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Treasury Inspector to Review CBS, O'Neill Documents (Update3)

Jan. 12 (Bloomberg) -- The Treasury Department asked its inspector general to review the use of a document stamped ``secret'' in a CBS News interview with former Treasury Secretary Paul O'Neill.

In a profile of O'Neill, the main source for a new book critical of President George W. Bush's administration, the CBS television network's ``60 Minutes'' program showed a document labeled ``secret'' that referred to U.S. plans for Iraq after the toppling of Saddam Hussein.

``We referred this today to the office of inspector general,'' Treasury spokesman Rob Nichols told reporters in Washington. ``It hit the threshold in our view to warrant a look by the office of the inspector general.''

Treasury Inspector General Jeffrey Rush conducts independent audits and probes of Treasury officials and actions. Nichols said the department asked Rush to review the matter and ``take appropriate steps if necessary.''

Author Ron Suskind and a spokesman for ``60 Minutes'' denied any wrongdoing. O'Neill, who is scheduled to appear on NBC television's ``Today'' program Tuesday morning, could not be reached for comment.

Suskind's book, titled ``The Price of Loyalty'' and published by Viacom Inc.'s Simon & Schuster unit, cites government briefing papers on Iraq and memos, including some from Defense Secretary Donald Rumsfeld. O'Neill said in the book and interviews that Bush appeared to enter office in January 2001 already planning to oust Hussein and that he saw no proof the Iraqi regime possessed the weapons of mass destruction.

To justify the war against Iraq, Bush said Hussein was trying to build or obtain weapons of mass destruction and cited the need to prevent terrorist attacks such as Sept. 11, 2001, strikes on New York and Washington. Bush's rivals from the Democratic Party today seized on O'Neill's criticism to condemn the White House's handling of the war.

`Right' Decision

At a press conference today in Monterrey, Mexico, Bush said he appreciated O'Neill's service to government and that the decision to invade Iraq ``was the right one for America.'' Bush had fired O'Neill in December 2002 as the administration began its push for a tax cut that the secretary did not support.

The book is now ranked No. 1 on Amazon.com's bestseller list. While author Suskind said in the book that O'Neill gave him 19,000 documents to aid his research, he did not reveal his source for a March 5, 2001, Pentagon document titled ``Foreign Suitors for Iraqi Oilfield contracts'' or another called ``Plan for Post-Saddam Iraq.''

CBS, which aired images of both last night, denied it participated in an unauthorized disclosure. ``We certainly didn't have any secret documents,'' said Kevin Tedesco, a `60 Minutes' spokesman. ``We only showed a cover sheet.''

Treasury Documents

Suskind today denied O'Neill had broken any law in passing materials to him. ``O'Neill checked as to what was his due legally as Treasury secretary,'' he said in an interview on NBC's ``Today'' program.

In his author's note at the start of the book, Suskind said that four months after O'Neill was fired the former secretary asked for copies of every document that had crossed his desk. These were provided in CD-roms and ranged from presidential memos to hand-written thank-you notes, Suskind said.

Bush's rivals from the Democratic Party seized on O'Neill's criticism to condemn the White House's handling of the war. Bush is up for re-election in November.

``Implied in O'Neill's allegations is that the president of the United States and his administration may have consistently lied to the American people in making the case for war against Iraq,'' said Democratic National Committee Chairman Terry McAuliffe in a statement.

Asked at a separate briefing about O'Neill's book, State Department deputy spokesman Adam Ereli said ``the administration's record is clear on this issue.''

``It was Saddam Hussein who chose not to abide by his international obligations,'' Ereli said. ``It's clear that this was not written in stone or preordained.''

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Democratic presidential contenders pose for a photo in Des Moines, Iowa January 11, 2004 prior to the final debate before the Iowa caucuses. L-r are Missouri Rep. Dick Gephardt, Rev. Al Sharpton, Ohio Rep. Dennis Kucinich, Connecticut Sen. Joe Lieberman, North Carolina Sen. John Edwards, Massachusetts Sen. John Kerry, Amb. Carol Moseley Braun and former Vermont Gov. Howard Dean. Dean and Gephardt were locked in a near dead heat for the top spot, according to a Reuters/MSNBC/Zogby poll released on Sunday. REUTERS/Rick Wilking

Democratic presidential contender Missouri Rep. Dick Gephardt (L) watches as opponent former Vermont Gov. Howard Dean has makeup applied in Des Moines, Iowa January 11, 2004 prior to the final debate before the Iowa caucuses. Dean and Gephardt were locked in a near dead heat for the top spot, according to a Reuters/MSNBC/Zogby poll released on Sunday. REUTERS/Jim Bourg