Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, March 16, 1990                   TAG: 9003162374
SECTION: VIRGINIA                    PAGE: B-3   EDITION: EVENING 
SOURCE: FISHER RICHMOND BUREAU
DATELINE: RICHMOND                                 LENGTH: Medium

TWO LEGISLATORS REMOVED FROM VIRGINIA PENSION BOARD

The surprise removal of Sen. Hunter Andrews of Hampton and Del. Robert Ball of Richmond was the latest development in the controversy over the proposed merger of RF&P railroad and CSX Corp.

The state holds about 20 percent of RF&P stock through its pension system, and the sale or trade of that stock to CSX requires approval of the General Assembly. That body is to consider the issue when it reconvenes for its annual veto session April 18.

Last month, Gov. Douglas Wilder blocked what he considered to be an effort by Andrews and Ball to get the assembly's speedy approval of the railroad merger.

The governor, who spent much of the legislative session engaged in thinly veiled warfare with Andrews, also took the unusual step of asking Attorney General Mary Sue Terry to investigate whether the two top-ranking legislators had violated the state's conflict-of-interest laws in their handling of the merger proposal.

Andrews, who owns stock in both CSX and RF&P, has dismissed the suggestion of a conflict, noting that his stock earns him less than $10,000 per year, the minimum needed under state law to trigger a conflict of interest.

Andrews - Senate majority leader and chairman of the Senate Finance Committee - and Ball, chairman of the House Appropriations Committee, also have dismissed the allegation by Wilder that they had tried to speed the sale of the state's RF&P shares during the regular assembly session.

Wednesday, Wilder installed his longtime political confidante, Jacqueline G. Epps, as chairwoman of the $11 billion state pension system to replace Charles B. Walker - a Republican who resigned under pressure from Wilder last month.

The governor charged that Walker had a conflict of interest because he headed the retirement system board while also serving on a special RF&P committee that recommended the merger.

Thursday morning, with Epps presiding and with top Wilder aide Walter McFarlane in attendance, the retirement board met in closed executive session for more than two hours.

When it emerged, Epps read a statement saying it was the consensus of the board that Andrews and Ball should be replaced as the state's RF&P directors. Replacing them will be Epps, a lawyer and Democratic Party leader in Richmond, and Mark T. Finn, a board member who heads a money management firm in Virginia Beach.

In her statement, Epps said the action was "not intended to be a reflection on the integrity of Sen. Andrews and Del. Ball or to suggest that they acted improperly."

But Epps said the board felt "our fiduciary responsibility to 58,000 state retirees and the $11 billion retirement fund - and, indeed, to the small investors in the RF&P - requires us to do what is necessary to eliminate any appearance of impropriety."