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The average net worth of the individual members of the Bush cabinet, including the President and Vice President, was between $9.3 and $27.3 million. That’s nearly ten times the average net worth of the cabinet officials who were their immediate predecessors, according to a Center for Public Integrity analysis of executive branch personal financial disclosure forms.

The Center examined the finances and professional affiliations of cabinet secretaries, deputy secretaries, and undersecretaries, heads of independent agencies, and top officials of the executive office of the president appointed in 2001.

The disclosure forms provide a snapshot of the professional relationships and personal economic interests of the individuals Bush chose for the highest positions in the government. Stock and real estate values fluctuate, and some officials have since sold investments listed on their forms. Undersecretary of Commerce Kathleen Cooper, who worked for Exxon Corp. as their chief economist, owned between $1,000 and $15,001 worth of Enron stock. The holding was part of a managed investment account which, she told the Center, she sold since joining the administration.

“I sold all my Exxon too,” she added, referring to her investment in that company, which she listed as being worth between $1 million and $5 million.

Cumulatively, the President, Vice President and cabinet secretaries were worth somewhere between $149 and $434 million. By contrast, the net worth of the same 16 officials from the last year of the Clinton administration was in a range between $14.5 to $45.9 million.

The fifteen officials include the President, Vice President, and secretaries of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Housing and Urban Development, Interior, Justice, Labor, State, Transportation, Treasury, and Veterans Affairs.

Overall, the average net worth of the top 100 members of the Bush administration was somewhere between $3.7 million and nearly $12 million.

Of Bushs top 100 appointees, 34 come from for-profit businesses, 27 were drawn from the executive, legislative and judicial branches of federal, state, and local governments, 19 from non-profit entities including educational institutions, and 16 from lobbying firms and law firms with significant lobbying operations.

Four members did not fit these categories: Secretary of State Colin Powell and Vice Presidential Counselor Mary Matalin derived the bulk of their income from speaking fees; senior advisor Karl Rove and counselor Karen Hughes both worked for the Bush presidential campaign before joining the administration.

The Centers analysis was based primarily on schedules A and D of the personal financial disclosure forms, which list assets and employers, respectively, and was conducted over the last six months. The Center created an unprecedented searchable database from the data in the executive branch officials disclosure forms, which is available online. On schedule A, many appointees did not distinguish between personal and spousal assets; because the assets of spouses are covered by the same conflict-of-interest rules that apply to an appointee’s holdings, the Center included spousal assets in its analysis.

In researching the subject, the Center found that several officials have recused themselves from dealings with their old companies or from companies in which they held stock. Others have divested their shares of stock.

For example, Francis Blake, the Deputy Secretary of Energy, was the senior vice president of corporate development at General Electric. GE has a wide range of government contracts with and regulatory issues before the Energy Dept, including a contract to develop an “Advanced Turbine System” for electrical generation. Blake has recused himself from dealings with GE.

The Center will continue to track personal financial forms of the Bush administration, updating the database when new disclosure forms, which must be filed annually, become available, and adding information on divestments and recusals when they are received.

Disclosure Forms: Personal financial disclosure forms, which executive branch appointees must file with the Office of Government Ethics within 30 days of assuming office, require that appointees value their assets in certain broad ranges: from 0 to $1,000; from $1,001 to $15,000; $15,001 to $50,000; $50,001 to $100,000; $100,001 to $250,000; $250,001 to $500,000; $500,001 to $1 million; more than $1 million to $5 million; more than $5 million to $25 million; and more than $25 million. Both Bush and Vice President Dick Cheney have backgrounds in the energy industry; six other members of the administration, including, in the Commerce Deprtment, Secretary Donald Evans and Undersecretary Kathleen Cooper, went straight from the energy industry to Washington. And energy companies are the favorite investment of the 100 officials. The top 100 Bush appointees collectively had most of their holdings in the energy sector, some 221 separate investments with a maximum value of $144.6 million. They also had 32 investments in the metal and mineral industries, worth a maximum of $102 million, and 367 investments in financial companies, worth $82.8 million.

The financial disclosures show that 14 members of the Bush administration owned stock in embattled energy services firm Enron when they were nominated, worth-at the time of their filing-as much as $886,000. Enron and its executives and directors were Bush’s most generous campaign contributors, the Center found in The Buying of the President 2000. Through 2001, they’ve given Bush $623,000.

Among the largest Enron shareholders are Undersecretary of State Charlotte Beers and senior adviser to the President Karl Rove, who each held up to $250,000 in the company when their forms were filed.

The investments of Bush officials have already created concerns over conflicts of interest. Rove met with an Intel executive and lobbyists for the company in March 2001, when he held roughly $100,000 in Intel stock. In June, after the story of his meeting and investment became public, Rove announced that he would sell off his stocks. At that time, Rove still owned stock worth more than $50,000 in five companies that lobbied the executive office of the President in 2001: Boeing, Disney, General Electric, Johnson & Johnson, and Pfizer.

Overall, 22 of the top 100 Bush officials had significant holdings in 33 companies that lobbied their departments, agencies or offices. Deputy Treasury Secretary Kenneth Dam had investments worth more than $50,000 in eight companies that lobbied his department in 2001 over various tax, trade, and regulatory issues, including American International Group, Boeing, and Citigroup. Alcoa-which employed Dam’s boss, Treasury Secretary Paul O’Neill-lobbied Congress on international tax and revenue issues, but, according to their financial disclosure reports, the company did not lobby Treasury in 2001. Nor did the company lobby Treasury in 2000, when O’Neill was chairman of the company and Kenneth Dam served on the board of directors.

The corporate connection

The corporate character of the Bush administration is both substantive and stylistic. While former President Bill Clinton’s managerial style was famously likened to a college all-nighter during the first year of his term, Bush has been frequently compared to a CEO, avoiding immersion in detail, relying on his subordinates to lay out options, and deciding between them. Media accounts of how Bush has handled the war on terrorism underscore his executive style.

To further that war, Undersecretary of State for Public Diplomacy Charlotte Beers, who formerly was chair of the J. Walter Thompson advertising agency, borrowed her approach from her business background. Beers said the American cause was “the most elegant brand I’ve ever had to work with.” She added that, “Our poster people are President Bush and Secretary Powell, whom I think are pretty inspiring symbols of the brand, the United States.” Yet the corporate character of the Bush administration carries with it the potential for conflicts of interest.

Harvey Pitt, who was confirmed as Chairman of the Securities and Exchange Commission in August 2001, would normally be expected to oversee what is the biggest crisis before the SEC: the collapse of Enron into bankruptcy. Before his nomination, Pitt, an attorney with Fried, Frank, Harris, Shriver & Jacobson, represented the accounting firm of Arthur Andersen, which served as Enron’s independent auditors and allegedly facilitated Enron’s issuance of misleading financial statements that hid the company’s true financial condition. Arthur Andersen can also expect an SEC investigation of the firm’s recent destruction of Enron-related documents.

White House Legislative Affairs Director Nicholas Calio was also a lobbyist for Arthur Andersen.

Christi Harlan, director of Public Affairs for the SEC, said agency rules would require the chairman sit out commission votes that involve any of his former clients, including Arthur Andersen.

Pitt has also represented Lloyd’s of London in an effort to “reorganize the insurance markets,” according to firm material, as well as the New York Stock Exchange and each of the “Big Five” accounting firms. He has also represented clients accused of accounting irregularities before the SEC, most notably Canadian entertainment executive Garth Drabinsky.

Overall, the Center found that 20 of the top 100 officials in the Bush administration work in departments, agencies or offices that their former, private sector employers lobbied or from which they sought federal contracts in 2001.

Transportation Secretary Norman Mineta, the lone Democrat among Bush’s cabinet secretaries, served as vice president for special business initiatives for Lockheed Martin after leaving public service. Mineta also sat on the board of MELE Associates, a technology consulting firm, which paid him with between $15,001 and $50,000 of the company’s stock. MELE Associates lists among its clients Verizon, Lockheed Martin, and several government agencies, including the Energy Department, the State Department, the Transportation Department, Veterans Affairs, and the EPA.

The Deputy Secretary of Transportation, Michael P. Jackson, also comes from Lockheed Martin, where he worked for Lockheed Martin IMS, which manufactured an automated system to catch speeding motorists. Before it was acquired by information technology outsourcing firm ACS, Lockheed Martin IMS brought its parent company millions in revenues from contracts with municipal and state governments for several transportation-related systems, from “red light runner” cameras to EZ pass and similar credit toll systems. Hugh Burns, a Lockheed Martin spokesman, had little to say about whether Mineta and Jackson would give the company any advantage in securing contracts with Transportation. “We don’t have a point of view,” he said.

Veterans Affairs Secretary Anthony Principi served as CEO of QTC Medical Devices for just 18 months prior to his nomination to join Bush’s team. During that year-and-a-half tenure at QTC, Principi quadrupled the firm’s contracts with the Veterans Administration. Principi had previously served as acting secretary of the department in the administration of George H.W. Bush.

From the lobby to the office

Director of Legislative Affairs Nicholas Calio is the administration’s top lobbyist on Capitol Hill; prior to joining the administration, he was one of the preeminent private lobbyists in Washington, working for the firm O’Brien Calio. In 1999, Calio represented a wide range of clients, from UPS to Anheuser Busch, Fannie Mae to the Cellular Telecommunications Industry Association. According to his financial disclosures, he was often paid with stock in lieu of cash; his firm took home $3.18 million in 1999 alone, and slightly more than $9 million from 1997-99 for lobbying.

On his disclosure form, Calio listed as clients 21 separate firms, some of which lobbied the Executive Office of the President in 2001. Among those were Anheuser-Busch (taxes), Merrill Lynch and Fannie Mae (both on various banking issues).

Calio is hardly the only lobbyist among the 100 top officials. Deputy Interior Secretary J. Steven Griles represented various companies, including the Edison Electric Institute, the Aluminum Association, and Occidental Petroleum as a registered lobbyist with both National Environmental Strategies and J. Steven Griles and Associates. On behalf of his clients, Griles lobbied Congress, the Bureau of Land Management (on power plant construction), the Environmental Protection Agency (clean air regulations), the Energy Department (utility deregulation) and the Treasury Department (making sure the definition of “synfuels” allows his clients to qualify for a tax break), to name a few. Some of Griles’ former clients, like Coastal Company and Devon Energy Corp., lobbied Interior during 2001.

Deputy EPA Administrator Linda Fisher served as vice president of government affairs for Monsanto prior to her appointment. She oversaw the chemical and agricultural products firm’s lobbying effort to win approval for the use of genetically modified foods, of which Monsanto is a major producer.

The richest officials

The wealthiest member of the Bush administration is Deputy Commerce Secretary Samuel Bodman, formerly chief executive officer at Cabot Corporation, which produces industrial carbon black, a byproduct of the oil refinery process. Bodman’s net worth was in a range between $49 million and $164 million, the bulk of it in Cabot stock, deferred compensation, and other company benefits.

Second and third, respectively, are the Cabinet members perhaps best-known for their personal fortunes, Rumsfeld (between $35 million and $135 million) and O’Neill (between $54 million and $111 million.)

Also a part of the Center’s analysis was a compilation of data about administration officials’ compensation for speaking engagements, board memberships, consulting and the like. Among the 100 officials, these sources accounted for at least an additional $177 million of income over the last two years before they joined the government; among the most notable were Counselor to the Vice President Mary Matalin, whose speaking engagements alone earned her nearly $1.36 million, and Secretary of State Colin Powell, whose speaking fees topped more than $6.78 million.

Many of the wealthiest members, like Bodman, received stock and benefits from their former employers which accounted for much of their personal fortunes: O’Neill (Alcoa, International Paper), Rumsfeld (technology firm ABB, Gilead Sciences), Office of Management and Budget Director Mitchell Daniels (pharmaceutical maker Eli Lilly; net worth between $11 million and $47 million) derived the bulk of their fortunes from their old employers.

The filings with the U.S. Office of Government Ethics, the agency responsible for oversight of various ethics-related laws, including post-Watergate disclosure regulations, value assets such as stocks, bonds and real estate in ranges for the minimum and maximum amounts — between $1,001 and $15,000, for example. The Center’s analysis used OGE guidelines for inclusion of assets, excluding many mutual funds that were part of a filer’s retirement accounts.

New economy, new tools

Many of the Bush administration officials whose filings were surveyed had invested in technology companies like JDS Uniphase, Cisco Systems, Dell Computer and Intel, yet only venerable computing stalwart IBM was among the top 10 holdings by dollar amount. Many of the other holdings, including Oracle and Microsoft, were held by several officials, but in smaller amounts, typically no more than $15,000. Overall, the high tech sector of computers, components and software was the fourth largest area of investment for Bush officials, with 617 holdings with a maximum value of $74.6 million. Mutual funds were also a popular haven for wealth, most notably the Vanguard family of funds, which accounted for as much as $14 million in assets — thanks in large part to Deputy Treasury Secretary Kenneth Dam, whose Vanguard holdings had a maximum value of nearly $13 million alone.

Several officials used everything from time-honored institutions like creating a charitable group and forming business partnerships to creating personal holding companies to manage and shelter many of their investments and forming “S” corporations, which have the liability protection of corporations, but whose income is reported on an individual’s tax return. Such strategies are often used by the wealthy to lower their net tax payments.

EPA Administrator Christine Todd Whitman, for instance, put money in a number of investment companies, including Israel Industrial Resources LLC, which is based in the Cayman Islands-a jurisdiction known as much for its stringent bank secrecy laws and appealingly low rate of taxation as for its sunny beaches. Whitman owns stakes in a total of 12 investment companies or partnerships, with those interests valued at as much as $688,000.

U.S. Trade Representative Robert Zoellick, who has been an academic and consultant in the field of international trade for years between government posts, took a different approach to the investment companies. He served as a member of the board of directors for Said Holdings of Bermuda, an investment company. The chairman of the company, Wafic Said, brokered a number of arms deals between Great Britain and Saudi Arabia, and whose leadership also includes Charles Powell, who served as the foreign policy adviser to former British Prime Minister Margaret Thatcher.

Others preferred to invest in limited partnerships, as Bodman did with three companies, Hollybank Investments L.P., Burton Partnership L.P., and Sequoia Technology Partners III L.P. Together, these three entities controlled nearly $2.5 million of Bodman’s assets.

Defense Secretary Rumsfeld created a charitable organization, D.H.R. Foundation, which maintains between $5 million and $25 million of his wealth. Listed as one line item on his disclosure form with no further explanation, the foundation — using Rumsfeld’s initials for its name — is not a public tax-exempt organization, but a private foundation. The Chicago-based foundation was created in 1985, according to the Illinois Secretary of State’s office. Since that time, Rumsfeld and his wife have contributed between $5 million and $10 million to their foundation, according to their accountant, Terry Robbins.

The foundation’s 1998 Form 990-PF, which all private foundations must file with the Internal Revenue Service to maintain their tax-exempt status, lists the total amount of assets under the foundation’s control as more than $6.2 million. That year, Rumsfeld gave 15,000 shares of Gilead Sciences, at the time worth more than $528,000, to the foundation. That year, the foundation only paid out $261,420 in grants, largely to conservative think-tanks such as the Leadership Institute, Freedom House and the Heritage Foundation and government affiliated think-tanks, such as the RAND Graduate Institute, which received $21,000. The largest grant that year went to St. John’s College in Rumsfeld’s current home state of New Mexico, and totaled $118,000. Since 1993, Rumsfeld has transferred stock worth more than $1.5 million at the time of transfer from his personal, taxable stock portfolios to the tax-exempt foundation.

Defense Department spokesman Dick McGraw said Rumsfeld followed meticulous reporting procedures for his foundation.

“His lawyers and his financial people are obviously very sensitive to doing the right thing,” McGraw said. “Everything is publicly disclosed right down to the gnat’s whisker.”

Most often, however, Bush administration officials invested the way most Americans do, in savings accounts, stocks, bonds, real estate or mutual funds. Nearly 60 percent of the total assets for all 100 individuals were held in stocks, and 8.5 percent in more conservative savings accounts or certificates of deposit. The officials invested 7.6 percent of their net worth in real estate and another 7 percent in various kinds of bonds.

Fourteen of the administration officials in the Center’s analysis included statements with their disclosure forms indicating what holdings they would divest and what procedures they would follow if a conflict arose. Half of these were from State Department officials, whose agency routinely attaches such statements to financial disclosures; other agencies, while completing similar forms, typically forward them to the Senate committees considering the nominations instead.

Among the other seven administration officials who made similar statements on their financial disclosures, Deputy Energy Secretary Francis Blake had twelve companies which he would recuse himself from dealing with, including Minnesota Mining & Manufacturing (3M), Cisco, IDACorp., Halliburton and General Electric — the latter three were companies in which Blake was either an employee or board member. Blake’s colleague at Energy, Robert Card, similarly recused himself from dealings with nine companies, including his former employer CH2M Hill, GE, General Motors and Chevron.

Deputy Education Secretary William Hansen’s situation is somewhat unique. In his private capacity as executive director at Education Finance Council — a trade group that represents secondary lenders of student loans — EFC was a party to a lawsuit filed against the Secretary of Education, at the time Richard W. Riley, a Bill Clinton appointee. The suit is ongoing, meaning that Hansen’s old employer is suing his new boss, Education Secretary Rod Paige. Hansen has agreed to recuse himself from all matters related to the case, which is ongoing as of this writing.

Small Business Administration administrator Hector Barreto, meanwhile, retained his holdings in Dell Computer, worth no more than $15,000, despite Dell’s contracts with the SBA, which were approved before his arrival.

Career government employees familiar with employment law said queries about such cases are far from unusual, and the Bush administration is no more frequent in how often such questions arise than previous presidencies.

“It’s pretty consistent, when you have a lot of high-level appointees,” State Department Senior Legal Adviser for Employment Law Mary McLeod, who has been in her position since the Clinton administration, said. “Many of these people have huge financial portfolios and extensive backgrounds, so we’re getting calls all the time asking if certain measures are appropriate.”

Bush administration officials who had investments of more than $50,000 in companies that lobbied their departments in 2001.

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