White House Responds to O’Neill’s Criticisms

Times Staff Writer

President Bush once defended Paul H. O’Neill’s penchant for speaking his mind, saying his then-Treasury secretary was “refreshingly candid.” Now, he is finding out just how candid O’Neill can be.

Bush and his aides have been forced to respond to stinging criticisms from a former member of their inner circle in a new book by a prominent journalist that has been the talk of Washington for several days. In the book, O’Neill, who was fired by Bush in late 2002, portrays the president as disengaged during Cabinet meetings and eager almost from Day One of his administration to remove Saddam Hussein from power in Iraq.

The comments have given ammunition to Bush’s political opponents at a time when the White House is already facing fire in an intensifying Democratic presidential primary campaign.


In a development Monday, the Treasury Department said it had asked for an investigation of the possible leak of a classified document in connection with O’Neill’s criticisms.

The document was shown during a report Sunday on the book by the CBS news program “60 Minutes.” It bore the Treasury Department letterhead and was marked “secret.”

“Based on the ’60 Minutes’ segment aired last night, which displayed a document with a classified marking, the department referred the matter to the Office of Inspector General,” said Treasury spokesman Rob Nichols. “That’s standard operating procedure. I can’t comment any further.”

O’Neill was a major source for the book, “The Price of Loyalty,” written by former Wall Street Journal reporter Ron Suskind, who reportedly had access to thousands of documents that O’Neill saw during his nearly two years in office. The book, published by Simon & Schuster Inc., is being released today.

The Treasury Department’s request for an inquiry came as Bush and other administration officials tried to deflect criticism contained in the book, which also details O’Neill’s disillusionment with the president’s economic policies, including his decision to impose tariffs on imported steel to protect ailing U.S. steelmakers.

Bush, asked Monday about O’Neill’s assertion that Hussein’s removal was discussed by the White House National Security Council 10 days after his inauguration, said his actions were consistent with those of the Clinton administration before it.


“The stated policy of my administration towards Saddam Hussein was very clear,” Bush told reporters during an appearance with Mexican President Vicente Fox in Monterrey, Mexico. “Like the previous administration, we were for regime change.”

During the early months of his presidency, Bush said the administration’s Iraq policy focused on “fly-overs and fly-betweens and looks” in an effort to monitor Hussein’s military and weapons programs.

“And then, all of a sudden, September the 11th hit,” Bush said. “And as the president of the United States, my most solemn obligation is to protect the security of the American people.... I took that duty very seriously.”

Bush did not respond directly when asked whether he felt betrayed by O’Neill’s public criticism, or whether he thought O’Neill should not have provided government documents to Suskind.

“I appreciate former Secretary O’Neill’s service to our country,” Bush said. “We worked together during some difficult times. We worked together when the country was in recession. We worked together when America was attacked on September the 11th, which changed how I viewed the world.”

O’Neill says that the administration began planning Hussein’s ouster shortly after Bush was sworn in as president in January 2001 -- long before the Sept. 11 attacks prompted the White House to declare war on international terrorism.


“From the very beginning, there was a conviction that Saddam Hussein was a bad person and that he needed to go,” O’Neill told “60 Minutes” interviewer Lesley Stahl. “From the very first instance, it was about Iraq. It was about what we can do to change this regime.”

He said he had seen no “real evidence” that Hussein’s regime possessed weapons of mass destruction, one of the administration’s main rationales for the March 2003 military offensive.

According to O’Neill, the two years he spent in Washington changed the way he viewed the administration.

Despite 16 years of previous experience in various government jobs, including a top spot in the White House budget office during the Gerald R. Ford administration, O’Neill said he was not prepared for what lay in store when Bush asked him to leave his post as chief executive of Alcoa Inc., the aluminum producer, to become the nation’s chief financial officer.

According to book excerpts published Monday by the Wall Street Journal, O’Neill had the impression that Bush had not read the short memos he sent to the White House before scheduled meetings with the president. During weekly sessions, Bush often listened to his Treasury secretary for an hour, offering no responses to his assessments and proposals. The same was true in Bush’s meetings with others, O’Neill said.

“The only way I can describe it is that, well, the president is like a blind man in a roomful of deaf people,” O’Neill said in the book. “There is no discernible connection.”


In O’Neill’s view, the advice rendered by him and other top administration officials could be easily trumped by Vice President Dick Cheney. As an example, he cited Bush’s decision in March 2002 to impose steel tariffs, a move favored by Cheney and U.S. Trade Representative Robert B. Zoellick, but opposed by other Cabinet officers and top economic advisors.

O’Neill said the decision was based on political calculations, not economic fundamentals. Last month, the administration removed the tariffs more than a year ahead of schedule, responding to pleas from domestic steel consumers who complained that the duties had done more harm to their industries than the benefits they provided to steelmakers.

In another policy showdown, O’Neill said he told Cheney in late 2002 that a round of tax cuts under consideration would be potentially dangerous, because the nation was “moving toward a fiscal crisis” of rising deficits and accumulating debt.

Cheney cut him off before he could finish, O’Neill said.

“Reagan proved deficits don’t matter,” the vice president was quoted as saying. “We won the midterms. This is our due.”

It was not clear what information was contained in the document displayed during the “60 Minutes” report, or whether it was provided by O’Neill. Neither Suskind nor O’Neill could be reached for comment.

Suskind told CBS he interviewed hundreds of people, including several Cabinet members, while preparing the book. But he identified O’Neill as his principal source and said the former Treasury boss gave him some 19,000 internal documents to help with his research.


“Everything’s there: memoranda to the president, handwritten thank-you notes, 100-page documents. Stuff that’s sensitive,” Suskind said in the “60 Minutes” interview.

“There are memos,” Suskind added. “One of them marked ‘secret’ says, ‘Plan for post-Saddam Iraq.’ ”

CBS spokesman Kevin Tedesco told Associated Press that only a cover sheet referring to confidential material was shown during the “60 Minutes” report. “We don’t have a secret document. We didn’t show a secret document. We merely showed a cover sheet that alluded to a secret document,” Tedesco said.

A U.S. government official who requested anonymity said it was not unusual for Cabinet members to make personal copies of unclassified documents, noting that O’Neill predecessors Robert E. Rubin and Lawrence Summers had done so. But the public disclosure of classified documents would be a potential violation of the law.

O’Neill’s comments have reverberated through the presidential campaign, with Democrats accusing the administration of trying to silence its former ally.

“The president’s White House advisors have launched an all-out attack on the man Bush once praised as a ‘straight-shooter,’ ” Democratic National Committee Chairman Terry McAuliffe said in a statement. “Already, White House officials and their allies have begun the process of trashing O’Neill while refusing to address the merits of his charges.”


Iraq war critic and former Vermont Gov. Howard Dean, who is leading the pack of Democratic presidential contenders, said O’Neill’s statements “only reaffirm my belief in how important it was for someone to stand up last year before we went to war.”

Speaking to reporters aboard Air Force One on the way to Monterrey, White House spokesman Scott McClellan said it appeared to him that the O’Neill book was “more about trying to justify personal views and opinions” than it was about trying to assess the merits of Bush’s presidency. But he declined to respond in detail to specific criticisms raised by O’Neill.

“We’re not in the business of doing book reviews,” McClellan said.