US President George Bush has once again turned to corporate America for his Treasury Secretary, picking an industrialist with a reputation for good communication skills.
Mr Bush nominated Mr John Snow (63), head of railroad holding company SCX Corporation, to succeed Mr Paul O'Neill, who was fired on Friday along with White House economic policy co-ordinator Mr Lawrence Lindsey.
At a brief White House ceremony yesterday, Mr Bush said his choice would be at the centre of the administration's effort to promote economic recovery with a stimulus package in the coming weeks. Mr Snow, whose performance will be a key element of Mr Bush's re-election effort in 2004, promised to advance a pro-growth and pro-jobs agenda.
Mr Stephen Friedman, former co-chairman of investment bank Goldman Sachs, is set to replace Mr Lindsey as Bush's top White House economic adviser.
Mr Bush praised the "long-standing commitment to ethical corporate governance" of Mr Snow, who has campaigned against excessive chief executive pay and compensation. "The scandals, breakdowns, collapses and fraud that was so apparent in Enron, Tyco and Global Crossing have shaken our confidence in the system," Mr Snow said recently.
Last year Mr Snow received $20.5 million (€20.3 million) compensation as chairman, chief executive and president of SCX. His contract gave him country-club membership, home security, physicals, accounting services and "reasonable and occasional use" of company aircraft for the rest of his life, according to the Wall Street Journal. As cabinet secretary, he will receive $157,000 a year.
SCX is the third-largest American railroad freight company and owns the Carolina-based containership company, Sea-Land Service, which has an operation in Cork.
SCX was in the news recently as one of eight firms cited in a Brooklyn lawsuit seeking slave trade reparations, for using forced labour to build railroads.
Mr Snow's main task in Washington will be to rally support in Congress and among voters for the stimulus package that Mr Bush is almost ready to announce. This will include additional tax cuts for low and middle-income taxpayers plus dividend write-offs and other proposals to stimulate investment.
Mr Bush's $1.35 trillion tax cut has yet to have an impact on the US economy and the administration has been on the defensive over corporate scandals and the forced resignation of Mr Bush's choice for chairman of the Securities and Exchange Commission, Mr Harvey Pitt after several major gaffes.
Mr Snow has long campaigned for a balanced budget. This was achieved under Bill Clinton in 1997. It returned to deficit last year with Democrats blaming Mr Bush's tax cuts while Republicans cited the cost of fighting terrorism. Mr Friedman is also a strong supporter of deficit reduction.
The US Treasury Secretary occupies a key position in the world economy. His comments can affect world markets and exchange rates.
He automatically becomes the US governor at the World Bank and the International Monetary Fund. Mr Snow said yesterday he understood "the importance of working with other countries to build a prosperous and stable global economy".
As a veteran of the Ford administration, Mr Snow is well connected in Washington and has a close relationship with Federal Reserve chairman Mr Alan Greenspan.Reaction on Wall Street to his nomination was muted, with traders saying the appointment of another industrialist rather than a financier - as had been the practice in former administrations - was "not much of a change".
Mr Robert Lenzner of Forbes magazine said Mr Snow had a "mediocre record" as a chief executive though he was a better communicator than Mr O'Neill, former chief executive of aluminium giant, Alcoa. Mr Snow must be confirmed by the Senate, which is under Republican control.
Mr O'Neill and Mr Lindsey were told on Thursday that the President wanted their resignations and that they could tell their staffs on Monday. However, Mr O'Neill was reported to be so furious that he made his resignation letter public on Friday morning and left immediately.
