Former Treasury Secretary Paul O'Neill

DATE January 14, 2004 ACCOUNT NUMBER N/A
TIME 12:00 Noon-1:00 PM AUDIENCE N/A
NETWORK NPR
PROGRAM Fresh Air

Interview: Paul O'Neill and Ron Suskind on their book "The Price
of Loyalty"
TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross.

I'm sure you've heard about the controversial new book about Paul O'Neill,
President Bush's first secretary of the Treasury. This inside look at the
Bush administration is very critical of many policies, but it's especially
critical of the lack of communication in making policy. After 23 months as
secretary of the Treasury, Paul O'Neill was asked to resign. O'Neill had
previously worked in the Nixon and Ford administrations and was the CEO of
Alcoa. The new book, "The Price of Loyalty," is written by Pulitzer
Prize-winning journalist Ron Suskind. Although his chief source of material
for the book is O'Neill, Suskind also interviewed other Bush administration
insiders and drew on 19,000 documents that O'Neill says were released to him
at his request by the Treasury Department. This week the inspector general's
office at Treasury confirmed that it had begun an investigation into whether
any laws were broken when these documents were turned over to O'Neill. I
spoke with O'Neill and Suskind yesterday.

Paul O'Neill, did you expect that you or that, you know, documents in that
you've used in the book would be the subject of an investigation by the
Treasury Department?

Former Secretary PAUL O'NEILL (Treasury Department): Well, I'm a little bit
surprised, Terry. Let me tell you the circumstances. I guess maybe a year
ago now on January the 6th, I gave a speech at the Sulgrave Club in
Washington, DC, and Ron Suskind was there. And afterward he came up to me and
indicated that he thought my ideas were worthy of a long article. As a matter
of fact, it started out as a 20,000-word article and evolved into what's now a
book, which is kind of a chronicle of the 23 months I was at the Treasury.
And after I'd read through the things that he'd previously written, including
the "Hope in the Unseen," which is, really, quite wonderful, remarkable book,
I agreed to be the main subject of a book he was going to write.

And after our conversations went on for a month or so, I called the legal
counsel, the top legal person, at the Treasury Department and said, `This book
is going to be written, and I would like to have you go through the documents
that passed over my desk while I was there and send me what I can have.' And
about three weeks later, he, the general counsel, sent me what Ron says is
19,000 documents. And I gave the CDs to Ron, you know. So I don't have any
documents I carted out of the place. The documents I have were ones that were
released to me by the top legal officer of the Treasury Department. And the
thing that's, frankly, a little bit surprising to me is that they didn't check
with the Office of the General Counsel at Treasury, apparently, before
deciding they needed to look into the matter because I'm sure someone in the
legal department would have said, `We gave him everything that it was possible
to give him without violating the secrecy laws.' And so I think when they make
that call, they will discover they should have made the call before they
decided to announce they were making an investigation, you know.

But I would also say this. You know, if I were the secretary of the Treasury,
I probably would have said to the inspector-general, `Take a look at this for
me.' Actually, I probably would have called the legal counsel myself and
said, `Tell me about this.' And the legal counsel would have said, `Yeah, we
gave it to him. We went through it very carefully. And so there's no cause
of concern here because we used our legal judgment to make sure that we were
not violating the law that pertains to us,' which says secret documents should
not leave the building.

GROSS: Are you suggesting that you think the people at the Treasury
Department, who gave you the documents, maybe should not have?

Mr. O'NEILL: No, absolutely not. I think what they gave me, so far as I
know, was carefully vetted by the lawyers in the Treasury Department, and they
only sent me things that were appropriate.

GROSS: Do you think that the investigation that is being opened is an attempt
to intimidate or punish you?

Mr. O'NEILL: No, not at all.

Mr. RON SUSKIND (Author, "The Price of Loyalty"): I'm a little less--Paul's a
little more forgiving than I am. I wonder about it. I do wonder about it.

Mr. O'NEILL: You know, I'm not a conspiracy theory person, and I don't try to
imply motives in other people because I resent so much people inferring
motives beyond what I've actually said. It really infuriates me.

Mr. SUSKIND: Just on this very point, I think people get a sense of how
evidence based Paul is. You know, he is kind of the king of facts. He needs
evidence, or he doesn't make judgments or conclusions. Now what's important
on that point are all the statements Paul makes in the book are ones supported
not only by Paul's rigorous standards of evidence but also by documentary
evidence in the documents and corroboration of other people. But I don't
know. I wonder about it. I can't draw conclusions either, but it could have
been handled with one call to one person who said, `We gave them what they
were due to get.'

GROSS: My guests are Paul O'Neill, who spent two years as secretary of the
Treasury under President Bush, and Ron Suskind, who's written a new book about
those two years called "The Price of Loyalty: George W. Bush, The White
House and the Education of Paul O'Neill."

Paul O'Neill, you say that Iraq and regime change were on the agenda from the
very start of the Bush administration; that even at the first National
Security Council meeting, right after the inauguration in January, that Iraq
and regime was on the agenda. What exactly was the agenda? What was being
proposed for Iraq the month of the inauguration?

Mr. O'NEILL: There's a government in Washington that's what I would
characterize as the permanent government, and that is to say all the millions
of people who are there independent of what party is in power. And, you know,
the thing people are incorrectly saying from this book is that somehow Iraq
was a wholly new subject when President Bush took office. That's just simply
wrong. The Clinton administration had announced that regime change was their
objective in Iraq, and there was a resolution passed, I think unanimously, in
1998 condemning Saddam Hussein and calling for regime change. So I think, you
know, some of the hype that's gone on is, as is often the case, simply wrong.

What was different, for me anyway, at the beginning of the administration was
the relative placement of priority of regime change in Iraq. I was, frankly,
surprised that Iraq was suddenly what I considered to be, from my own
engagement, the highest priority because there were a lot of other things
going on in the world, including the continuing 50-year struggle in the Middle
East.

Mr. SUSKIND: Terry, I think it's important to point out this is a perfect
example of what the book shows, I think, quite clearly. Here was a meeting in
which Paul is one person in the room who's interviewed, but several other
people were also interviewed for the book. Once it starts with Paul saying,
`Boy, that was an interesting meeting, Ron,' I say, `Fine. I can find out who
else is in the room because we have that in documents.' I call them up, and
we talk about, `What was your reaction? Paul was clearly surprised.' Others
in the room were surprised as well, including people, interestingly, who had
been around for a while--they weren't all new to the government--who said,
`There clearly is a change from what went before.' Regime change was a
consistent policy, has been, of the US government.

What was different about this first meeting was, as Paul says, the relative
priority. Iraq went to the top of the list. The same time there was a sense
that we should pull out of the Arab-Israel conflict. The president was quite
emphatic that, `There's nothing we're going to be able to do there, so let's
withdraw from that.' Colin Powell in the meeting, according to several of the
witnesses who offered their testimony to me, was surprised, cautioning the
president that that could cause a reaction. The Sharon government could be
unleashed. And the president responded to that in kind saying, `Sometimes a
show of force can clarify things.' And, importantly, at this moment many of
those said, `Here is what's different: not that Iraq is interesting to us as
the US government and our goals, but that there was not a sense of hesitancy
about the possibility of using military force in the goal of regime change.'
That was a difference from the Clinton years. Two, that, as Paul says in the
book, it was more about, `Find me a way to do this.' It wasn't about the
`whys': `Why Saddam?' It was about how: `How can we use the full force of
the US government to affect a change that is now clearly what we've decided we
want to show?'

Mr. O'NEILL: And, Terry, I think there's another important point to make
here to remind people of circumstances in 2001. When President Bush came to
office, Saddam had his missile batteries shooting at US flyers who were
patrolling the no-fly zone, and they were doing their best to shoot down our
planes, even though it was in violation of the agreement that the no-fly zone
would be patrolled and it would be protected. And so, you know, I think it
not unreasonable for an incoming administration to say, you know, `This is not
going to pass. We're not going to let the young people in America's Air Force
fly over Iraq in a sanctioned area and let Saddam Hussein blow our people out
of the sky.'

GROSS: My guests are Paul O'Neill, former secretary of the Treasury in the
Bush administration, and Pulitzer Prize-winning journalist Ron Suskind.
Suskind's new book about O'Neill is called "The Price of Loyalty." More after
a break. This is FRESH AIR.

(Soundbite of music)

GROSS: My guests are Paul O'Neill, who was asked to resign after 23 months as
secretary of the Treasury in the Bush administration, and Pulitzer
Prize-winning journalist Ron Suskind. Suskind's new book about O'Neill is
called "The Price of Loyalty."

One of the documents that you have is a Pentagon document that's headlined:
Foreign Suitors for Iraq Oil Field Contracts, March 5th, 2001. And there's a
map of areas for exploration. What was this document? What was in it? I'm
wondering if you think this document has any implications for the American
public...

Mr. SUSKIND: Terry, I can...

GROSS: Yeah.

Mr. SUSKIND: ...respond to that. That's actually--"60 Minutes" miscast it
as a Pentagon document. In the book it's clear it's not that. It's a
Commerce Department document that was circulated, you know, in various parts
of the US government, including to the Cheney energy task force, that came
through to land on Paul's desk. And what it is, it's a study of foreign
suitors who are interested or have experience in terms of oil in Iraq. That's
what it's about.

Mr. O'NEILL: Again, Terry, this is a guess on my part, but I believe that
this document had its roots in the Clinton administration. There was no way
that a new administration could create this kind of document in the short
period of time before this meeting.

Mr. SUSKIND: Well, but to be fair, let's make sure we're clear here, this is
a document that's dated March 1 or 2. So there probably was enough time, just
based on the dating of the document. But...

Mr. O'NEILL: Knowing how government works, I've got to tell you, I don't
believe it was done in six weeks. I just don't believe that.

Mr. SUSKIND: Terry...

GROSS: Yeah.

Mr. SUSKIND: ...you're getting a glimpse of the Suskind-O'Neill dialogue of
rigor that has resulted in this book, such that at the end of the day Paul can
read it, you know, for fact once the manuscript is finished and say, `It's all
right as far as I know.' And that's important. I think that the document
that's most interesting of this early part...

GROSS: Yeah.

Mr. SUSKIND: ...is one that essentially we don't have, but we have a clue
about, which is the cover sheet, which has gotten so much attention, for the
meeting on February 1st. Importantly, the first NSC meetings were all about
Iraq, all Iraq all the time: `What are we going to do about Saddam?' There's
a document which is marked `secret,' which we don't have--we just have the
cover sheet--which says, `Executive summary: Political-military plan for
post-Saddam Iraq crisis'. And it's marked secret. Now what I'm interested
in, in that document, is simply that a document with that title exists. Now,
obviously, that classified document was washed off of the disk that was given
to me. But I think it's a pertinent question for the American public to say,
`I really do want to know what was in that document for that meeting on
February 1st at the NSC.' That's important in terms of the "good reasons,"
quote, unquote, that drove us to war.

Mr. O'NEILL: Can I...

GROSS: Let me cut to the chase here and ask you a question that I think is on
the minds of many Americans who have heard about your book. Are you saying
that you think there's a possibility that the Bush administration led us into
war under false pretenses? In other words, that it wanted to go into Iraq,
and it was just waiting for the right excuse or opportunity, and that 2001 and
the UN weapons inspections that weren't turning anything up were the
opportunity that the Bush administration was waiting for. But saying that
that's why we went in was like false pretenses. That's not really the reason
why. That was just the excuse they were looking for to do it. Is that what
you're implying?

Mr. O'NEILL: It's not what I believe. Let me tell you, I think Colin Powell
is a man of the highest principle, and he went in front of the UN and laid out
the case that I truly believe he believed in deeply. He wouldn't have done it
if he hadn't done his own careful look at the evidence. The point that I've
made, and for me it's a really important point, is to know the difference
between what I call the highest level of hard evidence and sorting through and
sifting 10 years' worth of material from the national intelligence agencies
and drawing the conclusion that there's a high probability of weapons of mass
destruction. I think Colin Powell would not have intentionally or willingly
misrepresent what he thought one could fairly draw as an inference from what
was available. But that's different from my notion of what the highest
standard of evidence...

Mr. SUSKIND: And we didn't meet that standard. And Paul, as a principal of
the NSC, read every report that George Tenet and the CIA sent up, you know,
and he read it carefully. I mean, that's the way--everybody knows O'Neill as,
`That's sort of a thorough guy.' So when he makes the statement, it's based
on he having actually sat and read what the CIA sent up. And as you said to
somebody, it wasn't flat-footed analysis. Am I right?

Mr. O'NEILL: That's right. But I'd make one other point, you know, because
there's been some dialogue in the last few days, and I don't know who it was,
but some spokesman said, `He wasn't in a position to know.' And it may very
well be that someone decided to withhold information from me that I didn't
see, and so I can't judge information that was withheld from me. I can only
attest to what I actually saw, and what I actually saw didn't meet my standard
of concrete evidence.

GROSS: One more question about Iraq. In the National Security Council
meetings that you intended, what seemed to be the priority reasons for regime
change? Was it weapons of mass destruction? Was it fears that Saddam Hussein
was in league with al-Qaeda or other terrorists? Was it access to oil?

Mr. O'NEILL: I'd say the leading reason was one that carried over from the
Clinton administration. This is a horrible person, who's gassed his own
people, who's done terrible things and torturing and putting innocent people
to death. And there needs to be a regime change, and it was because Saddam is
such a proven criminal person, you know, at the highest level of criminality
in the last 50 years. He's way up there on the list. And that was the reason
for, `Saddam's got to go.'

Mr. SUSKIND: But it's important, Terry, that people note as well, and you can
see it in the documents--is that along with that, there was a lot of talk in
the first three NSC meetings about how Saddam is the key agent in
destabilizing the region and, in memos that Don Rumsfeld sent around and
others, that, `We need to make an example of sorts of Saddam, you know, to
help guide the behavior of other states.' What you're seeing there are the
early imputations of what would later be called preemption, which has specific
views about. But what's clear from the documentary evidence is that was the
discussion occurring in the first three NSC meetings of 2001.

GROSS: Let's talk about tax cuts. Paul O'Neill, you were secretary of the
Treasury, and you say that both you and Alan Greenspan, head of the Federal
Reserve, opposed the president's tax-cut plan. You both wanted triggers on
it. You both wanted some kind of interim measure, so that you could evaluate
along the way: Are the tax cuts hurting? Are they becoming counterproductive
or even dangerous? He was opposed to those triggers. You had other reasons
for opposing his tax cuts as well. Were you surprised that the president
didn't take more seriously the fact that his two leading economic advisers
were advising things that he wasn't doing?

Mr. O'NEILL: Well, we need to be precise, again, if we can. There were three
different tax cuts, and let me talk about them in order. The first tax cut is
one that the president had advocated during the campaign in 2000. Actually,
he was advocating one, if I remember correctly, tax cut that would have
totalled $1.6 trillion. It ended up being $1.3 trillion. And, you're right,
Alan Greenspan and I thought it would be a good idea to have some
conditionality, i.e. triggers, in the first tax cut. It didn't happen, but I
guess I would say the process did deliver some stimulus, which wasn't in the
first proposal. Thank God it did because the money started to flow into the
US economy, I think, on the 23rd of July, 2001, just a couple of months before
9/11. And it was very helpful during the trauma after 9/11. And I think both
Alan and I--I had no problem; he can speak for himself--had no problem with
where we ended up in terms of magnitude. The second one was smaller.

The third one I was opposed to because I thought there were four good reasons
not to do another tax cut. First of all, this is now in the summer of 2002
and into the fall of 2002. I believe, from the information that I had and 40
years' worth of experience and dealing with the economy, that the economy was
repairing itself, and the likelihood was that at the end of 2003, the real
rate of growth in the economy would be 6 percent or maybe even a little bit
better than that. And so I didn't think we ought to be adding more stimulus
because 6 percent seemed like a reasonable number to me. Secondly, I was
concerned, and I remain concerned, that we could still be the subject of
another terrorist attack that would require money from we, the people.
Thirdly, I was really concerned at that point that we probably were going to
go into Iraq, and that would require a fair amount of resources. And,
finally, I believed there was a better use for the fiscal flexibility of the
federal government to do some serious work on fundamental reform of Social
Security and the tax system. And so I found these really compelling reasons
not to do the final tax cut.

GROSS: Paul O'Neill and Ron Suskind will be back in the second half of the
show. Suskind's new book about O'Neill is called "The Price of Loyalty." I'm
Terry Gross, and this is FRESH AIR.

(Soundbite of music)

(Announcements)

(Soundbite of music)

GROSS: Coming up, more on the conflict between President Bush and Paul
O'Neill over tax cuts. We continue our conversation with O'Neill, former
secretary of the Treasury, and Pulitzer Prize-winning journalist Ron Suskind.

(Soundbite of music)

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REMOVE HEADER WHEN MERGING, PLEASE
GROSS: This is FRESH AIR. I'm Terry Gross, back with Paul O'Neill, the
former secretary of the Treasury in the Bush administration, and Ron Suskind,
a Pulitzer Prize-winning journalist. O'Neill is the subject of Suskind's new
book "The Price of Loyalty," which critically examines how the Bush
administration makes policy. O'Neill disagreed with the presidency over tax
cuts and was asked to resign after 23 months as the head of Treasury. When we
left off, O'Neill was explaining why he and Alan Greenspan were cautioning the
president about the tax cuts.

What was the president's response to you when you'd make criticisms like this?
I mean, caution him about the tax cuts?

Mr. O'NEILL: Well, in the early days, in the summer of 2002, I thought my
arguments were registering and that there was a general sentiment that that
was all right. After the elections in 2002, it was clear that my arguments
weren't winning arguments anymore.

GROSS: Did the president kind of argue with you or bring up points that
contradicted the points you made? Or did he listen to you and not say
anything? What was his approach...

Mr. O'NEILL: Yeah, not...

GROSS: ...to dealing with the types of criticisms you were making?

Mr. O'NEILL: Not much. You know, the book says there were offerings, but I
would say not engagement the way you're suggesting, of really noodling
through: What are the implications? First of all, what are the facts?
Secondly, what are the options that are available? Thirdly, what are the pros
and cons of the options? And finally and only finally, what are the opinions
of the different advisers and all written down in a very explicit way. I
found what I had been part of in previous administrations lacking in the way
we conducted our business. I have a hunger for explicitness in formulating
policy, and I didn't find that.

GROSS: Well, is the implication here that the decisions weren't really being
made because of the input of the expert advisers, but rather the decisions
were already made, and hearing what you had to say was just kind of for form
but not really for serious input? Are you implying that?

Mr. O'NEILL: I guess I'm not willing to make that kind of sweeping judgment,
Terry.

GROSS: Did you ever...

Mr. O'NEILL: I don't think you'll find that in the book, and I guess I'm not
prepared to go beyond the book at this point on that issue.

GROSS: During--in talking about the budget and tax cuts, you quote Vice
President Cheney as saying, "Reagan proved that deficits don't matter." When
he said that, do you know whether he meant that they don't matter in terms of
the functioning of the economy, or whether he meant they don't matter to
voters?

Mr. O'NEILL: I don't know. I don't know.

GROSS: What were...

Mr. SUSKIND: We had a...

Mr. O'NEILL: What I know is what he said and, you know, it's up to him to
elaborate what the implications of that are. You know, I was just frankly
stunned, because however it's taken, I don't agree with it.

GROSS: What do you think the Bush administration or Vice President Cheney
doesn't understand about deficits?

Mr. O'NEILL: As a general point, when the economy is operating below its
sustainable level of production, there's nothing wrong with having a deficit.
One could argue that actually it's quite valuable to run a short-term deficit
to help the economy get back to a good, sustainable level. What's not a good
idea is to have so-called structural deficits that get in the way of doing
other important things that this society needs to do. For example,
restructuring Social Security, because anyone who knows anything about our
Social Security system knows that it's not sustainable, and the longer we go
without addressing this problem, the bigger the mountain becomes, the
difficulty in actually being able to do something that is reasonable and fair,
not only for this generation, but for the ones to come.

Mr. SUSKIND: Now, Terry, you can sense the frustration Paul felt with the
administration when he says identically that, just what you heard, to the
president. Now he's the Treasury secretary and the president looks at him and
his face doesn't move, he shows no emotion, not even any reaction in many
cases. It leaves someone like Paul, as other members of the Cabinet said to
me, it leaves them in a vacuum, a kind of blindman's bluff of, `I don't know
the mind of the president, and if I don't know his mind or what's driving
conclusions that he seems to be making, it's hard for me as a Cabinet official
to act appropriately on his behalf. It becomes a blindman's bluff of feeling
my way around or relying on hunches of what the president says, "I went on
instinct on this" or "I went, you know, from my gut."' It's hard to know what
that means without a process to really look at what the choices and
consequences are for important policy.

GROSS: Well, O'Neill, the president obviously didn't create his tax policy
based on your recommendation because you opposed a lot of what he's done with
tax cuts. Who was he listening to, do you think? Who were the advisers most
strongly advocating it?

Mr. O'NEILL: Who was he listening to? Well, there were a number of famous
and maybe not-so-famous economists who were part of the campaign economic
team, names that you would probably know: Martin Feldstein at Harvard
University, John Koken(ph) at Stanford, Larry Lindsey and Glenn Hubbard and,
you know, many other people with very solid reputations in economic thought
were, I would say, the leading architects of the first round of tax cuts, and
many of them contributed to--and I had strong feelings about the second and
then the third tax cut being the right thing to do.

GROSS: I'm wondering if you think that Karl Rove played a part in tax-cut
strategy and, you know, from a political perspective, from something that
would appeal to voters?

Mr. O'NEILL: I'm not sure. I think it's well-known that the president has a
lot of confidence in Karl and Karl has a point of view about what's good
electoral politics.

GROSS: Did he have a major part in that? Was it a minor part? Could you...

Mr. O'NEILL: I don't know. You'd have to ask the president.

GROSS: Mm-hmm. OK. And, Ron Suskind, from talking to people behind the
scenes in addition to Paul O'Neill, any point of view on that?

Mr. SUSKIND: That Karl has extraordinary power for a political adviser.
Anyone with any experience in the White House has said that. You know, there
is a balance that has been traditional for White Houses between politics and
policy. Paul's very familiar with it having been in so many White Houses.
That basically the policy team goes out and does its hard work and
presents--does its white papers and studies, presents to the president, `Here
are our best estimations of what is known and knowable to help guide you as to
what the right thing to do it.' At that point, the political team gets called
in to talk about how to do this. `Can we get half a loaf or more than that.
How do we execute? You know, what can this do for us electorally.' That's
the traditional balance of a White House.

What's clear in this White House, clear from the documentary evidence from
what we now know from the study that we've done over the past year in this
book, is that that balance is not the balance that exists in this White House.
It is much more weighted toward political, you know, determinism, arriving
early or maybe even before the policy process begins.

GROSS: My guests are Pulitzer Prize-winning journalist Ron Suskind and Paul
O'Neill, the former secretary of the Treasury in the Bush administration.
Suskind's new book about O'Neill is called "The Price of Loyalty." More after
a break. This is FRESH AIR.

(Soundbite of music)

GROSS: If you're just joining us, my guests are Paul O'Neill, the former
secretary of the Treasury under President Bush, and Ron Suskind, a Pulitzer
Prize-winning journalist. Their new book is called "The Price of Loyalty" and
it's about Paul O'Neill's two years as secretary of the Treasury, and he is...

Mr. O'NEILL: Twenty-three months.

GROSS: ...nearly two years, and his impressions...

Mr. O'NEILL: Just to be precise.

GROSS: Very precise. And his impressions of the inside workings of the Bush
administration.

Paul O'Neill, you're quoted about the vice president's energy task force,
which you sat on, and you say that you thought it was oddly constructed, made
up solely of government officials, and because it had only government
officials, there were no reporting requirements. You're saying in this book
that Vice President Cheney likes to, when possible, work in secret. What's
your critique of how this energy task force was put together and operated,
from your inside point of view?

Mr. O'NEILL: Well, the general matter, I believe in inclusiveness in policy
issues, and by that I mean, you know, it's a concept that goes back to the
legal profession. In my judgment, the best lawyers are those who understand
the opposing view as well or better than they understand what they're
professing, because it leads to better outcomes. And so I like, for example,
the idea of including the smartest people on every issue, no matter what their
polarity is, because it's a way of sharpening your own thinking. And so I'm
an includer.

Mr. SUSKIND: And you did not feel that happen in the energy task force.

Mr. O'NEILL: Right.

Mr. SUSKIND: Then others in those energy task force meetings corroborated
Paul's general impressions that there was not balance, the way Paul defines
balance, bringing in an ecumenical community of folks to hash it out. As
well, there was a heavy inclusion, not in the room, but outside of the room,
so to speak, of the stakeholders, so-called, lobbyists from natural gas and
oil and coal and other industries, and not very much involvement from anyone
from the environmental or conservation movements. What Paul says in the book
is that when you have a process like that, you generally get something that is
not, quote, "in the public interest."

GROSS: Ron Suskind, you say in the book, and I think it's you speaking here,
and not Paul O'Neill, but correct me if I'm wrong, you say that Karen Hughes,
the president's adviser, left the administration not only because she wanted
to spend more time with her family, which was her public reason for leaving,
but also because she was exhausted trying to be a pragmatic counterweight to
the more ideological Karl Rove. Is that based on what other sources told you
for the book?

Mr. SUSKIND: Yeah, that's based on a previous story that I did for Esquire
magazine in the summer of 2002. It got some attention because of the
centerpiece of it. It was about Karen Hughes leaving. But Andy Card, the
chief of staff, spoke to me in frustration after Karen announced suddenly that
she was leaving, that Karen has been the beauty to Karl's beast, essentially
that Karl goes into so many meetings with the sharp sword of partisanship, and
Karen manages to beat that into a plowshare, that she acted thoroughly as a
counterweight to Karl. And what Andy Card was concerned about, he was
concerned about the fortunes as a president, as almost everyone in the White
House is, that Karen's departure would lead to a veering to the right by the
White House. You know, that's an opinion that many people in the White House
echoed, and it's one that some people--again, let's look at what the evidence
shows--some people may point to in terms of what the pattern has been over the
past, you know, year and a half, two years since Karen left.

GROSS: Could you spell out a little bit more based on your sources for this
and for the Karl Rove piece what the nature of Karl Rove's input is into the
development of policy in the Bush administration?

Mr. SUSKIND: Well, Karl is an extremely skillful fellow. In some
measure--and this was according to folks in the White House as well as to John
DiIulio, who spoke to me before Paul. Interestingly, John DiIulio, even
though his place in the White House was many levels lower than Paul, said some
things in his testimony to me in another piece that ran in Esquire, which are
almost word for word things that Paul says in the book about the lack of a
policy apparatus. Now DiIulio is very, very pointed in saying, "That allows
for the reign of the Mayberry Machiavellis." That's where that quote comes
from. He echoed that with a 3,000-word memo that he sent to me elucidating, I
think very soberly, how the balance of this White House has essentially been
upset by at least in some measure the presence and power of Karl. Karl being
very early in the process, often at the start of the process, as to what's
known and knowable and what the gods of policy might recommend to a president,
and as well engaged all the way through to that final point of, `OK,
politically now what might we do?'

I think there's no doubt that Karl's influence in this White House is dramatic
and unique for a political person, for a political agent of a president.
Every president has, you know, a political adviser and often many of them, and
no one is professing to be a choir boy here. Everybody understands politics
and policy are a left-hand, right-hand struggle. What's important that people
understand is that almost everyone I've spoken to in the White House, you
know, who I think has spoken to me in an unmanaged way, let's just say, has at
least raised the question about this balance and Karl's efficacy. He's
trusted by the president, the president turns to him with, you know, almost
minute-to-minute regularity, and I think it has been important, depending on
where you stand, on how things have turned out.

GROSS: Paul O'Neill, did you have direct discussions with Karl Rove, or does,
like, Karl Rove speak to the president and you speak to the president, but you
and Rove don't speak to each other?

Mr. O'NEILL: I had very little engagement with Karl in the 23 months that I
was there and, you know, what Ron had just said about Karl is his point of
view, and I'm not into, I guess, differentiating Karl from a Michael Deaver or
other people who surrounded President Clinton who had this portfolio, or the
people who surrounded other presidents. You know, Ron's entitled to his own
opinion. I don't really have an opinion because, you know, again I said
earlier, you want to know how much weight the president puts on what different
people say to him, you need to ask the president. It's not possible to know
independent of asking the president.

Mr. SUSKIND: The evidentiary rigor, Terry, you're hearing in Paul's point
just on that one area is precisely what I think is so important in people
understanding, you know, the level of evidence he demands before he makes a
statement, and I think that's important that people understand that so that
they understand that the quotes in the book, which of course, Paul says, `Yes,
all those are apt and correct,' are ones that are supported by a kind of rigor
that, frankly, you don't often find in the journalistic endeavor.

GROSS: The...

Mr. O'NEILL: You know, Terry, if I may say one thing about that, the quote
that has been run the most frequently about the blind and the deaf, I gotta
tell you, I really regret that. The language...

GROSS: Let me mention the quote so people know what we're talking about.

Mr. O'NEILL: Yeah, OK.

GROSS: The quote is that, "President Bush is like a blind man in a room full
of deaf people."

Mr. O'NEILL: Yeah.

GROSS: Were you misquoted or you just sorry you said it?

Mr. O'NEILL: No, no, no, no, no, no, no, no, no, no. It's one I'd like to
take back. You know, I have a penchant from time to time to use vivid
language and, you know, I could have made the point about not seeing a
connectedness in conversations without using that language. And, you know,
it's a consequence of hundreds, maybe even thousands of hours' worth of
engagement, and...

Mr. SUSKIND: With me.

Mr. O'NEILL: Yeah, with Ron and, you know, I don't walk away from it or say
he did it unfairly. It's something I said. It's an unfortunate, unnecessary
characterization to make the point about what I found to be a lack of
intellectual engagement.

Mr. SUSKIND: Terry, I think it's important you hear the give and take on that
one quote, is that that quote actually came when Paul had told me time and
again, `The president is not engaged, when we sit in meetings, he's
unemotive,' and all of those sorts of things, and frankly at one point I said,
`Paul, you just can't be serious that he doesn't engage at all, that he's not
asking even basic questions.' It was almost out of frustration I said, `I
mean, could that possibly be true?' At which point Paul, you know, blurts
this out after we'd had many, many discussions on the issue of the president
being disengaged. He said, `He's like a blind man in a room full of deaf
people. There's no discernible connection in meetings large and small,' you
know.

And the fact is, is that part of the colloquy, the dialogue between Paul and
myself, has been one in which almost side by side, me with all the documents
talking to lots of people, and Paul, you know, engaging as well as to what is
the evidence, is one where we're just trying to figure out for the public what
is true.

GROSS: My guests are Pulitzer Prize-winning journalist Ron Suskind and Paul
O'Neill, former secretary of the Treasury in the Bush administration.
Suskind's new book about O'Neill is called "The Price of Loyalty." We'll talk
more after a break. This is FRESH AIR.

(Soundbite of music)

GROSS: My guests are Paul O'Neill, who was asked to resign after 23 months as
secretary of Treasury in the Bush administration, and Pulitzer Prize-winning
journalist Ron Suskind. Suskind's new book about O'Neill is called "The Price
of Loyalty."

Paul O'Neill, you talk in Ron Suskind's book about a major economic conference
that was organized by the White House, and you say that people invited were `a
carefully vetted group of more than 240 executives, economists and even a few
labor leaders. They'd seem diverse and independent to the trained eye; in
fact, nearly everyone would be a Bush supporter and many were major
fund-raisers for President Bush.' Is that one of the ways the Bush
administration works? Are you saying that a lot of their committees and
commissions are made up of people who are either Bush supporters or who
already support the point of view that Bush insiders want the committee to
come up with, and that people with dissenting point of views or outside point
of views aren't invited? You're saying you're for process, for hearing every
point of view. Do you feel like the Bush administration wasn't effectively
working that way? I mean, on this economic conference, you as secretary of
Treasury weren't asked for people who you'd want to invite.

Mr. O'NEILL: Well, I tell you, when you raise the question, what flashes into
my mind was an economic conference in 1974 that was held in the East Room
of the White House after President Ford had become president in August of
1974, and they set up a huge table with a green felt cloth on it and there
were maybe 150 people in the room with all the television cameras. And the
people who were invited included people like John Kenneth Galbraith, who was
certainly not what one would call a conservative Republican economist, but he
was symptomatic of the kind of people that were gathered around the table to
talk about insights about our economy when we were in really difficult
straits.

And when I first suggested we have an economic conference, that's what I had
in mind was calling in people with sharply different points of view and
letting their ideas be exposed to a hard standard of `show me your evidence.'
And, you know, as one who's been a player in economic policy for a long time,
let me tell you, all the people you see on television, the talking heads and
all the rest of that who assert their certainty about economic matters, I'd
generally say they don't know what they're talking about. You know, so much
of economic thought is a speculation and doesn't reach the standard of what we
would consider to be scientific evidence.

And I think this is a really important point when you're dealing with such an
elusive subject to call on everyone and maybe they'll have a few tidbits of
thought that you can add to your integrated thought process that will help you
get someplace. And so that's what I had in mind. That's not the conference
we had.

Mr. SUSKIND: I mean, it's important, Terry, listeners can almost hear the
pitch right just as you just heard it that Paul made to the president and
said, `Mr. President, you're up to this. You can do this. You can hold the
center at a meeting like this and we can get some real ideas about the
condition of the economy and what the economy needs.' And I think it was a
crushing moment for Paul when he saw a few weeks later that it had been turned
largely into a media event, in large measure managed by Larry Lindsey and
Karl, that said a lot about, you know, not only where process fit in the
management of the government and the White House, but also a question of
either the president felt that's not something he needed, or the other
question, is he not capable of holding the middle. Did he decide he simply
didn't want to do that? It all presents a kind of puzzling mystery of why not
as opposed to why. Why not do that?

Mr. O'NEILL: I think a different point, Terry. I think we've been on a
40-year slide where not just federal government but state and local
government, so much of what goes on is made for media, if your object is to
get across the line of the day, to get a simple, straightforward line across
to the American people. And for me personally, I think I really do not like
the idea that I'm too stupid to be taken into the ambiguities of important
policy issues, and what I get at the end of the line is a bumper sticker
language that tries to tell me what to think. I think the American people are
worthy of a lot more than that, and you know, I'm sure there are a lot of
people who have already turned off this interview because they don't want to
listen to complicated things. They'd rather have bumper stickers. But I
believe there's a huge majority of the American people out there who would
welcome a more in-depth, detailed discussion of the ambiguities of important
policy issues rather than the bumper sticker treatment they generally get.

GROSS: To end on a slightly lighter note, Paul O'Neill, when you were
secretary of the Treasury, it was your signature on the dollar. How many
takes did you do before you were happy with the signature and said, `This is
it, this is the one that'll go on the dollar?'

Mr. O'NEILL: You know, you're stretching my memory a little bit. I think
they gave me a white sheet of paper and I probably wrote seven or eight
signatures on the paper, and then I looked at them and I said, `Eh, this one
looks good to me. Let's do this.'

GROSS: No big deal?

Mr. O'NEILL: No, absolutely not. You know, it's kind of fun. People are
constantly asking me to sign the currency and, you know, I chose a good one
because I can do it in a larger size with my eyes closed, and it looks exactly
the same, so, you know, it's not one that I faked up. It's how I really sign
things.

GROSS: Well, I want to thank you both for talking with us. Thank you.

Mr. O'NEILL: Thank you.

Mr. SUSKIND: Thanks, Terry.

GROSS: Paul O'Neill is the former secretary of the Treasury in the Bush
administration. Ron Suskind is a Pulitzer Prize-winning journalist.
Suskind's new book about O'Neill is called "The Price of Loyalty."

(Credits)

GROSS: I'm Terry Gross.
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