O'Neill Papers 'Classified'?

Documents given to former Treasury Secretary Paul O'Neill for an insider book on his two years in President Bush's Cabinet contained classified information, successor John Snow told Congress in a letter on Friday.

Snow's letter, obtained by The Associated Press, said that a preliminary investigation conducted by the Treasury Department's inspector general found that sensitive information was released in the documents given to O'Neill after he was ousted in late 2002.

The "documents were not properly reviewed before their release," said the letter.

Treasury began an inquiry into the documents last month after a TV segment on CBS' "60 Minutes" during which O'Neill was promoting the book "The Price of Loyalty" showed a document marked "secret."

O'Neill provided some 19,000 documents to former Wall Street Journal reporter Ron Suskind for the book, an account of O'Neill's two years in the Bush Cabinet. The former secretary said he merely passed along documents the department sent him after he left. Suskind has posted many of the documents on the Internet.

A memo, also obtained by the AP, from Treasury Inspector General Jeffrey Rush to Snow and dated Feb. 3, said that "at least three documents containing information that should have been classified were released to former secretary O'Neill. None of the documents were properly annotated with the required markings for classified information."

The memo also said that "none of the records" on the two computer discs given to O'Neill "were reviewed by the department to determine whether the information was releasable."

Treasury officials in the Office of Executive Secretary and the Office of General Counsel "failed to follow Treasury's procedures for the release of information to a former Treasury official or the requirements of the Freedom of Information Act," Rush's memo to Snow said.

Neither Snow's letter nor Rush's memo suggests that O'Neill acted improperly.

O'Neill, in previous interviews, denied allegations that classified material had been used in the book. He had said that he received documents that he was legally entitled to have.

Suskind, in an interview Friday, said his lawyers have been in contact with government attorneys to try to understand their concerns.

He declined to describe the documents in question or whether he had been asked to return them. He did say, however, that none of the documents with classified material was "released or revealed in the book or on my Web site."

Suskind said the root of the problem was in the government's release of the documents and not O'Neill.

"Paul O'Neill is not involved in this," he said. "He got the documents in good faith and he turned them over to me. It is very important that people understand that."

Administration officials have expressed strong disagreement with parts of the book, in which O'Neill characterizes Bush as a disengaged chief executive.

In one passage that has received much attention, O'Neill says that from the earliest days of Bush's new administration, the president was planning on removing Saddam Hussein from power in Iraq.

O'Neill was fired in a shake-up of Bush's economic team in December 2002.

Snow's letter said, "We have identified a number of documents that contain classified information and we are taking corrective action concerning those documents."

The investigation is still under way, said Treasury spokeswoman Anne Womack Kolton. Because of that, she would not discuss whether the department would act against anyone involved in the release of classified documents. She also would not comment on the nature of the classified material inadvertently released to O'Neill.

Snow also said the department was taking steps to prevent sensitive, classified information from being released in the future. He said the department is beginning to provide additional security training to people who handle such documents.

The department also is looking into using a third party to review Treasury's policies for handling sensitive information.

Snow's letter was sent to lawmakers, including top members of the appropriations committees in the House and Senate as well as the Senate Banking Committee and committees on government affairs and intelligence.

Rush's memo said that previous examinations, unrelated to the O'Neill document probe, have uncovered problems in the department's handling and safeguarding of classified and other sensitive information.

"Taken together, these weaknesses constitute a serious deficiency in the operations of the department," Rush's memo said.