f!Y4,AG 8/3; S.HRG, 103-1058
' S. Hrg. 103-1058
NOMINATIONS HEARING OF MARY L. SCHAPIRO,
SHEILA C. BAIR, DOYLE COOK, MARILYN
PETERS, AND CLYDE ARUE WHEELER, JR.
HEARING
BEFORE THE
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED THIRD CONGRESS
SECOND SESSION
ON
THE NOMINATIONS OF MARY L. SCHAPIRO TO BE CHAIRMAN OF THE
COMMODITY FUTURES TRADING COMMISSION; SHEILA C. BAIR TO BE
A COMMISSIONER OF THE COMMODITY FUTURES TRADING COMMIS-
SION; DOYLE COOK TO BE A MEMBER OF THE FARM CREDIT
AMINISTRATION BOARD; MARILYN PETERS TO BE A MEMBER OF THE
BOARD OF DIRECTORS OF THE FEDERAL AGRICULTURAL MORTGAGE
CORPORATION; AND CLYDE AI^LIE WHEELER, JR. TO BE A MEMBER
OF THE BOARD OF DIRECTORS OF THE FEDERAL AGRICULTURAL
MORTGAGE CORPORATION
-t/>J
Printed for the use of th, ,
Committee on Agriculture, Nutrition,/aii4 *W'
U.S. GOVERNMENT PRINTING OFFICE
94-104 CC WASHINGTON : 1995
For sale by ihe U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-047805-7
Y 4. AG 8/3; S.HR5. 103-1058
S. Hrg. 103-1058
NOMINATIONS HEARING OF MARY L. SCHAPIRO,
SHEILA C. BAIR, DOYLE COOK, MARILYN
PETERS, AND CLYDE ARLIE WHEELER, JR.
HEARING
BEFORE THE
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE ^HUNDRED THIRD CONGRESS
SECOND SESSION
ON
THE NOMINATIONS OF MARY L. SCHAPIRO TO BE CHAIRMAN OF THE
COMMODITY FUTURES TRADING COMMISSION; SHEILA C. BAIR TO BE
A COMMISSIONER OF THE COMMODITY FUTURES TRADING COMMIS-
SION; DOYLE COOK TO BE A MEMBER OF THE FARM CREDIT
AMINISTRATION BOARD; MARILYN PETERS TO BE A MEMBER OF THE
BOARD OF DIRECTORS OF THE FEDERAL AGRICULTURAL MORTGAGE
CORPORATION; AND CLYDE ARLIE WHEELER, JR. TO BE A MEMBER
OF THE BOARD OF DIRECTORS OF THE FEDERAL AGRICULTURAL
MORTGAGE CORPORATION
JUNE 20, 1994
Printed for the use of th-^^ ,
Committee on Agriculture, Nutrition,/an,q «^^i
"^UH
'^^s^Mf^y
^r
94-104 CC
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1995
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office. Washington. DC 20402
ISBN 0-16-047805-7
COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
PATRICK J. LEAHY, Vermont, Chairman
DAVID H. PRYOR, Arkansas RICHARD G. LUGAR, Indiana
DAVID L. BOREN, Oklahoma ROBERT DOLE, Kansas
HOWELL HEFLIN, Alabama JESSE HELMS, North Carolina
TOM HARKIN, Iowa THAD COCHRAN, Mississippi
KENT CONRAD, North Dakota MITCH McCONNELL, Kentucky
THOMAS A. DASCHLE, South Dakota LARRY E. CRAIG, Idaho
MAX BAUCUS, Montana PAUL COVERDELL, Georgia
J. ROBERT KERREY, Nebraska CHARLES E. GRASSLEY, Iowa
RUSSELL D. FEINGOLD, Wisconsin
Charles RiemenSCHNEIDER, Staff Director
James M. CUBIE, Chief Counsel
Christine Sarcone, Chief Clerk
Charles Conner, Staff Director for the Minority
(II)
CONTENTS
Page
Statements:
Hon. Patrick J. Leahy, U.S. Senator from Vermont, opening statement 1
Prepared statement 2
Hon. Richard G. Lugar, U.S. Senator from Indiana 2
Hon. Robert Dole, U.S. Senator from Kansas 3
Hon. Larry E. Craig, U.S. Senator from Idaho 4
Hon. Thomas A. Daschle, U.S. Senator from South Dakota 4
Hon. Don Nickles, U.S. Senator from Oklahoma 4
Hon. Mitch McConnell, U.S. Senator from Kentucky 5
Hon. David L. Boren, U.S. Senator from Oklahoma 5
Hon. Max Baucus, U.S. Senator from Montana 17
Hon. Kent Conrad, U.S. Senator from North Dakota 22
Mary L. Schapiro, of the District of Columbia 7
Sheila C. Bair, of Texas 13
Doyle L. Cook, of Washington 19
Marilyn Peters, of South Dakota 24
Clyde Arlie Wheeler, Jr., of Oklahoma 24
APPENDIX
Prepared statements
Sheila C. Bair, with attachments 29
Executive branch public financial disclosure report (public) 31
Biographical information (public) 38
Financial data and conflict of interest (public) 43
Doyle L. Cook, with attachments 45
Executive branch public financial disclosure report (public) 53
Biographical information (public) 65
Financial data and conflict of interest (public) 68
Additional material submitted for the record
Clyde A. Wheeler, Jr., with attachments 71
Executive branch public financial disclosure report (public) 71
Biographical information (public) 80
Financial data and conflict of interest (public) 84
Marilyn F. Peters, with attachments 93
Executive branch public financial disclosure report (public) 93
Biographical information (public) 102
Financial data and conflict of interest (public) 106
Mary L. Schapiro, with attachments 109
Executive branch public financial disclosure report (public) 109
Biographical information (public) 116
Financial data and conflict of interest (public) 117
Letters: To Senator Patrick J. Leahy, from Stephen D. Potts, Director, Office
of Government Ethics, re: 30
Sheila C. Bair 30
Doyle L. Cook 45
To Stephen A. Potts, from Kathleen A. Buffon, Designated Agency Ethics
Oflicial, Farm Credit Administration, with attachments 46
To Senator Patrick J. Leahy, from Stephen D. Potts, Director, Office of
Government Ethics, re: 70
Clyde A. Wheeler, Jr 70
Marilyn F. Peters 92
Mary L. Schapiro 108
To Senator Patrick J. Leahy, from the Honorable Thomas S. Foley,
Speaker, House of Representatives 119
(III)
NOMC^ATIONS HEARING
MONDAY, JUNE 20, 1994
U.S. Senate,
Committee on Agriculture, Nutrition, and Forestry,
Washington, DC.
The committee met, pursuant to notice, at 9:40 a.m., in room SR—
332, Russell Senate Office Building, Hon. Patrick J. Leahy (Chair-
man of the committee) presiding.
Present or submitting a statement: Senators Leahy, Boren,
Conrad, Daschle, Baucus, Lugar, Dole, McConnell, Craig, and
Nickles.
STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR
FROM VERMONT
The Chairman. Good morning.
We are here today to receive testimony from Mary Schapiro,
nominated to be chairman of the Commodity Futures Trading Com-
mission; Sheila Bair, nominated to be a commissioner of the Com-
modity Futures Trading Commission; Doyle Cook, nominated to be
a member of the Farm Credit Administration Board; and Marilyn
Peters and Clyde Wheeler, Jr., to be members of the Board of Di-
rectors of the Federal Agricultural Mortgage Corporation.
I welcome all of you here, as well as your friends and colleagues
who have come; and when each of you are introduced for your indi-
vidual testimony, I will ask you to let us know if there are any
friends or family or colleagues who are here with you, because
someday in the dusty archives, at least, your personal ones, you
may want to look at that record and actually see who was here.
I would note that the Commodity Futures Trading Commission
is adjusting to rapidly changing global financial markets. When we
reauthorized this agency a couple of years ago — all of the Members
here today; Senator Lugar, Senator Daschle, Senator Baucus, and
a number of others who worked so hard on that reauthorization —
we focused our efforts on fighting fraud and abuse in these impor-
tant markets. As a result, the CFTC has emerged as a more power-
ful agency with a very big job. I am glad we are moving ahead with
these nominations, because we need a full complement of commis-
sioners to do the job well.
Barbara Holum has done a fine job as acting chairman of the
CFTC for the past 6 months, and I am appreciative of her effort
and dedication, but it is time for the Agency to have a permanent
chairman. In that regard, I understand that Ms. Holum has been
eagerly anticipating Ms. Schapiro's arrival as chairman.
(1)
I should note that the Farm Credit System is also on stronger
financial footing since passage of the 1987 Agricultural Credit Act
by this committee. Members of the committee were very, very con-
cerned about the creditworthiness of the Farm Credit System; and
again, I would compliment my good friend from Indiana, Senator
Lugar, who joined with me and a bipartisan majority of this com-
mittee to put that Act through. I think that the nature of our re-
form would never have been possible without both Senator Lugar's
leadership and the bipartisan cooperation we had on that legisla-
tion.
The System has made good progress in repaying its Federal obli-
gations incurred as a result of the 1987 Act, and I think it is in
a position to restore much of its former strength and actually im-
prove on it.
And then we have the Federal Agricultural Mortgage Corpora-
tion, Farmer Mac. That was established in the 1987 Agricultural
Credit Act. Its progress has not been up to our original expecta-
tions, and I am hoping that that can improve over the coming
years. We are going to need some strong leadership in addressing
the need and viability of this corporation, especially as we come
into the 1995 Farm bill.
[The prepared statement of Senator Leahy follows.]
STATEMENT OF SENATOR PATRICK J. LEAHY
We are here today to receive testimony from: Mary L. Schapiro, nominated to be
Chairperson of the Commodity Futures Trading Commission; Sheila C. Bair, nomi-
nated to be commissioner of the Commodity Futures Trading Commission; Doyle
Cook, nominated to be a member of the Farm Credit Administration Board; Marilyn
F. Peters and Clyde A. Wheeler, Jr., to be members of the Board of Directors of tne
Federal Agricultural Mortgage Corporation.
I would like to welcome you, and your families, friends and colleagues who have
come to witness these proceedings.
The Commodity Futures Trading Commission (CFTC) is adjusting to rapidly
changing global financial markets. Two years ago when we reauthorized the CFTC,
the committee focused its efforts on fighting fraud and abuse in these important
markets. As a result, the CFTC has emerged as a more powerful agency with a big
job. I am glad that we are moving ahead with these nominations. We need a full
complement of commissioners to do the job well.
The Farm Credit System is also on stronger financial footing since passage of the
1987 Agricultural Credit Act by this committee. The System has made good progress
on repaying its Federal obligations incurred as a result of the 1987 Act and, through
increasing consolidation and effective oversight from the Farm Credit Administra-
tion, is in a good position to continue to improve its financial strength.
The Federal Agricultural Mortgage Corporation — Farmer Mac — was established in
the 1987 Agricultural Credit Act. Its progress, however, has not been up to our
original expectations. Over the next few years. Farmer Mac will face some tough
decisions.
Strong leadership will be essential when addressing the need and viability of this
corporation. As we begin negotiations for the 1995 Farm bill, a clear vision for
Farmer Mac will be more important than ever.
Each one of you is now being considered for top positions that will influence the
future of the CFTC, the FCA, and Farmer Mac. I look forward to hearing your testi-
mony.
The Chairman. I will yield to the Senator from Indiana for any
remarks he might have.
STATEMENT OF HON. RICHARD G. LUGAR, A U.S. SENATOR
FROM INDLVNA
Senator Lugar. Thank you very much, Mr. Chairman.
I appreciate the fact that these nominees are here. Both you and
I and other Members of the committee have encouraged the admin-
istration to come forward with these nominees. In the case of the
CFTC, in the event these two nominees are confirmed, the CFTC
will be back up to full strength for the first time in a long while,
and that is especially important.
I want to submit for the record a very strong statement of en-
dorsement for Sheila Bair by Senator Dole. In his statement, Sen-
ator Dole not only extols, quite correctly, the work of Sheila Bair,
but points out that she acted as acting chairman of the Commis-
sion for several months, and during that time, a very important
study was presented. Of course, the activities of that group, you
and I have shepherded during our entire Senate careers, as well as
the other farm credit institutions that are here today. So it is of
special satisfaction to see these nominees.
I would like to submit for the record Senator Dole's statement.
The Chairman. Thank you. It will be included in the record.
[The prepared statement of Senator Robert Dole follows.]
STATEMENT OF SENATOR ROBERT DOLE
Mr. Chairman, it is again my great pleasure to present Sheila Bair, who has been
nominated for a secona term as commissioner of the Commodity Futures Trading
Commission, to this committee. When I first introduced Sheila to this committee
over 3 years ago, I expressed my confidence that she would be a committed and
hard working commissioner. She has fulfilled my predictions and, by all accounts,
has done an outstanding job at the Commission.
Sheila's rare combination of experience and expertise have been an asset to the
Commission in working through tne many difficult issues resolved by the Commis-
sion during her tenure. Her background in financial markets, her knowledge of Gov-
ernment and Politics, and her sensitivity to the needs of agriculture will continue
to serve the Commission well as they confront the challenges of the coming year.
From August through December of last year. Sheila was the acting chairman of
the Commission. During that time, she oversaw the completion of a major study on
the OTC derivatives' market and its regulation. The central recommendation of that
study — that an interagency group should consider common approaches to the issues
Sosed by derivatives — led to the reinvigoration of the Working Group on Financial
larkets. The Commission's OTC report has received well deserved praise for its
thoughtful, even-handed analysis of the often complex subject of derivatives. The re-
port is characteristic of Sheila's careful but confident consensus-building style of
leadership.
Sheila has also acted as chairman of the Commission's Financial Products Advi-
sory Committee. In this role, she has been at the forefront of issues related to the
dramatic growth of innovative financial products on the Nation's futures exchanges.
Her experience on these issues makes ner a particularly valuable member of the
Commission as it continues to grapple with issues raised by these exotic new finan-
cial instruments.
Sheila's interest in financial products has not diminished her responsiveness on
the agriculture issues that continue to lie at the core of the Commission's mission.
She has been a reliable friend to agriculture, as evidenced by the broad support that
she has garnered among both Kansas and national agriculture groups.
If Sheila and Mary are confirmed, the CFTC finally will be operating with a full
complement of five commissioners and led by a permanent chairman. Operating at
full strength will increase the Commission's ability to perform its vital role as the
Federal Government's chief derivatives regulator. This role will continue to increase
in importance over the coming years. In order to vigorously fulfill this role and
confront the many challenges that lie ahead, the Commission deserves our respect
and full support.
The Chairman. As you can probably imagine. Senator Dole has
made it a point to mention to me his support, not unexpectedly, of
this nomination.
Senator Daschle.
Senator Daschle. I have no opening comments, Mr. Chairman.
The Chairman. Thank you.
Senator Craig.
STATEMENT OF HON. LARRY E. CRAIG, A U.S. SENATOR
FROM IDAHO
Senator Craig. I have met with both of the ladies who are here
at the table this morning, Mr. Chairman. I have had the privilege
of knowing Sheila prior to this confirmation hearing and share the
same positive feelings as Senator Dole. Certainly, Mary Schapiro
comes to us with a good deal of experience and talent for the job.
I also want to speak only briefly, because I know that Senator
Baucus will introduce Doyle Cook, out I had the privilege of know-
ing him when he was with the Spokane Bank. He is a quality man
and can serve us very well. I look forward to hearing his testimony.
The Chairman. Thank you very much.
Senator Baucus — I am sorry — did you wish to say anything about
these two nominees?
Senator Baucus. No, Mr. Chairman. Thank you.
The Chairman. I knew you were here for Mr. Cook, and I had
that in my mind, so I will plead only that it is Monday morning.
After "Racing for the Cure," and then, that afternoon, follovving my
young Marine son on what was supposed to be a 5-mile hike, but
he neglected to tell me that it was 5 miles in each direction in 94-
degree weather, I am still recuperating.
[Testimony resumes on page 6.]
[The prepared statements of Senators Daschle, Nickles, McCon-
nell, and Boren follow, respectively.]
STATEMENT OF SENATOR THOMAS A. DASCHLE
Mr. Chairman, I would like to take this opportunity to welcome Marilyn Peters,
who is from Britton, South Dakota.
I have had the pleasure of knowing Marilyn and her husband Emerald for several
years, having first met them when I worked on the staff of former U.S. Senator
James Abourezk. Marilyn's background is in agriculture and education. She has
been actively involved in the family's grain ana livestock operation with her hus-
band since 1955. Although they currently rent most of their farmland on a share
basis, they are still involved in agriculture.
Marilyn is a graduate of Northern State University, with a Bachelor of Science
degree in Education. She is a former high school math, English, and physical edu-
cation teacher and also served as a coach who helped pioneer women's gymnastics
and track in South Dakota.
In addition, Marilyn has been active in civic affairs, having served on numerous
boards and commissions in South Dakota and in her local community of Britton.
While she insists that she is semi-retired, she still continues be involved in commu-
nity affairs, as she is presently serving as an elected member of the local school
board.
Mr. Chairman, Fellow Colleagues, as you can see for yourself, Marilyn Peters is
a great choice to serve as a member of the Board of Directors of the Federal Agricul-
tural Mortgage Corporation. Her agricultural background will be invaluable in ad-
vancing the perspective of family farmers on the Farmer Mac board, and I would
urge your support for her nomination.
STATEMENT OF SENATOR DON NICKLES
Chairman Leahy, I would like to thank you and the Distinguishing Ranking Mem-
ber, Senator Lugar, for allowing me to come before this committee to introduce
Clyde A. Wheeler, Jr. from Laverne, Oklahoma, who has been nominated to be a
member of the Federal Agricultural Mortgage Corporation Board of Directors.
Clyde Wheeler and his wife Barbara currently operate the Clear Creek Ranch, a
cattle and hay operation in northwestern Oklahoma, with their son, Clyde III. They
also have two daughters, Ruth and Jane, and five grandchildren.
Clyde has a long and impressive resume of public and military service and busi-
ness success. A Navy veteran of World War II, his early working years centered
around the Federal Government, where he worked for Congressman Page Belcher
(R-OK), Secretary of Agriculture Erza Tafl Benson, and President Eisenhower.
In 1961, Clyde went to work for the Sunray UX Oil Company in Tulsa, which
would eventually merge with the Sun Company in 1969. During his tenure at Sun,
Clyde served as their Washington Representative and Corporate Vice President be-
fore retiring from the company in 1984. Since that time he has continued to work
as a consultant to the Sun Company and the American Petroleum Institute.
Because of a rocky start, Mr. Chairman, Farmer Mac is only now beginning to
increase the availability of capital and create more opportunities for agricultural
and rural housing borrowers. Clyde Wheeler's public service, business, and agri-
culture background prepare him well to help Farmer Mac fulfill its promise to meet
the credit needs of rural America.
Thank you, Mr. Chairman.
STATEMENT OF SENATOR MITCH McCONNELL
Mr. Chairman, this morning we consider the nominations of Mary L. Schapiro,
to be chairman and Sheila C. Bair to be a commissioner to the Commodity Futures
Trading Commission, Marilyn F. Peters and Clyde A. Wheeler, Jr., to be members
of the Board of Directors of the Federal Agricultural Mortgage Corperation, and
Doyle L. Cook to be a member of the Board of Directors of the Farm Credit Adminis-
tration.
I congratulate each of you for being nominated to serve in such important posi-
tions.
Our world is changing constantly, and with it agriculture is becoming more and
more diversified. A renewed optimism and creativity allows agriculture to aggres-
sively face these changes. When you are confirmed to these important positions, you
too will be faced with these changes. I hope that you will use your leadership to
turn these changes into challenges and opportunities for continued growth for a
more prosperous agricultural sector.
I welcome each of you and look forward to your statements.
Thank you, Mr. Chairman.
STATEMENT OF SENATOR DAVID L. BOREN
Mr. Chairman, I am proud to present a distinguished Oklahoman to the commit-
tee for his nomination as a member of the Board of Directors of the Federal Agricul-
tural Mortgage Corporation (Farmer Mac). My good friend, Mr. Clyde A. Wheeler,
is a native Oklahoman whose grandparents homesteaded and settled near Fort Sup-
ply, Oklahoma in the early 1900's. Mr. Wheeler and his wife, Barbara, now reside
in Harper County, Oklahoma where they operate a cattle and hay ranch. They have
two daughters, Ruth and Jane, and a son Clyde A., Ill, and five grandchildren.
Clyde Wheeler began his public service career in Washington, DC. as administra-
tive assistant to Representative Page Belcher (R-OK). Three years later he became
special assistant to Secretary of Agriculture Erza Taft Benson, where he specialized
in Congressional Relations. In 1959, Mr. Wheeler was named staff assistant to
President Dwight D. Eisenhower. He is a veteran of World War II, with 3 years-
and 2-months-active service. He received an honorable discharge with the rank of
Lieutenant Junior Grade from the United States Navy.
In 1960, he was declared the victor in Oklahomas Sixth District Congressional
race, but in December of that year, a special recount was held and he was 76 votes
shy of winning the seat. He has held many positions in the Republican Party, from
campaign manager to National Committeeman of the Oklahoma Young Republican
Federation to National Vice-President of the National Young Republican Federation.
Mr. Wheeler's business career began when he joined Sunray DX Oil Company in
Tulsa in 1961. His 24 years of service with Sunray and then the Sun Company were
distinguished with experience in Public Relations, Mergers, and Government Rela-
tions. Following his retirement, Clyde acted as a consultant to Sun Company, Inc.
and the American Petroleum Institute until 1989.
Mr. Wheeler graduated from Oklahoma State University with a Bachelor's Degree
in History and Master's in Political Science. He is also a graduate of the American
Business College. He obtained a Life's Teaching Certificate in 1949 from study at
Oklahoma City University and taught school for 2 years. Oklahoma State Univer-
sity awarded him the Distinguished Alumnus Award in 1978 and named him a Fel-
low of the Academy of Arts and Sciences in 1979. On March 18, 1988, he was in-
ducted into the OSU Alumni Hall of Fame. On November 8, 1988, Sun Company,
Inc. endowed a chair in his name, the Clyde A. Wheeler, Jr. Sun Company Chair
in Hydrogeology.
He has long been active in energy, agriculture, education, political and other com-
munity activities. He has served as chairman of the Oklahoma State Regents for
Higher Education and is currently a member of the Oklahoma State University
Foundation Board of Governors.
He has served as a board member of many State and national petroleum and
business trade associations, as well as numerous church, civic and cultural groups.
He currently serves on the Executive Committee of the Oklahoma Academy for
State Goals and as a trustee of the Oklahoma Foundation for Excellence in Edu-
cation, the Oklahoma School of Science and Mathematics and the Board of the Okla-
homa Heritage Association.
Clyde has given much of his time to serving his community and making a dif-
ference. He will be a fine asset to the board of Farmer Mac. He has been my friend
and advisor for many years. I have great admiration for him and absolute con-
fidence in his integrity. While he has been an active member of his own political
party, Clyde Wheeler has, above all, been a good American and the kind of citizen
who puts the well-being of his country and his community ahead of all other per-
sonal interests. I endorse his nomination wholeheartedly and urge the committee to
act favorably in confirming him for appointment to this important position.
The Chairman. I would ask Ms. Schapiro and Ms. Bair if you
would stand and raise your right hands. Do you solemnly swear
that the testimony you will give in this matter will be the truth,
the whole truth, and nothing but the truth, so help you God?
Ms. ScHAPmo. I do.
Ms. Bair. I do.
The Chairman. Ms. Schapiro, if you are confirmed by the Senate,
will you faithfully execute the laws passed by Congress regardless
of any prior statements you have made or biases you may have
held?
Ms. Schapiro. Yes, I will, Mr. Chairman.
The Chairman. And if your nomination is approved by the com-
mittee and the Senate, do you promise to respond to requests to ap-
pear and testify before this committee or any other duly-constituted
committee of the Senate?
Ms. Schapiro. Yes.
The Chairman. Ms. Bair, would your answers be the same?
Ms. Bair. Yes, Mr. Chairman.
The Chairman. Thank you.
Ms. Schapiro, do you have any friends, colleagues, or family here
that you would like to introduce?
Ms. Schapiro. I do. Senator Leahy.
My parents, Robert and Sue Schapiro, are here from New York;
my husband, Charles Caldwell, is here; I have lots of friends in the
audience, I hope, including colleagues from the SEC and the CFTC.
And for the sake of the decorum of the committee, I left 5-month-
old Molly at home.
The Chairman. Thank you.
The Chairman. And Ms. Bair, do you have family or friends
here?
Ms. Bair. Yes, Mr. Chairman. My husband, Scott Cooper, is here
with me today; and also, three of my staff members — Susan Milli-
gan, Kristyn Burnett, and Linda Mauldin— are here with me today.
Also, in the interest of decorum, I left my 13-month-old son at
home.
The Chairman. Ms. Schapiro, go ahead with your opening state-
ment.
TESTIMONY OF MARY L. SCHAPIRO, OF THE DISTRICT OF
COLUMBIA, NOMINATED TO BE CHAIRMAN OF THE COM-
MODITY FUTURES TRADING COMMISSION
Ms. Schapiro. Thank you very much, Mr. Chairman, Senator
Lugar, and Members of the committee.
It is an honor for me to come before you today as the nominee
to serve as the chairman of the Commodity Futures Trading Com-
mission. I am grateful to the President for making me his choice
for such an important post, at such a crucial time for the Nation's
and the world's derivative markets.
Throughout my career, I have been involved to varying degrees
with the CFTC, and for me, this is a very exciting opportunity to
return to an agency where I began my professional career as a trial
attorney, right out of law school.
Later, at the Futures Industry Association and throughout my
tenure as a commissioner on the Securities and Exchange Commis-
sion, I have tried to stay actively involved in the myriad and com-
plex issues that surround the derivatives market.
My vision for the Agency is shaped by these past experiences. My
emphasis will be squarely on the protection of the integrity of the
marketplace and on the creation of an environment that encour-
ages, in equal parts, innovation and integrity.
I can commit to you now that my tenure at the CFTC will also
be marked by a strong enforcement presence, where rules designed
to ensure fair and honest markets will be strictly enforced and vio-
lators punished.
Whether we are talking about agricultural or financial futures,
our overriding commitment will be to market integrity. We will
work to achieve balance in our oversight and regulatory program,
understanding that our actions directly impact the ability of the
U.S. financial services industry to remain globally competitive and
to contribute to economic growth here at home.
I believe that a sound regulatory system is a market strength
which gives users the confidence to commit capital to the market-
place. And we will work in coordination and cooperation with the
bank and securities regulators, as well as with our foreign counter-
parts, in this increasingly interconnected and international market-
place.
During my 5-plus years at the SEC, that Commission and indus-
try confronted dramatic challenges that were posed by rapidly
changing technology, increasing global competition through the
internationalization of the markets, and tremendous growth in new
products and trading strategies. The number and diversity of is-
sues facing the SEC during the past 5 years have been truly re-
markable.
I believe that the same may be said of the CFTC, as we try to
envision what challenges the next 5 years may hold. It is my intent
8
for the CFTC to play a prominent role in shaping the evolution of
the markets and the fmancial services industry.
The CFTC is fortunate to have a core of talented, dedicated, and
knowledgeable people. Just since the 1992 Reauthorization, the
CFTC and its staff can point to a long list of accomplishments, pro-
ducing a number of very significant studies, reports, and regula-
tions in a timely and professional manner.
But, if the CFTC is to be a strong, independent voice in the
arena of fmancial regulation — and I intend on settling for nothing
less — the support of this committee will be critical. I hope that we
will forge a relationship of trust and confidence that will permit us
to address in partnership the difficult issues that face our markets.
The CFTC is 20 years old this year, and as it enters its third and
perhaps most important decade, I commit to you that I will devote
myself fully to enhancing the reputation of the Agency as a strong,
fair, flexible, and independent regulator. I look forward to working
with each of you and the members and staff of the Commission
during the coming years.
I am, of course, happy to answer any of your questions.
Thank you.
The Chairman. Thank you, Ms. Schapiro.
When we did the reauthorization of the CFTC, we asked the
GAO to do a study on derivatives — this was back in 1992. They re-
cently released that report, and there has been a great deal of in-
terest in the press, especially the financial press, about derivatives.
I expressed some concern myself. Some suggest they pose a threat
to financial markets.
Do you have concerns about derivatives and do you feel there is
any need to push forward with new legislation?
Ms. ScHAPmo. Senator, I do have some concerns. I think all reg-
ulators who are taking their jobs seriously have some concerns
about the potential for systemic risk that this $12 trillion market
presents for us.
I think the GAO did a very good job in detailing for us exactly
what those risks are. Credit risk; impacts on primary markets, on
cash markets, and on futures markets; issues about disclosure and
whether accounting principles have kept pace; concerns about
whether there are sufficient internal management and risk con-
trols, are all extremely important risks for us to be focused on.
I believe at this point, particularly for the CFTC, there is not a
particular need for new legislation. I would agree with a number
of the GAO recommendations. For example, the benefit of a com-
mon repository for information to be shared by all regulators; the
need for the FASB to improve accounting standards; the need for
better end user disclosure.
The big issue, obviously, is whether or not the unregulated deal-
ers need to be brought under regulation and whether or not legisla-
tion is necessary for that. I think the CFTC has the maximum
amount of flexibility in this regard because, these firms operate
largely by virtue of the CFTC swaps exemption, and it would be
possible to condition that exemption on some regulatory require-
ments if that were determined to be necessary.
Finally, I would say that, as you know, the President's Working
Group on Financial Markets is very closely and carefully address-
ing these issues, and I think that the benefit of a multitude of
agencies involved in that deliberation will be that we can develop
alogical, interagency approach.
The Chairman. Well, do not be surprised if I contact you directly
about this in the coming months because I have some concerns
about the potential for real problems in the derivative markets. I
would like if possible to allow markets to experiment and learn
where they might go, but I have a very queasy feehng involving de-
rivatives, and we may be discussing this more as we go along.
In another area, after the stock market drops in October 1987 to
1989, the interagency working group pressed the stock and com-
modity exchanges to institute circuit-breakers. I wonder how effec-
tive they have been. You have had experience in the SEC. What
role do you see yourself playing now, wearing a different hat, in the
interagency coordination as CFTC chairman?
Ms. ScHAPmo. With respect to the circuit-breakers, the speed
bumps and other mechanisms that were instituted after the 1987
break, the perspective of both agencies is that they have worked
extremely well; they have played an important role in mitigating
the volatility and the speed of market declines, in particular.
My view I cannot believe would change very much from the SEC
when I get to the CFTC, assuming confirmation. I would continue
to encourage the exchanges to keep the circuit-breakers in place
and take regulatory action necessary to ensure that. I would con-
tinue to build on the relationship between the SEC and the CFTC
that has improved very much in the past couple of years, particu-
larly since the 1992 Reauthorization.
The Chairman. Does the interagency coordination work?
Ms. ScHAPERO. I believe it is working very well right now, and
I do not see any reason for that to change.
The Chairman. When the CFTC was created 19 years ago, there
were fairly bright lines between futures contracts under the
CFTC's jurisdiction and securities under the SEC. With the advent
of over-the-counter derivatives that may resemble futures, securi-
ties and banking instruments, do there need to be changes in the
regulatory structure for Federal oversight of financial services mar-
kets? In particular, would merging the SEC and the CFTC make
sense?
Ms. Schapiro. And a question to which I have given a tremen-
dous amount of thought, as you can imagine. I do not think it is
necessary. I think that the two agencies do have unique expertise.
There are products and trading strategies that cross the lines of ju-
risdiction of the SEC and the CFTC. The agencies can work to-
gether on those particular products and the issues that they raise,
and I believe we can do so quite successfully.
There are still large areas where the SEC and the CFTC have
unique expertise, where there would be no efficiencies or economies
achieved by a merger of the agencies.
The Chairman. Thank you.
Senator Lugar.
Senator Lugar. Mr. Chairman, I would like to pose a philosophi-
cal question. My own contention and yours, hearing your testimony
today, Ms. Schapiro, has been that well-regulated markets are at-
tractive markets, that investors will seek a situation in which they
10
are certain of the rules of the game, and that is one of the
strengths of our markets, that the CFTC obviously plays a crucial
role in insuring integrity and confidence.
Now, the counter-position that is posed from time to time is one
that you also alluded to, and that is that those who are partici-
pants in those markets, who are seeking larger volume, who are
seeking really that volume for United States' markets as opposed
to markets around the world, say that regulations become burden-
some and costly, that the expense of dealing in our markets makes
them an uncompetitive proposition as opposed to European or
Asian alternatives, which some would claim have certain strong
ethical standards likewise, as well as sophistication.
What is the balance? As you have looked at this during your pro-
fessional life, how do you meet the objections that we are over-
regulating to the point that we are losing business for our country,
as well as for those participants in the markets? And to what ex-
tent is there the other charge, which you clearly have heard from
the press and from others who are critics, who believe the CFTC
has been unduly lenient and that in essence, on occasion, this com-
mittee has been unduly lenient. We are all sort of sharing the
thought that there are persons out there, operating without proper
scrutiny.
Can you give a broader, philosophical overview of how you come
down and what kind of leadership you will bring to CFTC that will
try to satisfy each of these contending parties?
Ms. ScHAPmo. I will be happy to try to do that. I think that you
have very accurately described the dilemma that faces regulators
on a day-to-day basis, and that is, how do we balance the competi-
tive needs of our industry with the importance of having a soundly-
regulated marketplace.
I think enforcement is key to that, and my view would be that
rules and regulations ought to be clear and concise, and well-
tailored to fit a particular situation or a particular problem in the
marketplace, and then aggressively enforced, rather than layering
on more and more regulation.
I think that we can also do more for our competitive posture in
approving new products and rule proposals more quickly. We can
provide efficiency in the regulatory process itself, and in doing that,
also continuously revisit the rules and regulations that are on the
books, to make sure that they continue to serve a purpose and are
well-tailored to the particular situation they seek to address.
It is a balancing. It is something that we have to go through all
the time. I guess I come back to the belief, as I said in my state-
ment and as you reiterated, that well-regulated markets are a
strength, that business will come to a market that is perceived to
have integrity.
With respect to the Asian and Latin American and other mar-
kets, I think that we will find — and certainly, I have spent a good
bit of time working in those regions on the securities side — that the
model for regulation throughout the world for financial markets is
the U.S. model, and to the extent there are lesser regulatory sys-
tems in those jurisdictions, that is changing rather dramatically,
and we are really seeing a convergence of regulatory systems so
11
that they look veiy much more hke the United States than they
used to.
The growth of these markets I think is largely due to the fact
that they serve very unique local risk management needs that per-
haps our markets cannot always serve. We have seen the develop-
ment of over 40 new futures markets in 20 countries in the last few
years; they tend to offer local government debt contracts, local
stock index contracts, and they trade in a time zone that makes
sense for the users of those particular products.
So a good bit of the competition results from the fact that our
markets are mature, and the rest of the world has discovered that
futures markets and options markets provide very important risk
management tools.
Senator Lugar. You have touched upon two issues that, in reau-
thorization, have brought a crisis of sorts. On one occasion, I be-
lieve two reauthorizations ago, the industry felt that there was ex-
cessive time required for the scrutiny of new contracts, and this
was a cause celebre of sorts during that time. Apparently, the Com-
mission has reduced the timeframe very substantially, as it pledged
to do and as the legislation sought to do, but that is always impor-
tant, obviously, for traders and for the innovation that is part of
our system.
The other issue that brought at least a crisis of sorts was the
audit trail. And of course, during the aftermath of the crash of
1987, the success of CFTC and the Chicago markets, as a matter
of fact, in providing an audit trail was extremely important in both
the criticism that went back and forth between the New York mar-
kets and the Chicago markets, and SEC and CFTC and others,
that has been a source of conversation between the committee and
obviously the CFTC and the markets currently is, as an aftermath
of the last three authorizations, but extremely important in terms,
not only of integrity for the public, but probably in terms of data
that the markets are now able to collect, and innovations and
breakthroughs in terms of their own operations.
So I appreciate your highlighting that. Obviously, you are a very
sophisticated observer of the situation, and I appreciate your re-
sponse.
Ms. ScHAPmo. Thank you.
Senator Lugar. Thank you, Mr. Chairman.
The Chairman. Thank you very much.
Senator Baucus.
Senator Baucus. Thank you, Mr. Chairman.
Ms. Schapiro, I am just curious as to what you think the rela-
tionship of the CFTC and the SEC should be with FASB.
Ms. Schapiro. Well, I have a very strong view about the SEC re-
lationship with FASB. FASB is important as an independent stand-
ard-setting body for the accounting and auditing profession, and
the SEC's role there is to provide oversight of the FASB rule-
setting process and
Senator Baucus. I guess my question is just how independent do
you think FASB should be.
Ms. Schapiro. Well, I think it should be independent— this will
probably get me in terrible trouble, but I am obviously on record
12
saying this — I think it needs to be independent of the legislative
process in particular.
Senator Baucus. What about the degree to which independent of
the Commission?
Ms. SCHAPIRO. Well, so far as I know, the CFTC has very little
overlap with the FASB, although I think that there is a role for the
CFTC to play in providing advice and guidance to FASB on impor-
tant accounting issues that FASB's Emerging Issues Task Force
ought to be addressing.
With respect to the SEC, I believe that FASB is in the best posi-
tion in the first instance to promulgate accounting standards, and
the SEC needs to review those, and if it deems it appropriate, to
overrule the FASB.
Senator Baucus. In your experience at SEC, did the Commission
ever overrule
Ms. ScHAPmo. No.
Senator Baucus [continuing]. Or in any way take a position that
was contrary to an earlier FASB position, with the result that
FASB changed its mind in accordance with the Commission's wish-
es?
Ms. SCHAPIRO. Not in the formal context of Commission action,
although SEC staff works with FASB on a very close basis, and so
has tremendous input into the FASB processes. But in my experi-
ence, the Commission has never voted to overrule.
Senator Baucus. Do you think the Commission should have that
authority in any way, because FASB decisions have an enormous
effect on the financial statements of companies, and therefore in
the markets.
Ms. ScHAPmo. Oh, absolutely, they do. I guess I think that there
is that safety valve there, and that the SEC has the ultimate say
about accounting standards.
Senator Baucus. What do you think the biggest problem of de-
rivatives is or might be? What should we be worried about?
Ms. ScHAPmo. There are a number of things. I think we need to
be worried about users who do not understand the potential impli-
cations of the transactions that they are engaged in. We have seen
Procter and Gamble and Dell; we have seen money market and
mutual funds using instruments when perhaps they did not under-
stand the volatility or the riskiness and have had some significant
losses passed on, particularly in the corporate context, to share-
holders. I think we have to be very worried about that.
Senator Baucus. How does that differ from an individual inves-
tor who, after reading a prospectus, decides to take the risk-— or,
they probably did not even look at the prospectus, and still decides
to take the risk?
Ms. SCHAPIRO. Well, that is a concern always, but there is no
prospectus when these instruments are being sold.
Senator Baucus. Should there be?
Ms. ScHAPiRO. Well, there certainly should be some disclosure
standards.
Senator Baucus. More than currently?
Ms. ScHAPmo. I think it is hard for us to say what the current
level of disclosure is, since it is largely unregulated.
Senator Baucus. Well, if we do not know what it is, how
13
Ms. ScHAPmo. What we do know is that end users are from time
to time saying they did not understand, and the evidence is largely
anecdotal at this point. But perhaps there should be some disclo-
sure standards.
Senator Baucus. I frankly have some concern along these lines,
and I would just urge you at first to err a little bit on the side of
a little more regulation disclosure, and then you might have to
back off a little bit. But I think things are getting a little out of
hand here, and it is important for you to take a good, long, hard
look at it.
Thank you.
Ms. ScHAPmo. Thank you. Senator.
The Chairman. Senator Craig.
Senator Craig. I have no questions, Mr. Chairman.
The Chairman. Thank you.
Let me ask Ms. Bair, going back to the issue of derivatives, many
of the over-the-counter derivatives are really equivalent to com-
modity futures and options, at least economically equivalent to
them. What role do you think the CFTC should play in oversight,
supervision, or regulation of over-the-counter derivatives. Is new
legislation necessary?
TESTIMONY OF SHEILA C. BAIR, OF TEXAS, NOMINATED TO BE
A COMMISSIONER OF THE COMMODITY FUTURES TRADING
COMMISSION
Ms. Bair. I think I would echo what Mary said on that score,
that it has been fairly consistent among the financial regulatory
community that it would be premature, I think, at this point to try
to formulate legislative responses to the issues that have been
raised with regard to OTC derivative products.
I think the CFTC has already taken a leadership role. We are
the premier derivatives regulatory. We are the only agency whose
sole mission is the regulation of derivatives, and we have a lot to
bring to the table in terms of the appropriate policy responses to
these important markets.
The CFTC's report, which Senator Lugar and Senator Dole were
kind enough to refer to in their statements, that we did last Octo-
ber had, in fact, recommended that greater interagency coordina-
tion was needed with regard to OTC derivatives. Consistent with
our recommendation. Secretary Bentsen subsequently wrote the
members of the Working Group and asked them to take up this
issue, which they have been doing, and we continue to participate
in that and be influential in that.
I think one of the more important projects that the Working
Group has taken upon itself is information access, information
sharing. I have a particular concern with regard to these markets
that if there should be a "problem" with regard to a major market
participant, that the systems are in place, that information can be
obtained and shared quickly among all the various affected regu-
latory agencies. This is not just a CFTC problem or an SEC prob-
lem. It is also a bank regulatory problem, given the fact that most
of the major dealers in these markets are at banks.
So I think that would be a high priority. On an individual basis,
the CFTC has already proceeded with risk assessment rules which
14
this committee, in our authorizing statement which was enacted in
1992, gave us, which will enable us to extend greater financial
oversight to many of the participants in OTC derivatives that are
affiliated over regulated firms that really have no current informa-
tion reporting responsibilities to us.
Also, one of my pet interests and something that I have tried to
provide a forum for and do some jawboning on is the development
of a clearing system for at least what they call the "plain vanilla"
segment of the OTC derivatives markets. I think to the extent we
can try to formulate an appropriate regulatory structure for an
OTC derivative clearing facility, you can take a lot of the credit
risk out of the market, or virtually eliminate it for a major segment
of the market, assuming we can get something that will work as
well in the OTC derivatives context that we have in the regulated
futures context.
The Chairman. You will not be surprised if I come back to this
subject a little bit during the year, because it is one, as I men-
tioned, that concerns me.
Ms. Bair. Absolutely.
The Chairman. If you or any of the other commissioners have
suggestions, or if you change your view as you go along, please do
not hesitate to let me know.
Speculative position limits were recently increased for several ag-
ricultural commodities by the CFTC. Are you concerned that these
higher limits increase the potential for manipulation of these mar-
kets? Is there any evidence that these limits have increased vola-
tility in the markets?
Ms. Bair. Well, I think it is a legitimate issue for us to always
take very seriously and keep a constant watch to make sure that
the increased limits do not have that kind of an impact. I had
worked with the staff and Commissioner Dial, the chairman of our
Agriculture Advisory Committee, to develop a phased-in system for
the increased spec limits in recognition of the fact that there were
concerns out there, particularly in the producer community, that
increased spec limits could lend themselves to potential abuse by
some. So we opted for a phased-in approach by which we would
study at each phase what the impact was.
We have just completed phase one. The staff filed their first re-
port. They have not been able to determine that there have been
any issues from a market surveillance standpoint that have been
raised by the increased limits. We are into phase two now. The
staff is also very carefully scrutinizing that.
I would note as a matter of interest, one thing we have found is
that the new spec limits are not being used very much. There are
only one or two traders in each of the grain markets that are af-
fected that are even using them.
The Chairman. But this is something you are watching.
Ms. Bair. Absolutely.
The Chairman. Fine. Again, this is another issue we may be
coming back to. It is something we had better keep an eye on.
Ms. Bair. Yes, absolutely.
The Chairman. Thank you.
Senator Lugar.
15
Senator Lugar. May I just followup? You mentioned the clearing
facility for OTC derivatives. What would that mean for laypeople
like ourselves — what is a clearing facility or a clearinghouse for
those sorts of instruments? And how is that perceived? Discussion,
I know, has been under way, but it is unclear to me how much
progress has been made.
Ms. Bair. Well, a futures stock clearing facility basically means
an entity where a number of market participants come together,
capitalize the entity. It is subject to regulatory standards and su-
pervision, and for members wno come to a clearinghouse for their
trades to be cleared, the clearinghouse becomes a universal
counter-party to all the transactions. In other words, the clearing-
house guarantees each trade.
Right now, you have a situation where each transaction is ex-
posed to credit risk by defaults of either counter-party, because
these transactions are individually and privately negotiated. With
a well-capitalized, well-supervised clearinghouse, you can virtually
eliminate credit risk from the system, which have been the cases
with the regulated futures markets.
Senator Lugar. And obviously, that would seem to be highly de-
sirable, given even the semi-anxiety of the panel today, because es-
sentially, one of the great fears is that if there is a credit risk out
there, if someone does not get paid, then an unraveling begins to
occur in other markets, and the repercussions of that ricochet, par-
ticularly if the sums are very, very large, as they are in many of
these transactions. But to the extent you have an enclosed entity,
the damage may occur to the persons who invest wrong, but not
to the whole system, so it is essentially compartmentalized.
Ms. Bair. Right, exactly.
Senator Lugar. That is why I was pleased that you mentioned
that in your testimony to begin with, and likewise in your answer
to Senator Leahy, because it seems to me as we look constructively
at this, as opposed to just looking at the total thing in an a priori
way, that we can try to look at a constructive way to enclose the
damage if there is to be damage.
I just want to inquire — recent press accounts have suggested the
Chicago future exchanges do not believe they can meet the 1995
deadline for introducing the hand-held, automated audit trail sys-
tem. I am sure they have visited with you on that subject. What
are your views as to whether delay might be justified, or can you
give us any guidance as to the CFTC position on the Chicago peo-
ple's plight?
Ms. Baer. Well, I guess I would feel compelled to say at the out-
set that, no, this is not something that the exchanges have dis-
cussed with me personally. I understand that there have been some
staff discussions, but to my knowledge, there has been no formal
application or petition made to the Commission at this point for an
extension of the time by which it was expected that they would
have electronic audit trail systems in place.
So it is somewhat hypothetical to even discuss, because there is
no pending petition. If one were to be filed, I assume it would be
accompanied by the appropriate underlying documentation. The
statutory standard which we must be guided by — what is the law —
which is the Futures Trading Practices Act of 1992, states that we
16
can grant an extension if we determine that notwithstanding the
good faith efforts of the exchanges, due to circumstances beyond
their control, it simply is not practicable for them to meet the
guideline.
So that is the statutory standard that I would apply, and I am
afraid I cannot say more than that because a request simply has
not been made yet.
Senator LUGAR. I think that is important testimony, at least for
the record, that the legislation of 1992, as you recall it and as I
recall it, offers an opportunity for evidence to come forward as to
why this is not feasible or practical, and that the Commission then,
on the basis of that formal testimony, can consider that.
Ms. Bair. Exactly.
Senator Lugar. And at least the committee or the Congress was
farsighted enough to understand that these are extremely technical
and very innovative devices, and it was not the purpose of the leg-
islation to be disruptive, but it was to try to get an audit trail that
was even more certain to bring satisfaction for all parties — that
was very clear — and perhaps to the exchanges themselves.
In any event, I appreciate the response.
Thank you, Mr. Chairman.
The Chairman. Thank you very much.
Senator Baucus.
Senator Baucus. No questions, thank you.
The Chairman. Senator Craig.
Senator Craig. No statement.
The Chairman. And you had an opening statement, Ms. Bair. I
apologize.
Ms. Bair. Yes; I can just put it in the record.
The Chairman. Feel free to give it, summarize it, put it in the
record — whatever you like. And I apologize.
Ms. Bair. I can submit it for the record. I have already covered
a lot of it already.
The Chairman. OK Thank you very much, and I thank you both
for being here and for your cooperation with the staff in coming be-
fore us. I suspect this will probably not be one of the more difficult
matters the committee will face this week, and Senator Lugar and
I will get together and try to find a time when the full committee
can come together on this matter.
Thank you very, very much.
Ms. SCHAPIRO. Thank you.
Ms. Bair. Thank you.
The Chairman. Mr. Cook, we are delighted to have you here
today. Would you stand and raise your right hand? Do you sol-
emnly swear that the testimony you will give in this matter will
be the truth, the whole truth, and nothing but the truth, so help
you Grod?
Mr. Cook. I do.
The Chairman. Mr. Cook, we are delighted to have you here, and
I would note for the record a very strong and positive letter from
the Speaker of the House, Thomas Foley, in your behalf, saying —
he even added a handwritten note on the bottom — how strongly he
supports you, and that will be made part of the record.
17
Senator Leahy. I should ask you first, do you have any members
of your family, or friends, or anybody else here with you today?
Mr. Cook. Yes, I do, Mr. Chairman. I have my wife, Peggy, and
my brother-in-law and sister-in-law, Philip and Frances Christie. I
would like to note that Philip is a retiree from the USDA. I also
have a nephew, Steve Elfers.
The Chairman. I would like to yield first to Senator Baucus, who
I know has some words in your behalf We take a lot of our leader-
ship on this matter of your nomination, knowing how hotly con-
tested it is, Mr. Cook, from Senator Baucus, so I will yield to him.
STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR
FROM MONTANA
Senator Baucus. With that, Mr. Chairman, I will gladly proceed.
Mr. Chairman, I would like to thank you for scheduling this
hearing, and I would also like to note at the outset how wonder-
fully auspicious this hearing is and the precedent that Mr. Cook is
setting. I think this is a record event. This nomination was an-
nounced just last week, and now, here, today, we are holding this
hearing.
The Chairman. I must say. Senator Baucus, that a good part of
that is because of the fact that you have also pushed that we have
this hearing right away, too. So I give you a lot of compliments on
that.
Senator Baucus. Thank you, Mr. Chairman.
Mr. Chairman, I am very honored to present Mr. Doyle Cook, the
nominee to the board of the Farm Credit Administration. In Mr.
Cook we have — and I think the letter from the Speaker indicates
it — an excellent candidate. I am proud to say that this is a can-
didacy that I have been supporting since the beginning of this year.
Doyle Cook comes to us with 23 years of experience in agricul-
tural lending and a lifetime involvement in the industry of agri-
culture.
He entered this world in Star City, AR. I believe that, Mr. Chair-
man, is a good place to enter this world.
The Chairman. Where is it?
Senator Baucus. It is in Arkansas; that is all that counts.
The Chairman. I have heard more names of more small towns
in Arkansas in the last couple of years than I ever thought I would
in my life.
Senator Baucus. However, let me assure you that since his work
revitalizing the Farm Credit Bank in Spokane, I would like to
claim him as an honorary Montanan, and I will have a few more
words about that in a minute.
Doyle studied vocational agriculture in high school, and his lead-
ership was recognized at an early age, when the Arkansas FFA
named him the star farmer of Arkansas. From there, he has never
looked back.
Mr. Cook studied at Arkansas A&M for a couple of years and
then earned a bachelor of science and agricultural economics and
a master of science in agricultural business from the University of
Arkansas.
Along the way, he wed Peggy Rackley, and I am pleased that she
is here today. And I must say I am pleased that they have been
18
married a good length of time, even after a career which has wit-
nessed over 15 moves. They have two sons, and todaj' Doyle and
Peggy are joined by Mr. Cook's relatives, Philip and Frances
Christie, and Doyle also has a nephew here, Steve Elfers. And I
might mention that Mr. Christie is retired from the USDA.
Doyle's career began with Ralston Purina, where he eventually
rose to the position of controller. But it was in January 1975 that
Doyle started the career track which led him to this room today.
It was then that Doyle became a regional vice president with the
Federal Intermediate Credit Bank in St. Louis. He followed with
similar positions in Louisville and in Texas.
In 1986, he became the president and chief executive officer of
Farm Credit Services of Mid-America in Louisville. In that posi-
tion, he really excelled. While improving the credit quality of that
institution from 50 percent to 85 percent in just 3 years, he also
supervised the merger of 30 production credit associations and 53
Federal land bank associations into one entity. It was a rousing
success, converting a 1985 loss of $75 million into a 1989 profit of
$52 milHon.
In 1989, he took over another bank in trouble and turned it
around. In fact, in 1989, the Farm Credit Bank of Spokane was de-
clared on its death bed. At the time, the chairman of Spokane's
Whitworth College Department of Economics and a member of the
Spokane Farm Credit Association's Board of Directors, Jay Ken-
dall, described it as the "laughingstock of the system." Doyle wast-
ed no time laughing.
Instead, he rolled up his sleeves and went to work. He accepted
the goal of reviving the bank.
He selected a management team which turned the bank around.
In a tenure of 5 years, he turned a deficit position into a surplus
of twice the minimum required by law. He turned a negative vol-
ume of 6 percent into an annual growth of 5 percent. And he ob-
tained $88 million in Federal financing to stabilize the operation.
I think it is essential to recognize that this spring, 4 years later,
that Federal obligation was retired largely due to his efforts — 10
years early.
As many of you may know, the Farm Credit Bank of Spokane
merged with the Bank of Omaha this past April 1st to become the
Ag-America Farm Credit Bank. Doyle stepped down from his CEO
position to help create a leaner, stronger bank. Even though this
left Doyle without a job, he knew it was best for the bank and,
more importantly, best for the customers.
I know that his efforts have helped restore the faith of Montana
farmers and ranchers in this critical financial institution.
When Mike Espy became Secretary of USDA, Mr. Chairman, he
described a new, farmer -friendly USDA. I believe that in Doyle
Cook, we go one step further. We have a man who, indeed, proved
to be farmer -friendly; he also will be taxpayer-friendly. I cannot
think of a better combination for this position.
I am pleased to be able to introduce him, and I strongly rec-
ommend Doyle Cook as the next member of the board of the Farm
Credit Administration and look forward to casting my vote in his
favor.
Thank you.
19
The Chairman. Thank you very much.
Senator Craig. Mr. Chairman.
The Chairman. Yes, Senator Craig.
Senator Craig. I spoke of Doyle in my opening comments. Let me
only say that I certainly agree with the comments of Senator
Baucus. Doyle Cook came to Spokane and made tough decisions
and turned that bank around. Of course, any time any of us make
tough decisions, there are some who like them and some who do
not; and there are a few in my State who are disgruntled by that,
but you cannot in any way mistake the record of success and the
stability of that bank, and of course, the merger that Senator
Baucus just spoke to. I think that Doyle Cook is certainly qualified
to serve in the capacity that this President is asking him to serve.
For all of us, he will do an excellent job.
I do apologize. I am going to have to leave for an appointment
in my office, but I want to say that I, too, will join with Senator
Baucus in supporting this nomination.
The Chairman. Well, I thank both of you for being here. I know
you both have numerous other things on your schedules this morn-
ing, and I appreciate you taking the time.
I also think, Senator Baucus, that is as strong a recommendation
as I have heard of a nominee before this committee in a long, long
time.
Senator Baucus. It is well-deserved, Mr. Chairman.
The Chairman. Well, I know you do not pass out those kinds of
recommendations easily, and I appreciate that.
Senator Craig, I was going to say on some of the tough decisions
that you referenced that Mr. Cook had to make, that working in
the Farm Credit System, where the problems have occurred have
been sometimes when people have not made the tough decisions.
Senator Craig. That is exactly right.
The Chairman. I, too, do not have many problems with that,
I would note in going over your background, Mr. Cook, that you
have a number of past associations within this business, and you
have filled out all the appropriate forms and listed them rather ex-
haustively. Have you set up in your own mind, or with your staff
or whatever, a system of recusal when issues involving some of
your past associations come up, and can you tell us what you plan
to do?
TESTIMONY OF DOYLE COOK, OF WASHINGTON, NOMINATED
TO BE A MEMBER OF THE FARM CREDIT ADMINISTRATION
BOARD, FARM CREDIT ADMINISTRATION
Mr. Cook. I have worked extensively with ethics officials on the
recusal issue. I was a member of the Farmer Mac Board of Direc-
tors and also just completed service as president and CEO of the
Farm Credit Bank of Spokane. I have agreed to recuse myself from
any action pertaining to the Farm Credit Bank of Spokane for 1
year. I will also recuse myself from participating in any matter in
which Farmer Mac is involved for 1 year. We have taken the
recusals one step further to say that if tnere are any actions relat-
ing to Farm Credit System institutions in which I participated that
come before the regulator, I would recuse myself from those actions
as well.
20
The Chairman. Have you set up kind of a system so that you can
check and monitor — I do not want you coming to work every day
and having to spend the first 5 hours figuring out what things you
do not get involved in, because there is going to be more than
enough to get involved in — but are you pretty sure that you have
got kind of a warning signal that will go up on issues on a regular
basis, something that you can go back and look at and monitor and
say, yes, I did what I was supposed to do?
Mr. Cook. I believe so, Mr. Chairman. In fact, if you will notice
in the disclosure forms I submitted to the committee, I have re-
ported that the Farm Credit System has planned a retirement
party in my honor in conjunction with the President's Planning
Committee. I have since felt it best to cancel my attendance be-
cause of time constraints and the conflict of interest with the use
of System expenditures for my benefit. So, I am confident that my
early warning system is beginning to work.
The Chairman. I was going to bring that matter up, had you not.
Thank you.
The FCA has gone from kind of a day-to-day overseer to an arm's
length regulator. That has worked well in some places and has not
worked well in others, as you know very well. What is the proper
role — I mean, your estimation of the FCA — in this day-to-day oper-
ation? How do you do this arm's length, but at the same time not
lose sight of what you are supposed to be doing?
Mr. Cook. To me, the main objective of the FCA is to see that
the System is run in a safe and sound manner, which, of course,
involves marketing, credit, and finance. I think that, as a regu-
lator, it is also the role of the FCA to ensure that the System
serves eligible farmers and ranchers as it was designed to do.
The Chairman. Please understand, I come from a State that is
predominantly rural; I live in a town and have a small tree farm
in a town that probably, in land area, is the size of the District of
Columbia and has about 1,200 people — for the last 100 years, there
have been around 800 people, and suddenly in the last decade, we
have expanded to 1,200, so I guess we are experiencing the prob-
lems of urban growth. One of the things I get concerned about is
the need to build businesses in rural areas. You have all kinds of
needs in rural areas, but do not always think of small business
start-up and expansion, with the water and sewer construction,
and repair of the infrastructure as of them. We also have a lot of
lower-income communities in rural America, and we also have a lot
of minority-based communities, if not in my State, certainly in the
South and Southwest and other areas.
Is there a role for the Farm Credit System, with expanded lend-
ing authority, looking at some of these problems not only of rural
America, but of minority and poverty-driven rural America?
Mr. Cook. There is quite an effort being put forth by the System
to do just that. I have some feelings in this area, but as I move
from the System to the Farm Credit Administration, I do not feel
that it is my responsibility to try to get those authorities expanded.
I believe it would be our role at the Farm Credit Administration
to see that safety and soundness remain the priority if expansion
comes.
21
While I feel strongly that there are some needs that could be met
by the System, I would work diligently as the regulator to see that
the System expands lending in a safe and sound manner.
The Chairman. What about in partnership with private banks?
Mr. Cook. Any way to do it on a safe and sound basis would be
fine with me.
The Chairman. Do you think the System and the private banks
are working enough together now, or should that partnership be
expanded?
Mr. Cook. Personally, I would like very much to see a greater
partnership.
The Chairman. To see what — to see it expanded?
Mr. Cook. To see more cooperation. Not everyone in the Farm
Credit System shares that view, but that is mine. I would like to
see us work together any way we can to promote safety and sound-
ness and assist rural America.
The Chairman. If they could work together more than they are
now, doesn't that give you a greater reach into rural areas?
Mr. Cook. Yes. Improved participation would be excellent.
The Chairman. And I should ask you the usual questions: If you
are confirmed by the Senate, will you faithfully execute the laws
passed by Congress regardless of any prior statements you have
made or biases you may have had?
Mr. Cook. Yes, I will.
The Chairman. And if your nomination is approved by the com-
mittee and the Senate, do you promise to respond to requests to ap-
pear and testify before this committee or other duly constituted
committees of the Senate?
Mr. Cook. Yes, I will.
The Chairman. Thank you.
Senator Lugar.
Senator Lugar. Thank you, Mr. Chairman.
Mr. Cook, I think you made the distinction, correctly, between
your role as a management person in the banking system and as
a regulator. As you look at the role of regulator, are there aspects
of the Farm Credit System that give you some pause as you take
a look at them? We have been through rocky times, and you have
been a leader in trying to work with the committee and the
Congress in getting us through that situation. And obviously,
things are so much improved that there is almost a euphoria over
the situation. But are there any aspects of operations that have
drawn your attention and are bobbing up and may require at least
some concern on your part as a regulator?
Mr. Cook. I am not sure there is anything of major significance
that I see now. However, I have served the last 3 years as the
chairman of the Contractual Inter-Bank Performance Agreement
(CIPA), and also as chairman of the Market Access Committee. As
chairman of these committees, I have worked very hard to see that
the System is self-policing and self-monitoring. We have tried to
detect our own problems and not wait until the regulator tells us
what our problems are.
I have worked very hard at that, and I think the System has
made a lot of progress. I believe those two agreements will help the
22
System a great deal. But I have spent all of my career working
with System safety and soundness.
Also, as chairman of the Credit and Operations Committee, I
looked at ways to try to improve the System.
Senator Lugar. Senator Leahy mentioned things the System
might become involved in in working with people in rural commu-
nities and those who are poor. Various components of the System
have been fairly aggressive in making suggestions as to new loans
that Farm Credit ought to have an opportunity to get into. In that
respect, I want your judgment in terms, both of the continuity and
strength of the System, as well as the risks involved in doing that.
Clearly, there has been a contraction of the amount of credit in the
System as a whole, and this has led to the feeling on the part of
some member banks that they ought to have opportunities for more
aggressive lending, both in terms of mortgages or community devel-
opment, or even export sales.
Do you have any pause about these extensions of authority if
they should be granted by legislation of the Congress or by regu-
latory authority, if that is appropriate?
Mr. Cook. Yes, I do, but let me comment about Senator Leahy's
position. In the northeast region of the country, there is a high per-
centage of the agricultural business with the Farm Credit System.
In the districts in which I have worked, we have gotten down to
10 and 15 percent. Frankly, in these districts, I see a need for them
to work with the farmers and do business with the people who are
already there, but who have left farm credit in the past.
If I were in the Northeast, I would want expanded authority so
I could continue to grow. But, I do think the System needs to con-
tinue to emphasize cutting expenses and streamlining the organi-
zation. I would put emphasis on building business rather than get-
ting different types of business, but that is prompted by my experi-
ence with troubled institutions.
There are areas where I think Farm Credit should be allowed to
expand, and one of those areas is the feed and fertilizer dealerships
serving agriculture. We are presently limited in the types of busi-
ness we are able to conduct with them. As far as areas that we are
not serving, I would be very cautious and make sure that we have
the right type of expertise before we expand.
Senator Lugar. Thank you very much.
The Chairman. Thank you. Senator Lugar.
Senator Baucus.
Senator Baucus. I have no questions; thank you.
The Chairman. Senator Conrad.
Senator Conrad. Thank you, Mr. Chairman.
Senator Lugar asked a question that is very much on my mind.
That is, we are seeing the Farm Credit System go through an eval-
uation process, and in that evaluation process, they have concluded
that if they are to have a future, they need to expand their authori-
ties; that the marketplace that they are serving is changing, chang-
ing dramatically, and that they are heavily restricted in terms of
the coverage that they can provide to their client base.
They are telling me, at least, that unless they are given those ex-
panded authorities that there would be some question about the fu-
ture role that they play. Also, I am wondering if you could come
23
at this perhaps in a different way and tell this committee, do you
believe that expanded authority for the System is justified, or is
the role that it currently plays the appropriate role?
Mr. Cook. You have presented some caveats that make this a
difficult question. Again, my experience indicates there are produc-
ers that we are not doing business with now that we need to do
business with — but again, I am not coming from a district that has
a high penetration. I believe there are some operations that Farm
Credit is in a very good position to finance. We have field offices
located in many small towns that could meet this need, and if there
is a shortage of credit available, then Farm Credit should be al-
lowed to meet that need.
If the credit problems experienced during the mid-1980's still ex-
isted, we would need to concentrate on rectifying those problems.
Farm Credit has come through a good economic cycle and has im-
proved financially such that we need to explore other possibilities.
But again, as the regulator, I would look at it very carefully to see
that it is done safely and soundly.
Senator Conrad. Thank you.
The Chairman. Thank you, Senator Conrad.
Thank you very much, Mr. Cook. I will offer you congratulations
and condolences both; your job is a difficult one, and, as you know,
because of the work done by this committee a few years ago, one
that this committee follows very closely, so I suspect you will be
hearing from Senator Lugar and myself and other Members of the
committee as we go along.
Thank you very much.
Mr. Cook. Thank you, Mr. Chairman.
The Chairman. Our next two nominees are Marilyn Peters of
South Dakota, nominated to be a member of the board of the direc-
tors of the Federal Agricultural Mortgage Corporation, and Clyde
Arlie Wheeler, Jr., of Oklahoma, nominated to be a member of the
Board of Directors of the Federal Agricultural Mortgage Corpora-
tion.
I would note, Ms. Peters, that as you know. Senator Daschle was
here earlier; he also made it a point to contact me well before this
hearing to tell me of his strong support of you, and I will put a
statement of his in the record. He does state that he has known
both you and your husband. Emerald, for a long, long time.
If I could, I would ask both of you to please stand and raise your
right hands. Do you solemnly swear that the testimony you will
give in this matter will be the truth, the whole truth, and nothing
but the truth, so help you God?
Ms. Peters. I do.
Mr. Wheeler. I do.
The Chairman. Thank you very much.
First, Ms. Peters, do you have any family members, friends, or
others here in the committee room that you would like to intro-
duce?
Ms. Peters. Yes, Senator. I would be happy to introduce my hus-
band, Emerald Peters. We are farmers in northeastern South
Dakota.
The Chairman. It is nice to have you here, Mr. Peters.
24
Oh yes, Mr. Wheeler, do you have anyone with you today whom
you would like to introduce?
Mr. Wheeler. Yes, Senator. I have two long-time friends, and
one friend of about 10 or 15 years. Mary Haught is the wife of Bob
Haught, who was the administrative assistant to Senator Bellmon.
She is from North Carolina and Oklahoma. Dawson "Tack" Nail,
with Television Digest, a long-time friend; and Mike Massie, with
Kidder, Peabody and Company; and Bill Sallee, whom I went to
Oklahoma State University College. There are probably some more
Oklahomans here I have missed.
The Chairman. Thank you.
As you know. Senator Bellmon — Governor Bellmon — was a val-
ued Member of this committee and also a very good friend of mine.
He traveled to Vermont with me on one occasion. I, in turn, spent
one of the most delightful weekends, during my Senate career, with
him at his home. We bounced around that area in his pickup truck;
went out to breakfast at the local diner, that I thought was a movie
set for "The Last Picture Show" — the Peter Bogdanovich movie of
years ago — it was the most enjoyable time. I look forward every so
often — when Henry is back in town — to seeing him. I think he was
one of the most respected Members of the Senate, on both sides of
the aisle, whom I have known since I have been here.
Mr. Wheeler. I agree.
The Chairman. Did either of you have an opening statement you
wish to make? Ms. Peters.
Ms. Peters. I do not. Thank you.
The Chairman. Mr. Wheeler.
Mr. Wheeler. No, Senator.
TESTIMONY OF MARILYN PETERS, OF SOUTH DAKOTA, AND
CLYDE ARLIE WHEELER, JR., OF OKLAHOMA, NOMINATED
TO BE MEMBERS OF THE BOARD OF DIRECTORS OF THE
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
The Chairman. Let me ask the same question of both of you. If
you are confirmed by the Senate, will you faithfully execute the
laws passed by Congress, regardless of any prior statements you
have made or biases you may have held?
Ms. Peters.
Ms. Peters. I will.
The Chairman. Mr. Wheeler.
Mr. Wheeler. Yes, I will.
The Chairman. If your nomination is approved by the committee
and the Senate, do you promise to appear and testify before this
committee or any other duly constituted committee of the Senate?
Ms. Peters.
Ms. Peters. Yes.
The Chairman. Mr. Wheeler.
Mr. Wheeler. Yes.
The Chairman. Ms. Peters, as you know from my opening state-
ment, I have expressed some concern about Farmer Mac. In 1987,
when we created it, I remember thinking this was great for those
of us who live in rural America, that we would see competitively
priced credit. I do not see it living up to its expectations, certainly
not the expectations I had in 1987. It continues to use its invest-
25
ment capital to fund operations, and that reduces stockholders eq-
uity and so on.
What have been the major factors behind the slow development
of Farmer Mac's loan pooling program — I am thinking both in rural
housing and in the agricultural mortgage sectors.
Ms. Peters. I do not have an extensive background in this par-
ticular area. I represent — I hope — the agricultural community of
rural America and of the world and feel it is a very important part
of our global economy.
I would hazard a guess that the whole credit history in the last
5 years has been quite different than when Farmer Mac was origi-
nated, and that might have something to do with it. I really feel
it is very important for us to get the cooperation of all the lending
agencies. As a member of the private sector, I would hope that I
would be able to be instrumental in helping to provide that cooper-
ative effort for expanding the credit where it is needed, and at a
lower rate than currently is prevalent.
The Chairman. Don't we have to expand the number of certified
loan poolers to do that?
Ms. Peters. Yes; the broader the base that we would have, the
better it would be. My understanding at this time is very limited,
but I've been told that currently farm credit moneys are readily
available to the lenders, so there has not been an incentive to
broaden the base as we need to do. I would hope the public sector
could help the banking and insurance and farm credit people see
that it is to their advantage as well as to the overall economy, and
especially to the rural economy, to have that base broadened.
The Chairman. Would you go there with the idea of pushing
them to expand that kind of a base?
Ms. Peters. I do not view myself as a pusher. I would certainly
be a facilitator and hope to be someone who could help them see
that there would be advantages to all sides in such an expansion.
I have a strong feeling as a farmer that what happens to the ag-
ricultural community has a direct effect on the entire economy, not
only in the United States, but the global economy.
The Chairman. Mr. Wheeler, let me ask you this. We put all
these different safety features into the Farmer Mac mechanism.
Did we put too many in there? Is this one of the reasons why it
has moved a little bit slowly, or are there other reasons?
Mr. Wheeler. I have had only limited exposure to Farmer Mac
so far. I think that as to safety factors, I would hesitate to say. I
feel, though, that Farmer Mac has done a better job than a lot of
people realize. It is fairly new; it is something like 6- or 7-years-
old, and it is just getting started. From what exposure I have had,
I have the feeling that it is getting up more momentum. And I
have heard people talk around the table here about people leaving
the rural communities, and that is certainly true in Oklahoma and
everyplace else. I think they are aware of that, and I am hopeful
to review what we do and what can be done to help stop that exo-
dus. But I think Farmer Mac has got the tools, and I think they
just need to live a little longer.
The Chairman. Well, even though one of the most distinguished
residents of Vermont was Norman Rockwell, and I admire his
paintings and so on, I do not have some kind of view of rural
26
America that is such that nothing is ever going to change; that the
same things I knew as a boy will remain the same today, half a
century later. However, I do know that one of the problems in rural
America is the inability to create jobs because of lack of financing,
lack of an understanding that things can be different, that some-
times, risks have to be taken. There are an awful lot of people who
leave rural America who want to stay there, but they just do not
have the jobs or the opportunity; while I realize there will be some
in rural America who have decided they want city life, or other
urban living, and that is always going to happen.
But what I am concerned about as a resident of rural America
is that if people want to stay, and if people want to start busi-
nesses and so on, that they at least have the opportunity to get the
financing necessary to do it.
Mr. Wheeler. I sure agree with you. Governor Bellmon put me
on the High Plains Economic Development Council in northwestern
Oklahoma, and we worked at trying to stimulate economic develop-
ment to create jobs so that people could stay out there. We lost 300
people — we did not have but 1,500 people in this little town, and
we lost 300 people in 10 years. That is a lot of people, and that
is what is happening all over.
But I think the key is job creation, because people do want to
stay out there, and supplemental income will keep a lot of them out
there, because they do not want to move to Kansas City and Okla-
homa City and Denver; they want to stay out in the rural areas.
And I am hoping that we can turn that around.
The Chairman. Thank you.
Senator Lugar.
Senator Lugar. Thank you, Mr. Chairman.
You have obviously been heavily involved in the farming system
and come onto this board as representatives of agriculture and the
general public; but you come onto a board in which Farmer Mac,
originally capitalized at about $22 million — $10 million from the
Farm Credit System and $12 million from banks, insurance compa-
nies, and other institutions — has seen its capital eroded to approxi-
mately $13 million plus, without showing a profit during this pe-
riod of time. And that must be of some concern to you as you join
this board.
Mr. Wheeler. It sure is.
Ms. Peters. That is right.
Senator Lugar. Both of you have been involved in businesses
and have been invited, I am certain, to serve in various capacities
and as trustees of those institutions, and have offered your good
counsel. And obviously, one of the responsibilities before you here,
is that you are not personally liable, but you are public trustees of
a situation in which some public money as well as a good bit of pri-
vate money is involved.
Have either of you thought about that picture? In other words,
after the honor of the nomination sunk in, with the possibilities for
public service, what are your views about coming onto a board of
an institution that has not shown a profit and, as a matter of fact,
has shown considerable erosion of the original capital?
27
Ms. Peters. Well, I certainly was honored to be appointed and
would be honored to be confirmed. I did look at the bottom line,
and I see that it is improving. I think they have just included the
linked portfolio strategy, which will help make it more highly com-
petitive.
I am getting a crash course on banking and fmd that this strat-
egy is a very legitimate way for them to improve. I think the secret
is, as Senator Leahy said, to broaden the base and to make it more
widely used by the credit institutions that involve the other direc-
tors and the stockholders.
I do see that there is a need for understanding that should be
developed among the lending agencies that the farm lenders them-
selves will benefit by lower interest margins if there is a much
broader base. The more assured the lenders can be of getting a
broad-based, stable income, the more incentive there will be to help
rural borrowers establish their financial planning over a longer pe-
riod of time. I think the linked portfolio strategy has been a good
addition in this last year, and I think that if you look at the bottom
line, it is improving quite rapidly. We are hoping — as I understand,
Farmer Mac is hoping — to get some more poolers also, and go into
the rural housing element of it, although I also understand that
Fannie Mae is being involved in that consideration. So I hope that
we can get into the rural housing development area also.
Senator Lugar. Mr. Wheeler, what is your analysis?
Mr. Wheeler. I think the situation has to be turned around, ob-
viously, and I think if we were to sit here a year from now, and
there is not a better picture, it will be unfortunate. But what I see
in place is competent people and good policies, and I think it is just
going to take a hard selling job. I think a lot of lending institutions
do not know about Farmer Mac. But I am concerned about the
rural impact and new jobs that it can create for worthy new starts
and that sort of thing, so for me to say this and this has to be done,
I cannot do it. But I see willing people and good people, and I think
they sure want to do it. I expect it to turn around.
Senator Lugar. I appreciate the thought that both of you have
given to the situation as business persons. Obviously, this commit-
tee receives the nominations from the President of the United
States; we do not make the nominations. We are interested in how
Farmer Mac turns out. As Chairman Leahy pointed out at the be-
ginning, this is an outgrowth of important farm credit legislation,
and I am hopeful that as we all gather a year from now, as you
suggest, that there will be a turnaround. And of course, one meth-
od of doing that is through the development of strong leaders such
as yourselves, who not only understand farm credit, but also the
particular institution that you are serving as trustees.
I would like to add for the record, Mr. Chairman, a very strong
statement of endorsement of Senator Nickles of Mr. Wheeler, in
which he points out their long association in Oklahoma; as well as
a statement by Senator Mitch McConnell with regard to all of the
nominees, in which he congratulates them and raises some ques-
tions which you and I have covered during the course of the hear-
ing on these nominees.
28
The Chairman. Thank you. I would also note that Senator Boren
has a strong statement in favor of Mr. Wheeler, and we will in-
clude that in the record, too.
If there are no further questions, we thank you both for being
here.
The committee stands adjourned.
[Whereupon, at 10:59 a.m., the committee was adjourned.]
APPENDIX
PREPARED STATEMENTS
Sheila C. Bair
Mr. Chairman, and Members of the committee. I am honored to appear before you
today as a nominee to continue as commissioner of the Commodity Futures Tramng
Commission.
When I first appeared before this committee 3 years ago, the CFTC had just
emerged — albeit victorious — from a bruising battle with the SEC over who should
have jurisdiction over stock index futures. I testified then that improved relations
between the SEC and CFTC should be a priority. I also hoped that this was an area
where I could make a contribution, given my working relationships with the SEC
and securities industry stemming from my position as legislative counsel to the New
York Stock Exchange.
Today — through the determined efibrts of the commissioners and stafi"s of both
agencies — relationships between the SEC and CFTC have never been better. In this
regard, I would like to pay particular tribute to Arthur Levitt, whose consensus-
building style and exceptional diplomatic skills, have helped set the tone.
Consistent with the new era of cooperation and harmony between our two agen-
cies, Mary Schapiro, an SEC commissioner, has been nominated to serve as chair-
man of the CFTC. I have known Mary for several years. I believe she will make
an excellent chairman, and am pleased to be appearing with her at the same hear-
ing. She is well qualified to lead our agency and to strengthen our ties to the SEC
and other members of the financial regulatory community. This, I believe, will, in
turn, strengthen the influence and stature of tne CFTC.
Being a commissioner at the CFTC for the past 3 years has presented me with
many unique challenges and opportunities.
In December of 1991, I was made chairman of the Commission's Financial Prod-
ucts Advisory Committee. This group — also known as FPAC — is composed of promi-
nent regulators and industry members who provide input to the Commission on is-
sues relating to financial derivative instruments. I am very proud of FPAC's record
of accomplishment during the time I have served as its chairman.
FPAC's work on the proper definition of modern-day hedging strategies helped
prompt the IRS to draft regulations to address tax uncertainties in the treatment
of hedging resulting from the Supreme Court's Arkansas Best decision. In recogni-
tion of FPAC's en"orts, IRS commissioner Margarct Richardson personally addressed
our group and sought our input on the temporary and proposed regulations.
FPAC's efforts to facilitate greater harmony between SEC and CFTC regulations,
particularly in the regulatory treatment of collective investment vehicles, has led
both agencies to engage in rulemakings to ease mutual fund access to futures mar-
kets. FPAC's work on interagency coordination issues generally has been favorably
cited in the Market Reform Reports submitted to Congress by both the SEC and
CFTC.
Finally, FPAC has provided a highly visible forum for exploring issues related to
the complex new world of off-exchange derivative instruments. We have played a
particular leadership role in encouraging efforts to develop a clearinghouse for OTC
derivatives — efforts which I believe, in the long run, hold out the promise of sub-
(29)
CiA 1 rt/1
30
stantially reducing — if not eliminating — credit risk, from a large segment of the
OTC derivatives market.
In addition to my work on FPAC, I was privileged to have the opportunity to
serve from August to December of last year as acting chairman of the CFTC.
During my tenure as acting chairman, I oversaw the completion of a major Com-
mission study on OTC derivatives markets. The central recommendation of that
study was for greater interagency coordination to address issues of common concern
to ILS. financial regulators, such as reporting and disclosure, internal controls, and
clearing. Shortly ailer our report was released. Treasury Secretary Lloyd Bentsen,
citing the CFTC's recommendation, wrote the members of the Working Group on Fi-
nancial Markets requesting that they examine issues relating to OTC derivative
markets. Consistent with Secretary Bentsen's request, both the principals and staff
of the Working Group have been meeting on a regular basis for quite some time
now, and the CFTC's report has provided a useful framework for much of their work
and discussions.
Challenges presented by the growth of OTC derivative markets loom large on the
CFTC's horizon. As the only financial regulator whose sole mission is the regulation
of derivative instruments, the CFTC will continue to play a leadership role in Work-
ing Group efforts to develop appropriate regulatory policies for OTC derivative mar-
kets. In addition, the CFTC can be expected to finalize risk assessment rules that
will facilitate expanded financial oversight of certain OTC derivative market partici-
pants. In light of increasing concerns about risks associated with OTC derivatives,
we may also — in consultation with other regulators — wish to review regulatory ex-
emptions we have previously granted for certain types of OTC products.
As we grapple with demands for increased regulation of the OTC derivatives mar-
kets, we wiU also need to continue to search for ways to streamline or eliminate
unnecessary regulatory requirements for exchange traded markets. This process
must not, however, in any way undermine core regulatory protections central to the
honesty and financial integrity of those markets. It will be particularly important
for the CFTC to move ahead firmly with needed improvements to exchange audit
trail systems. And in that endeavor, I hope the Commission can continue to count
on this committee for support.
Mr. Chairman. I have greatly enjoyed my tenure at the CFTC and am grateful
that I will be able to continue my service to the Commission, if confirmed. I will
be happy to answer any questions that you might have.
Office of Government Ethics,
Washington. DC. June 14, 1994.
Hon. Patrick J. Leahy,
Chairman, Committee on Agriculture. Nutrition, and Forestry.
U.S. Senate, Washington. DC.
Dear Mr. Chairman: In accordance with the Ethics in Government Act of 1978,
I enclose a copy of the financial disclosure report filed by Ms. Sheila C. Bair, who
has been nominated by President Clinton for the position of commissioner, Commod-
ity Futures Trading Conrmiission.
We have reviewed the report and have also obtained advice from the Commodity
Futures Trading Commission concerning any possible conflict in light of its func-
tions and the nominee's proposed duties. Ms. Bair has agreed to recuse herself from
participation in any particular matter that would have a direct and predictable ef-
fect on a financial interest that she holds or that is imputed to her under 18 U.S.C.
§ 208.
Based thereon, we believe that Ms. Bair is in comphance with applicable laws and
regulations governing conflicts of interest.
Sincerely,
Stephen D. Potts,
Director.
Enclosure
31
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38
BIOGRAPHICAL INFORM ^TION (PUBLIC)
L Full name (include any former names used).
Sheila Colleen Bair
2. Address: List current place of residence and office address(es). List all office and
home telephone numbers where you may be reached.
3704 Brandywine Street, N.W.
Washington, D.C. 20016
(202) 363-3873 -- home
2033 K Street, Suite 802
Washington, D.C. 20581
(202) 254-6354 - office
3. Date and place of birth.
April 3, 1954
Wichita, Kansas
4. Marital Status (include maiden name of wife or husband's name). List spouse's
occupation, employer's name and business address(es).
Married:
Scott Cooper
Professional Staff
Subcommittee on Transportation and Hazardous Waste
324 Annex 2
House Office Building
Washington, D.C. 20545
5. Education: List each college and graduate or professional school you have attended,
including dates of attendance, degrees received, and dates degrees were granted.
Kansas University
Lawrence, Kansas
BA: 1975
JD: 1978
6. Employment Record: List (by year) all business or professional corporations,
companies, firms, or other enterprises, partnerships, institutions and organizations,
nonprofit or otherwise, including farms, with which you were connected as an officer.
39
director, partner, proprietor, or employee since graduation from college; include a
title and brief job description.
From
5/91
lo
Present
Position
Commodity Futures Trading Commission,
Commissioner. Serve as one of five
commissioners on the independent
financial regulatory agency responsible for
oversight of the nation's commodity
futures and options markets. Position
requires Presidential appointment/Senate
confirmation. Since December 1991, have
served as Chairman of the CFTC's
Financial Products Advisory Committee
(FPAC) and have specialized in issues
relating to the dramatic growth of financial
hedging instruments. From August to
December 1993, served as agency's Acting
Chairman and oversaw the completion of
a major study of OTC derivatives. The
study's central recommendation for an
interagency coordinating group for OTC
derivatives was adopted by the Working
Group on Financial Markets.
7/88
5/91
New York Stock Exchange, Counsel
Legislative Affairs. (Excluding a 10 month
period from 1/90 - 10/90 during which I
was a candidate for Congress in the
Kansas 5th District GOP Primary). Served
as a legal counsel to the New York Stock
Exchange in its Washington office, working
with Congress and its committees, the
Securities Exchange Commission, and the
Commodity Futures Trading Commission
on a wide array of financial issues, with
emphasis on derivative products and
intermarket coordination.
40
1/87 7/88 Kutak Rock & Campbell, Of Counsel
(Excluding a 6 month leave to work for
Dole campaign, below). Represent firm's
clients before Congress an federal
agencies, dealing primarily with tax,
banking and related matters.
10/87 3/88 Dole for President, Campaign, Research
Director. Headed the Research Division
of the Dole for President campaign.
Responsibilities included briefing the
candidate on major policy issues;
preparing for debates; and coordinating
campaign position papers and policy
statements.
1/85 7/86 Omce of the Senate Majority Leader,
Deputy Counsel to Majority Leader
Robert Dole. Served as general legal
counsel to Majority Leader Dole. Major
issue areas included civil and constitutional
rights, international human rights,
antitrust, intellectual property, tort liability
reform, and judicial nominations.
10/81 12/84 Senate Judiciary Committee Counsel,
Subcommittee on Courts. Advised
Senator Dole in his capacity as
Subcommittee Chairman, with particular
emphasis on civil and constitutional rights,
women's issues, criminal law, antitrust, and
intellectual property.
5/79 10/81 HEW/Department of Education,
Attorney/Advisory. Served as legal counsel
in Department's civil rights compliance,
findings, negotiations, and administrative
enforcement proceedings. Responded to
agency requests for legal advice
concerning FOIA, Privacy Act, and
Administrative Procedures Act.
41
8/78 5/79 Teaching Fellow, University of Arkansas
School of Law. Taught first year law
students legal writing, appellate advocacy,
and ran the moot court competition.
Teaching fellows were selected annually by
the law school in a national competition.
7. Military Service: Have you had any military service? If so, give particulars, including
the dates, branch of service, rank or rate, serial number and type of discharge
received.
None
8. Government Service: State (chronologically) your government service or public
offices you have held, including the terms of service grade levels and whether such
positions were elected or appointed.
May 1979 - October 1981, Attorney Advisor, DHEW/Department of
Education, GS11-GS13:
October 1981 - December 1984, Counsel, Courts Subcommittee, Senate
Judiciary Committee; and
January 1985 - July 1986, Deputy Counsel, Senate Majority Leader's Office.
May 1991 - Present, Commissioner, Commodity Futures Trading Commission.
Presidential Appointment requiring Senate confirmation.
9. Honors and Awards: List any scholarships, fellowships, honorary degrees, and
honorary society memberships that you received and believe would be of interest to
the Committee.
1978 - 1979: Teaching Fellow, University of Arkansas School of Law,
Fayetteville, Arkansas
10. Other Memberships: List all organizations to which you belong, excluding religious
organizations.
American Bar Association
WISH LIST
Women's Leadership Network
Women's Campaign Fund -- Board of Directors (Uncompensated)
42
11. Published Writings: List the titles, publishers, and dates of books, articles, reports,
or other published materials (including published speeches) you have written. Please
include on this list published materials on which you are listed as the principal editor.
It would be helpful to the Committee if you could provide one copy of all published
material that may not be readily available. ^AJso, to the maximum extent practicable,
please supply a copy of all unpublished speeches you made during the past five years
on issues involving agriculture, nutrition, forestry or commodity futures policy or
related matters.
"Why 'Offshore' Doesn't Mean 'Off Limits'," Futures Magazine, January 1992.
"Is There a 'Future' in Swaps?," Mortgage Banking Magazine, September
1992.
"The Worst of Arkansas Best," The University of Kansas Law Review, Spring
1993, (lead author).
"U.S. Regulation of Derivative Instruments: Reflections from a Crucial
Crossroads" Paper Submitted to the University of London Institute of
Advanced Legal Studies for Inclusion in Proceedings of the International
Conference on Derivative Instruments, October 1993.
"Change and Challenge in the Marketplace Meeting the Darwinian
Challenge," Futures Industry, September/October 1993.
"The Future of Past Performance Reporting," Managed Account Reports, Inc.,
January 1994.
"Regulatory Issues Presented by the Growth of OTC Derivatives: Why OfT-
Exchange is No Longer Off-Limits," in the Handbook of Derivatives and
Synthetics (to be published).
12. Health: What is the present state of your health?
Excellent
43
FINANCIAL DATA AND CONFLICT OF INTEREST (PUBLIC)
1. Have you severed all connections with your immediate past private sector employers,
business firms, associations, and/or organizations?
Yes.
2. List sources, amounts and dates of all anticipated receipts from deferred income
arrangements, stock options, incompleted contracts and other future benefits which
you expect to derive from previous business relationships, professional services, =firm
memberships, former employers, clients, or customers.
None.
3. Do you, or does any partnership or closely held corporation in which you have an
interest, own or operate a farm or ranch? (If yes, please give a brief description
including location, size and type of operation.)
No.
4. If confirmed, do you have any plans, commitments, or agreements to pursue outside
employment or engage in any business or vocation, with or without compensation,
during your service with the government? (If so, explain.)
No.
5. Do you have any plans to resume employment, affiliation, or practice with your
previous employers, business firms, associations, or organizations after completing
government service? (If yes, give details.)
No.
6. Has anyone made a commitment to employ you or retain your services in any
capacity after you leave government service? (If yes, please specify.)
No.
7. Identify all investments, obligations, liabilities, or other relationships which involve
potential conflicts of interest in the position to which you have been nominated.
Employment by the New York Stock Exchange -- See below.
44
8. Have you ever received a government guaranteed student loan? If so, has it been
repaid?
No.
9. If confirmed, explain how you will resolve any potential conflict of interest, including
any that may be disclosed by your responses to the above items.
Prior to my appointment to the CFTC, I worked for the NYSE. Consistent
with my answer to this question when I was first appointed, I will continue my
commitment to recuse myself should there ever be any adjudicatory
proceeding or other particular matter before the Commodity Futures Trading
Commission to which the New York Stock Exchange is a party. If any other
situation arises where there might be a question of conflict, I will seek the
opinion of agency ethics counsel. It should be noted that the NYSE recently
divested itself of its futures subsidiary, the New York Futures Exchange.
45
Doyle L. Cook
Mr. Chairman, and Members of the committee, it is an honor to appear before
you today as you consider my nomination for appointment to the board of the Farm
Credit Administration.
I would like to thank Senator Baucus for taking the time to introduce me here
today. I appreciate his words of support.
Agriculture has always been an integral part of my life. I was raised on a farm
and worked my way through college by raising livestock. The formative years of
many Members of this committee are similar, so I know you can understand how
my roots have guided my career in agriculture.
During the first 13 years of my career with the Ralston Purina Company, I had
the uniaue opportunity to work directly with farmers and to gain both marketing
and creait experience. One thing I learned about myself while at Ralston Purina
was that I liked working in the business side of agriculture, which led me to my
career with the Farm Credit System. During my 18 years with the System, I worked
in the Texas Farm Credit District and the former St. Louis and Louisville districts
and served the last 4 years as president and chief executive officer of the Farm
Credit Bank of Spokane until April of this year.
I recognize there may be concern that someone, who has worked as many years
with the Farm Credit System as I have, may have difficulty making the change
from banker to regulator. I believe my experience in handling difficult situations in
both Ralston Purina and Farm Credit were the building blocks that have prepared
me for the responsibilities I would have as a member of the Farm Credit Adminis-
tration Board. Furthermore, I have great respect for the role the Farm Credit Ad-
ministration has played in restoring the System to financial health. I believe the
Farm Credit System provides an important and needed service to American agri-
culture. But in order for the System to face the challenges of the future, the Farm
Credit Administration must continue its vigilance as a strong, effective, arm's length
regulator.
Mr. Chairman, I hope I will be granted the opportunity of serving the agricultural
producer, as well as those who invest in American agriculture, as a member of the
Farm Credit Administration Board.
Office of Government Ethics,
Washington, DC, June 16, 1994.
Hon. Patrick J. Leahy,
Chairman, Committee on Agriculture, Nutrition, and Forestry,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: In accordance with the Ethics in Government Act of 1978,
I enclose a copy of the public financial disclosure report filed by Doyle L. Cook, who
has been nominated by President Clinton for the position of Member, Board of Di-
rectors, Farm Credit Administration (FCA).
We have reviewed the report and have also obtained advice from the FCA con-
cerning any possible conflict in light of its functions and the nominee's proposed du-
ties. Also enclosed is a letter from the FCA's ethics official, dated June 14, 1994,
which discusses Mr. Cook's ethics agreements with respect to recusals and certain
other matters.
Based thereon, we believe that Mr. Cook is in compliance with applicable laws
and regulations governing confiicts of interest.
Sincerely,
Stephen D. Potts,
Director.
Enclosures
46
Farrn Credit Administration 1501 Farm credit Dnve
McLean. Virginia 22102-5090
(703) 883-4000
Fjim ciioiT jDminori jTion
June 14, 1994
Mr. Stephen A. Potts, Director
United States Office of Government Ethics
Suite 500
12 01 New York Avenue, N.W.
Washington, D.C. 20005-3917
Dear Mr. Potts:
This letter concerns our review of the public financial disclosure
report (278 Report) of Doyle L. Cook, nominee to the position of
Member of the Board of the Farm Credit Administration (FCA) .
Mr. Cook has spent much of his career with institutions in the Farm
Credit System. His most recei'.t position was President and Chief
Executive Officer of the Farm Credit Bank (FCB) of Spokane.
Mr. Cook resigned from this position on March 31, 1994, when the
FCB of Spokane merged with another Farm Credit Bank, the FCB of
Omaha, to form a new Farm Credit System institution known as
AgAmerica .
The FCA is an independent regulatory agency, administered by a
three-member board that oversees the Farm Credit System. The Farm
Credit System is a nationv;ide system of lending institutions that
provides credit and related services to farmers, ranchers,
producers and harvesters of aquatic products, rural homeowners,
certain farm-related businesses, agricultural and aquatic
cooperatives, and rural utilities. The banks and associations in
the Farm Credit System are cooperatively owned, directly or
indirectly, by their respective borrowers. In his role as Board
Member, Mr. Cook, along with the other two Board Members, would be
responsible for directing the implementation of the policies and
regulations adopted by the Board and executing the administrative
functions and duties of the FCA. " More specifically, his duties
would include prescribing the rules and regulations necessary for
the implementation of the Farm Credit Act of 1971, as amended, and
providing for the examination of Farm Credit System institutions
and for the perforrriance of all the powers and duties vested in the
agency.
In addition, at present, the FCA Board also functions as the Board
of Directors for the Farm Credit System Insurance Corporation (the
Corporation). The Corporation is a Government-controlled
corporation established to insure the timely payment of principal
and interest on notes, bonds, debentures, and other obligations
47
issued by the Farm Credit System banks. As a Corporation director,
Mr. Cook would administer the business of the Corporation, which
includes insurance, financial assistance, receivership, and
examination functions.
Based on our review of Mr. Cook's 27 8 Report and follow-up
discussions with him, there appear to be no present financial
conflicts of interest that would violate 18 U.S.C. 208(a) or 5
C.F.R. § 2635, subpart D. However, we have issued a cautionary
letter (in draft) to Mr. Cook, a copy of which is enclosed,
concerning his retained health benefits, life insurance, and
retirement plans with two Farm Credit System institutions. The
retirement plans with those institutions, AgAmerica and the FCB of
Texas, are both fully funded, independently managed, defined
benefit plans. I do not anticipate any matter coming before Mr.
Cook in his role as FCA Board Member that would have a direct and
predictable effect on his retained interests. However, in the
unlikely event that such a matter should arise during his tenure,
the cautionary letter serves as advance notice to avoid acting on
a matter involving a conflict of interest by disqualifying himself.
We note that, pursuant to 5 C.F.R. § 2635.502, Mr. Cook is in a
covered relationship with certain Farm Credit System institutions
due to his former positions.^ Within the past year, Mr. Cook has
been a board member of the Federal Agricultural Mortgage
Corporation (Farmer Mac) and President and Chief Executive Officer
of the FCB of Spokane, which merged with the FCB of Omaha in March
1994 to become AgAmerica. In order to avoid any appearance of loss
of impartiality with regard to these institutions, we will ask
Mr. Cook to execute the enclosed recusals. The recusals prohibit
Mr. Cook's participation in matters involving the particular
interests of AgAmerica, Northwest Farm Credit Services, ACA (the
only association in the former FCB of Spokane district), and
Farmer Mac for a period of one year from his dates of resignations
from these institutions.
I am of the opinion that neither the retained interests nor the
recusals will impede Mr. Cook from effectively fulfilling his
responsibilities as Board Member of the FCA.
^ Although Mr. Cook is in a covered relationship with all of the entities
in which he served within the past year, only those entities that are part of or
related to the Farm Credit System or that do business with FCA will be the
subject of written recusals.
48
Please let me know if you have any questions about this opinion or
the enclosed material.
Best regards,
y\[i\t^i
TiSf.
Kcithleen V. Buff on
Designated Agency Ethics Official
Enclosures
Copy to: Cheryl Piasecki
49
To: Doyle L. Cook
Board Member
From: Kathleen V. Buffon
Designated Agency Ethics Official and
Associate General Counsel, Administrative Law and
Enforcement Division
Subject: Cautionary Letter
We have reviewed the public financial disclosure report (278
Report) that you filed on April 18, 1994. Your 278 Report
indicates that you have potentially conflicting interests with
AgAmerica and the Farm Credit Bank (FCB) of Texas. Specifically,
you have retained medical, dental, and life insurance benefits with
AgAmerica.^ In addition, you have retained retirement plans with
AgAmerica and the FCB of Texas. ^
These retained interests represent potential conflicts of interest
in that, in your official capacity, you could be asked to
participate in a matter that would have a direct and predictable
effect on them. You are barred by criminal statute, as well as by
the standards of ethical conduct applicable to all Executive Branch
employees, from involvement in matters that would so affect your
personal financial interests. Although we do not anticipate that
any action that might be considered or taken by the agency during
your tenure as a Member of the FCA Board would be likely to affect
your retained interests, if this should occur you should refrain
from involving yourself in the matter and consult with me, in my
capacity as Designated Agency Ethics Official, as soon as possible.
' It is our understanding that you pay your medical and dental insurance
premiums, but that AgAmerica pays your life insurance premiums. We also
understand that these medical, dental, and insurance benefits will terminate on
March 3, 1996.
' Your retirement plan with the FCB of Spokane (now part of the newly
formed AgAmerica) was entered into September of 1989. Your retirement plan with
the FCB of Texas was entered into April of 1983. Our understanding is that both
of these retirement plans are fully funded, independently managed, defined
benefit plans. The AgAmerica plan is managed by Minnesota Mutual Insurance
Company. The FCB of Texas plan is managed by Nations Bank.
I
H
»«-»^ r
^^ i
A determination will then be made regarding the need for you to
disqualify yourself from acting on the matter.
If you have any questions about this or other ethical concerns,
please contact me at your convenience.
51
To: Kathleen V. Buff on
Designated Agency Ethics Official and
Associate General Counsel, Administrative Law and :
Enforcement Division
From: Doyle L. Cook
Board Member
Subject: Conflict of Interest Disqualification
In accordance with the uniform standards of ethical conduct at 5
C.F.R. § 2635.502, the possibility of an appearance of loss cl*"
impartiality in the performance of my official duties requires that
I disqualify myself from participation in any particular matter
involving specific parties in which AgAmerica or Northwest Farm
Credit Services, ACA is or represents a party for a period of one
year beginning on March 31, 1994, the date of my resignation from
my position as Chief Executive Officer of the Farm Credit Bank
(FCB) of Spokane, or until April 1, 1995.
This disqualification does not prohibit me from participating in
matters affecting the interests of the Farm Credit System
generally, even though such matters may also affect the interests
of AgAmerica and Northwest Farm Credit Services, ACA. However, if
I believe that I may be unable to remain impartial in any matter as
a result of my former position with the FCB of Spokane (which has
now merged with the FCB of Omaha to form AgAmerica) , I will
disqualify myself from participating in that matter.
Doyle L. Cook, Board Member Date
52
To: Kathleen V. Buff on
Designated Agency Ethics Official and
Associate General Counsel, Administrative Law and :
Enforcement Division
From: Doyle L. Cook
Board Member
Subject: Conflict of Interest Disqualification
In accordance with the uniform standards of ethical conduct at 5
C.F.R. § 2635.502, -the possibility of an appearance of loss of
impartiality in the performance of my official duties requires that
I disqualify myself from participation in any particular matter
involving specific parties in which the Federal Agricultural
Mortgage Corporation (Farmer Mac) is or represents a party for a
period of one year beginning on May 13, 1994, the date of my
resignation from my position as Board Member of Farmer Mac, or
until May 14, 1995.
This disqualification does not prohibit me from participating in
matters affecting the interests of the Farm Credit System
generally, even though such matters may also affect the interests
of Farmer Mac. However, if I believe that I may be unable to
remain impartial in any matter as a result of my former position
with Farmer Mac, I will disqualify myself from participating in
that matter.
Doyle L. Cook, Board Member Date
53
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Mutual Funds List
Market Value Summary as of 4/16/94
Doyle Cook
4/16/94
Security Name
JS&
Mkt Price
AYilCo^t
%Gain
Shares
MkJ.YAiJiS
(American Funds)
BALFUND
Mutual
11.990
11.940
0.4
11,262
$135,033
ICAFUND
Mutual
18.060
17.270
4.6
3,013
54,411
NPERSP
Mutual
14.860
12.254
21.3
5,977
88.823
Total Market Value 7.1 $278,267
(Balanced Fund, Equity Fund, and New Perspectives--a global fund. All are EIFs.)
Interest Earnings on Funds 1-1-93 to 3-31-94
Balanced Fund: $10,048
ICA Fund: $4,305
New Perspective Fund: $19,788
59
Stocks Owned in Doyle Cook's IRA
As of 4-18-94 Held by Merrill Lyncb
Stock
Market Value
Boeing
45-1/4
Chase Maohattan
33-3/4
GTE
30
IBM
53
Lilly
47-1/2
Norom (ArkLa)
6-1/2
Wesdnghouse
11-1/2
Ca.sh
Shares Total
100 $4^25
200 6.750
100 3,000
50 2,650
200 5,675
1.000 6,500
500 5,750
3.0S0
$47,400
Dividends Received from 1-1-93 to 3-31-94
Boeing $200
Chase Manhattan 216
GTE 28
IBM 50
Lilly 548
Norom E 140
Westinghousc Q (recently purchased)
$1,182
60
Stodcs Owned in Peggy Cook's IRA
As of 4-18-94 Held by Merrill Lynch
StocH
Marliet Value
Shares
Total
Bank America pf
28-1/4
200
$5,650
Boeing
45-1/4
200
9,050
Borden Inc.
12-1/2
500
6,250
IBM
53
50
2,650
Laidlaw b
6
100
600
Texaco pf
50-1/4
2
101
Cash
5,50P
$29,801
Dividends Redeved from 1-1-93 to 3-31-94
Bank America pf
Boeing
Borden
IBM
Laidlaw b
Texaco pf
$275
200
0 (Recently Purchased)
62
18
8
$563
61
Stock Owned Jointly by Doyle and Peggy Cook
As of 4-18-94 Held by Merrill Lynch
Shares
Stock
Market Value
Boiden Inc.
12-1/2
Gticorp pf
25-7/8
Chase Manhattan pf
27-7/8
GTE
30
IBM
53
Merck
28-3/8
Sallie Mae
39-7/8
Westingbouse
11-1/2
Total
soo
$6,250
200
5,176
200
5,576
400
12,000
100
5,300
800
22.704
100
3,988
500
^,750
$66,744
Dividends Received from 1-1-93 to 3-31-94
Boiden Inc.
Citicorp pf
Chase Manhattan pf
GTE
0 (recently purchased)
$228
262
113
IBM
125
Merck
241
Sallie Mae
160
Westinghouse
0 (recently purchased)
$1,129
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62
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June 14, 1994
1. " Full name (include any former names used).
Doyle L. Cook
2. Address: List current place of residence and office address(es). List all office and
home telephone numbers where you may be reached.
428 W. High Drive
Spokane, Washington 99203
(509) 838-6494 Home
(509) 838-9510 Office
3. Date and place of birth.
February 24, 1938
Star City, Arkansas
4. Marital Status (include maiden name of wife or husband's name). List spouse's
occupation, employer's name and business address(es).
Peggy Rackley Cook— Housewife
5. Education: List each college and graduate or professional school you have attended,
including dates of attendance, degrees received, and dates degrees were granted.
College Dares Degrees Date conferred
Arkansas A&M 9/56 to 5/58 Associate in Agriculture 5/58
University of Arkansas 9/58 to 6/60 Bachelors ofAg Economics 6/60
University of Arkansas 6/60 to 6/62 Masters in Ag Business 1/63
6. Employment Record: List (by year) all business or professional corporations,
companies, firms, or other enterprises, partnerships, institutions and organizations,
nonprofit or otherwise, including farms, with which you were connected as an officer,
director, partner, proprietor, or employee since graduation from college; include a title
and brief job description.
Brief description as follows. See Resume for detail
PRESroENT AND CHIEF EXECUTIVE OFTICER
FARM CREDIT BANK OF SPOKANE 9/89 - 4/94
Responsible for bank operations and supervision of lending and funding in five states. Total loan volume $2.7
billion. Includes 45 branches and 650 employees.
PRESIDENT AND CHIEF EXECUTIVE OmCER
FARM CREDIT SERVICES OF MID-AMERICA 3/86 - 9/89
Responsible for $3 billion association with 950 employees that provided credit to 66, 000 farmers in four states.
66
SENIOR VICE PRESIDENT-CREDIT
FARM CREDIT RANKS OF TEXAS 1/85 - 3/86
Responsible for all credit operations of the Federal Land Bank of Texas, Federal Intermediate Credit Bank and the
Bank of Cooperatives, including 49, 050 borrowers for a loan volume of $4.2 billion.
SENIOR VICE PRESIDENT
FEDERAL INTERMEDIATE CREDIT BANK OF TEXAS 4/83 - 1/85
Supervised 30 production credit associations throughout texas. Responsible for loans in excess of $1 billion to
over 14,000 farmers.
SENIOR VICE PRESIDENT - ASSOCUTION OPERATIONS
FEDERAL INTERMEDIATE CREDIT BANK OF LOUISVILLE 6/79 - 4/83
Supervised 34 production credit associations with 450 employees located in four states. Loan volume was $2.8
billion and they served over 100, 000 farmers.
REGIONAL VICE PRESIDENT
FEDERAL INTERMEDIATE CREDIT BANK OF ST. LOUIS 11/75 - 6/79
Supervised seven production credit associations in Arkansas. Loans were in excess of $500 million to over 5,000
farmers.
RALSTON PURINA COMPANY 7/62 - 11/75
Positions held: Controller Regional Credit Manager
General Manager Credit Manager
Marketing Manager Trainee
OTHER EMPLOYMENT 2: 7/62 - 11/75
In addition I own a 320 acre farm in Atkins, Arkansas that is rented out on a crop share basis. At present time we
are producing rice, soybeans and wheat.
7. Military Service: Have you had any military service? If so, give particulars, including
the dates, branch of service, rank or rate, serial number and type of discharge received.
None
8. Government Service: State (chronologically) your government service or public offices
you have held, including the terms of service grade levels and whether such positions
were elected or appointed.
None
9. Honors and Awards: List any scholarships, fellowships, honorary degrees, and
honorary society memberships that you received and believe would be of interest to the
Committee.
Working Scholarship for the first four years of college
Star Farmer of Arkansas Award
American Farmer Degree
Graduate Research Fellowship
National Honor Society
67
10. Other Memberships: List all organizations to which you belong, excluding religious
organizations.
All responsibilities in various organizations have been terminated
1 1 . Published Writings: List the titles, publishers, and dates of books, articles, reports, or
other published materials (including published speeches) you have written. Please
include on this list published materials on which you are listed as the principal editor.
It would be helpful to the Committee if you could provide one copy of all published
material that may not be readily available. Also, to the maximum extent practicable,
please supply a copy of all unpublished speeches you made during the past five years
on issues involving agriculture, nutrition, forestry or commodity fiitures policy or
related matters.
/ have not had any items published. My speeches have all been in outline form and
normally consists of financial condition of the organization being served. These
speeches normally take the form of overheads where explanations are given.
12. Health: What is the present state of your health?
My present health status is very good. I have never had a serious illnesses and
have had no treatmerui.
68
FINANCIAL DATA AND CONFLICT OF INTEREST (PUBLIC)
1. Have you severed all connections with your immediate past private sector employers,
business firms, associations, and/or organizations?
All responsibilities with previous employers and previous organizations have been
severed, (traditional post retirement dinner to be held on June 27, 1994. This has
been a standing tradition that when president's retire, they come to the next meeting
to be honored. This invitation was extended in January 1994.)
2. List sources, amounts and dates of all anticipated receipts from deferred income
arrangements, stock options, incompleted contracts and other future benefits which you
expect to derive from previous business relationships, professional services, firm
memberships, former employers, clients, or customers.
/ am receiving the following items of compensation from my previous employers.
1. Retirement due to merger of Spokane and Omaha Farm Credit Banks
a. Minnesota Mutual Insurance Company 3,500/month
b. Nations Bank of Texas 500/month
2. Benefits are provided by AgAmerica.FCB, until 3/31/96 in the form of medical,
dental, and life insurance. Employee pays most of the premiums.
3. Do you, or does any partnership or closely held corporation in which you have an
interest, own or operate a farm or ranch? (If yes, please give a brief description
including location, size and type of operation.)
We own a 320 acre farm in Atkins, Arkansas. We rent the Farm to Mr. Troy Austin
who is not a Farm Credit Borrower. We receive 50% of the Rice proceeds and
25% of the soybean and wheat proceeds. We pay one half of the crop expenses of
rice and none of the soybean and wheat expenses.
4. Have you, or any partnership or closely held corporation in which you have an interest,
ever participated in Federal commodity price support programs? (If yes, provide all
details including amounts of direct government payments and loans received or
forfeited by crop and farm, etc. during the past five years.)
No Federal Support proceeds have been received by myself.
5. Have you, or any partnership or closely held corporation in which you have an interest,
ever received a direct or guaranteed loan from or cosigned a note to the Farmers Home
Administration? (If yes, give details of any such loan activity during the past five
years.)
No FmHA loans have ever been used by myself.
69
6. Have you, or any partnership or closely held corporation in which you have an interest,
ever received payments for crop losses from the Federal Crop Insurance program? (If
yes, give details.)
/ have never received any payment for crop losses from the Federal Crop Insurance
Program.
I. If confirmed, do you have any plans, commitments, or agreements to pursue outside
employment or engage in any business or vocation, with or without compensation,
during your service with the government? (If so, explain.)
/ have no agreements or intentions to engage in other employment during my service
with the government.
8. Do you have any plans to resume employment, affiliation, or practice with your
previous employers, business firms, associations, or organizations after completing
government service? (If yes, give details.)
/ have no plans to resume affiliation with anyone after employment with the
government.
9. Has anyone made a commitment to employ you or retain your services in any capacity
after you leave government service? (If yes, please specify.)
No one has committed to employ me after government service.
10. Identify all investments, obligations, liabilities, or other relationships which involve
potential conflicts of interest in the position to which you have been nominated.
/ know of no items that present conflicts of interest except
• previous employment with Spokane Bank.
• Previous Board Member of Farmer Mac Organization.
II. Have you ever received a government guaranteed student loan? If
so, has it been repaid?
No government loan has been received.
12. If confirmed, explain how you will resolve any potential conflict of interest, including
any that may be disclosed by your responses to the above items.
Agreements to recuse will be signed on
• Spokane Bank - One year from March 31, 1994
• Farmer Mac — One year from May 13, 1994
70
Office of Government Etphcs,
"Washington, DC, May 23, 1994.
Hon. Patrick J. Leahy,
Chairman, Committee on Agriculture, Nutrition, and Forestry,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: Under the Ethics in Government Act of 1978, presidential
nominees requiring Senate confirmation who are not expected to serve in their Gov-
ernment positions for more than 60 days in a calendar year are not required to file
public financial disclosure reports. The Act, however, contains a provision in section
101(b) which allows the committee holding the confirmation hearing to request any
financial information it deems appropriate from the nominee.
We understand that your committee desires to receive a financial disclosure re-
port (SF-278) from any presidential nominee for whom your committee holds a con-
firmation hearing, along with a written opinion from this Office regarding any pos-
sible confiicts of interest.
Therefore, I am forwarding a copy of the financial disclosure report of Clyde A.
Wheeler, Jr., who has been nominated by President Clinton to serve as a member
on the Board of Directors of the Federal Agricultural Mortgage Corporation (Farmer
Mac). Because Mr. Wheeler is not expected to serve more than 60 days in any cal-
endar year, the enclosed report and this letter are subnaitted to you in accordance
with your committee's confirmation procedures and will be available for public in-
spection only to the extent provided oy your practices. There is no authority under
the Act for public release of this material by the executive branch.
We have reviewed the report and have obtained advice from Farmer Mac concern-
ing any possible confiict in light of its functions and the nominee's proposed duties.
We note that Mr. Wheeler will not be subject to normal executive branch standards
of conduct, since Farmer Mac is not considered to be an executive agency but rather
is one of a group of entities known as Government Sponsored Enterprises, and be-
cause its Board members are not employees of the Federal Government. Nonethe-
less, Board members are subject to conflict of interest and disclosure regulations is-
sued by the Farm Credit Administration at 12 C.F.R. Part 650 and Farmer Mac's
own conflict of interest requirements.
Based thereon, we believe that Mr. Wheeler will be in compliance with applicable
laws governing conflicts of interest.
Sincerely,
Stephen D. Potts,
Director.
Enclosure
71
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77
REVIEWER'S COMMENTS
Continuation of Comments from Cover Page of SF 278 for
Clyde A. Wheeler. Jr., Nominee
May 18, 1994
The information in this report (SF 278) was reviewed and corrections (to pages
identified as "revised 5/18/94") and clarifying explanations were made on the basis of
information provided by the nominee and other relevant sources to the extent necessar>' to
formulate the opinion of the reviewer expressed on the cover page of the report. The
nominee reviewed a copy of the report as revised and stated to the reviewer by telephone .
that the information provided is true, complete and correct to the best of his knowledge.
Explanatorv' comments regarding certain entries on the report, keyed to the relevant page
and item numbers of the report (as revised) follow:
Schedule A:
Pg. 2. item #1: Clear Creek Ranch - The ranch consists of 2040 acres of land
owned by the filer, plus an additional 700 acres of land rented by the filer from another
owner. The ranch is primarily operated by the filer's son. Alfalfa, hay and wheat are
raised for use on the ranch and for sale. In addition, a cow/calf operation, which involves
the purchase of calves and grazing them for sale, is conducted on the ranch. About 300
head of cattle are currently being raised on the ranch. Income from the farming operation
is divided between the filer and his son, but the son has no ownership interest in the ranch
at this time.
NOTE: Farm ownership and/or operation does not necessarily create a
conflict or appearance of conflict with service on the Board of Farmer Mac in
view of the statutory requirement that at least 2 of the 5 Presidentially appointed
members of the Board "be experienced in farming or ranching" (12 U.S.C.
2279aa-2(b)(2)(c)(iv)). Further, service by the nominee on the Board of Farmer
Mac would not appear to have any direct and predictable effect on the value of the
nominee's farmland as an investment.
Pg. 2. item #2: Cattle — This asset consists of about 295 head of cattle currently
being raised on the filer's ranch. The filer owns half of the cattle jointly with his wife.
The other half of the cattle are owned by the filer's son. Cattle are purchased as calves
and grazed for sale which typically occurs after one year.
Pg. 2. item #3: Sho-Bar Energy, Inc. -- Sho-Bar is a small oil and gas company
formed by the filer's nephew. This company owns and operates oil and gas wells. The
filer contributed money to the formation of Sho-Bar retaining an equity interest in some
of the wells being operated, estimated by the filer to be about a 3% interest. This asset
earns royalties on gas and oil produced.
78
Pg. 2. item #4: Unit Drilling -- This asset consists of two gas and oil wells located
on the filer's ranch and owned by the filer.
Pg. 2. item #6: ORYX Energy Co. explores for and produces oil and natural gas in
the U.S. and abroad. In 1988 ORYX was spun off from the Sun Company as Sun
Exploration and Production, but changed its name in 1989. This company is one of the
largest independent oil and gas exploration companies in the world.
Pg. 3. item #1: Sun Company, Inc. is engaged in production of natural gas and oil.
Pg. 3. item #2: MPS Municipal Bond Fund is a widely held investment fund,
which is publicly traded and available, and consists of a wide diversity of municipal
bonds. The filer does not exercise control over the assets held by the fund. Accordingly,
because the asset is an excepted investment fund, the underlying holdings of the fund are
not required to be separately listed.
Pg. 3. item #5: Premium Account Fund, held in the filer's wife's name but jointly
owned by the filer, is a money market fund maintained by Kidder. Peabody for
investment of client funds. This fund is a widely held investment fund, which is publicly
traded and available, and consists of a wide diversity of securities totaling approximately
$750 million in value. The filer's spouse does not exercise control over the assets held by
the fund. Accordingly, because the asset is an excepted investment fund, the underlying
holdings of the fund are not required to be separately listed.
Schedule C —
Part 11 -
Pg. 5. item #1 : The filer participates in a pension program provided by his former
employer the Sun Company, described as follows: Receives income of about $80,000
annually from a company pension plan. The pension is a defined benefit plan which
provides an annual cash benefit to the filer based on his years of service and level of
compensation while employed by Sun Company. No plan assets are managed by the filer.
The filer's participation in the pension plan began in April 1984. Benefits under the plan
continue until the filer's death, after which the filer's wife will receive payments under
the plan at 50% of the level previously being paid.
79
Schedule D —
Pan I -
Pg. 6. item #2: "Centennial Farm & Rancli Program, Oklahoma Historical Society,
Wiley Post Historical Building, Oklahoma City, OK 73105. A state sponsored
organization that identifies and provides recognition to family farms held for 100 years or
more in the same family. This organization meets infrequently and has not met in the last
two years. The filer has ser\'ed as member of the Review Panel for the organization,
without compensation, since his appointment by the Governor of Oklahoma in 1988."
Pg. 6. item #3: "Oklahoma Academy for State Goals, 121 East Sheridan Avenue,
Suite 106. Oklahoma City, OK 73101 . This is a non-profit private organization that
studies and promotes state education and economic policies (think tank type operation).
Quarterly meetings are held by the Academy members. The filer has served as Vice
President since 1989, without compensation."
Pg. 6. item #4: "Oklahoma Foundation for Excellence, 621 N. Robinson, Suite
350. Oklahoma City. OK 73102. The Foundation is a non-profit private organization
founded by Senator Boren in the late 1980"s. The purpose of the Foundation is to
promote and recognize excellence in education in the state. The filer has served as
member of the Board of the Foundation, without compensation, since his appointment by
Senator Boren in 1991.
NOTE: Mr. Wheeler has indicated his present intention is to retain the positions
he holds with these organizations after his confirmation as a member of the
Farmer Mac Board.
Thomas R. Clark, Reviewer
Vice President - Corporate Relations
Federal Agricultural Mortgage Corporation
80
BIOGRAPHICAL INFORMATION (PUBLIC)
Clyde A. "C. A." Wheeler, Jr.
1. Full name (include any former names used).
Clyde Arlie Wheeler, Jr. ("C. A.")
2. Address: List current place of residence and office
address(es). List all office and home telephone numbers where
you may be reached.
Clear Creek Ranch
R.R. 1, Box 386
Laverne, OK 73848
Home Phone Number (405) 837-5521
3. Date and place of birth.
March 21 , 1921
Laverne, Oklahoma
4. Marital Status (include maiden name of wife or husband's
name). List spouse's occupation, employer's name, and
business address (es).
Married
Barbara Ann (Dodd) Wheeler
Occupation: Housewife
5. Education : List each college and graduate or professional
school you have attended, including dates of attendance,
degrees received, and dates degrees were granted.
See attached resume--page 1 .
6. Employment Record. List (by year) all business or
professional corporations, companies, firms, or other
enterprises, partnerships, institutions and organizations,
nonprofit or otherwise, including farms, with which you were
connected as an officer, director, partner, proprietor, or
employee since graduation from college; include a title and
brief job description. Are you now or have you ever been an
officer or director of any financial institution or entity?
Have had farming interests since 1959.
1968 to present--Clear Creek Ranch, a 2,000 acre hay and
ranch operation; owner and operator.
81
Biographical Information (Public)
Clyde A. "C. A." Wheeler, Jr.
Page 2
1986-1989--Bishop, Cook, Purcell and Reynolds;
Legislative Consultant
1984-1 986--Riddel 1 , Fox, Holyroyd and Jackson;
Legislative Consultant
1 961-1 984--Sun Company, Inc., Vice President
1959-1960--President Dwight D. Eisenhower; Staff
Assist ant -Congressional Relations
1954-1 959--Secretary of Agriculture Ezra Taft Benson;
Special Assistant-Congressional Relations
1 951-1 954--U . S. Congressman Page Belcher, Executive
Secretary-Treasurer of Office
See attached resume--pages 2 and 3.
No.
Military Service: Have you had any military service? If so,
give particulars, including the dates, branch of service, rank
or rate, serial number, and type of discharge received.
Yes.
U. S. Navy
August 1943-February 1963
Aviation Cadet until September 1945
Navy Reserves until 1963
Discharged as a Lt . J. G.
USNR (Honorable) in 1963
#530346/1355
U. S. Army
Civilian Pilot Training Program
July 1942-August 1943
Discharged Private Enlisted Reserve Corps
(Honorable) in August 1943
#17,115,352
82
Biographical Information (Public)
Clyde A. "C. A." Wheeler, Jr.
Page 3
8. Government Service: State (chronologically) your government
service or public offices you have held, including the terms
of service grade levels and whether such positions were
elected or appointed.
1951-1954--Executive Secretary to U.S. Congressman Page
Belcher
$5,000 per year
Appointed
1954-1959--Special Assistant (Congressional Relations) to
Secretary of Agriculture Ezra Taft Benson
GS 15
Appointed
1959-1 960--Staff Assistant to President Dwight D.
Eisenhower
GS 17
Appointed
9. Honors and Awards: List any scholarships, fellowships,
honorary degrees, and honorary society memberships that you
received and believe would be of interest to the Committee.
See attached resume--page 3.
10. Political Affiliation: The statue creating the Federal
Agricultural Mortgage Corporation requires that no more than
three public members of the Board be from the same political
party. List your current political party registration or
affiliation.
Republican.
11. Other Memberships: List all organizations to which you
belong, excluding religious organizations.
See attached resume--pages 2 and 3.
12. Published Writings: List the titles, publishers, and dates of
books, articles, reports, or other published materials
(including published speeches) you have written. Please
include on this list published materials on which you are
listed as the principal editor. It would be helpful to the
Committee if you could provide one copy of all published
material that may not be readily available. Also, to the
maximum extent practicable, please supply a copy of all
unpublished speeches you made during the past five years on
83
Biographical Information (Public)
Clyde A. "C. A." Wheeler, Jr.
Page 4
issues involving agriculture, nutrition, forestry or commodity
futures policy or related matters.
None .
13. Health: What is the present state of your health?
Good.
84
FINANCIAL DATA AND CONFLICT OF INTEREST (PUBLIC)
Clyde A. "C. A." Wheeler, Jr.
If confirmed, do you have any plans, commitments, or
agreements to pursue or continue outside employment or engage
in any business or vocation, with or without compensation,
during your service with the government? (If so, explain.)
Plan to continue operating our cattle and hay ranch as I
have been--nothing more.
List sources, amounts, and dates of all anticipated receipts
from deferred income arrangements, stock options, incompleted
contracts and other future benefits which you expect to derive
from previous business relationships, professional services,
firm memberships, former employers, clients, or customers.
None.
Do you, or does any partnership or closely held corporation in
which you have an interest, own or operate a farm or ranch?
(If yes, please give a brief description including location,
size, and type of operation.)
Yes.
My wife and I own and operate with my son, Clyde A.
Wheeler III, a 2,000 plus acre cattle and hay ranch in
northern Ellis County in Northwestern Oklahoma. We lease 700
acres of dry grassland. We have 300 acres of alfalfa under
sprinklers and 220 acres of bluestem grass under sprinklers.
We have 130 acres of dryland farm ground and 1,346 acres of
dry grassland plus the 700 acres of leased grassland. We
usually run around 250 to 300 cows and calves each year.
Have you, or any partnership or closely held corporation in
which you have an interest, ever received a direct or
guaranteed loan from or cosigned a note to the Farmers Home
Administration or Farm Credit System? (If yes, give details
of any such loan activity during the past five years.)
My son, Clyde A. Wheeler III, has a Farmers Home
Administration guaranteed loan in the amount of $119,000. I
have a regular Federal Land Bank loan in the amount of
$525,000 at 9% interest.
Do you have any plans to resume employment, affiliation, or
practice with your previous employers, business firms,
associations, or organizations after completing government
service? (If yes, give details.)
I plan to continue operating our cattle and hay ranch as
I have been.
85
Financial Data and Conflict of Interest (Public)
Clyde A. "C. A." Wheeler, Jr.
Page 2
6. Has anyone made a commitment to employ you or retain your
services in any capacity after you leave government service?
(If yes, please specify.)
No.
7. Identify all investments, obligations, liabilities, or other
relationships which involve potential conflicts of interest in
the position to which you have been nominated.
The only one I can think of is the Federal Land Bank
loan, and I have been assured that it presents no problem.
8. If confirmed, explain how you will resolve any potential
conflict of interest, including any that may be disclosed by
your responses to the above items.
I don't plan to involve myself in any activity that will
present a conflict of interest. If any conflict does
develop, I will back up from whatever it is that might cause
a problem.
86
RESUME
CLYDE A. WHEELER, JR ■
Address :
Vital Statistics:
Route 1, Box 386
Clear Creek Ranch
Laverne, Oklahoma
(405) 837-5521
73848
Born March 1 2 ,
Oklahoma
Married former
Enid, Oklahoma
Three children
1921, Laverne,
Barbara Ann Dodd of
Barbara Ruth
Clyde Arlie,
Jane Dodd
Five grandchildren
III
Military Service:
Veteran of World War II, 3 years and
2 months of active service. (Aviation
--pilot training and aircraft
testing.) Honorable discharge with
rank of Lieutenant Junior Grade from
United States Navy
Education:
Elementary and Secondary education and 4-H Club leader in
Harper County Public Schools, Oklahoma
American Business College, Wichita, Kansas (1938-40)
Graduate of two-year Business Administration course
Oklahoma City University, Oklahoma City, Oklahoma (1949)
Life Teaching Certificate
Oklahoma State University, Stillwater, Oklahoma (1946-47;
1949-50) B.A. Degree in History, August, 1947
M.A. Degree in Government, August, 1950 (degree received
in 1951 )
Political Activities:
Young Republican Affairs, 1946-54
Oklahoma Republican State Central Committee (1950), field
man in gubernatorial, senatorial, and congressional
campaigns
National Committeeman, Oklahoma Young Republican Federation,
1952-54
National Vice President, National Young Republican Federation,
1953-54
87
Clyde A. Wheeler, Jr.
Page 2
Political Activities (Continued):
U.S. Congressional candidate. Sixth District of Oklahoma,
1960. Won by 188 votes in the general election but lost by
76 votes in a recount, December 16, 1960.
Chairman, State Advisory Committee, Bud Wilkinson U.S. Senate
Campaign, 1964
Active participant in Bellmon, Belcher, and Bartlett campaigns
as fundraiser and advisor in Oklahoma
First District Campaign Chairman and State Finance Chairman,
Oklahoma Nixon for President Committee, 1968
Oklahoma Member of Electoral College, 1968
Active participant in all Republican Presidential and Oklahoma
Campaigns since 1952
Oklahoma Co-Chairman of Burns Hargis for Governor Committee
O rqanizations (Member or Former Member):
United Methodist Church, Laverne, Oklahoma
McLean Presbyterian Church, McLean, Virginia
Tulsa Scottish Rite, Tulsa, Oklahoma
International Club, Washington, D.C.
Capital Hill Club
The Washington Golf and Country Club
The Tulsa Club
The American Legion
Oklahoma Northwest, Inc.
Business-Government Relations Council
Independent Petroleum Association of America
American Petroleum Institute
National Association of Manufacturers
U.S. Chamber of Commerce
Who's Who in America, 1960
Who's Who in Commerce and Industry, 1966
Who's Who in South and Southwest, 1969
Who's Who in Oil and Gas, 1970
Who's Who in Finance and Industry, 1972
Agricultural Round Table
Agriculuture Council of America
Arts and Sciences Centennial Planning Commission of OSU
Life Member of the OSU Alumni Association
Oklahoma Farm Bureau
Oklahoma Cattlemen's Association
Oklahoma Agriculture/Rural Council
Member or Former Member - Board of Directors:
Centennial Farms
The Carlton Club
88
Clyde A. Wheeler, Jr.
Page 3
Member or Former Member - Board of Directors (Continued):
College of Business Administration Associates, Oklahoma State
University
Mid-Continent Oil and Gas Association
Goodwill Industries, Washington, D.C.
Public Affairs Council
Business-Government Relations Council
Ford's Theater
NAM "Washington Representatives Advisory Council to the NAM
President"
American Association of Political Consultants
Capital Hill Club
American League of Lobbyists
Oklahoma State Regents for Higher Education, Chairman, 1968
Boy Scouts of America, Indian Nations Council
Oklahoma Public Expenditures Council
Oklahoma State Chamber of Commerce
Tulsa Council of Churches
Junior Achievement of Greater Tulsa, Inc.
Salvation Army
Goodwill Industries, Oklahoma
Oklahoma Council on Economic Education
Thomas Gilcrease Institute of American History and Art
Boston Avenue Methodist Church
Board of Governors, Oklahoma State University Foundation
(Board of Trustees)
Bryce Harlow Foundation
Oklahoma Center for the Advancement of Science and Technology
(Vice-chairman)
High Plains Economic Council
Oklahoma Academy for State Goals, Vice President
Oklahoma Foundation for Excellence
Oklahoma School of Science and Mathematics
Awards :
Distinguished Alumnus Award, 1978, Oklahoma State University
Fellow, Academy of Arts and Sciences, 1979; Oklahoma State
University
Award of Appreciation, 1968; Goodwill Industries
Lincoln Award, Ford's Theater, 1984
Hall of Fame, OSU Alumni Association (1988)
Clyde A. Wheeler, Jr., Sun Company Chair in Hydrogeology
(OSU-1988)
89
Clyde A.
Wheeler, Jr.
Page 4
Employment Record:
1989 - Present
1984 - 1989
1974
1970
1984
1974
1970 - January/
November
1968
1966
1964
1969
1968
1966
1961 - 1964
1959 - Present
1959 - 1960
1954 - 1959
1951
1954
1950 - 1951
1949 - 1950
1948 - 1949
1947 - 1948
1942
1940
1947
1942
Farmer /Rancher
Consultant, Bishop, Cook,
Purcell & Reynolds
Vice President, Government
Relations, Sun Company, Inc.,
(Formerly Sun Oil Company)
Director, Government Relations,
Sun Oil Company
Washington Representative, Sun
Oil Company
Vice President, Public Affairs
and Public Relations, Sun Oil
Company-DX Division , and Merger
Management Staff
Vice President, Public Affairs
and Public Relations, Sunray DX
Oil Company
Director, Public Affairs and
Public Relations, Sunray DX Oil
Company
Public Affairs Representative,
Sunray DX Oil Company
Owner and operator of a ranch in
Northwestern Oklahoma
Staff Assistant to President
Dwight D. Eisenhower
Special Assistant (Congressional
Relations) to Secretary of
Agriculture Ezra Taft Benson
Executive Secretary to
Congressman Page Belcher of
Enid, Oklahoma
Field man for Oklahoma
Republican State Committee
Teaching Fellow at Oklahoma
State University
Sales Manager and Partner of
Masonry Products Manufacturing
and Construction Company , Garden
City, Kansas
Principal, Eureka Public
Schools, Wichita, Kansas
Military Service
Office Manager and Clearance
Officer, Municipal Airport,
Wichita, Kansas
90
ClydeA.
Employment Record (Continued)
Wheeler , Jr .
Page 5
1938
1940
Various part-time jobs while
attending American Business
College, Wichita, Kansas
11-93
91
CLYDE A. (C.A.) WHEELER, JR.
Fanner/Rancher/Consultaiit
Clyde Wheeler's public service career began in the Nation's Capitol in
1951, when as Administrative Assistant he helped form the staff of Representative
Page Belcher (R-Okla.)- Three years later he became Special Assistant to Secretary
of Agriculture Erza Taft Benson. In 1959 Mr. Wheeler was named Staff Assistant to
President Eisenhower. He was a Veteran of World War II with three years and two
months active service. He received an honorable discharge with the rank of
Lieutenant Junior Grade from the United States Navy.
In 1960 he was declared the victor in Oklahoma's Sixth District
Congressional race, but in December of that year, was counted out by 76 votes in a
special recount. He has held many positions in the Republican Party, from Campaign
Manager to National Committeeman of the Oklahoma Young Republican Federation to
National Vice-President of the National Young Republican Federation.
Mr. Wheeler's business career began when he joined Sunray DX Oil Company
in Tulsa in 1961. Three years later he was named Director of Public Affairs and
Public Relations. He was elected Vice President in 1967 and was appointed to the
Merger Manager's staff following Sunray 's merger with Sun Company, Inc. in 1969. He
served as Sun's Washington Corporate Representative from 1970 to 1984. In 1974 he
was elected Corporate Vice-President and retired from that position in April of
1984. After that he was a Consultant to Sun Company, Inc. and Liie American
Petroleum Institute until 1989.
Mr. Wheeler graduated from Oklahoma State University with a Bachelor's
Degree in History and Master's in Political Science. He is also a graduate of the
American Business College. He obtained a Life's Teaching Certificate in 1949 from
study at Oklahoma City University. (He taught two years.) From OSU he received the
Distinguished Alumnus Award in 1978 and Fellow, Academy of Arts and Sciences in
1979. On March 18, 1988, he was inducted into the OSU Alumni Hall of Fame. On
November 8, 1988, Sun Company, Inc. endowed a Chair in his name, the Clyde A.
Wheeler, Jr. Sun Company Chair in Hydrogeology .
He has long been active in energy, agriculture, education, political and
other community activities. He has served as Chairman of the Oklahoma State Regents
for Higher Education and is currently a member of the Oklahoma State University
Foundation Board of Governors. He is a board member or former board member of many
state and national petroleum and business trade associations, as well as several
church, civic and cultural groups. He served on the Executive Committee and as
Vice-chairman of the Board of Directors of the Oklahoma Center for the Advancement
of Science and Technology. He currently serves on the Executive Committee of the
Oklahoma Academy for State Goals and as a trustee of the Oklahoma Foundation of
Excellence, the Oklahoma School of Science and Mathematics and the Board of the
Oklahoma Heritage Association. He is serving as a member of the Community
Empowerment Group of the Oklahoma Futures and Oklahoma Department of Commerce.
Mr. Wheeler has had farming interests since 1960. He is a member of
various farm organizations such as the Farm Bureau, the Oklahoma Cattlemen's
Association and the Oklahoma Agricultural Council.
He and his wife, Barbara, live at Clear Creek Ranch, Laverne, Oklahoma, a
cattle and hay ranch, which he and his son jointly operate. They have two
daughters, Ruth and Jane, and a son, Clyde A., Ill, and five grandchildren.
92
Office of Government Ethics,
Washington, DC, April 25, 1994.
Hon. Patrick J. Leaiiy,
Chairman, Committee on Agriculture, Nutrition, and Forestry,
U.S. Senate, Washington, DC.
Dear Mr. Chair.MAN: Under the Ethics in Government Act of 1978, presidential
nominees requiring Senate confirmation who are not expected to serve in their Gov-
ernment positions for more than 60 days in a calendar year are not required to file
public financial disclosure reports. The Act, however, contains a provision in section
101(b) which allows the committee holding the confirmation hearing to request any
financial information it deems appropriate from the nominee.
We understand that your committee desires to receive a financial disclosure re-
port (SF-278) from any presidential nominee for whom your committee holds a con-
firmation hearing, along with a written opinion from thiis Office regarding any pos-
sible confiicts of interest.
Therefore, I am forwarding a copy of the financial disclosure report of Marilyn F.
Peters, who has been nominated by President Clinton to serve as a member on the
Board of Directors of the Federal Agricultural Mortgage Corporation (Farmer Mac).
Because Ms. Peters is not expected to serve more than 60 days in any calendar year,
the enclosed report and this letter are submitted to you in accordance with your
committee's confirmation procedures and will be available for public inspection only
to the extent provided by your practices. There is no authority under the Act for
public release of this material by the executive branch.
We have reviewed the report and have obtained advice from Farmer Mac concern-
ing any possible conflict in light of its functions and the nominee's proposed duties.
We note that Ms. Peters will not be subject to normal executive branch standards
of conduct, since Farmer Mac is not considered to be an executive agency but rather
is one of a group of entities known as Government Sponsored Enterprises, and be-
cause its Board members are not employees of the Federal Government. Nonethe-
less, Board members are subject to conflict of interest and disclosure regulations is-
sued by the Farm Credit Administration at 12 C.F.R. Part 650 and Farmer Mac's
own conflict of interest requirements.
Based thereon, we believe that Ms. Peters wiU be in compliance with applicable
laws governing conflicts of interest.
Sincerely,
Stephen D. Potts,
Director.
Enclosure
93
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100
REVIEWER'S COMMENTS
Continuation of Comments from Cover Page of SF 278 for
Marilyn F. Peters, Nominee
April 21, 1994
The information in this report (SF 278) has been reviewed and clarifying
explanations were obtained from the nominee and other relevant sources to the extent
necessary to formulate the opinion of the reviewer expressed on the cover page of the
report. Explanatory comments regarding certain entries on the report, keyed to the
relevant page and item numbers of the report follow:
Cover page —
Under the heading "Reporting Status" the block marked "Calendar Year Covered by the
Report" should be blank given that the reporting individual is a new entrant or nominee.
The Senate committee considering the nomination should be marked as the "Committee
on Agriculture, Nutrition, and Forestry."
The "No" block should be marked in response to the question regarding creation of a
qualified diversified trust because the nominee does not intend to create a qualified
diversified trust.
Schedule A:
Pg. 1, item#l: Agricultural land in Dumarce and White Twps., Marshall County,
SD ~ This land is rented to another operator. The rental agreement provides for payment
in the form of commodities produced on the land by the operator, one third to the
nominee and her husband and two thirds to the operator. Production expenses are
similarly shared under the agreement. The nominee and her husband do not control
farming activities on this land.
NOTE: Farm ownership and/or operation does not necessarily create a conflict or
appearance of conflict with service on the Board of Farmer Mac in view of the statutory
requirement that at least 2 of the 5 Presidentially appointed members of the Board "be
experienced in farming or ranching" (12 U.S.C. 2279aa-2(b)(2)(c)(iv)). Further, service
by the nominee on the Board of Farmer Mac would not appear to have any direct and
predictable effect on the value of the nominee's farmland as an investment.
P^. 1. item #4: AIM Charter Fund -- This asset is a growth and income mutual
fund managed by AIM. The identity of the indi\ idual stocks and other assets that make
up the fund is not readily available, but the fund assets are described as widely
diversified.
101
Pg. 1. item #5: First Variable Life Annuity (IRA) -- This asset is a fixed rate
annuity offered by First Variable Life Insurance Company, Kansas City, MO. First
Variable Life Insurance Company is not a Farmer Mac stockholder and is not known to
be involved in agricultural lending.
Pg. 2. item #12: FHLMC - This asset consists of interest bearing CMOs
(collateralized mortgage obligations) issued by the Federal Home Loan Mortgage
Corporation (Freddie Mac) and backed by pools of residential housing mortgage loans.
Pg. 3. item #13: FNMA — This asset consists of interest bearing CMOs issued by
the Federal National Mortgage Association (Fannie Mae) and backed by pools of
residential housing mortgage loans.
Pg. 3. item #14: John G. Kinnard & Co. Prime Cash Money Market Fund ~ The
fund name of this asset is actually Federated Securities Fund. Kinnard. the nominee's
broker, subscribes to this funds on behalf of its clients. Money deposited in the Federated
Securities Fund is invested in a diversified portfolio of stocks and bonds. Information on
the specific securities in the Fund is not readily available.
Pg. 3. item #16: A new item (#16) "37 acres of agricultural land in Marshall
County. SD" should be added to Schedule A. The nominee advised that, in addition to
the rental of farm land reflected on pg. 1. item #1 of Schedule A, she and her husband
farm 37 acres of land on their ov\ti. "Asset value" of this land should be indicated as
"$1,001 - $15,000". Gross income from the property should be listed under the "other"
category as "proceeds from the production of agricultural commodities" in the amount of
approximately $7,000 annually. The land farmed by the nominee and her husband was
not enrolled in any government agricultural programs during the reporting period.
NOTE: See note regarding ownership and'or operation of farmland as a potential
conflict of interest.
Schedule D:
Part II: The block for "None" should be marked.
^- W^^W^
Thomas R. Clark, Re\ iewer
Vice President - Corporate Relations
Federal Agricultural Mortgage Corporation
102
Hay 3, 1994
United States Senate
Committee on Agriculture, Nutrition, and Forestry
Washington, D. C. 20510-6000
Re: Nomination to be a Member of the Board of Directors
of the Federal Agricultural Mortgage Corporation,
aka Farmers MAC .
To the Honorable Senator Leahy and all Members of the Committee
BIOGRAPHICAL INFORMATION (PUBLIC)
Full name (include any former names used).
MARILYN PETERS (middle name,FAL ; maiden name NELSON)
Address: List current place of residence and office
address(es). List all office and home telephone numbers
where you may be reached.
RR 1 BOX 64
BRITTON, SD 57430-9730
Phone: (605) 448-2578
Date and place of birth.
AUGUST 24, 1929 - BRITTON (MARSHALL COUNTY), SU
Marital Status ( include maiden name of wife or husband's
name) . List spouse' s occupation, employer's name and
business address(es).
MARRIED: EMERALD PETERS; self-employed farmer;
RRl Box 64
Britten , SD 57430-9730
Education : List each college and graduate or professional
school you have attended, including dates of attendance,
degrees received, and dates degrees were granted.
NORTHERN STATE UNIVERSITY, Aberdeen SD; (1947-48,
1949-1951) Bachelor of Science Degree in Education
with a major in mathematics, 1951.
HAMLINE UNIVERSITY, St. Paul, MN : 1948-1949
ALSO: Numerous short-term courses at both the
undergraduate and graduate levels in colleges/
universities in SD, lA, and ND to update
professional standing.
103
1 952- Cu rrent : Except for
my husband
have been
him of our
and 1 i vest
ret i red an
and pastur
1961-1968: Part-time phy
Britton, SD;
t ra ck coach .
1986-1991: DISCOVERY TOY
Consultant.
I have never been an of
financial institution o
t,
igh
Eng
th
se
a j
fa
ock
d r
e 1
si c
als
SD:
Sc
lis
e t
rve
oi n
rm
).
ent
and
al
0 9
hool faculty- m6 ^,,c...u ^ . ^.
,h and physical education.
;wo years (1953-55) when
id i n the U.S. Army , I
It owner/operator with
operation (small grain
We are currently semi-
out most of our crop
education teacher (K-12)
ymnas ti cs and girls
S, Martinez CA; Educational
ficer or director of any
r entity.
7. Military Service: Have you had any military service?
If so, give particulars, including dates, branch of service,
rank or rate, serial number and type of dischare received.
NONE
8. Government Service: State (chronologically) your government
service or public offices you have held, including the terms
of service grade levels and whether such positions were
elected or appointed.
1985-1987: SD Job Training Coordinating Council and
SD Private Industry Council - appointed
by the Governor.
1985-1992: SD Council on Vocational Education, and
National Association of State Councils on
Vocational Education, a representative of
agriculture and small business - appointed
by the Governor. For NASCOVE I served as
chair of meetings for members respresenting
agriculture.
1985-1988: SD Professional Administrators Practices
and Standards Commission - appointed by
the Governor .
1 991 -Cu rrent : School Board Member, Britton Public
Schools - public election.
104
In public political service, I am a longtime
Precinct Commi tteewoman for the Marshall County
Republican Party and have served, by election,
in the following positions:
State Central Commi tteewoman ;
1979-1983, 1987-1991
County Chairman;
1983-1987, 1991-1993
I am also currently appointed by the Bishop of the
Dakotas Area United Methodist Church to serve on
the Episcopacy Committee.
9. Honors and Awards : List any scholarships, fellowships,
honorary degrees, and honorary society memberships that you
received and believe would be of interest to the Committee.
In the academic field, I was graduated with highest
honors (1951) and inducted into mathematics, English,
and Education fraternities.
1984: Recipient of the Marshall County SD
Stewardship of Soil Conservation Award-
EmeraldandMarilynPeters
10. Political Af f i 1 i ati on : The statute creating the Federal
Agricultural Mortgage Corporation requires that no more than
three public members of the Board be from the same political
party. List your current political party registration or
affiliation.
Registered Republican
11. Other Memberships: List all organizations to which you
belong, excluding religious organizations.
Marshall County Republican Party
SD Fa rmers Un i on
SD Chapter BG, P. E. 0.
Britton Study Club
Marshall County Historical Society
12. Publi shed Writings: List the titles, publishers, and dates
of books, articles, reports, or other published materials
(including published speeches) you have written. Please
include on this list published materials on which you are
listed as the principal editor. It would be helpful to the
Committee if you could provide one copy of all published
material that may not be readily available. Also, to the
maximum extent practicable, please supply a copy of all
unpublished speeches you made during the past five years
on issues involving agriculture, nutrition, forestry or
commodity futures policy or related matters.
"Rose of the Prairie": South Dakota Magazine;
May 1989 Pioneer Edition^ (I give Chautauqua
portrayals of this 1882 Dakota pioneer woman;
105
Dr. Abbie Jarvis, one of SD's first licensed women
pharmacists and doctors; and Mary Montgomery Borglum,
wife of sculptor Gutzon Borglum.)
13. Health: What is the present state of your health?
Good.
106
FINANCIAL DATA AND CONFLICT OF INTEREST (PUBLIC;
If confirmed, do you have any plans, commitments, or
agreements to pursue or continue outside employment or
engage in any business or vocation, with or without
compensation, during your service with the government?
(If so, explain.)
I would continue my role in our farming operation,
which at this time is substantially reduced from
earlier years ,
-Our Conservation Reserve Program (CRP) contract
129 acres, for $5800/year ends in 1999.
-Other income from our farm operation is predominantly
on a share basis with our rentor, and from pasture
rent, plus crops sold from the 37 acres we continue
to farm ourselves.
-My per diem reimbursement as a school board member.
-Cenex, unpaid accumulated dividends of $7,026
Do you, or does any partnership or closely held corporation
in which you have an interest, own or operate a farm or
ranch? (If yes, please give a brief description including
location, size and type of operation.)
YES - a farm in Dumarce and White Townships of
Marshall County SD - 1020 acres of crop land
(diversified small grain) and pasture (cattle).
Have you, or any partnership or closely held corporation in
which you have an interest, ever received a direct or
guaranteed loan from or cosigned a note to the Farmers Home
Administration or Farm Credit System? (If yes, give details
of any such loan activity during the past five years.)
NO
Do you have any plans to resume employment, affiliation, or
practice with your previous employers, business firms,
associations, or organizations after completing government
service? (If yes, give details.)
I have no plans to change
status .
my current employment
Has anyone made a commitment to employ you or retain your
services in any capacity after you leave government service?
(If yes, please specify.)
NO
107
Identify all investments, obligations, liabilities, or
other relationships which involve potential conflicts of
interest in the position to which you have been nominated,
NONE
If confirmed, explain how you will resolve any potential
conflict of interest, including any that may be disclosed
by your responses to the above items.
If any unforseen conflict of interest should arise,
I believe it could be handled expeditiously to avoid
continued concern.
108
Office of Government Ethics,
Washington, DC, June 14, 1994.
Hon. Patrick J. Leaiiy,
Chairman, Committee on Agriculture, Nutrition, and Forestry,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: In accordance with ihc Ethics in Government Act of 1978,
I enclose a copy of the financial disclosure report filed by Mary L. Schapiro, who
has been nominated by President Clinton for the position of chairman and commis-
sioner of the Commodity Futures Trading Commission (CFTC).
We have reviewed the report and have obtained advice from the CFTC concerning
any possible conflict in light of its functions and Ms. Schapiro's proposed duties.
Based thereon, we believe that Ms. Schapiro is in compliance with applicable laws
and regulations governing confiicts of interest.
Sincerely,
Stephen D. Potts,
Director.
Enclosure
109
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BIOGRAPHICAL INFORMATION (PUBLIC)
1. Full name (include any former names used) .
Mary L. Schapiro
2. Address: List current place of residence and office
address (es) . List all office and home telephone numbers where
you may be reached.
5207 38th Street, NW ,.
Washington, DC 20015
202-686-1723
US SEC
450 5th Street, KW
Washington, DC 20549
202-942-0700
3. Date and place of birth.
June 19, 1955
New York, NY
4. Marital Status (include maiden name of wife or husband's
name) . List spouse's occupation, employer's name and business
address (es) .
Charles A. Cadwell (attorney)
University of Maryland
IRIS Center
2105 Morrill Hall
College Park, MD 20742
5. Education: List each college and graduate or professional
school you have attended, including dates of attendance,
degrees received, and dates degrees were granted.
Franklin and Marshall College (1973-1977) BA 1977
National Law Center, George Washington Univ. (1977-1980) JD1980
6. Employment Record: List (by year) all business or
professional corporations, companies, firms, or other
enterprises, partnerships, institutions and organizations,
nonprofit or otherwise, including farms, with which you were
connected as an officer, director, partner, proprietor, or
employee since graduation from college; include a title and
brief job description.
1980 - 1981 Trial Attorney - Commodity Futures Trading Comm.
1981 - 1984 Counsel to Commissioner, and later Chairman, Susan
Phillips, CFTC
1984 - 1988 General Counsel, Futures Industry Association
1988 - present Commissioner, DS Securities and Exchange Comm.
117
Military Service: Have you had any military service? If so,
give particulars, including the dates, branch of service, rank
or rate, serial number and type of discharge received.
None
8. Government Service: State (chronologically) your government
service or public offices you have held, including the terms
of service grade levels and whether such positions were
elected or appointed.
Trial attorney, CFTC, grade 11-12
Counsel to Commissioner, grade 13-14
Counsel to Chairman, grade 15-16
SEC Commissioner, ES level 4 (appointed)
9. Honors and Awards: List any scholarships > fellowships,
honorary degrees, and honorary society memberships that you
received and believe would be of interest to the Committee.
Member, Board of Trustees, Franklin and Marshall College
(1994)
10. Other Memberships: List all organizations to which you
belong, excluding religious organizations.
American Bar Association, DC Bar
11. Published Writings: List the titles, publishers, and dates
of books, articles, reports, or other published materials
(including published speeches) you have written. Please
include on this list published materials on which you are
listed as the principal editor. It would be helpful to the
Committee if you could provide one copy of all published
material that may not be readily available. Also, to the
maximum extent practicable, please supply a copy of all
unpublished speeches you made during the past five years on
issues involving agriculture, nutrition, forestry or commodity
futures policy or related matters.
Fair and Efficient Administrative Proceedings: Report of the
Task Force on Administrative Proceedings (attached)
I have attached my speeches of the past five years.
12. Health: What is the present state of your health?
Excellent.
FINANCIAL DATA AND CONFLICT OF INTEREST (PUBLIC)
Have you severed all connections with your immediate past
private sector employers, business firms, associations, and/or
organizations?
Yes.
118
2. List sources, amounts and dates of all anticipated receipts
from deferred income arrangements, stock options, incompleted
contracts and other future benefits which you expect to derive
from previous business relationships, professional services,
firm memberships, former employers, clients, or customers.
None.
3. Do you, or does any partnership or closely held corporation
in which you have an interest, own or operate a farm or ranch?
(If yes, please give a brief description including location,
size and type of operation.)
No.
4. If confirmed, do you have any plans, commitments, or
agreements to pursue outside employment or engage in any
business or vocation, with or without compensation, during
your service with the government? (If so, explain.)
No.
5. Do you have any plans to resume employment, affiliation, or
practice with your previous employers, business firms,
associations, or organizations after completing government
service? (If yes, give details.)
No.
6. Has anyone made a commitment to employ you or retain your
services in any capacity after you leave government service?
(If yes, please specify.)
No.
7. Identify all investments, obligations, liabilities, or other
relationships which involve potential conflicts of interest
in the position to which you have been nominated.
None.
8. Have you ever received a government guaranteed student loan?
If so, has it been repaid?
Yes. I am current in my payments.
9. If confirmed, explain how you will resolve any potential
conflict of interest, including any that may be disclosed by
your responses to the above items.
In consultation with ethics counsel, I will recuse myself as
appropriate from specific matters.
119
THOMAS S FOLEY
THE SPEAKER
nCASf nryr to
COMCRtSSKWAt OtftCt
d )20l LOMCWOMTM HOB
W*5«.«.cio»» OC 20515-4705
AaCA Coof (202) 225-2006
Congrc£l£( of ttjc ^nitcb States
J^oust of iRtprefitntattbcS
aaasfiington. J3(C 20515
D
June 17, 1994
nt*S£ WPVT TO
OlSTftiCT o'ncts
WIST 601 FmsT AvtMUf
Secomd Floo« wist
SfOKAME. WA 99204
Ant* Cooe (5091 353-2155
] E 12929 Smacue
SK>«ane WA 992I6-0736
AjiE* Cooe 1509) 926-4434
n 28 W Maim
Walla Walla. WA 39362-26 I
AjtEA Cooe (509) 522-6372
My dear Mr. Chairman:
It is a ciistinct pleasure for me to write in strong support of
the nomination of Doyle Cook of Spokane, Washington, to be a member
of the Farm Credit Administration Board.
Doyle Cook is a remarkably talented individual who has
extensive experience that demonstrates his commitment to efforts to
strengthen the financial safety and soundness of the Farm Credit
System. His leadership was instrumental in the financial recovery
of the Spokane Farm Credit District Bank prior to its merger.
I am confident that Doyle Cook will work well with the other
members of the Farm Credit Administration Board. He is committed
to regulatory efforts that will protect both the safety and
soundness of the Farm Credit System and the farmer borrowers who
are the backbone of the system. His intelligence, broad
experience, and objectivity will make him a very important member
of the Farm Credit Administration Board.
I strongly recommend that the nomination of Doyle Cook be
approved, and I will appreciate your advising the other Senators
who serve on the Committee of my endorsement of his nomination.
With best wishes.
Foley
Member of Congress
The Honorable Patrick Leahy
Chairman
Committee on Agriculture, Nutrition and Forestry
United States Senate
Washington, D. C. 20510 ^ V
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