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Treasury Gave Secret Papers to Ex-Secretary

Times Staff Writer

The Treasury Department said Friday that some of the documents it provided to former Secretary Paul O’Neill, and which were used in writing a book about his stormy two-year tenure, contained classified information that should not have been released.

But the department also took responsibility for releasing the documents and said O’Neill appeared to have done nothing wrong.

Treasury Secretary John Snow said in a letter to Congress that the department had failed to properly screen the material it gave O’Neill after he was fired by President Bush in late 2002, and that steps were being taken to prevent future security breaches.

“What it’s saying is the problem was here,” Treasury spokeswoman Anne Womack Kolton said. “It basically means that [O’Neill] didn’t do anything. It was information that was given to him that was not supposed to have been given to him.”

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Kolton declined to specify the nature of the classified information. Although the department’s inspector general is still investigating the matter, Kolton said, it appeared unlikely that any action would be taken against the former secretary. O’Neill could not be reached for comment.

The Treasury Department launched its investigation last month after publication of “The Price of Loyalty,” a book written by journalist Ron Suskind with O’Neill’s assistance. The book contains highly critical accounts of the inner workings of the Bush White House, portraying the president as disengaged from policy deliberations and determined from the start to oust Iraqi leader Saddam Hussein.

Suskind said the book was based in part on about 19,000 memos, notes, meeting minutes and other official documents provided to him by O’Neill. A report aired by the CBS news program “60 Minutes” showed a sheet of paper bearing the Treasury Department’s letterhead and marked “secret.” CBS later said it was only a cover sheet and that the network had not been given any classified documents.

But in his letter to congressional committees, Snow said some of the material provided to O’Neill did contain classified material.

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“The Treasury Department recognizes that those documents were not properly reviewed before their release,” Snow wrote. “Treasury personnel have conducted a systematic review of the documents released to Mr. O’Neill. We have identified a number of documents that contained classified information, and we are taking corrective action concerning those documents.”

Kolton said the corrective action would consist of additional training for staffers who handle sensitive documents and a thorough review of Treasury Department security procedures by an independent agency.

“Secretary Snow takes this issue very, very seriously,” she said.


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