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Nomination of Thomas A. Fink : hearing before the Committee on Governmental Affairs, United States Senate, One Hundred Fourth Congress, second session on nomination of Thomas A. Fink, to be a member of the Federal Retirement Thrift Investment Board, March 11, 1996 online

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Online LibraryUnited States. Congress. Senate. Committee on GoveNomination of Thomas A. Fink : hearing before the Committee on Governmental Affairs, United States Senate, One Hundred Fourth Congress, second session on nomination of Thomas A. Fink, to be a member of the Federal Retirement Thrift Investment Board, March 11, 1996 → online text (page 1 of 2)
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^^'' \ S. Hrg. 104-406

NOMINATION OF THOMAS A. HNK



Y 4. G 74/9: S. HRG. 104-406

Konination of Thonas A. Fink* S.Hrg. ..

iiiiARING

BEFORE THE

COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE

ONE HUNDRED FOURTH CONGRESS

SECOND SESSION

ON

NOMINATION OF THOMAS A. FINK, TO BE A MEMBER OF THE FEDERAL
RETIREMENT THRIFT INVESTMENT BOARD



MARCH 11, 1996



Printed for the use of the Committee on Governmental Affairs




May 2 3



U.S. GOVERNMENT PRINTING OFFICE
23-120 cc WASHINGTON : 1996

For sale by the U.S. Government Fainting Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

ISBN 0-16-052485-7



\ \ " \ S. Hrg. 104-406

\v) \ NOMINATION OF THOMAS A. RNK

Y 4. G 74/9: S. HRG, 104-406

HoninatioR of Thonas A. Finki S.Hrg. ..

ttJiiARING

BEFORE THE

COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE

ONE HUNDRED FOURTH CONGRESS

SECOND SESSION

ON

NOMINATION OF THOMAS A. FINK, TO BE A MEMBER OF THE FEDERAL
RETIREMENT THRIFT INVESTMENT BOARD



MARCH 11, 1996



Printed for the use of the Committee on Governmental Affairs




May 2 3



1338



U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1996



For sale by the U.S. Government Printing Office

Superintendent of DocumenLs, Congressional Sales Office, Washington. DC 20402

ISBN 0-16-052485-7



COMMITTEE ON GOVERNMENTAL AFFAIRS

TED STEVENS, Alaska, Chairman
WILLIAM V. ROTH, Jr., Delaware JOHN GLENN, Ohio

WILLIAM S. COHEN. Maine SAM NUNN, Georgia

FRED THOMPSON, Tennessee CARL LEVIN, Michigan

THAD COCHRAN, Mississippi DAVID PRYOR, Arkansas

JOHN McCAIN, Arizona JOSEPH I. LIEBERMAN, Connecticut

BOB SMITH, New Hampshire DANIEL K. AKAKA, Hawaii

HANK BROWN, Colorado BYRON L. DORGAN, North Dakota

Albert L. McDermott, Staff Director
Susanne T. Marshall, Professional Staff
Leonard Weiss, Minority Staff Director
Michal Sue Prosser, Chief Clerk



(II)



CONTENTS



Opening statement: Page

Senator Stevens 1

WITNESSES

Monday, March 11, 1996

Thomas A. Fink, nominee, to be a Member of the Federal Retirement Thrift

Investment Board 2

Biographical and financial information 3

Responses to pre-hearing questions 6



(III)



[ERRATA]

S. Hrg. 104-406

NOMINATION OF THOMAS A. RNK



Y4,G 74/9: S. HRG. 104-406/
ERRATA

Honination of Thonas A. Fink* S.Hrg...

HEARING

BEFORE THE

COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE

ONE HUNDRED FOURTH CONGRESS

SECOND SESSION

ON

NOMINATION OF THOMAS A. FINK, TO BE A MEMBER OF THE FEDERAL
RETIREMENT THRIFT INVESTMENT BOARD



MARCH 11, 1996



Printed for the use of the Committee on Governmental Affairs



^c*^^







^996






U.S. GOVERNMENT PRINTING OFFICE
23-120 cc WASHINGTON : 1996

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington. DC 20402

ISBN 0-16-052485-7






ERRATA

Nomination of Thomas A. Fink

The above referenced hearing held before the Committee on
Governmental Affairs was inadvertently printed with the designation of
S. Hrg. 104-406.

The con-ect designation is S. Hrg. 104-409.

S. Hrg. 104-406 was assigned to another hearing.



NOMINATION OF THOMAS A. FINK TO BE A
MEMBER OF THE FEDERAL RETIREMENT
THRIFT INVESTMENT BOARD



MONDAY, MARCH 11, 1996

U.S. Senate,
Committee on Governmental Affairs,

Washington, DC.
The Committee met, pursuant to notice, at 10:13 a.m., in room
SD-342, Dirksen Senate Office Building, Hon. Ted Stevens, Chair-
man of the Committee, presiding.
Present: Senator Stevens.

OPENING STATEMENT OF CHAIRMAN STEVENS

Chairman STEVENS. Good morning, Mr. Fink.

Mr. Fink. Good morning, Mr. Chairman.

Chairman Stevens. Let me call the Committee to order. This
morning, we will be considering the nomination of Thomas A. Fink
to be a member of the Federal Employees Retirement Thrift Invest-
ment Board. I welcome you to Washington, Tom, and I know you
have traveled a great distance to be here. We have been profes-
sionally and personally acquainted for at least 35 years, according
to my memory.

Mr. Fink served in the Alaska State Legislature from 1967 to
1975. He is a prominent member of the Anchorage, Alaska commu-
nity and served as mayor of Anchorage from 1988 until 1994. I
have a particular interest in the thrift fund, having authored the
legislation that created it, and my recommendation and support of
you as a nominee reflects my full confidence in your ability not only
with regard to honesty and integrity, but I think it will be in the
best interest of Federal employees who put their savings in this
fund.

You have spent your professional career providing guidance to in-
dividuals on planning for the future, through your own insurance
agency. The thrift fund is a form of insurance in providing Federal
employees with a sound retirement savings plan, and I am con-
fident that Mr. Fink will draw on all of his past professional and
public experience in making sound decisions to preserve and en-
hance the fund.

It was my privilege to recommend Mr. Fink to the White House,
and I am pleased that President Clinton has nominated him for
this position. The Committee rules mandate that an inquiry be con-
ducted into the experience, qualifications, suitability and integrity
to serve. The Committee has received information detailing the

(1)



nominee's qualifications, educational background, employment
record and professional achievement, as well as financial state-
ments.

In addition, the nominee has responded as required in writing to
pre-hearing questions submitted by the Committee concerning the
duties and responsibilities associated with being a member of the
Federal Employees Retirement Thrift Fund Investment Board.
Copies of the biographical information and pre-hearing responses
will be placed in the record as part of this hearing and will be
available upon request.

The financial statements are available for inspection by the pub-
lic in the Committee office. Committee staff has reviewed all of the
information. In addition, staff has examined the financial disclo-
sure reports submitted by the Office of Government Ethics.

As Committee Chairman, I, along with the ranking member,
Senator Glenn, have reviewed the FBI investigation report on the
nominee, and the nominee has been interviewed by designated
Committee staff members prior to this hearing.

Committee rules require that all nominees be placed under oath
while testifying on matters relating to their suitability for office, in-
cluding the policies and programs which the nominee will pursue
if confirmed.

Tom, I will ask you to stand and raise your right hand. Do you
solemnly swear to tell the truth, the whole truth and nothing but
the truth in the statements you make here and in the statements
you have submitted to the Committee?

Mr. Fink. I do.

Chairman Stevens. Thank you very much. Do you have a state-
ment you would like to make for the record at this time?

TESTIMONY OF MR. FINK

Mr. Fink. No, Mr. Chairman.

Chairman Stevens. I know that your family could not be
present, and I know that you and Pat have 11 children. That would
be a tough job to bring them down for your hearing today.

As I indicated earlier, the Committee submits detailed written
questions to you and to all nominees. I do not repeat those ques-
tions here. The questions highlight a number of issues being con-
sidered by the thrift board. After 10 years in operation, there are
a number of changes being contemplated. The main change is im-
proving the computer and data processing capabilities. That is an
area advancing quickly in the private sector, and the thrift fund
cannot fall behind in providing com.petitive services to Federal em-
ployees.

They have also been looking into expanding the options available
to employees for borrowing from this fund. Any change of that type,
of course, will take legislative action, and the board is responsible
for ensuring that any expanded services are efficiently provided.
We will look forward to the board's review of some of the options
that are being suggested.

We have standard questions under our Committee procedure
that must be answered by any nominee under oath. So I ask you
these questions, my good friend. Is there anything you are aware



of in your background which might present a conflict of interest
with the duties of office to which you have been nominated?

Mr. Fink. No.

Chairman Stevens. Do you know of any reason, personal or oth-
erwise, that would in any way prevent you from fully and honor-
ably discharging the responsibilities of the office for which you
have been nominated?

Mr. Fink. No.

Chairman Stevens. Do you agree without reservation to respond
to any reasonable summons to appear and testify before any duly
constituted Committee of Congress if you are confirmed?

Mr. Fink. Yes.

Chairman Stevens. Those are all of the questions that I have.
I understand the board has a teleconference meeting set for Mon-
day, March 18. It will take unanimous consent to bypass the Com-
mittee vote and send the nomination directly to the floor. I do in-
tend to ask my colleagues on this Committee for their cooperation
in agreeing to such a discharge so that we can move expeditiously
on your nomination. It is my hope that that will be done in time
for you to participate in the next scheduled meeting.

Mr. Fink. Thank you.

Chairman Stevens. I thank you very much for attending and
wish you good luck, my friend.

Mr. Fink. Thank you, Mr. Chairman. Thank you very much.

[The biographical information follows:]

biographical and financial information requested of

nominees

A. Biographical Information

1. Name: Thomas A. Fink

2. Position to which nominated: Member of Federal Employees Retirement Thrift
Board of Directors

3. Date of nomination: January 25, 1996

4. Address: 1350 W. 23rd, Anchorage, Alaska 99503, Office and Residence

5. Date and place of birth: August 26, 1928, Peoria, Illinois

6. Marital status: Patricia a. Fink (Israelson)

7. Names and ages of children: Deborah 43, Ann 41, Maureen 38, Mark 36, Mi-
chael 34, Kathryn 33, Tom 31, Matthew 30, Joshua 28, Johanna 27, and Kelly 25

8. Education:

Chillicothe High School 1942-46, Chillicothe, Illinois— Graduated.
Bradley University, Peoria, Illinois 1946-50 — B.S.
University of Illinois Law School, Champaign, Illinois 1949-52 — J.D.
American College of Life Underwriters 1960-63 — C.L.U.

9. Employment record:

Kay, Robison, & Moody — Law firm 1952-53, Law Clerk, Anchorage, Alaska

City National Bank 1953-55, Vice President, Anchorage

Friendly Finance Co., Inc. 1955-58, Small Loan Co., Manager, Anchorage

Property & Casualty Agent: 1965-75

Life Insurance Sales: 1958-current



Under names of:

Von Gillern Agency 1958-59, Agent
Tom Fink Agency 1959-96, Owner-Agent

Schroer Fink Agency, Inc. 1964-96, Stockholder, Officer, and Agent,
Anchorage

9. Employment record continued:

State legislator 1967-75, State of Alaska
Mayor of Anchorage 1988-August 1994

10. Government experience: None

11. Business relationships:

Current:

Officer — Schroer-Fink Agency, Inc.
Partner — Fink, Schroer, Swanson, Swanson
Life Insurance Agent — Schroer-Fink Agency, Inc.

Past:
Trustee — Alaska Pacific University
Partner — Fink Schroer
Partner — Schroer, Fink, Swanson

12. Memberships:

Knights of Columbus

Pioneers of Alaska

Chamber of Commerce — intermittedly

American Society of Chartered Life Underwriters

National Association of Life Underwriters

NRA

13. Political affiliations and activities:

a. Candidate:

School Board, City Council, Governor.
Elected: State Legislature, Mayor of Anchorage

b. Just my own election committees

c. Political Contributions 1986-1995

GOP— $481

Governor Races— Randolph $1,050 Coghill $200

Presidential Races— Bush-Quayle $250, Buchanan $100

Congressional Races— D. Young, $350, Murkowski $250, Stevens $100

Political Action Committees— LUPAC $400, Wildlife Legislative Fund $500,
Alaska Black Caucus $100, Pacific Legal Fdtn. $250, Citizens for Indept.
CEA $400, Alaska 92 $100

State Legislators— Barnes $350, Moffatt $150, Faiks $200, Wilcox $150, T.
Miller $200, T. Martin $650, Uehling $100, Zawackie $201, Leman $201,
A. Hanley $101, Boucher $101, Collins $101, Waggoner $201, Nunnally
$101, L. Baker $100, Choquette $100, Hoffman $100, Sanders $100, M.
Hanley $100, Rokeberg $100, R. Taylor $100, R. Halford $100, L. Halford
$100, R. Phillips $100, Webb $100, Porter $100, Kelly $100. Burt $100,
Mulder $100, Kott $200, Nicolai $100, C. Moses $100, Ogan $50, Kohring
$50

Local Government— Wood $100, L. Dineen $200, L. Rexwinkel $150, J.
Garrigues $100, Kerbow $101, Schroer $101, Sykes $101, Bradley $101, B.
Phillips $101, Vasquez $100, Boucher $100, Burke $500, Traini $100,
Rivenbank $100, Bell $200, Porter $100, Thompson $100, Smith $200, E.
Young $100, J. Murdy $100, K. Myers $200, G. Schriver $200, J. Fleming
$200, L. Ferrel $200, T, Petrone $100, F. Thompson $100, Mystrom $200,
Wuerch $100, S. Fowler $100, Versup $100, T. Humphrey $100

Summary— 1986 $2,750, 1987 $325, 1988 $1,773, 1989 $250, 1990 $250,
1991 $1,025, 1992 $3,375, 1993 $1,650, 1994 $1,035, 1995 $1,160— Total
$13,593

14. Honors and awards: Minor recognitions

15. Published writings:



Weekly Opinion Columns intermittedly — Anchorage Times 1975-94
Alaska Star 1995-current

16. Speeches: I talk from notes which I do not keep.

17. Selection: (a) Recommended by Sen. Stevens and Sen. Dole.

(b) Government service background, education, experience in investments
through life insurance sales (some for Pension), and management of State
and municipal funds as State legislator and mayor.

B. Future Employment Relationships

1. Will you sever all connections with your present employers, business firms,
business associations or business organizations if you are confirmed by the Senate?

If necessary, but see no conflict of interest or time.

2. Do you have any plans, commitments or agreements to pursue outside employ-
ment, with or without compensation, during your service with the government? If
so, explain.

Nothing new.

3. Do you have any plans, commitments or agreements after completing govern-
ment service to resume employment, affiliation or practice with your previous em-
ployer, business firm, association or organization?

No.

4. Has anybody made a commitment to employ your services in any capacity after
you leave government service?

No.

5. If confirmed, do you expect to serve out your full term or until the next Presi-
dential election, whichever is applicable?

Yes.

C. Potential Conflicts of Interest

1. Describe all financial arrangements, deferred compensation agreements, and
other continuing dealings with business associates, clients or customers.

(a) Continue to service existing life insurance clients.

(b) Continue to receive deferred compensation for past services from
Mattson Investigations (owned by my son, Mike)

2. Indicate any investments, obligations, liabilities, or other relationships which
could involve potential conflicts of interest in the position to which you have been
nominated.

None.

3. Describe any business relationship, dealing or financial transaction which you
have had during the last 10 years, whether for yourself, on behalf of a client, or
acting as an agent, that could in any way constitute or result in a possible conflict
of interest in the position to which you have been nominated.

None.

4. Describe any activity during the past 10 years in which you have engaged for
the purpose of directly or indirectly influencing the passage, defeat or modification
of any legislation or affecting the administration and execution of law or public pol-
icy.

As Mayor 1988-August 7, 1994 tried to persuade Congress, Governor, State
Legislature for city and State issues.

As Legislator 1967-75 tried to influence Congress on State issues.

In early 1960's lobbied for State Life Insurance Ass'n for code changes.

5. Explain how you will resolve any potential conflict of interest, including any
that may be disclosed by your responses to the above items. (Please provide a copy
of any trust or other agreements.)



There are none.

6. Do you agree to have written opinions provided to the Committee by the des-
ignated agency ethics officer of the agency to which you are nominated and by the
Office of Government Ethics concerning potential conflicts of interest or any legal
impediments to your serving in this position?

Yes.

D. Legal Matters

1. Have you ever been disciplined or cited for a breach of ethics for unprofessional
conduct by, or been the subject of a complaint to any court, administrative agency,
professional association, disciplinary committee, or other professional group? If so,
provide details.

As Mayor I had one or two complaints filed with Ethics Committee which
were dismissed by Committee as unfounded (I believe FBI looked into).

2. Have you ever been investigated, arrested, charged or held by any Federal,
State, or other law enforcement authority for violation of any Federal, State, county
or municipal law, regulation or ordinance, other than a minor traffic offense? If so,
provide details.

No.

3. Have you or any business of which you are or were an officer ever been in-
volved as a party in interest in any administrative agency proceeding or civil litiga-
tion? If so, provide details.

A Real Estate partnership F.S.S.S. was foreclosed upon by FDIC

FDIC vs FSSS

Wife and I and others
U.S. District Court of Alaska #A92-719-CV (JWS)
Judgment 7/28/93
Satisfaction of Judgment 1/27/94
Amount: $2,425,122.21
Property foreclosure

Also as Mayor of Anchorage, I was named as defendant in many suits
against the municipality.

4. Have you ever been convicted (including pleas of guilty or nolo contendere) of
any criminal violation other than a minor traffic offense?

No.

5. Please advise the Committee of any additional information, favorable, or unfa-
vorable, which you feel should be considered in connection with your nomination.

Foreclosure set out in No. 3 above was result of very substantial recession
in late 1980's wherein 9 banks in Alaska went under and Assessed Value
of property went down 40 percent in Anchorage.

E. Financial Data
On file in the Committee Office.



PRE-HEARING QUESTIONS FOR THOMAS A. FINK TO BE A MEMBER OF
THE FEDERAL RETIREMENT THRIFT INVESTMENT BOARD

I. Nominations Process and Potential Conflicts

1. Were any conditions, express or implied, attached to your nomination as a
Member of the Federal Retirement Thrift Investment Board (FRTIB)?

No.

2. Have you made any specific commitments with respect to the basic policies and
philosophy which you will follow while a Member of the Thrift Investment Board?

No.



3. To your knowledge, did persons representing interests that could be influenced
by the FRTIB actively support or endorse your nomination? Is so, please explain.

No.

4. Is there any issue currently under consideration by the Thrift Board, or any
which may come under consideration, from which you may have to disqualify your-
self? If so, please explain.

No.

5. Do you have any interest in any corporation, partnership, association, or other
entity whose interest may be affected significantly by the Board?

No.
II. Role and Responsibilities of the Position to Which Nominated

1. What do you believe are the most important responsibilities of the position to
which you are nominated and what challenges do you expect to face?

To set policies that result in the best returns at the least cost as allowed
within the statute. It seems to me there are many value judgments to be
made within that framework.

Also to make sure Federal participants' attitudes are known by the Board.

2. What contributions do you feel you can make to the Thrift Board?

Main contribution would be a reasoned judgment in Board decisions. I have
had a certain amount of experience in handling investments of governments
and pensions in State government and more so in local government.

III. Role of the Thrift Board

1. How do you view the role and responsibilities of the Thrift Board?

To adopt prudent investment policies and administrative procedures within
the statute and have constant overview of Executive Director.

2. The Thrift Board is an independent agency. What do you consider to be the
proper relationship between the Board and (1) the President and (2) the Congress?

The Board should make decisions independently of the President or Con-
gress as that is clearly the intent of Congress when the TSP was set up.
The Board, of course, has to acknowledge that Congress and the President
write the laws and have an interest in the TSP being successful.

3. On what model do you think the Board should operate — a private pension plan
or a Federal agency model? On what statutory basis do you base your view of the
function of the Board?

The statute makes this a Federal Agency Model pension plan. Prudence ap-
plies to both types, but the authorizing statute limits the Board more than
in a private pension.

4. How do you view the current statutory division of responsibilities between the
Board members, as policy-makers, and the Executive Director, the chief executive
officer of the agency?

It looks as if it works well.

(a) Do you consider the Executive Director to be accountable to Board members
for his actions and decisions?

Yes.

(b) Should there be oversight or reporting mechanisms available to Board mem-
bers to keep them apprised of, or to allow evaluation of, actions or decisions taken
by the Executive Director?

Yes.

5. Should Board members have any management responsibilities in addition to
their policy-making duties?

No.

6. Do you consider a long-term planning policy for the Board to be required by
statute?



8

No. It is implied. Prudence requires it.

7. Do you believe the current funding system is adequate? Are there any changes
you would like to see made?

It appears to be adequate.

IV. Thrift Savings Plan

1. Federal employees participating in the TSP currently have the option of invest-
ing in one or more of three investment funds: A government securities fund, a com-
mon stock fund, and a fixed income fund. The Thrift Investment Board is beginning
to evaluate investment options, for example, a stock fund based on foreign stocks.

It seems clear that the Federal Government should try to maintain com-
petitive pay and benefits relative to other employers, in order to attract and
retain quality people in the career Federal service.

(a) What is your assessment of the current competitiveness of the TSP relative
to other employer-sponsored retirement investment/savings plans?

It appears very competitive.

(b) What administrative and legislative modification(s), if any, do you think would
benefit the TSP without significantly increasing costs to the government?

I don't know of any at this time.

2. When the FERS system was designed, the TSP portion of the FERS retirement
benefits package was intended to provide a large part of the retirement incomes of
those who complete Federal service careers. While active participation in the TSP
among FERS employees has gradually increased in the years since its inception (to
about 78.3 percent as of December 1995), a significant number of FERS employees —
many of whom are newer, lower-salaried employees — are not actively participating.

(a) What do you think the FRTIB can do to increase the participation rate?
Just continue to point out the advantages to employees.

(b) Do you think there are attributes of the current TSP that actually discourage
FERS employees from program participation? If so, what might be done to reduce
that adverse impact?

I am unaware of any at this time.

3. Reportedly there has been under consideration a proposal as part of the effort
to cut current Federal entitlement program costs, a proposal to reduce the amount
of the government's contribution to the TSP accounts of FERS employees. Do you
favor the implementation of such a proposal?

I believe that is for Congress to determine. Any cuts would make the plan
less attractive to Federal employees.

4. Some civil service annuitants (including survivor annuitants) have expressed
an interest in participating in the TSP under essentially the same conditions as do
current CSRS-covered employees (i.e., that they be allowed to invest up to 5 percent
of their gross civil service annuities in the TSP without any matching government
contributions).

I don't know enough yet to give an adequate answer.


1

Online LibraryUnited States. Congress. Senate. Committee on GoveNomination of Thomas A. Fink : hearing before the Committee on Governmental Affairs, United States Senate, One Hundred Fourth Congress, second session on nomination of Thomas A. Fink, to be a member of the Federal Retirement Thrift Investment Board, March 11, 1996 → online text (page 1 of 2)