Ersatz Advisers. by Robert Kuttner

Old Blog Import

What happened next was even stranger. To succeed O’Neill, Bush turned to another industrialist with no Wall Street credentials, railroad executive John Snow. Snow is also a leader of the Business Roundtable who in the recent past has expressed public doubts about the need for a big economic stimulus.

Snow is an unfortunate symbol. As head of CSX, he enjoyed a sweetheart stock deal of the kind coming under Securities and Exchange Commission scrutiny. In 1996, CSX lent Snow $25.4 million to buy stock. Snow put up $7 million of his own money as a down payment. When CSX stock later tanked, the company generously forgave the loan and returned Snow’s $7 million down payment — not exactly a deal available to the average unlucky shareholder. What a perfect nominee for the Enron era. Ironically, Snow supervised a recent Conference Board report on corporate governance.”