Second of Four Articles
During the middle of the savings and loan crisis, a dinner host once introduced John L. von Seggern as "the guy with the worst job in Washington."
No wonder. As congressional liaison for the Office of Thrift Supervision, it was his duty to tell lawmakers when a savings and loan association in their district was being closed.
"We were shutting down five a week for a while," Mr. von Seggern recalled.
Named director of external affairs in July - a post he held in an acting capacity for a year - Mr. von Seggern now heads Capitol Hill and press relations for OTS.
From one crisis to another during the past six years, the 38-year-old Mr. von Seggern has been the agency's point man with Congress. Today, the bulk of his time is spent pressing lawmakers to shore up the shaky Savings Association Insurance Fund.
But the worst of the industry's troubles have past, and lawmakers no longer dread his call, Mr. von Seggern said.
Though making Capitol Hill aware of OTS opinions on legislation is his primary task, Mr. von Seggern is adamant: he's not a lobbyist.
"We're not just trying to bring the OTS point of view," he said. "A lot of my work is fielding calls from the Hill."
Members frequently ask for help drafting legislation or resolving constituents' problems with thrifts.
But capitalization of the thrift insurance fund has been the top issue for Mr. von Seggern and his boss, acting OTS Director Jonathan Fiechter.
During the fall of 1993, Mr. Fiechter was a lonely voice warning about the insurance fund's future. Part of Mr. von Seggern's mission was to recruit the Treasury and the Federal Deposit Insurance Corp. as allies.
Now, FDIC Chairman Ricki Helfer and Treasury Under Secretary John D. Hawke Jr., are the administration's most visible advocates for the thrift fund bailout.
To bring Treasury, the FDIC, and lawmakers on board, Mr. von Seggern painted the problem in simple terms: Financing Corp. bonds used to finance the first industry bailout will default as institutions flee the fund to avoid its high premiums.
"We've never said the sky is falling, or the thrift industry is about to collapse. The problem is that Fico is in danger of not being paid."
Eric Mondres, a lobbyist with America's Community Bankers, a thrift trade group, said Mr. von Seggern's straightforward manner has won friends on Capitol Hill. "Not for a moment does anyone question what he's saying. That's not said of many people working in this town," he said.
"John was tremendously effective in providing OTS views to members," said Mr. Mondres, who was congressional liaison for the Resolution Trust Corp. Oversight Board when Mr. von Seggern joined OTS.
That was 1990, after a 10-year stint in the Air Force. A captain when he retired, Mr. von Seggern flew aerial refueling planes and directed his unit's planning branch.
He has a bachelor's degree in finance from Colorado State University. He had no legislative experience when he joined OTS.
"I'm not sure how I got here. But when I was hired, savings and loans were not all that popular in Washington and there weren't a lot of people clamoring to be the congressional liaison with their regulator," he said.
Mr. von Seggern said his role is to be an information source for lawmakers rather than protecting the agency's interests. "We only have a prayer if we're not trying to put on a political spin. If the Hill doesn't agree with us, the Hill doesn't agree."
Despite professing such nonchalance, Mr. von Seggern admits that legislative defeats do frustrate him. After the House Rules Committee squelched a deal to pass the thrift fund rescue as part of a spending bill one night in April, he stewed at home.
"That was when my wife, Gayle, suggested I was getting a little too close to the issue," he said.
In spite of that defeat, Mr. von Seggern expects Congress to approve legislation capitalizing the thrift fund soon. Once that hurdle is cleared, the next issue will be merging the thrift and bank charters.
OTS agrees that the thrift charter is out-of-date because it forces institutions to concentrate on low-profit residential lending, Mr. von Seggern said. But he will be a strong advocate for a new charter that preserves thrift powers such as insurance sales and real estate management.
One big issue: affiliations between banks and commercial firms. "We have power companies that own thrifts," he noted. "The affiliation issue is very, very difficult."
Mr. von Seggern conceded that many lawmakers are reluctant to allow common ownership of banks and commercial firms, but he hopes to convince them that the affiliations have strengthened thrifts and should be expanded to banks.
"We've been saying don't throw out what's good in the thrift charter just to get a bank charter," he said.
Next: Alice Goodman at the Federal Deposit Insurance Corp.
