Angela Bradbery
Treasury Secretary Nominee: Questionable
Thu Dec 12 20:19:52 2002
204.189.23.154

Treasury Secretary Nominee: Questionable

-------- Original Message --------
Subject: Public Citizen press release
Date: Thu, 12 Dec 2002 17:41:24 -0500
From: "Angela Bradbery" abradbery@citizen.org


Dec. 12, 2002

Public Citizen Seeks Government Records on Treasury Secretary Nominee

CSX Executive's Involvement in Questionable Corporate Practices Raises
Serious Doubts About His Suitability for Cabinet Post

WASHINGTON, D.C. - Concerned about the prospect of a corporate executive
involved in questionable business practices joining the Bush Cabinet,
Public Citizen today filed records requests to obtain information about
loans, stock sales, safety compliance and other matters involving John
W. Snow, the Treasury Secretary nominee who for years headed CSX Corp.

The requests, filed with the Securities and Exchange Commission (SEC)
and the Federal Railroad Administration (FRA), are an attempt to learn
more about Snow's policies as chairman and chief executive officer of CSX.

"As head of CSX, Mr. Snow apparently was involved in some of the same
questionable practices
that have come under scrutiny recently and even been outlawed by
Congress," said Joan Claybrook, Public Citizen president. "We question
whether a top corporate executive who abused his position by benefiting
from insider deals will be a good public servant. We are filing this
request so that before Congress votes on Mr. Snow, the public record can
be clear and complete as to his ethical and safety performance as CEO of
a major transportation company."

In the request to the SEC, filed under the Freedom of Information Act,
Public Citizen seeks all records concerning loans from CSX to Snow and
the forgiveness of those loans, sales of CSX stock by Snow, any SEC
investigation into CSX matters, and all transactions between CSX and
members of the company's compensation committee. From the FRA, Public
Citizen seeks all records concerning Snow's role as a CSX executive,
Snow's involvement with the company's lack of compliance with federal
track safety standards, any enforcement actions against CSX since 1991,
and Snow's role in the negotiation and implementation of an April 2000
Safety Compliance Agreement between the company and the FRA, which came
about after an FRA review of CSX tracks uncovered a number of safety
problems.

Snow has been a beneficiary of many of the questionable corporate
practices that came to light after the Enron scandal, according to news
reports. CSX loaned Snow $24.5 million to purchase company stock valued
at $32.3 million, but after the stock price dropped, the company forgave
the loan. During his tenure, Snow received more than $50 million in
compensation over 12 years even though profits fell and the stock didn't
do as well as the average U.S. company. Last year, he made $10.1 million
in cash and stock grants and received stock options valued at $8
million. According to a Corporate Library survey, Snow is the third
highest-paid chief executive among 37 transportation company CEOs.

Further, according to media reports, Snow sold 120,000 shares of CSX
stock this year, less than a
month before the company announced that its third-quarter outlook was
not as rosy as it had first predicted. The stock price dropped, but Snow
dumped the stock just in time to avoid losing approximately $750,000.

Additionally, Snow served on five other corporate boards, including
NationsBank, where he helped set compensation for one of CSX's outside
directors.

"It would appear that Mr. Snow misused his position as CEO to gain
benefits available to few others," Claybrook said. "How many CSX workers
were able to obtain multimillion-dollar loans for stock purchases and
have the loans forgiven?"

A copy of the request to the SEC is on the Web at
http://www.citizen.org/litigation/briefs/FOIAGovtSec/articles.cfm?ID=8708 .
The request to the FRA is posted on the Web at
http://www.citizen.org/litigation/briefs/FOIAGovtSec/articles.cfm?ID=8707 .

###

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===========================================
http://www.forbes.com/markets/newswire/2002/12/12/rtr821961.html
WASHINGTON, Dec 12 (Reuters) - President George W. Bush is scheduled to announce at 4 p.m. (2100 GMT) on Thursday the appointment of Wall Street veteran Stephen Friedman to coordinate White House economic policy, administration officials said.

Former Goldman, Sachs chairman Friedman will replace National Economic Council chief Lawrence Lindsey, who was forced out by Bush on Friday along with Treasury Secretary Paul O'Neill. Bush has tapped John Snow, chairman of railroad giant CSX Corp. (nyse: CSX - news - people), to replace O'Neill.

Unlike Snow, Friedman's appointment does not require Senate approval.

Copyright 2002, Reuters News Service
==============================================

Corporate Governance
Donaldson's Dalliance With CEO Loans
Michael Maiello, 12.11.02, 6:15 PM ET

NEW YORK - Certain to be a subject for the confirmation hearings of Treasury Secretary nominee John Snow, will be a $24.5 million loan given to him by his company, CSX, and then forgiven. But while congressmen grill Snow, investors might wonder about the corporate board members who approve such gifts to wealthy executives.

William Donaldson, President Bush's pick to chair the Securities and Exchange Commission, is that kind of board member.
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