Wash. Times: “N.Y. Times still pays Obama's nominee to Army post”

Wash. Times reports that Watson “will receive at least $1 million in deferred compensation from the New York Times Co. even as he works for the government.” In a front-page April 1 article, The Washington Times reported: “President Obama's nominee for U.S. Army general counsel, who pledges to investigate anyone leaking military secrets to the media, will receive at least $1 million in deferred compensation from the New York Times Co. even as he works for the government, records show.” The article further reported that the White House said Watson “is recused from matters that have a direct and predictable effect on the financial interests of The New York Times”:

Solomon B. Watson IV, former chief legal officer for the newspaper, is due the money through an executive payout plan that ends in 2015, according to a recent government ethics form.

[...]

White House spokesman Tommy Vietor told The Washington Times in an e-mail Wednesday that Mr. Watson “is recused from matters that have a direct and predictable effect on the financial interests of The New York Times.”

Because of his participation in the company's deferred executive compensation and retirement and pension plans, Mr. Watson agreed to be recused unless he gets a written waiver or qualifies for a regulatory exemption, Mr. Vietor said.

“It is our understanding that Mr. Watson will be fully compliant with all ethics laws and able to perform the duties of his position with these recusals in place,” Mr. Vietor said.

Diane McNulty, a New York Times spokeswoman, said Mr. Watson's deferred compensation plan was originally approved by the company's board of directors. She said the newspaper does not expect to communicate with Mr. Watson on specific issues pertaining to the newspaper, such as open records requests. Nor does the company make payments to increase the value of the plan after Mr. Watson's retirement, she said.

Under President Obama's ethics rules, political appointees generally are barred from specific matters involving former employers or clients for a period of two years after their employment.

Mr. Watson left the company well over two years ago, but he is continuing to receive substantial income from his former employer.

The deferred compensation deal wasn't Mr. Watson's only source of cash. He also reported receiving $16,861 per month during 2008 and most of 2009 through the newspaper company's supplemental executive retirement plan, and another $6,050 per month through a pension plan, records show.

But these types of arrangements are not uncommon*

Cheney received deferred compensation payments from Halliburton while in office. In an August 12, 2009, article [accessed via Nexis] on former Vice President Dick Cheney's retirement package from Halliburton prior to the 2000 presidential election, The Associated Press noted that Cheney “was entitled to at least $2.1 million in deferred compensation” from Halliburton. Indeed, Cheney received deferred payments from Halliburton while vice president; for example, the Los Angeles Times reported in April 2004 “that Cheney ... reported taxable income of $813,226, including $178,437 in deferred payment from Halliburton Co.” The AP noted in its report on Cheney's retirement from Halliburton that Karen Hughes, the Bush campaign's communications director, said that “when elected, he will act to ensure there is no conflict of interest.” Further, the AP reported on September 17, 2004, [accessed via Nexis] that "[t]he Bush-Cheney campaign denied any conflicts of interest existed for Cheney, saying that deferred compensation agreements aren't uncommon."

Wash. Times, noting Cheney's Halliburton deal, has previously reported these arrangements “aren't unprecedented”*

In article on Obama nominee Madison's pay arrangement, Times cited Cheney in noting, "[A]rrangements like Mr. Madison's aren't unprecedented." On May 12, 2009, The Washington Times reported that Obama Treasury general counsel nominee George W. Madison “can receive almost $3 million in pay over the next three years from one of the nation's largest financial-services companies under a compensation plan approved by government ethics lawyers.” The article reported that “Treasury officials said government ethics lawyers approved the deal and that safeguards are in place to avoid any conflicts.” Moreover, the Times reported that “arrangements like Mr. Madison's aren't unprecedented” and noted that “Dick Cheney continued getting deferred compensation from defense contractor Halliburton after he left the company to become vice president.”

Other Bush nominees had similar compensation arrangements; agreed to recuse themselves from matters involving those companies

CSX reportedly paid Bush Treasury Secretary John Snow annually under pension plan. The New York Times reported on December 17, 2002, that "[t]hough he has renounced his claim to about $15 million in severance benefits, Mr. Snow's pension improvements mean he will collect $2.47 million a year from CSX until he dies, according to company disclosures." The Times later reported on January 23, 2003, that Snow said “that he would sell or cash out of at least $80 million in stocks, options and retirement compensation from the CSX Corporation,” but that “while Treasury secretary, Mr. Snow said he would receive annual payments from CSX's defined-benefit pension plan. The amount of the annual payments was not listed, but the total value of the pension is $1 million to $5 million, according to the documents.” The Times further reported that “Snow said he would disqualify himself from participating 'in any particular matter involving specific parties in which CSX is or represents a party,' unless he obtained special authorization.” Snow was confirmed as Treasury secretary on January 30, 2003.

Bush Energy Secretary Samuel Bodman had “deferred compensation arrangement ... worth $1 million to $5 million” with Cabot Corp. In a January 31, 2005, article [accessed via Nexis] on Bodman's confirmation as Energy Secretary, the AP reported that “Bodman has told the Energy Department's ethics office that he plans to keep his financial holdings in Cabot Corp., including stock options, deferred compensation and proceeds in a retirement savings plan.” The AP noted that Bodman “has a Cabot Corp. deferred compensation arrangement that is worth $1 million to $5 million and pays him about $15,000 per month.” The AP further stated that Bodman “pledged to recuse himself from any Energy Department matters specific to the company.”

Bush ambassador to Ireland Richard Egan arranged deferred compensation plan with company he co-founded. In a July 24, 2001, article [accessed via Nexis], The Boston Globe reported that “EMC Corp. cofounder Richard Egan plans to step down from the company's board if confirmed as ambassador to Ireland, but doesn't intend to sell his large stake in the data storage equipment maker.” The article later reported that “Egan also plans to exercise all his presently vested EMC stock options, convert them to common stock and place them into an EMC deferred compensation plan.” The Globe noted that “EMC employs nearly 2,000 people in Ireland, and some foreign policy specialists have suggested Egan could face conflict-of-interest concerns if he were to retain any ties to EMC while representing the US government in Dublin.” Further, the Globe reported that Egan stated “he will not participate in any matter 'that will have a direct and predictable effect on the financial interests of EMC Corp. unless I first obtain a written waiver or qualify for a regulatory exemption.' ” Egan served as ambassador to Ireland from 2001-2003.

Bush Treasury Secretary Paul O'Neill reportedly received annual pension from Alcoa. A January 19, 2001, Washington Post article [accessed via Nexis] reported that "[s]tarting this month, [O'Neill] began receiving $926,000 in annual pension from Alcoa, in addition to nearly $16,500 a year he already receives in retirement pay from International Paper Co., where he was president from 1985 to 1987." O'Neill was confirmed by the Senate on January 20, 2001. As the AP reported in a June 20, 2001, article, O'Neill sold millions of dollars' worth of stock and options in Alcoa despite originally saying that he would keep the holdings but that he “would not participate in decision-making that might affect his personal finances.”

*The headline and text of this item have been edited for clarity.