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fings, answers to Congressional request for brie s con cer nin g (1) certain questions, and doc um ent Tyco International, WorIdCom, Inc. ("W orId Com "), g Ltd. ("Global Inc, ("T yco "), Global Cro ssin ("X ero x") , Qw est Crossing"), Xer ox Cor por atio n Inc. ("Q wes t") Com mu nic atio ns International, pan ies" ) and (2) (collectively the "Ju ly 2 letter com Aid"), Ad elp hia Rit e Aid Cor por atio n ("R ite del phi a") , Wa ste Com mu nic atio ns Corporation ("A em ent "), Km art Ma nag em ent , Inc. ("W aste Ma nag m Cor por atio n Corporation ("K ma rt") , Sunbea Cor por atio n ("E nro n") , Enr on ("S unb eam "), ere grin e") , and Per egr ine Systems, Inc. ("P ("M icro Stra teg y") Inc orp ora ted Mic roS trat egy panies"). (collectively the "Ju ly 5 letter com

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ize SEC staff, if Tha t the Com mis sion (1) author mit tee on Ene rgy necessary, to brie f the Ho use Com tee" ) and its and Com me rce ("th e Com mit Inv esti gat ion s Sub com mit tee on Ov ersi ght and f on non -pu blic ("th e Sub com mit tee" ) and their staf and to provide information related to this ma tter request from the briefing upd ates upo n further staf f to provide Committee, (2) authorize SEC staf f wit h Sub com mit tee and Com mit tee certain cas es only information, and copies of, or in specified herein, access to, doc um ent s as further staf f to provide and (3) authorize Com mis sion and copies of similar briefings, information, ess to other doc um ent s and doc um ent acc of Con gre ss upo n com mit tees and sub com mit tees t and one day 's receipt of an initial written reques Com mis sion . advice me mo ran dum notice to the

Reproduced from the Unclassified I Declassified Holdings of the National Archives

PRIVILEGED AND CONFIDENTIAL

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ACTION REQUESTED BY:

2:00 P.M., Wednesday, July 17, 2002

SUNSHINE ACT STATUS:

Not applicable.

PRIOR COMM1SSION ACTION:

On February 1, 2002, the Commission authorized SEC staff to submit a letter, a memorandum, and certain documents relating to the Enron investigation (the documents being copies of staff comments on Enron's SEC filings) to the Committee and to provide their staff with a briefing and briefing updates upon request.

...

NOVEL, UNIQUE OR COJ\l[PLEX ISSUES:

OTHER OFFICES OR DIVISION CONSULTED:

On June 13, 2002, the Commission authorized SEC staff to· brief staff of the Committee and Subcommittee with respect to the Global Crossing and Qwest investigations. On July 12, 2002, the Commission authorized SEC staff to provide staff of the Committee and Subcommittee with access to investigative testimony taken in the Global Crossing and Qwest investigations from specified persons.

None.

Division of Enforcement/Linda Thomsen, 942-4501 Office of Corporation Finance/Bill Tolbert 942-2891 Office of General Counsel/Gordon Seymour 942-0932

SOURCE OF CASE:

Not Applicable.

PERSONS TO CONTACT:

Laurie Stegman Jane Patterson

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202-942-4607 202-942-0119

ified I Reproduced from the Unclass

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BACKGROUND

man Pitt (letter eenwood wrote to Chair Gr d an in uz Ta n me air r each On July 2, 2002, Ch requesting separately fo , ies an mp co ter let 2 the July ified periods, attached at A) concerning tions relating to, for spec es qu of s rie se a to SEC ers answ records concerning any d an company, by July 9, the n tio ma or inf s; ing company's fil internal SEC the SEC's review of the mal; records relating to or inf or l ma for er eth , or s, wh g practices, disclosures tin un inquiries or investigation co ac y's an mp co pect to the ing such communications with res C and the company regard SE the n ee tw be ns tio 's unica tments by the company jus ad l financial statements; comm tua ac or ed os op ating to any pr issues; and all records rel C filings. ors to the company's SE dit au l na ter ex or al ern int at the estions about procedures qu ral ne ge re mo ee thr ed edures for The July 2 letter also ask whether the SEC's proc : ed lud inc e es Th tion "). tions on 7) whether to take ac sti SEC ("procedural ques ue (q d an on ati tig es inquiry or inv how and (question 6) initiating an 1998 to the present and m fro d ge an ch ve ha g tigation nce uses for determinin na Fi on an inquiry or inves on ati or rp Co of ures the Division and how inquiry or investigation (question 8) what proced an th wi n tio ec nn co in y review C provide to what company filings the ter requested that the SE let 2 ly Ju the y, all fin ons of d, EC 's current investigati "S they have changed. An the g rin ve co ing ief lO a br Committee staff by July co Ty ." WoridCom, Xerox, and ... ood wrote to men Tauzin and Greenw air Ch , 02 20 5, ly Ju iew to Three days later, on were expanding their rev y the t tha g tin ica ind for each ached at B) Chairman Pitt (letter att letter requested separately 5 ly Ju e Th . ies an comp of questions to those posed s rie se include the July 5 letter l ca nti ide t os alm answers to an procedures. company, by July 17, the ating to general SEC rel ns tio es qu the ing t omitt ittee staff by July 8 to mm Co in the July 2 letter, bu ct nta co ff sta C asked that SE July 5 estigations of all of the Finally, the July 5 letter inv s C' SE the of ls tai ver the de schedule a briefing to co letter companies. t meeting ittee staff both to note tha mm Co d cte nta co y ntl 2 ue SEC statf have subseq er responses to the July oth d an s ing ief br d ste for the reque responses, scope of the briefings, the time frames suggested the w rro na to d an ble t possi and July 5 requests is no to be provided. and documents requested Briefings

pects of the briefed on the public as re we ff sta e tte mi Rite om Committee and Subc on the public aspects of s ing ief Br . 15 ly Ju on during Tyco matters WorldCom, Xerox, and are likely to be scheduled y teg tra oS icr M d an m, t, Sunbea going forward Aid, Waste Managemen Committee staff insist on the If 5. st gu Au or , s will be the weeks of July 22, 29 yet public, those briefing t no are t tha rs tte ma tigative t divisions, we with briefings on inves y staff from our relevan ke of lp he the ith W d July 5 enormity of the July 2 an scheduled subsequently. the at wh ct nta co of y int ee's po ources, and subsequentl res d an explained to the Committ e tim ff sta C in terms of SE requests would involve 3

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in giving the ized by the Commission, we will beg hor aut if re, whe s ces pro a to eed pull agr e requested - that which we can hav they tion rma info the of e Committee som , after they k may be most helpful to them; then thin we ch whi and , ckly qui st mo er togeth accordingly. they want to drill down and respond have a chance to look at it, see where rmation in ing the Committee non-public info ply sup ut abo ns cer con ed ress exp We also the form of a response letter. 17. e to the Committee's requests by July We hope to provide an initial respons Responses se two onses to the questions posed in the SEC statT are drafting written resp providing more onses as narrowly as possible, while letters. We hope to confine our resp ussed with than in writing. As previously disc er rath fing brie via tion rma info e sensitiv stions 6, 7 and ially provide written answers to que Committee staff, SEC staff plan to init ision of on question 1, 4 and 5 from the Div tion rma info ry ina lim pre e vid pro 8, and to . Although the 2 from the Division of Enforcement e to Corporate Finance and on question es on public information, the respons ons resp e thes of e som e bas to ns SEC staff pla n for review more information about our selectio at ewh som tain con s doe 8 n stio -public que stions 1, 4 and 5 will contain non que to es ons resp the lic; pub is process than of Corporate identified companies the Division the of gs filin ch whi on tion lic rma info 2 will be based entirely on non pub n stio que to e ons resp the and ed; Finance review information.

11.

EN FO RC EM EN T RE LA TE D DO

CU ME NT S

ted in narrow the scope of documents submit As noted above, SEC staff intend to Committee and as is practicable, acceptable to the response to these requests insofar investigations tecting the Commission's ongoing pro h wit ent sist con and tee, mit Subcom will be at the estigative transcripts to be provided into these matters. Access to any inv e or keep mittee or Subcommittee staff to mak Com w allo to plan not do We . sion Commis er copies of or do not plan to provide them with eith copies of such transcripts. And we tion will The Enforcement Division's produc ers. pap rk wo sion mis Com l rna inte access to investigations and describing closed inquiries and nal consist of information identifying 2 and July 5 letters, with additio July the in ed nam ies pan com the concerning tee and only as required by the Commit ed vid pro s ent um doc or tion informa Subcommittee in follow up requests.

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TE D DO CU ME NT CORPORA TlO N FIN AN CE RE LA

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ood ers from Chairmen Tauzin and Greenw lett 2 200 5, July and 2 200 2, July The ations of the ision of Corporation Finance's examin Div the ut abo tion rma info ted ues t the req companies. The letters requested tha er lett 5 July the and ies pan com July 2 letter t~e reviews ed and provide a brief description of iew rev gs filin all y ntif ide sion mis Com

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PRIVILEGED AND CONF IDEN TIAL

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ration Finance conducted and all records related to such reviews. The Division of Corpo the time period conducted at least one review of each of the July 2 letter companies for the July 5 letter requested. The Division of Corporation Finance is still gathering companies' review.

IV.

RECO MME NDAT ION

ary, to We recommend that the Commission (1) authorize SEC staff: if necess ation inform blic brief the Committee and its Subcommittee and their staff on non-pu request from the related to this matter and to provide briefing updates upon further ee staff with Committee, (2) authorize SEC staff to provide Committee and Subcommitt ents as further information, and copies of, or in certain cases only access to, docum similar briefings, specified herein, and (3) authorize Commission staff to provide committees and information, and copies of documents and document access to other t and one day's subcommittees of Congress upon receipt of an initial written reques advice memorandum notice to the Commission. itting Staff response letters providing answers to questions posed in, and transm ation; inform ted reques the of documents requested by, the July 2 and July 5 letters; much be provided; and a number of the documents to be provided, or to which access is to ation, making several of the proposed staff briefings will contain nonpublic inform yees of the Commission authorization necessary because members and emplo .! ization author Commission may not divulge nonpublic information without such contains The staff responses will indicate that the information being provided ittee not publicly nonpublic and sensitive information and will request that the Comm disclose this information without prior consultation with the Commission.

v.

ATTAC HJVIE NTS

(A) (B)

July 2, 2002 request from Chairmen Tauzin and Greenwood. July 5, 2002 request from Chairmen Tauzin and Greenwood.

7), applies Rule 3-7 of the Commission's Rules of Conduct, 17 C.F.R. § 220.753-3(b)( ission authorization generally to all requests for 110npublic information. Rule 3-7 requires Comm ed in such contain ation inform for disclosure of any nonpublic Commission documents, and ' documents, or any confidential Commission information.

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