(The following story by Jonathan Weisman was published in the January 23 issue of the Washington Post.)
WASHINGTON, D.C. — Treasury secretary nominee John W. Snow yesterday disclosed assets worth tens of millions — if not hundreds of millions — of dollars and compensation of more than $5 million in salaries, bonuses and directors fees in the past two years.
That compensation included country-club memberships valued at more than $45,000, provided by freight-railroad giant CSX Corp., where he is chairman and chief executive, according to newly released financial disclosure forms.
One of Snow’s country clubs, the Commonwealth Club of Richmond, admitted its first African American only in 1988, a fact that Democratic aides pledged to raise in Snow’s confirmation hearing on Tuesday. Still, no one suggested that his nomination is in jeopardy.
“The president remains confident” that Snow will be confirmed, White House spokesman Ari Fleischer told reporters aboard Air Force One yesterday. Snow has declined any public comment before his confirmation hearing.
The new disclosure forms reveal that the Bush administration will almost certainly be welcoming a multimillionaire into a Cabinet full of them. Snow disclosed assets worth between $77 million and $295 million.
When President Bush’s first Treasury secretary, Paul H. O’Neill, revealed assets of comparable magnitude, they received scant attention. But in the post-Enron era, executive compensation and perquisites are bound to receive much more scrutiny, warned Finance Committee aides from both political parties. When Bush nominated Snow, he touted his leading role in establishing new corporate governance standards as head of a blue-ribbon panel convened by the Conference Board.
Already, one corporate watchdog group, the Corporate Library, is decrying perks in Snow’s executive compensation package that include access to country clubs, the CSX-owned Greenbrier resort, car services and the “reasonable and occasional use of company aircraft . . . for the remainder of his lifetime.” Snow said yesterday he would forgo those perks.
“While he talks a good game on corporate governance, his record does not live up to the rhetoric,” said Nell Minow, the watchdog group’s editor.
Still, Republican and Democratic Finance Committee aides said they have found no red flags in Snow’s disclosures. Indeed, according to newly released documents, Snow has pledged to quit every job, directorship and trusteeship he currently holds — 32 positions in all. He also pledged to exercise all stock options and sell all his stock and bond holdings within 90 days of confirmation, including CSX holdings valued at between $32 million and $158 million.
O’Neill’s initial refusal to sell tens of millions of dollars in stock in his former company, Alcoa Inc., ensnared him in controversy for months.
“John Snow is committed to the highest standard of ethical conduct,” said Treasury spokesman Rob Nichols.
One government ethics official said Snow’s ethics agreement goes well beyond what is required under the law.
Finance Committee aides conceded that Snow’s memberships in two clubs — the Commonwealth Club and the Augusta National Club — will likely attract attention at next week’s hearing — especially with a 2004 presidential candidate, Sen. John F. Kerry (D-Mass.), sitting on the committee. Snow quit both clubs when he was nominated for the Treasury post in December. Both have faced criticism for barring women and past discrimination against blacks.
But, as one Republican aide noted, Snow — a scratch golfer — disclosed to the committee that he belongs to no fewer than 18 clubs.
“We think he’s writing a book on country clubs,” the aide said.
More serious might be questions over his compensation package. Snow disclosed that CSX last year granted him a car allowance worth $4,800, country-club memberships worth $45,870, financial planning services worth $4,977, automobile usage worth $7,771, life insurance valued at $220,216, access to company aircraft worth $20,625 and tax-preparation services valued at $7,540.
Snow’s financial disclosure also shows just how well he was compensated during a time when CSX was having a bit of a bumpy ride. His $1.25 million salary last year was supplemented with an $810,000 bonus. In 2001, he received a $1 million bonus to cap a $1.2 million salary. Those figures do not include stock-based compensation.
In addition, directors’ fees from Johnson & Johnson, U.S. Steel Corp., Circuit City Stores Inc., Sapient Corp. and Verizon Communications Inc. boosted his income by $439,500. Minow said Snow served on Verizon’s compensation committee when the company decided to pay its top two executives $37 million, as it was laying off thousands of workers.
Minow also said Snow was serving on Verizon’s board when the telecommunications company gave CSX $700,000 for the right to lay cable along CSX tracks. Such mutually beneficial relationships between ostensibly independent boards of directors and corporate officers are not illegal and would have received scant notice in the past. But they are the kind of entanglements that increasingly raise the ire of corporate governance watchdogs and shareholder groups.Snow’s nomination was buffeted on Tuesday when he revealed a 1982 drunken-driving arrest in Utah and a legal tussle over child-support payments in 1988. Snow said he paid a $334 fine “for making an unauthorized left turn” but was never charged or convicted in connection with the arrest. The child-support fracas ensued when his ex-wife sought additional compensation, even though Snow said his two sons were living with him at the time.
The White House indicated no decline in the support it has for Snow going into new week’s hearings, nor did many Democrats.
“He’s a good, solid pick,” said Sen. John Breaux (D-La.). “He’s going to be confirmed, and I think he’ll do a terrific job.”