With all of the talk about the ports deal, and the recent revelation that David Sanborn's ties to DP World, I am surprised that very little attention has been given to the fact that CFIUS Chair, John Snow was head of CSX for 20 years before resigning his post to become Treasury Secretary; nor with
the fact that Snow may be drawing millions in pension from DP World as part of his deal when he left CSX; nor to the
millions that CSX contributed to various Republican and Democratic leadership committees while Snow was CEO.
In any case, Senator Kerry appears to have figured some of this out, and is pushing for full disclosure on all ties between CFIUS and DP World. Read his letter to Snow below the fold:
Update: I've folded Katymine's excellent research from the comments section into the diary.
Update #2 Sen Chris Dodd(D-CT) sent a letter to Bush outlining concerns about potential conflict of interest for Snow.
Senator Dodd's letter as received this afternoon by
SenateDemocrats.net
The President
The White House
Washington, DC 20500
Dear President Bush:
I write to express my concerns regarding Treasury Secretary John Snow's involvement in the Committee on Foreign Investment in the United States' (CFIUS) approval of the acquisition of Peninsular and Oriental Steamship Navigation Co.'s (P&O) U.S. port operations by DP World. As you know, DP World is owned and controlled by the Government of Dubai in the United Arab Emirates (UAE).
Prior to joining the Treasury Department in February 2003, Secretary Snow spent approximately twenty years working at the CSX Corporation, including as Chairman and CEO. According to press reports, Secretary Snow received $72.2 million in compensation from CSX in 2003 (including $33.2 million from a special retirement pension), and he has a stake in a CSX deferred compensation plan worth between $5 million and $25 million. In December 2004, after Secretary Snow's departure from CSX, that company's port business was purchased by DP World in a deal worth more than $1 billion. It is unclear whether Secretary Snow was involved in any discussions related to that sale before his resignation from CSX in 2003.
There may have been no actual conflict in Secretary Snow's involvement in the CFIUS process related to the review of DP World's proposed acquisition of P&O's U.S. port operations. However, given the highly sensitive nature of this matter it would have been better had Secretary Snow not been the Chair, or served in any capacity, of the CFIUS review in this case.
The security of some of our Nation's most important ports is at stake. I know you agree that an effective and unbiased CFIUS process is a vital component of protecting the national security of these ports. In order for the process to be effective, however, it must be transparent and free from not only any conflict, but also the appearance of any conflict. Secretary Snow's involvement in the CFIUS review has clouded the recently concluded review process.
I believe that the additional information that has come to light with respect to Secretary Snow and the DP World acquisition of certain CSX port business makes it all the more compelling that an additional, more extensive review of the P&O-DP World deal be conducted to ensure that all of the potential national security implications of this transaction have been fully analyzed. Furthermore, I believe that Secretary Snow should not serve in any capacity as part of CFIUS during its review of this matter. Given that our nation's security is at risk, I believe that this is the prudent way to proceed. I hope you do as well.
Sincerely,
Christopher J. Dodd
United States Senator
Kerry's letter as received this morning by
SenateDemocrats.net
The Honorable John Snow
Chair
Committee on Foreign Investment in the United States
Office of International Investment
Department of Treasury
1500 Pennsylvania Avenue, N.W. Room 4201 NY
Washington, DC 20220
Dear Mr. Secretary:
I write to you in your capacity as Chairman of the Committee on Foreign Investment in the United States (CFIUS) regarding the review and approval of the sale of Peninsular and Oriental Steamship Navigation Company to Dubai Ports World (DP). As you know, this sale would give DP, a company owned by the government of the United Arab Emirates, significant operational control over six major US ports.
Specifically, given the national security implications of this sale, I am concerned about the process by which this transaction was approved by CFIUS. First, it appears that CFIUS approved the sale as expeditiously as possible, without even using the additional 45 day investigation process that was clearly warranted under the circumstances.
Further, several media reports have cited ties between Administration officials and DP that raise questions about the basis for the approval of this sale by CFIUS. As you know, the CSX rail corporation, where you previously served as Chief Executive Officer, sold its port operations to DP in 2004. Moreover, the President's nominee for Administrator of the Maritime Administration, David Sanborn, was DP's Head of Operations for Latin America while this transaction was being reviewed by CFIUS. In light of these connections, Congress needs to learn more about the relationship between CFIUS members and DP, and whether Administration officials could have unduly influenced CFIUS's approval process.
Therefore, in the interest of full disclosure and the transparency appropriate under these circumstances, I request that you provide to the relevant committees in Congress all documentation and information relating to contacts between Administration officials, CFIUS members and staff, and DP, including any lobbyists or registered foreign agents working on behalf of DP.
Given the national security implications surrounding this transaction, it is essential that lawmakers have access to this information so that Congress can conduct meaningful oversight.
Sincerely,
John F. Kerry
Additional Reseach by
Katymine:
Snow History
CSX Tax history under Snow
Citizens for Tax Justice has a press release noting that CSX:
# In three of the past four years, Snow�s company, CSX Corporation, paid no
federal income tax at all.
# In fact, instead of paying taxes, CSX supplemented its $934 million in pretax
U.S. profits over the four years with a total of $164 million in tax rebate checks
from the federal government.
Times on Snow
Treasury Secretary John Snow, who led the CSX Corporation for 14 years, received $60.8 million in cash, stock and pension money when he resigned last month to join the government, according to a report filed today by the company.
Mr. Snow, who was CSX's chairman and chief executive, received the money under a 2001 agreement, the company said in a report to the Securities and Exchange Commission.
Extra benefit for taking a Gov job
And Snow's "sacrifice" will be cushioned by a clause that hepresciently had placed in his most recent contract making himeligible to receive an additional $3.3 million should he everleave CSX to "fulfill an appointment to public office." And hereI thought companies gave execs big bonuses to keep them fromleaving. Unless, of course, they are leaving for a lofty positionfrom which they can help enhance their former company's bottomline. In that case, all aboard!
Mr. Snow has assets with an estimated worth of $77 million to $297 million. He promised before his Senate confirmation that he would sell his extensive stock holdings in CSX and 60 other companies and that he would forgo a severance payment of about $15 million.
According to the filing, the company was required to pay Mr. Snow $8.7 million in deferred cash compensation, stock worth $18.9 million and a pension payment of $33.2 million when he resigned on Feb. 3.