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Treasury Nominee to Sell Stock

John Snow also says he will leave his post on 32 boards to limit any conflicts of interest. However, he plans to keep his CSX pension.

January 23, 2003|Warren Vieth and Peter G. Gosselin | Times Staff Writers

WASHINGTON — Treasury Secretary-Designate John W. Snow agreed Wednesday to give up 32 directorships and sell more than $20 million worth of stocks, bonds and mutual funds to avoid potential conflicts as a member of President Bush's Cabinet.

But he said he would hang on to his CSX Corp. pension and take lump-sum payments of $35 million to more than $100 million on various forms of deferred compensation he received from his former employer.

Snow, former chairman and chief executive of railroad operator CSX, said he would divest himself of virtually all his private sector financial interests within 90 days of being confirmed as the nation's chief financial officer.

"I am entering into this ethics agreement because I am committed to the highest standards of ethical conduct," Snow said in a letter to a Treasury Department attorney.

For The Record
Los Angeles Times Friday January 24, 2003 Home Edition Main News Part A Page 2 National Desk 13 inches; 483 words Type of Material: Correction
Chairman -- An article in Thursday's Business section about Treasury nominee John W. Snow's plans to divest his stock holdings incorrectly listed Sen. Max Baucus (D-Mont.) as chairman of the Senate Finance Committee. Baucus is the committee's ranking Democrat.

"I believe that these steps will ensure that I avoid even the appearance of a conflict of interest in the performance of my duties."

Snow's nomination will be taken up next week by the Senate Finance Committee, whose chairman said the process could be slowed by Snow's disclosure of a 1982 arrest on suspicion of drunken driving and a 1988 child-support dispute with an ex-wife.

"It's at least a speed bump," Finance Committee Chairman Max Baucus (D-Mont.) said. "We don't know the importance." Baucus and other committee members could not be reached for comment on Snow's ethics agreement, which was announced by Treasury officials late in the day.

Snow's decision to forfeit his directorships and liquidate most of his securities appears to go beyond the requirements of the law, which prohibits high-ranking officials from having a direct financial stake in companies they regulate.

Although it is common practice for Cabinet appointees to resign from their private sector jobs and give up corporate directorships, some have been reluctant to sell their stock, options and other securities.

Former Treasury Secretary Paul H. O'Neill, who resigned in December, insisted for weeks after his nomination that he should be able to keep the stock and options he received as chairman of Alcoa Inc. He finally relented and sold the securities.

A 60-page financial disclosure document released Wednesday shows that Snow has a stock and mutual fund portfolio worth more than $20 million. CSX shares represent by far his biggest single holdings, valued at more than $17.2 million.

Snow also listed CSX stock options worth at least $5.6 million, which he has promised to either exercise or allow to lapse. His disclosure form says that over the last year, he has made more than $5 million by exercising stock options or selling restricted stock.

Snow reported receiving a 2002 salary of $1.3 million and a bonus of $810,000 from CSX, compared with a salary and bonus package of $2.2 million the previous year.

Snow said he intended to hold on to his CSX pension, worth at least $1 million, and retain the right to receive annual payments through a CSX deferred compensation plan, worth more than $5 million.

Snow also reported smaller holdings in dozens of corporations, partnerships and mutual funds. He is a director of several companies and has received deferred compensation packages worth at least $250,000 apiece from Verizon Communications Inc. and Johnson & Johnson.

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