Voting ESOP Stock

[Guest svatty]

If a privately held company, whose only business is printing newspapers, wishes to establish an ESOP (most likely through a leveraged transaction with sellers using Section 1042) is there ANY requirement that the ESOP permit pass through voting?

From my research it would appear that the exception in Section 401(a)(22) provides that the newspaper client need not provide pass through voting. This seems very strange to me, and I feel like I am missing some issue. Would anyone happen to know the rationale behind this exemption?

I have searched the 1986 Committee reports and can find no printed explanation for this bizarre exemption.

In addition, is there another requirement somewhere that I am unaware of that would require the vote to be passed through (for example as Section 133 required)?

THANKS.

[RLL]

The "newspaper exception" in IRC Sec 401(a)(22) was added to the Code as a "special interest" provision at the request of a powerful member of Congress (not Senator Long) who had a constituent that controlled a family-owned newspaper.

There is no other current "hidden" provision of the Code that would require a pass-thru of voting rights. IRC Sec. 133 was repealed a number of years ago.