPXQUHDVRQDEOHWRUHTXLUHSHRSOHWRJRDZD\DQGSDWLHQWO\VWXG\LW
LQRUGHUWRXQGHUVWDQGWKHSROLWLFDOLQWHUYHQWLRQVRIWKHLUUHOLJLRXVIHOORZ
FLWL]HQV%XWUHPHPEHUZKHUHZHDUHLQWKHDUJXPHQW:HDUHGHDOLQJZLWK
WKHREMHFWLRQWKDWWKHUHLVVRPHWKLQJXQFLYLODERXWVSHDNLQJWRRQH¶VIHOORZ
FLWL]HQVLQWHUPVWKH\FDQQRWSRVVLEO\XQGHUVWDQG,WLVWKH³FDQQRWSRVVLEO\´
WKDW,DPFRQWHVWLQJKHUH
,DVVXPHWKDWWKRVHZKRRSSRVHUHOLJLRXVGHFODUDWLRQVDUHQRWGRLQJVR
RQWKHJURXQGWKDWSROLWLFDOVSHHFKPXVWDOZD\VEHFRQGXFWHGLQVLPSOH
6HHDOVRWKHGLVFXVVLRQLQ-HUHP\:DOGURQ7ULEDOLVPDQGWKH0\WKRIWKH)UDPHZRUNLQ3KLOLS
&DWWRQDQG*UDKDP0DFGRQDOGHGV.$5/3233(5&5,7,&$/$335$,6$/6/RQGRQ5RXWOHGJH
DQG&XOWXUDO,GHQWLW\DQG&LYLF5HVSRQVLELOLW\LQ:LOO.\POLFNDDQG:D\QH1RUPDQ
HGV&,7,=(16+,3,1',9(56(62&,(7,(62[IRUG2[IRUG8QLYHUVLW\3UHVV
*HWQXPEHUV
VRXQGE\WHVRUWKDWLWPXVWQRWHYHUPDNHLQWHOOHFWXDOGHPDQGVRQLWV
DXGLHQFH,IWKDWZHUHUHTXLUHGZHVKRXOGKDYHWRDEDQGRQPRVWSROLWLFDO
HFRQRP\DVZHOO$QDZIXOORWRIZKDWJHWVVDLGDQGZKDWQHHGVWREHVDLG
LQWKHZD\RIHFRQRPLFVUHTXLUHVSHRSOHWRDEDQGRQWKHLULQWXLWLYHYLHZVDQG
GRVRPHSDWLHQWVWXG\XVLQJUHVRXUFHVDYDLODEOHWKRXJKQRWVXSHUILFLDOO\RU
HDVLO\DYDLODEOHLQWKHFXOWXUH:KHQ3DXO.UXJPDQWDONVDERXWWKHEDQNLQJ
FULVLVDFHUWDLQDPRXQWRIEDFNJURXQGOHDUQLQJLVQHFHVVDU\WRHYDOXDWHZKDW
KHVD\V7KDWRQO\DIHZDUHZLOOLQJWRGRWKLVGRHVQ¶WPHDQWKDWWKHGHPDQG
IRUWKRXJKWIXOXQGHUVWDQGLQJLVXQFLYLO$QGWKDWLVZKDW,WKLQNLVWUXHLQWKH
FDVHRIUHOLJLRQ,GRQ¶WEHOLHYHWKDWWKHLVVXHLVWKH³FDQ¶W´RI
XQLQWHOOLJLELOLW\,WKLQNWKHLVVXHLVWKH³ZRQ¶W´RILQWHOOHFWXDOUHIXVDO0DQ\
SHRSOHKDYHUHVROYHGWRKDYHQRWKLQJWRGRZLWKUHOLJLRXVWKRXJKWDQG
VWDQGLQJILUPRQWKDWUHVROXWLRQWKH\GHPDQGWREHVSRNHQWRLQRQO\VHFXODU
WHUPV
2IFRXUVHWKH\GRQ¶WGRWKLVJUDWXLWRXVO\7KH\GRLWEHFDXVHWKH\
EHOLHYHWKDWDOOWKLVVWXIIDERXWWKHFULHVRIWKH+RO\*KRVWLVVXSHUVWLWLRXV
QRQVHQVH7KH\WKLQNWKH\KDYHJRRGUHDVRQWRGLVPLVVLWDQGWRUHIXVHDQ\
IXUWKHUVWXG\WRWU\DQGPDNHVHQVHRILW7KH\ZRXOGVLPLODUO\UHIXVHDQ\
VXJJHVWLRQWKDWWKH\VKRXOGUHDGWKHZRUNVRI/5RQ+XEEDUGRUWKH
OLWHUDWXUHRI0DMRU'RXJODV¶V6RFLDO&UHGLWSDUW\
,QSULQFLSOHWKHUHLVQRWKLQJZURQJZLWKWKLVDWWLWXGH:HFDQQRW
HQJDJHZLWKDQGHYDOXDWHHYHU\WKLQJ:HWXQHRXWIURPVWXIIZHWKLQNLV
XVHOHVVDQGZHSD\DWWHQWLRQWRZKDWZHWKLQNPD\EHLPSRUWDQW7KDW¶VILQH
%XWWKHIDFWWKDW\RXDUHLQFOLQHGWREORFNRXWZKDW,VD\DERXWWRUWXUHDQG
OLVWHQLQVWHDGWR-RKQ<RRRU&KDUOHV.UDXWKDPPHULVKDUGO\DUHDVRQIRU
GHQ\LQJWKHFLYLOLW\RIP\VD\LQJLW
,QDQ\FDVHWKHFDVHDJDLQVWUHOLJLRXVLQWHUYHQWLRQVLQSROLWLFV²WKHDUJXPHQWWKDWVXFKLQWHUYHQWLRQVDUH
XQFLYLORULQVRPHRWKHUZD\LQDSSURSULDWH²KDVQRWXVXDOO\EHHQEDVHGRQDQ\FODLPDERXWWKHIDOVLW\RU
LUUDWLRQDOLW\RIUHOLJLRQ,Q5DZOV¶VWKHRU\IRUH[DPSOHFRPSUHKHQVLYHHWKLFDOSKLORVRSKLFDORUUHOLJLRXV
GRFWULQHVDUHQRWH[FOXGHGIURPSXEOLFUHDVRQEHFDXVHWKH\DUHIDOVHRULUUDWLRQDO1RGRXEWVRPHDUH%XW
ZHGRQ¶WQHHGDQ\VSHFLDOGRFWULQHRISXEOLFUHDVRQWRMXVWLI\WKHH[FOXVLRQRIWKRVH5DZOV¶VWKHRU\
DSSHDOVWRGRFWULQHVRIFLYLOLW\DQGPXWXDOLQWHOOLJLELOLW\WRH[FOXGHUHOLJLRXVLGHDVWKDW²IRUDOOKHVD\V²
PD\EHWUXHUHOLJLRXVUHDVRQVZKLFKPLJKWDFWXDOO\MXVWLI\WKHSRVLWLRQVWKDWWKH\DUJXHIRU7RSURSHUO\
HYDOXDWHKLVSRVLWLRQDQGWKRVHOLNHLWZHQHHGWREHVWHDGIDVWLQIRFXVLQJRQWKLVFDVH&I-RKQ5DZOV
7KH,GHDRI3XEOLF5HDVRQ5HYLVLWHG81,9(56,7<2)&+,&$*2/$:5(9,(:DW
³>7@KHUHDUHQRUHVWULFWLRQVRUUHTXLUHPHQWVRQKRZUHOLJLRXVRUVHFXODUGRFWULQHVDUHWKHPVHOYHVWREH
H[SUHVVHGWKHVHGRFWULQHVQHHGQRWIRUH[DPSOHEHE\VRPHVWDQGDUGVORJLFDOO\FRUUHFWRURSHQWRUDWLRQDO
DSSUDLVDORUHYLGHQWLDOO\VXSSRUWDEOH´7KDWLVZK\,DPEHLQJVXFKDSDLQLQVLVWLQJRQDVNLQJZKHWKHUWKH
DOOHJHGXQLQWHOOLJLELOLW\KHUHLVOLWHUDORUVLPSO\WKHXSVKRWRISHRSOH¶VUHIXVDOWRKDYHDQ\WKLQJWRGRZLWK
DUJXPHQWVRIWKLVVRUW
7ZRZD\WUDQVODWLRQ
7KHWLWOHRIP\OHFWXUHZDV³WZRZD\WUDQVODWLRQ´DQG,QRZZDQWWRVD\
VRPHWKLQJVSHFLILFDOO\DERXWWKDW
:HDUHRIWHQWROGWKDW-RKQ5DZOV¶KLVWRULFKHURZDV$EUDKDP
/LQFROQ%XW5DZOV¶VWKHRU\RISXEOLFUHDVRQPLJKWVHHPWREH
HPEDUUDVVHGE\WKHZD\LQZKLFK/LQFROQXVHGWRDGGUHVVWKHQDWLRQ7KLQN
RIWKHODVWSDUDJUDSKVRIWKH6HFRQG,QDXJXUDOZLWK/LQFROQDGYLVLQJKLV
IHOORZFLWL]HQVWRWKLQNDERXWVODYHU\DQGWKHJUHDWVKHGGLQJRIEORRGLQWKH
&LYLO:DULQWKHIROORZLQJWHUPV,IZHDFFHSWWKDWVODYHU\ZDVDQRIIHQVH
DJDLQVWKLJKKHDYHQKHVDLGWKHQSHUKDSVZHPXVWDOVRDFFHSWWKDW*RGKDV
EURXJKWWKLV³WHUULEOHZDU´XSRQXV³DVWKHZRHGXHWRWKRVHE\ZKRPWKH
RIIHQVHFDPH´
)RQGO\GRZHKRSHIHUYHQWO\GRZHSUD\WKDWWKLVPLJKW\VFRXUJHRI
ZDUPD\VSHHGLO\SDVVDZD\<HWLI*RGZLOOVWKDWLWFRQWLQXHXQWLODOO
WKHZHDOWKSLOHGE\WKHERQGVPDQ
VWZRKXQGUHGDQGILIW\\HDUVRI
XQUHTXLWHGWRLOVKDOOEHVXQNDQGXQWLOHYHU\GURSRIEORRGGUDZQ
ZLWKWKHODVKVKDOOEHSDLGE\DQRWKHUGUDZQZLWKWKHVZRUGDVZDV
VDLGWKUHHWKRXVDQG\HDUVDJRVRVWLOOLWPXVWEHVDLGµWKHMXGJPHQWVRI
WKH/RUGDUHWUXHDQGULJKWHRXVDOWRJHWKHU¶
,Q3ROLWLFDO/LEHUDOLVP5DZOVHYDGHGWKHTXHVWLRQRIZKHWKHUKLVKHURLQ
VD\LQJWKLVYLRODWHGWKHUHTXLUHPHQWVRISXEOLFUHDVRQ+HVDLGLWPLJKWQRW
KDYHYLRODWHG³SXEOLFUHDVRQDVLWDSSOLHGLQ>/LQFROQ¶V@GD\´$QGKHVDLG
WKDWZKDWHYHULPSOLFDWLRQVWKH6HFRQG,QDXJXUDOKDGIRUFRQVWLWXWLRQDO
GHFLVLRQPDNLQJ³FRXOGVXUHO\EHVXSSRUWHGILUPO\E\WKHYDOXHVRISXEOLF
UHDVRQ´
7KDWODVWFRPPHQWPLJKWLQGLFDWHWKDW5DZOVWKRXJKWLW2.WR
LQWURGXFHUHOLJLRXVFRQVLGHUDWLRQVLQWRSXEOLFSROLWLFVVRORQJDVRQHZDV
UHDG\WRWUDQVODWHWKHPRUWKHLULPSOLFDWLRQVLQWRVHFXODUWDON7KLVLV
7KRPDV1DJHO-RKQ5DZOVDQG$IILUPDWLYH$FWLRQ-2851$/2)%/$&.6,1+,*+(5
('8&$7,216SULQJDW6HHDOVR3(5&<%/(+1,1*-2+15$:/6$1
,1752'8&7,21S³+LVSDUDGLJPRILQMXVWLFHZDVVODYHU\DVLWKDGH[LVWHGLQWKH
VRXWKHUQVWDWHVRIWKH86$6RPHMXGJPHQWV5DZOVYLHZHGDVIL[HGSRLQWVRQHVZHQHYHUH[SHFW
WRZLWKGUDZDVZKHQ$EUDKDP/LQFROQVDLGµ,IVODYHU\LVQRWZURQJQRWKLQJLVZURQJ¶/LQFROQ
ZDVQH[WWR,PPDQXHO.DQWDSHUPDQHQWVRXUFHRILQVSLUDWLRQ´
/LQFROQ6HFRQG,QDXJXUDO
3/S
1RWLFHRIFRXUVHWKDWVDWLVI\LQJVXFKDWUDQVODWLRQUHTXLUHPHQWLVQRJXDUDQWHHWKDWRQHLVQRWD
GRPLQLRQLVWVHH0,&+(//(*2/'%(5*.,1*'20&20,1*7+(5,6(2)&+5,67,$1
1$7,21$/,60SBB&KDSWHU2QHIRUDQDFFRXQWRIWKHGRPLQLRQLVWVWUDWHJ\RIDUJXLQJ
LQVHFXODUO\DFFHSWDEOHWHUPVIRUNH\SRVLWLRQV
PRUHRUOHVVZKDWKHVDLGLQDHVVD\³7KH,GHDRI3XEOLF5HDVRQ
5HYLVLWHG´7KHUHKHWDONHGDERXWDZLGHUDQGPRUHDFFRPPRGDWLQJYLHZRI
SXEOLFUHDVRQWRZKLFKKHQRZWRZKLFKKHWKHQLQFOLQHG
>5@HDVRQDEOHFRPSUHKHQVLYHGRFWULQHVUHOLJLRXVRUQRQUHOLJLRXVPD\
EHLQWURGXFHGLQSXEOLFSROLWLFDOGLVFXVVLRQDWDQ\WLPHSURYLGHGWKDW
LQGXHFRXUVHSURSHUSROLWLFDOUHDVRQV«DUHSUHVHQWHGWKDWDUH
VXIILFLHQWWRVXSSRUWZKDWHYHUWKHFRPSUHKHQVLYHGRFWULQHV«DUHVDLG
WRVXSSRUW«>&@RQVLGHUWKHIDPLOLDUVWRU\RIWKH*RRG6DPDULWDQ
$UHWKHYDOXHVDSSHDOHGWRSURSHUO\SROLWLFDOYDOXHVDQGQRWVLPSO\
UHOLJLRXV«YDOXHV":KLOHWKHZLGHYLHZRISXEOLFSROLWLFDOFXOWXUH
DOORZVXV«WRLQWURGXFHWKH*RVSHOVWRU\SXEOLFUHDVRQUHTXLUHVXV
WRMXVWLI\RXUSURSRVDOLQWHUPVRISURSHUSROLWLFDOYDOXHV
5DZOVFDOOHGWKLVDSURYLVRLQKLVWKHRU\RISXEOLFUHDVRQ7KRXJKUHOLJLRXV
LQWHUYHQWLRQVDUHJHQHUDOO\H[FOXGHGIURPSXEOLFUHDVRQWKH\DUHQRW
LQDSSURSULDWHSURYLGHGWKDWDVHFXODUWUDQVODWLRQLVIRUWKFRPLQJ²WKDWLV
SURYLGHGLQKLVH[DPSOHWKDW³>F@LWL]HQVRIIDLWKZKRFLWHWKH«*RRG
6DPDULWDQGRQRWVWRSWKHUHEXWJRRQWRJLYHDSXEOLF>SXEOLFO\LQWHOOLJLEOH@
MXVWLILFDWLRQIRUWKLVSDUDEOH¶VFRQFOXVLRQV´
,QVRPHUHFHQWZRUN-UJHQ+DEHUPDVKDVWDNHQXSWKLVSRLQWDERXW
WKHUHTXLUHPHQWWRWUDQVODWHLQWRVHFXODUWHUPVUHOLJLRXVLQWHUYHQWLRQVWKDW
PD\QRWEHLQWHOOLJLEOHDVWKH\VWDQG5DZOVVHHPHGWRVXJJHVWWKDWWKH
EXUGHQRIWKLVVKRXOGIDOORQWKHUHOLJLRXVVSHDNHU+DEHUPDVKRZHYHU
LQVLVWVWKDWDQ\³UHTXLUHPHQWRIWUDQVODWLRQPXVWEHFRQFHLYHGDVD
FRRSHUDWLYHWDVNLQZKLFKWKHQRQUHOLJLRXVFLWL]HQVPXVWOLNHZLVH
SDUWLFLSDWH´
:KHUHDVFLWL]HQVRIIDLWKPD\PDNHSXEOLFFRQWULEXWLRQVLQWKHLURZQ
UHOLJLRXVODQJXDJH«VXEMHFWWRWKHSURYLVRWKDWWKHVHJHWWUDQVODWHG
WKHVHFXODUFLWL]HQVPXVWRSHQWKHLUPLQGVWRWKHSRVVLEOHWUXWKFRQWHQW
RIWKRVHSUHVHQWDWLRQVDQGHQWHULQWRGLDORJXHVIURPZKLFKUHOLJLRXV
5DZOV,GHDRI3XEOLF5HDVRQ5HYLVLWHGDQG
,ELGS5DZOVDOVRVD\V³2EYLRXVO\PDQ\TXHVWLRQVPD\EHUDLVHGDERXWKRZWRVDWLVI\
WKHSURYLVR«>7@KHGHWDLOV«PXVWEHZRUNHGRXWLQSUDFWLFHDQGFDQQRWIHDVLEO\EHJRYHUQHG
E\DFOHDUIDPLO\RIUXOHVJLYHQLQDGYDQFH+RZWKH\ZRUNRXWLVGHWHUPLQHGE\WKHQDWXUHRIWKH
SXEOLFSROLWLFDOFXOWXUH«´LELGSWKRXJKKHGRHVDFNQRZOHGJHWKHQHHGIRU³JRRG
VHQVHDQGXQGHUVWDQGLQJ´
+DEHUPDV5HOLJLRQLQWKH3XEOLF6SKHUH(8523($1-2851$/2)3+,/2623+<DW
DYDLODEOHDWKWWSZZZLQWHUVFLHQFHZLOH\FRPFJLELQIXOOWH[W3')67$57
P\HPSKDVLV
UHDVRQVWKHQPLJKWZHOOHPHUJHLQWKHWUDQVIRUPHGJXLVHRIJHQHUDOO\
DFFHVVLEOHDUJXPHQWV
+DEHUPDVWKHUHIRUHFRQFHLYHVWKHFLYLOLW\EXUGHQVRISXEOLFUHDVRQDV
DWZRZD\VWUHHW,WLVQRWRQO\VSHDNHUVZKREHDUDEXUGHQRIFLYLOLW\WKH
DXGLHQFHGRHVWRR7KHVSHDNHUPXVWVWUDLQWRFRQYH\KLVSRLQWVLQZD\VWKDW
ZLOOFRPPXQLFDWHDVPXFKRIWKHLUFRQWHQWDVKHFDQWRWKRVHZKRGRQRW
VKDUHKLVIDLWKRUWKHELEOLFDORUWKHRORJLFDOUHVRXUFHVKHLVGUDZLQJRQ%XW
WKHOLVWHQHUKDVDVLPLODUUHVSRQVLELOLW\+HPXVWVWUDLQWROLVWHQDQGWU\WR
XQGHUVWDQGZKDWLVEHLQJVDLGDQGLIQHFHVVDU\GUDZRQUHVRXUFHVLQKLVRZQ
EDFNJURXQGHYHQDVSHFWVRIKLVEDFNJURXQGWKDWKHKDVUHSXGLDWHGRU
UHVRXUFHVLQWKHFXOWXUHWKDWKHKDVDFFHVVWRLQRUGHUWRJHWDEHDULQJRQ
ZKDWLVEHLQJVDLGZKDWLVEHLQJDUJXHG
&HUWDLQO\LWLVQRWDSSURSULDWH²LWLVQRWFLYLO²IRUVHFXODUFLWL]HQVWR
VWUDLQQRWWRXQGHUVWDQGZKDWLVEHLQJVDLGLQRUGHUWRSXEOLFO\EXUQLVKWKHLU
RZQFUHGHQWLDOVDVQRQEHOLHYHUV,WLVQRWDSSURSULDWHIRUWKHPWREORFNRXW
RUUHIXVHWRHPSOR\DYDLODEOHUHVRXUFHVIRUPDNLQJVHQVHRIZKDWLVVDLG
EHFDXVHRIWKHLURZQUHVROYHWRSXUJHUHOLJLRQIURPWKHLUOLYHV2UUDWKHUD
SHUVRQFDQGRWKDWSHRSOHGRQ¶WKDYHWKHREOLJDWLRQWROLVWHQWRDQGJUDSSOH
ZLWKHYHU\WKLQJWKDWLVVDLGLQSXEOLFGLVFRXUVH%XWWKHQLIWKH\GRWXUQD
GHDIHDUIRUZKDWHYHUUHDVRQWRVRPHRIZKDWLVEHLQJVDLGWKH\FDQKDUGO\
WXUQURXQGDQGFRPSODLQDERXWWKHLQFLYLOLW\RIWKHVSHDNHU
5HOLJLRXV&RQWULEXWLRQVDV,PPRGHUDWH
,WPD\EHZRUWKDQVZHULQJRQHODVWFRQFHUQWKDWSHRSOHKDYHDERXWUHOLJLRXV
LQWHUYHQWLRQVLQSROLWLFV5HOLJLRXVYLHZVDUHRIWHQGHHSO\IHOWDQGLWLVSDUW
RIWKHHWLTXHWWHRIRUGLQDU\VRFLDOOLIHWKDWRQHWULHVWRDYRLGWKHDLULQJRI
VXFKGLIIHUHQFHVLQFRPPRQFRQYHUVDWLRQEHFDXVHRIWKHWHQVLRQVDQG
DQWDJRQLVPVWKDWFDQDULVH3HRSOHGRQ¶WMXVWGLVDJUHHWKH\DUHRIWHQ
RIIHQGHGE\RQHDQRWKHU¶VUHOLJLRXVYLHZVKXUWIHHOLQJVDERXQG7KH
GLIIHUHQFHVLQPDQ\FDVHVDUHXQFRPSURPLVLQJWKH\DUHWKHVRUWRI
GLIIHUHQFHVWKDWSHRSOHKDYHJRQHWRWKHVWDNHIRURUWKHVRUWRIGLIIHUHQFHV
WKDWSHRSOHVWUDSERPEVWRWKHLUERGLHVDQGEORZWKHPVHOYHVXSIRU:H
GRQ¶WZDQWWKDWVRUWRIVSLULWLQRUGLQDU\FRQYHUVDWLRQDQGSHUKDSVZH
VKRXOGVD\LWLVQRWSDUWLFXODUO\GHVLUDEOHLQSROLWLFVHLWKHU
,ELG
7KDWLVZK\,HPSKDVL]HGDPRPHQWDJRWKDWVHFXODUFLWL]HQVDUHQRWEHUHIWRIWKHZKHUHZLWKDOWR
XQGHUVWDQGVRPHRIWKHUHDVRQLQJDGGUHVVHGWRWKHPE\EHOLHYHUV
:HOLYHLQDODQGRIDTXDUWHUELOOLRQRSLQLRQDWHGSHRSOHPRVWRIWKHPRQGUXJVZHZRXOGJR
PDGLIZHWULHGWRHQJDJHIXOO\ZLWKHYHU\RQH
0D\EHUHOLJLRXVLQWHUYHQWLRQVRQDERUWLRQUDLVHWKHVWDNHV
GUDPDWLFDOO\LQWKLVZD\SHRSOHVHHPSUHSDUHGWRNLOOIRUH[DPSOHDVWKH
VDGFDVHRI6FRWW5RHGHULOOXVWUDWHV,¶PDFWXDOO\QRWVXUHZKHWKHUWKH
DERUWLRQDVVDVVLQDWLRQVDUHVSHFLILFDOO\WKHUHVXOWRIUHOLJLRXVSDVVLRQLWLV
SDUWO\WKDWDERUWLRQLWVHOILVVHHQDVDPDWWHURIOLIHDQGGHDWK$Q\ZD\LW
ZRXOGLPSODXVLEOHWRWKLQNWKDWWKLVVRUWRIYLROHQFHLVOLNHO\WRHQVXHDVD
UHVXOWRIWKHHYDQJHOLFDO'HFODUDWLRQRQWRUWXUH
6WLOOWKHUHPLJKWVWLOOEHDFRQFHUQDERXWODFNRIPRGHUDWLRQLQD
EURDGHUVHQVH
:KDW'DYLG*XVKHHDQGRWKHUVDUHWU\LQJWRGRLQWKHLU'HFODUDWLRQLV
WRLQWURGXFHLQWRWKHSROLWLFDOGHEDWHDVHQVHWKDWWKHVWDNHVDUHPXFKPXFK
KLJKHUWKDQWKH\KDYHJHQHUDOO\EHHQVXSSRVHGWREHLQWKHFRXQWU\¶VGHEDWH
DERXWWRUWXUH:HWKRXJKWLWZDVDPDWWHURIWKHSUDJPDWLFVRIKRPHODQG
VHFXULW\VWUDWHJ\ZLWKSHUKDSVVRPHWKLQJDERXW$PHULFD¶VUHSXWDWLRQDQG
WKHLPSRUWDQFHRILQWHUQDWLRQDOODZWKURZQLQ1RZVXGGHQO\ZHDUHEHLQJ
WROGWKDWLWLVDOODERXWWKHLPDJHRI*RGWKHSUHVHQFHRI&KULVWDQGWKHVLQ
DJDLQVWWKH+RO\*KRVWIRUZKLFKWKHUHLVQRIRUJLYHQHVV6XGGHQO\WKH
6FRWW5RHGHUFRQYLFWHGRIPXUGHULQVKRRWLQJRIDERUWLRQSURYLGHU*HRUJH7LOOHU/RV$QJHOHV7LPHV
-DQXDU\
7KDWVDLGLWLVZRUWKEHDULQJLQPLQGWKDWZHGRRIWHQH[DJJHUDWHWKHUHOLJLRXVGLPHQVLRQRI
PXUGHURXVGLVSXWHVLQSROLWLFV)RU\HDUV$PHULFDQQHZVSDSHUVUHSRUWHGWKHWURXEOHVLQ
1RUWKHUQ,UHODQGDVDPDWWHURIYLROHQFHEHWZHHQ&DWKROLFVDQG3URWHVWDQWVDVWKRXJKWKHGLVSXWH
WKHUHZHUHDERXWWUDQVXEVWDQWLDWLRQ&LWHWR%5,$1%$55<&8/785($1'(48$/,7<ZKRPDGH
WKLVSRLQW(YHQZKHQWKHSDUWLHVDUHSURSHUO\LGHQWLILHGDVQDWLRQDOLVWVDQGOR\DOLVWVWKH1HZ
<RUN7LPHVIRUH[DPSOHDOZD\VIHHOVFRQVWUDLQHGWRWDONDERXWWKH³PDLQO\&DWKROLF´QDWLRQDOLVWV
DQGWKH³PDLQO\3URWHVWDQW´OR\DOLVWVDVWKRXJKUHOLJLRQZHUHDNH\HOHPHQWRIWKHGLVSXWHDQG
WKHRQHODUJHO\UHVSRQVLEOHIRUWKHYLROHQFHDQGWKHWHUURULVP
)RUWKH³VLQDJDLQVWWKH+RO\*KRVW´UHIHUHQFH,KDYHLQPLQGQRWWKH(YDQJHOLFDO'HFODUDWLRQ
EXWWKHIROORZLQJZKLFKZDVDPRWLRQSURSRVHGLQWKHWUDYDX[SUpSDUDWRLUHVIRUWKH(&+5LQ
E\D8QLWHG.LQJGRPGHOHJDWHD0U&RFNV
>7@KH&RQVXOWDWLYH$VVHPEO\WDNHVWKLVRSSRUWXQLW\RIGHFODULQJWKDWDOOIRUPVRISK\VLFDO
WRUWXUHDUHLQFRQVLVWHQWZLWKFLYLOL]HGVRFLHW\DUHRIIHQFHVDJDLQVWKHDYHQDQG
KXPDQLW\DQGPXVWEHSURKLELWHG,WGHFODUHVWKDWWKLVSURKLELWLRQPXVWEHDEVROXWHDQG
WKDWWRUWXUHFDQQRWEHSHUPLWWHGIRUDQ\SXUSRVHZKDWVRHYHUQHLWKHUIRUH[WUDFWLQJ
HYLGHQFHIRUVDYLQJOLIHQRUHYHQIRUWKHVDIHW\RIWKH6WDWH,WEHOLHYHVWKDWLWZRXOGEH
EHWWHUHYHQIRUVRFLHW\WRSHULVKWKDQIRULWWRSHUPLWWKLVUHOLFRIEDUEDULVPWRUHPDLQ
>&RXQFLORI(XURSH&ROOHFWHG(GLWLRQRIWKHµ7UDYDX[3UpSDUDWRLUHV¶RIWKH(XURSHDQ
&RQYHQWLRQRQ+XPDQ5LJKWV9RO,,$XJXVW±1RYHPEHUSS±@/DPHQWLQJWKHULVH
RIWRUWXUHLQWKHWZHQWLHWKFHQWXU\0U&RFNVDGGHGWKLVLQKLVVSHHFKPRYLQJWKLVSURSRVDO
,IHHOWKDWWKLVLVWKHRFFDVLRQZKHQWKLV$VVHPEO\VKRXOGFRQGHPQLQWKHPRVWIRUWKULJKW
DQGDEVROXWHIDVKLRQWKLVUHWURJUHVVLRQLQWREDUEDULVP,VD\WKDWWRWDNHWKHVWUDLJKW
EHDXWLIXOERGLHVRIPHQDQGZRPHQDQGWRPDLPDQGPXWLODWHWKHPE\WRUWXUHLVDFULPH
PRVWIULJKWIXOPRUDODEVROXWHVDUHEHLQJVSRNHQRI²WKHLQKHUHQWVDFUHGQHVV
RIWKHKXPDQSHUVRQIRUH[DPSOH²EXWWUHVVHGZLWKWKHGHHSHVWSRVVLEOH
VHQVHRIZKDWPLJKWEHDWVWDNHLQWKHLUYLRODWLRQ
6RPHZLOOVD\WKDWWKLVVRUWRIH[WUHPHPRUDOH[SUHVVLRQVSXUUHGRQE\
UHOLJLRXVFRQYLFWLRQLVLQKHUHQWO\LQDSSURSULDWHLQSROLWLFVFRQFHUQHGDV
SROLWLFVQHFHVVDULO\LVZLWKPRUDOUHODWLYLW\DQGFRPSURPLVH7KH\PLJKW
HFKR0D[:HEHU¶VIDPRXVREVHUYDWLRQLQWKDWWKHUHLVDQHFHVVDU\
FRQWUDVWEHWZHHQWKHSLRXVDEVROXWHVRIZKDWKHFDOOHG³WKHHWKLFRIXOWLPDWH
HQGV´DQGWKHKDUGKHDGHGFRPSURPLVLQJSUDJPDWLVPRI³WKHHWKLFRI
UHVSRQVLELOLW\´³3ROLWLFV´VDLG:HEHU³LVDVWURQJDQGVORZERULQJRIKDUG
ERDUGV´DQGZKDWLVQHHGHGLVD³WUDLQHGUHOHQWOHVVQHVVLQYLHZLQJWKH
UHDOLWLHVRIOLIHDQGWKHDELOLW\WRIDFHVXFKUHDOLWLHV´2UPRUHFUXGHO\DV
-RKQ<RRDXWKRURIVRPHRIWKHZRUVWRIWKH³7RUWXUH0HPRV´SXWLWWRPH
LQRXU&ROXPELDGHEDWHDERXWWRUWXUH³7KHUHLVQRURRPIRU.DQWLDQV
LQJRYHUQPHQW´
$WWKLVSRLQW,EDONDQG,LPDJLQH'DYLG*XVKHHGRHVWRR:HVD\
VLPSO\WKDWLQWKLVUHJDUGWKHFULWLFVRIWKHUHOLJLRXVVSLULWLQSROLWLFVDUH
ZURQJ7KHUHLVURRPIRU.DQWLDQVLQJRYHUQPHQWLIZHKDYHOHDUQHG
DQ\WKLQJLQWKHSDVWHLJKW\\HDUVLWLVWKDWQRWHYHU\WKLQJLVQHJRWLDEOHQRW
HYHU\WKLQJLVXSIRUJUDEVRUFDQOHJLWLPDWHO\EHWUDGHGRIIIRUPRUHZHDOWK
PRUHVDWLVIDFWLRQRUHYHQPRUHVHFXULW\7KHUHDUHVRPHDEVROXWHVDQGWKH
FUXFLDOWKLQJLVQRWWRGLVPLVVPRUDODEVROXWLVPDQGWKHHWKLFVDQGWKHRORJ\
WKDWPLJKWVXSSRUWLWRXWRIKDQGEXWWRORRNDVFDUHIXOO\DVSRVVLEOHDW
DJDLQVWKLJKKHDYHQDQGWKHKRO\VSLULWRIPDQ,VD\LWLVDVLQDJDLQVWWKH+RO\*KRVWIRU
ZKLFKWKHUHLVQRIRUJLYHQHVV
>,ELGS,KDYHDGDSWHGWKLVQRWHIURP:DOGURQ7RUWXUHDQG3RVLWLYH/DZRSFLWDWSBB@
0D[:HEHU3ROLWLFVDVD9RFDWLRQLQ)250$;:(%(5«³>7@KHUHLVDQDE\VPDOFRQWUDVW
EHWZHHQFRQGXFWWKDWIROORZVWKHPD[LPRIDQHWKLFRIXOWLPDWHHQGV²WKDWLVLQUHOLJLRXVWHUPV
³7KH&KULVWLDQGRHVULJKWO\DQGOHDYHVWKHUHVXOWVZLWKWKH/RUG´²DQGFRQGXFWWKDWIROORZVWKH
PD[LPRIDQHWKLFRIUHVSRQVLELOLW\LQZKLFKFDVHRQHKDVWRJLYHDQDFFRXQWRIWKHIRUHVHHDEOH
UHVXOWVRIRQH
VDFWLRQ«(YHU\WKLQJWKDWLVVWULYHQIRUWKURXJKSROLWLFDODFWLRQRSHUDWLQJZLWK
YLROHQWPHDQVDQGIROORZLQJDQHWKLFRIUHVSRQVLELOLW\HQGDQJHUVWKH³VDOYDWLRQRIWKHVRXO´«
>7@KHZRUOGLVJRYHUQHGE\GHPRQVDQGWKDWKHZKROHWVKLPVHOILQIRUSROLWLFVWKDWLVIRUSRZHU
DQGIRUFHDVPHDQVFRQWUDFWVZLWKGLDEROLFDOSRZHUVDQGIRUKLVDFWLRQLWLVQRWWUXHWKDWJRRGFDQ
IROORZRQO\IURPJRRGDQGHYLORQO\IURPHYLOEXWWKDWRIWHQWKHRSSRVLWHLVWUXH$Q\RQHZKR
IDLOVWRVHHWKLVLVLQGHHGDSROLWLFDOLQIDQW´
$YDLODEOHDWUWVSPHGLDFFFROXPELDHGXODZ)HG6RF:DOGURQ<RRUPYE$FWXDOO\
ZKDW3URIHVVRU<RRVDLGZDV³,WKLQNLWZRXOGEHYHU\GLIILFXOWWREHD.DQWLDQDQGKDYHDQ\
UHVSRQVLELOLW\LQWKHJRYHUQPHQW3HRSOHLQWKHJRYHUQPHQWKDYHWREHFRQVHTXHQWLDOLVWVKDYHWR
PDNHWUDGHRIIV´
ZKHUHWKHDEVROXWHVPLJKWEHDQGJDLQWKHGHHSHVWVHQVHZHFDQRIZKDWOLHV
EHKLQGWKHP
6RPHZKHUHDV0D[:HEHUSXWLWWKHJRRGFLWL]HQ³UHDFKHVWKHSRLQW
ZKHUHKHVD\Vµ+HUH,VWDQG,FDQGRQRRWKHU¶´$QG:HEHUFRQWLQXHV
HYHU\RQHRIXVZKRLVQRWVSLULWXDOO\GHDGPXVWUHDOL]HWKHSRVVLELOLW\
RIILQGLQJKLPVHOIDWVRPHWLPHLQWKDWSRVLWLRQ,QVRIDUDVWKLVLV
WUXHDQHWKLFRIXOWLPDWHHQGVDQGDQHWKLFRIUHVSRQVLELOLW\DUHQRW
DEVROXWHFRQWUDVWVEXWUDWKHUVXSSOHPHQWVZKLFKRQO\LQXQLVRQ
FRQVWLWXWHDJHQXLQHPDQ²DPDQZKRFDQKDYHWKH³FDOOLQJIRU
SROLWLFV´
:HEHUPD\EHULJKWWKDWVRPHSUHDFKHUVZKRLQWHUYHQHLQSROLWLFVDUH
³SROLWLFDOLQIDQWV«ZKRGRQRWIXOO\UHDOL]HZKDWWKH\WDNHXSRQ
WKHPVHOYHV´³ZLQGEDJV«ZKRLQWR[LFDWHWKHPVHOYHVZLWKURPDQWLF
VHQVDWLRQV´7KHVHFXODUZRUOGLVQRWVKRUWRIZLQGEDJVHLWKHU%XW,ZRXOG
QRWWUDGHDSROLWLFVUHSOHWHZLWKZLQGEDJVWKDW\LHOGHGWKHRFFDVLRQDOIODVK
RIVSLULWXDOLQVLJKWIRUDSROLWLFVRIFRQVHTXHQFHVGHDGHQHGWRVDFUHGQHVV
DQGSULQFLSOHSXUVXLQJWKHIODWLQH[RUDEOHSURFHVVRIWUDGHRIIDIWHUWUDGHRII
DIWHUWUDGHRIIXQWLOWKHUHZDVQRWKLQJRILQWHJULW\WRKROGRQWR
&RQFOXVLRQ
$WWKHEHJLQQLQJRIP\ERRN*RG/RFNHDQG(TXDOLW\,REVHUYHGWKDW
>V@HFXODUWKHRULVWVRIWHQDVVXPHWKDWWKH\NQRZZKDWDUHOLJLRXV
DUJXPHQWLVOLNHWKH\SUHVHQWLWDVDFUXGHSUHVFULSWLRQIURP*RG
EDFNHGXSZLWKWKUHDWRIKHOOILUHGHULYHGIURPJHQHUDORUSDUWLFXODU
UHYHODWLRQDQGWKH\FRQWUDVWLWZLWKWKHHOHJDQWFRPSOH[LW\RID
SKLORVRSKLFDODUJXPHQWE\5DZOVVD\RU'ZRUNLQ:LWKWKLVLPDJH
LQPLQGWKH\WKLQNLWREYLRXVWKDWUHOLJLRXVDUJXPHQWVKRXOGEH
H[FOXGHGIURPSXEOLFOLIH
$QG,VDLGWKDW³WKRVHZKRKDYHERWKHUHGWRPDNHWKHPVHOYHVIDPLOLDUZLWK
>DFWXDOO\@H[LVWLQJUHOLJLRXVEDVHGDUJXPHQWVLQPRGHUQSROLWLFDOWKHRU\
NQRZWKLVLVPRVWO\DWUDYHVW\´,VDLGWKDWRQHRIP\UHDVRQVIRUH[SORULQJ
ZKDW,FDOOHG/RFNH¶V&KULVWLDQDUJXPHQWIRUHTXDOLW\ZDVQRWMXVWWR
LPSURYHRXUNQRZOHGJHRI-RKQ/RFNHRURXUYLHZVDERXWHTXDOLW\EXWDOVR
³WRHQULFKRXUVHQVHRIZKDWLWLVOLNHWRPDNHDUHOLJLRXVDUJXPHQWLQ
SROLWLFV´,KRSH,KDYHEHHQDEOHWRGRWKLVDELWKHUHWRGD\
)URP*/(S
,ELG
%\IRFXVLQJVWHDGIDVWO\RQDSDUWLFXODUUHOLJLRXVDUJXPHQWDQGE\
GHHSHQLQJDQGFRPSOLFDWLQJRXUVHQVHRILWVUHODWLRQILUVWWRHFFOHVLDVWLFDO
DQGELEOLFDODXWKRULW\VHFRQGO\LWVUHODWLRQWRWKHUHVRXUFHVDYDLODEOHLQRXU
FXOWXUHIRUPXWXDOLQWHOOLJLELOLW\DQGWKLUGO\LWVUHODWLRQWRDJHQHUDOVHQVHRI
ZKHUHPRGHUDWLRQLVDQGLVQRWDSSURSULDWHLQPRGHUQSROLWLFV²ZLWKDOOWKLV
,KRSH,KDYHJLYHQ\RXDULFKHUVHQVHRIZKDWUHOLJLRXVSDUWLFLSDWLRQ
LQYROYHVDORQJWKHHWKLFVRISXEOLFOLIHWKDWDWWHQGLW²WKHHWKLFVRIWKRVH
ZKRVSHDNDQGEHDUZLWQHVVLQWHUPVRIUHOLJLRXVDEVROXWHVDQGWKRVHZKR
DUHWURXEOHGE\WKHLULQWHUYHQWLRQV