THE SNOW BIRDS: Sightings of the John Snow flock

WASHINGTON - The Dubai firm that won Bush administration backing to run six U.S. ports has at least two ties to the White House.

One is Treasury Secretary John Snow, whose department heads the federal panel that signed off on the $6.8 billion sale of an English company to government-owned Dubai Ports World - giving it control of Manhattan's cruise ship terminal and Newark's container port.

Snow was chairman of the CSX rail firm that sold its own international port operations to DP World for $1.15 billion in 2004, the year after Snow left for President Bush's cabinet.

The other connection is David Sanborn, who runs DP World's European and Latin American operations and who was tapped by Bush last month to head the U.S. Maritime Administration.

The ties raised more concerns about the decision to give port control to a company owned by a nation linked to the Sept. 11 hijackers.

"The more you look at this deal, the more the deal is called into question," said Sen. Charles Schumer, D-N.Y., who said the deal was rubber-stamped in advance - even before DP World formally agreed to buy London's P&O port company.

Besides operations in New York and Jersey, Dubai would also run port facilities in Philadelphia, New Orleans, Baltimore and Miami.

"It's particularly troubling that the United States would turn over its port security not only to a foreign company, but a state-owned one," said western New York's Rep. Tom Reynolds, chairman of the National Republican Campaign Committee. Reynolds is responsible for helping Republicans keep their majority in the House.

Snow's Treasury Department runs the Committee on Foreign Investment in the U.S., which includes 11 other agencies.

"It always raises flags" when administration officials have ties to a firm, Rep. Vito Fossella, R-N.Y., said, but insisted that stopping the deal was more important.

The New York Daily News has learned that lawmakers also want to know if a detailed 45-day investigation should have been conducted instead of one that lasted no more than 25 days.

According to a 1993 congressional measure, the longer review is mandated when the company is owned by a foreign government and the purchase "could result in control of a person engaged in interstate commerce in the U.S. that could affect the national security of the U.S."

Congressional sources said the president has until March 2 to trigger that closer look.

"The most important thing is for someone to explain how this is consistent with our national security," Fossella said.

WASHINGTON - The Senate approved President Bush’s nomination of John Snow as Treasury secretary last night after the railroad executive gave assurances he would review a department rule on pensions that opponents contend discriminates against older workers.

The nomination was approved by voice vote after many senators had already left the Capitol for the weekend.

Snow, the head of CSX Corp., was picked by Bush last month after the ouster of Paul O’Neill in a shake-up of the administration’s economic team.

Snow’s nomination won approval after he held a 40-minute meeting with Sens. Tom Harkin, D-Iowa, and Dick Durbin, D-Ill, who had blocked the nomination from being taken up by the full Senate until they had a chance to air their grievances over the pension issue.

They want the government to implement a rule that would prohibit companies from forcing workers out of so-called defined benefit plans into “cash balance” plans. Many companies have been adopting the new type of pension to cut costs.

The two senators said Snow gave no assurances on what shape the final Treasury rule would take but did pledge to keep the current moratorium on forced conversions in place until a final rule is implemented.

Durbin said he was satisfied with Snow’s assurances, saying Snow had recounted in the meeting that CSX employees had been given the choice of sticking with their current plans or switching to the new cash-benefit programs and that the same options were offered at other companies where Snow served on the board of directors....

President Bush yesterday nominated railroad executive John W. Snow to replace Paul H. O'Neill as Treasury secretary and lead a revamped economic team to reinvigorate the economy and bolster investor confidence.

"I'll be proposing specific steps to increase the momentum of our economic recovery," Mr. Bush said.

"And the Treasury secretary will be at the center of this effort. Investor confidence needs to be strengthened."

Mr. Snow, chairman, president and chief executive of Richmond-based CSX Corp., will play a critical role in promoting the tax-cut package of up to $300 billion that Mr. Bush is expected to propose next month.

"I pledge to you to use all my talents, my power, my energy and my ability to strengthen the current economic recovery and create an environment where millions of job creators and investors, all across America, will grow and prosper," said Mr. Snow, 63, who served as undersecretary of transportation in the Ford administration.

Mr. Bush nominated Mr. Snow three days after dismissing Mr. O'Neill and White House economic adviser Lawrence Lindsey. The economic team shake-up is expected to be completed today with the selection of Stephen Friedman, the former chairman of Goldman Sachs, to replace Mr. Lindsey, aides say.

The president also was close yesterday to naming a replacement for Harvey Pitt, who resigned as chairman of the Securities and Exchange Commission on Election Day. Mr. Pitt had been criticized for failing to shield Mr. Bush politically from the corporate-abuse scandals but resigned over conflict-of-interest charges.

Democrats seized on the shake-up as evidence that Mr. Bush's tax-cutting economic policies had hurt the economy.

"Trickle-down economics doesn't work," said Senate Democratic leader Tom Daschle of South Dakota. "We have argued from the very beginning, going back to the tax cut of last year, that the tax cut needed to be more immediate, needed to be more targeted. We still hold that view."

Rep. Nancy Pelosi, California Democrat and the newly elected House minority leader, said Mr. Bush "can shuffle [his economic team] all he wants."

One of Mr. Bush's priorities in the new Congress and the run-up to his re-election bid in 2004 will be another round of tax cuts, and an attempt to expedite and make permanent the 10-year cuts enacted last year.

Wall Street's reaction to Mr. Snow's nomination was muted by news of United Airlines' bankruptcy filing, which helped send the Dow Jones industrials down 172.36 points, said Charles Pradilla, chief investment strategist at SG Cowen Securities....

"His role as an economist, business leader and public servant will have a positive impact from Main Street to Wall Street," said Senate Republican Leader Trent Lott of Mississippi.

"I look forward to working with him next year when Congress will consider a new jobs growth package that will improve America's economic security."...

White House officials expect Mr. Snow to be questioned about any government aid to CSX, the largest freight rail network in the eastern United States, as well as his membership in Augusta National Golf Club. The club, which hosts golf's premier tournament, is under fire because it does not allow women to be members.

White House spokesman Ari Fleischer said Mr. Snow will resign from the club but that his membership is not a "disqualifying factor." Mr. Fleischer said the president did not encourage Mr. Snow to leave the club.

Deputy House Majority Whip Mark Foley, Florida Republican and member of the tax-writing Ways and Means Committee, said he is confident that Mr.Snow's appointment "will make an instant difference" in the economy.

"This will hopefully be the answer to the cavalry call we've been waiting for," Mr. Foley said.

"There must be a renewed effort to round up our troops in this economic battle. I'm confident we can now immediately speak as one voice moving our nation forward."

Mr. Snow worked on a Republican tax-policy panel created in 1995 by House Speaker Newt Gingrich of Georgia and Senate Majority Leader Bob Dole of Kansas.

"John W. Snow strongly supports tax relief as a vehicle to achieve economic growth, he is an ardent supporter of free trade, he is a champion of business deregulation and the removal of burdensome red tape, and he understands the importance of reining in government spending," said Grover Norquist, president of Americans for Tax Reform.

Two other members of Mr. Bush's economic team, budget director Mitchell E. Daniels Jr. and Glenn Hubbard, chairman of the president's Council of Economic Advisers, are said to be in good standing with the president.

The company headed by the Treasury secretary-designate had large pretax profits at same time. Its practices appear legal, however.

WASHINGTON -- CSX Corp., the big railroad company headed by Treasury secretary-designate John W. Snow, paid no federal income taxes during at least two of the last four years despite recording more than $1 billion in pretax profits.

Over the same four-year period, the company gave Snow $36 million in salary, bonuses, stock and options, and forgave a $24-million loan so he wouldn't lose money along with other shareholders as the company's stock price declined.

Although CSX's tax and compensation practices appear to be legal, these and other aspects of Snow's career suggest the man President Bush has chosen to head his revamped economic team may have a lot of explaining to do before he takes the oath of office.

"Treasury is supposed to make sure that the taxes are collected fairly," said Robert McIntyre, director of Citizens for Tax Justice, an advocacy group that opposes many corporate tax breaks.

"Bush has just nominated a guy who thinks it's dandy that his company's contributing nothing to help support the country."...

Snow's private sector resume bears a striking similarity to those of Bush and Vice President Dick Cheney. The president has been bedeviled by persistent questions about his stock sales while serving on the board of Harken Energy Corp. 12 years ago. Cheney has drawn fire for his actions as CEO of Halliburton Co., a big oilfield services firm that is under investigation for its accounting practices.

Even Snow's critics concede they have no evidence he and his company have not played by the rules governing corporate accounting and compensation. But that may only reinforce perceptions that big business is allowed to engage in practices and enjoy tax breaks not available to ordinary taxpayers.

The company has made clear its desire to pay the government as little as possible. "CSX will pursue all available opportunities to pay the lowest federal, state and foreign taxes, consistent with applicable laws and regulations and the company's obligation to carry a fair share of the cost of government," the management team said in its 2001 report to shareholders.

Snow made the same basic argument on behalf of the nation's biggest corporations when he lobbied on Capitol Hill as chairman of the Business Roundtable in the mid-1990s.

He also served on a blue-ribbon tax reform panel headed by former Cabinet secretary Jack Kemp, an aggressive champion of tax cuts.

According to an analysis of corporate disclosure documents by McIntyre's advocacy group, which posted the results on its Internet site, CSX paid no federal income taxes in 1998, 2000 and 2001.

Instead, it received federal rebates of more than $150 million by claiming a number of tax breaks, including accelerated depreciation of equipment purchases....

Over the same four-year period, Snow received salary, bonuses and other cash compensation totaling $15.6 million, CSX stock worth $8.4 million and stock options valued at $12.5 million, for a total pay package of $36.5 million, according to CSX's filings with the Securities and Exchange Commission.

CSX is by no means the only company that has deferred taxes by taking advantage of the many deductions and credits created by Congress to boost corporate cash flow and encourage new investment.

In fact, the White House is expected to propose expanded business write-offs as part of a new tax-cut initiative it will unveil early next year....

The tax flap is only one of the issues the committee is likely to explore as it looks at Snow's record at CSX, which operates the largest rail network in the eastern United States.

Questions are being raised about a $24-million loan Snow received from CSX in 1996 to help him purchase $32-million worth of company stock as a performance incentive. Instead of rising, the price of CSX stock subsequently declined, reducing the value of Snow's holdings to less than the loan balance.

In 2000, the board agreed to forgive the outstanding loans to Snow and other CSX executives who had made similar stock purchases.

At about the same time, two members of the company's compensation committee purchased vacation property worth millions of dollars from CSX subsidiaries, leading some critics to question whether there had been a quid pro quo.

"This is as egregious as anything we've come up against with any company," said William B. Patterson, director of the investment office of the AFL-CIO, which called attention to the loan cancellation. "The company gave the management a significant upside if the company did well. When that didn't happen, it just scrapped the plan and gave the money back. That's contrary to the spirit of pay for performance."

In the wake of recent corporate scandals, notably last year's collapse of Enron Corp., such company loans to executives were banned under reform legislation recently signed into law.

Another potential problem area is Snow's sale of 120,000 shares of CSX stock in August. Shortly after he sold the stock, the company announced that its financial condition was weakening, and the stock price fell.

There is no evidence that Snow was anticipating the negative news when he sold. But it was the same basic sequence of events that has created problems for Cheney, who sold much of his Halliburton stock shortly before the oil field services company disclosed unexpected financial liabilities in late 2000.

White House officials, congressional Republicans, political analysts and financial experts were quick to defend Snow's record at CSX, noting that he is widely regarded as an effective corporate manager who insists on playing by the rules.

"He did nothing wrong," said Charles Gabriel, senior Washington analyst for Prudential Securities. "This is a publicly traded company that's using the congressionally enacted tax laws to try to stay in business and advance its cause and take care of its stakeholders. What's wrong with that?"

Dick Barsness, a management professor at Lehigh University, said Snow has performed ably during "a very difficult period for the railroad industry." Profit margins have been low for years, he said, and carriers have faced daunting challenges as they try to modernize their systems and improve service.

"In this environment it would be hard for any leader to be brilliant," Barsness said. "But Jack Snow has been solid and forward-looking in positioning CSX for more prosperous days ahead. This is no small achievement."

Rep. Christopher Cox (R-Newport Beach) said CSX appeared to have followed acceptable accounting practices, and that he did not think the criticisms of Snow and CSX would create serious problems for Bush's nominee.

"The early book on secretary-designate Snow is that he's going to be speedily confirmed with bipartisan support," Cox said.

Even if Snow is a shoo-in, some lawmakers said the disclosures raise legitimate questions about existing law and administration priorities.

"He needs to be asked during the confirmation process whether he's willing to look at these kinds of deductions," said Rep. Robert T. Matsui (D-Sacramento).

"He has to ask himself philosophically, should a profitable company ever be in a position where they don't pay taxes?"...

Nov. 14, 1978	CSX Corporation was incorporated in the Commonwealth of Virginia, for purposes of a merger of Seaboard Coast Line Industries Inc., headquartered in Jacksonville, Fla.; and Chessie System Inc., headquartered in Cleveland, Ohio. One of the criteria which led to the selection of Richmond was the historic association with both Chessie and Seaboard. The Chesapeake and Ohio Railway Company, part of the Chessie System Railroads, traced its corporate ancestry to the Louisa Railroad Company which was chartered in Richmond in 1836, and the C&O had its headquarters in that city for many years. One of Seaboard's earliest predecessors was the Richmond and Petersburg, which was chartered in 1836 to run between those two cities. A predecessor of Seaboard Coast Line Railroad had general offices in Richmond since 1958.
Jan. 18, 1979	Seaboard Coast Line Industries Inc. and Chessie System Inc. filed a joint application with the Interstate Commerce Commission asking for approval of the proposed merger of the two holding companies. Shareholders approved the merger at separate special stockholders' meetings on Feb. 13.
Nov. 1, 1980	Effective date of merger of Seaboard Coast Line Industries and Chessie System Inc. into CSX Corporation. ● Prime F. Osborn named chairman and co-CEO; ● Hays T. Watkins named president and co-CEO ● Due to this merger, certain non-rail assets became part of the new CSX Corporation. ● From the Seaboard side: Cybernetics & Systems Inc., Florida Publishing Company, Clay Video and Area Communications. ● From the Chessie side: Chessie Resources Inc., The New River Company, The Greenbrier and Beckett Aviation Corporation.
December 1981	CMX Trucking formed.
May 1, 1982	● Prime Osborn retired; ● Hays Watkins named chairman and CEO; ● Paul Funkhouser named president
Aug. 16, 1982	Florida Publishing, Clay Video and Area Communications put up for sale.
Dec. 3, 1982	Sold Area Communications to Demetree.
June 7, 1983	Merger of Texas Gas Resources Corporation and CSX approved by respective boards. With this merger, CSX would also acquire American Commercial Lines.
June 10, 1983	ACL put in voting trust pending approval of CSX's control by ICC.
July 1, 1983	Sold ferry to Michigan-Wisconsin Transportation Co.
Aug. 6, 1983	Acquired 72 percent of TXG.
Sept. 30, 1983	Texas Gas (TXG) merger completed.
Oct. 28, 1983	CSX stock split 3-for-1. (10/25/83 $75.25 close; 10/28/83 $25.0833).
Sept. 7, 1984	ACL merger approved by ICC.
Dec. 7, 1984	CSX listed on London Stock Exchange.
Jan. 24, 1985	Letter of intent to sell Beckett Aviation to Aero Services.
Aug. 30, 1985	Sale of Beckett Aviation to Aero completed.
Dec. 11, 1985	Announced realignment into four major areas: transportation, energy, technology and properties.
Dec. 16, 1985	John T. Collinson named vice chairman.
Jan. 9, 1986	Signed letters of intent to purchase Rockresorts from Laurance S. Rockefeller.
Feb. 4, 1986	Purchased 30 percent interest in Yukon Pacific Corporation.
April 10, 1986	Rockresorts purchase completed.
April 21, 1986	Announced proposal to acquire Sea-Land.
Dec. 2, 1986	Board approved B&O merger into C&O.
Dec. 31, 1986	Sold CSX Minerals to Quintana Minerals Corp. Sold New River Company to Quintana Minerals Corp.
Feb. 11, 1987	Sea-Land merger approved by ICC.
April 30, 1987	B&O merged into C&O.
July 20, 1987	Announced formation of CSX/Sea-Land Intermodal and Logistics.
Sept. 2, 1987	C&O merged into CSX Transportation Inc.
April 20, 1988	John Snow elected president & COO.
April 27, 1988	CSX Oil & Gas sold to Total Minatome.
July 12, 1988	Acquired majority interest in Yukon Pacific.
Sept. 19, 1988	CSX announced restructuring program; TXG and resort properties put up for sale.
Oct. 18, 1988	Self-tender Dutch auction completed, CSX buys 43,129,902 shares at $32 per share.
Nov. 11, 1988	CSX/Sea-Land Intermodal announced restructuring.
Dec. 20, 1988	Signed agreement to sell Rockresorts to VMS Realty Partners.
Dec. 23, 1988	Signed definitive agreement to sell Texas Gas Transmission to Transco Energy Company.
April 20, 1989	John W. Snow elected CEO.
July 11, 1989	Completed sale of Rockresorts to VMS. CSX retained management of Grand Teton Lodge and Carambola Beach Resort.
March 8, 1990	Sale of CSX Energy to Enron Corp.
Sept. 14, 1990	Virginia Retirement System and CSX jointly announced RF&P proposal.
Jan. 31, 1991	Hays T. Watkins retired.
Feb. 1, 1991	John W. Snow named chairman.
June 27, 1991	CSX announced agreement to sell one-third interest of Sea-Land Orient Terminals Ltd. (a Sea-Land Hong Kong terminal) to Ready City Ltd.
July 1, 1991	CSX Transportation combined three-unit rail structure into one.
July 29, 1991	ACL agreed in principle to acquire Hines Inc.
Sept. 12, 1991	Sea-Land and the Soviet Railways announce partnership to utilize Trans-Siberian Railway.
Sept. 30, 1991	Sea-Land announced organizational moves.
Oct. 9, 1991	CSX raised dividend to 38 cents.
Oct. 10, 1991	RF&P transaction consummated.
Oct. 17, 1991	Barnett Banks agreed in principle to acquire CSX Commercial Services.
Feb. 14, 1992	CSXT entered into negotiations to purchase P&LE's railroad business.
April 23, 1992	Encompass - joint venture between AMR and CSX.
May 22, 1992	Valley Line sold to ACL and assets placed in voting trust.
June 12, 1992	ICC approved ACL's acquisition of Valley Line.
June 23, 1992	Valley Line assets transferred from voting trust to ACL.
Aug. 6, 1992	Announced CSX/Sea-Land Logistics restructuring and new name of CSX Logistics.
Sept. 14, 1992	Three Rivers Railway, a subsidiary of CSXT, purchased remaining rail lines of P&LE (60 miles), already owned the other 50 percent.
Feb. 8, 1993	Acquisition of CTI (held an interest since 1988).
June 1993	Sea-Land applied to reflag 13 U.S.-flag ships.
Oct. 13, 1993	CSX raised dividend to 44 cents.
Feb. 14, 1995	Sea-Land received MARAD approval to reflag five U.S.-flag vessels under foreign registry of the Marshall Islands.
Feb. 21, 1995	Jeff B. Lowenfels named president and CEO of Yukon Pacific Corp.
Oct. 11, 1995	CSX raised dividend to 52 cents and announced 2-for-1 stock split.
Dec. 4, 1995	Effective date of stock split.
July 4, 1996	Netherlands Railway, Deutsche Bahn AG and CSX announce plans for joint venture - NDX.
Oct. 15, 1996	CSX and Conrail announce strategic merger.
April 8, 1997	CSX and NS agree on division of Conrail.
Nov. 4, 1997	John Andrews named Chief Information Officer of CSX.
Nov. 6, 1997	Les Passa named president and CEO of CSX Intermodal.
Jan. 19, 1998	CSX unveils Direct Stock Purchase Plan.
March 26, 1998	Sanga and CSX Technology announce intent to form a joint venture company to be exclusive channel for Sanga and CSX's SCM Java Products.
June 16, 1998	Charles J.O. Wodehouse appointed president of CSX Technology after Andrews resigns.
June 30, 1998	Competed ACL transaction with Vectura; own 34 percent.
Aug. 6, 1998	Terminated joint venture with Sanga.
Oct. 1, 1998	CSX Integrated Services becomes BridgePoint.
Feb. 1999	CSX and Vail Resorts entered into a contract for Grand Teton Lodge Company.
March 16, 1999	Announced Sea-Land to be managed as three distinct businesses - global container shipping (John P. Clancey), international terminal operations (Robert J. Grassi), and domestic trade (Charles G. Raymond).
March 31, 1999	CSXT and UP reach historic interchange agreement directing traffic through major gateways connecting the two railroads.
June 1999	Vail's acquisition of Grand Teton Lodge Company completed.
June 1, 1999	CSX begins operating new rail network to include Conrail.
July 14, 1999	Alvin R. (Pete) Carpenter named vice chairman of CSX.
July 14, 1999	Ronald J. Conway named president of CSXT.
July 22, 1999	Reached agreement to sell Sea-Land's international liner business and related assets to A.P. Moller-Maersk Line for $800 million.
Nov. 16, 1999	CSX announces CSX Lines (domestic container-shipping). Charles G. Raymond, president and CEO.
Dec. 10, 1999	CSX completes Maersk/Sea-Land transaction.
Dec. 15, 1999	CSX launches CSX World Terminals. Robert J. Grassi, president and CEO.
April 11, 2000	John W. Snow becomes acting president of CSXT.
Sept. 22, 2000	Sale of CTI Logistx to TNT Post Group, N.V.
Nov. 29, 2000	Michael J. Ward named president of CSX Transportation Inc.
Feb. 15, 2001	CSX Vice Chairman Alvin R. (Pete) Carpenter retires.

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