Paul O’Neill, Treasury Secretary Who Clashed With Bush, Dies at 84
Paul H. O’Neill had just presided over a celebrated revival of the aluminum giant Alcoa and was about to begin his retirement in late 2000 with a long drive across the back roads of America in a new Bentley Flying Spur.
Then came calls from Vice President-elect Dick Cheney asking him to become secretary of the Treasury. Despite having a list of reasons for being not right for the job — a key one being that he had become used to being the boss — Mr. O’Neill agreed.
It turned out to be an agonizing tenure.
Mr. O’Neill lasted less than two years in the job; his outspoken independence was seen as political disloyalty, and President George W. Bush fired him in December 2002.
On Saturday, Mr. O’Neill died at his home in Pittsburgh at 84. His son, Paul Jr., said the cause was lung cancer.
Having been handed his walking papers by the White House, Mr. O’Neill rejected the suggestion that he should say publicly that he wanted to return to private life.
“I’m too old to begin telling lies now,” he said with typical candor. “If I took that course, people who know me well would say that it wasn’t true. And people who don’t know me well would say, ‘O’Neill was a coward — things aren’t going so well, and he bailed out on the president.’”
He promptly became the subject and chief source for a rare book about the inner workings of an administration still in power, “The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O’Neill,” by Ron Suskind, published in 2004. Its contents were considered so politically volatile at a time when Mr. Bush was seeking re-election that the title was withheld until just before publication.
Mr. Suskind called the book “an experiment in transparency,” relying on thousands of documents supplied by Mr. O’Neill, who fact-checked the manuscript. Michael Tomasky, writing in The New York Times Book Review, said it showed how “deeply corrupted” traditions of public service had become. The book reached No. 1 on The Times’s best-seller list.
Among its allegations was not only that Mr. Bush was often unengaged in policy discussions, but also that many decisions, including the invasion of Iraq, had seemed to have been politically ordained.
As Mr. Bush’s first term proceeded early on, the impression grew among outsiders that Mr. O’Neill’s long corporate career had rendered him insensitive to Washington realities and undermined his influence.
“People think he was politically tone-deaf,’’ David Aufhauser, the general counsel of the Treasury Department from 2001 to 2004, was quoted as saying in the book. “He wasn’t.”
“He knew full well the political consequences,” Mr. Aufhauser said, and he was “fearless” in pressing ideas based on facts and evidence. He cautioned, for example, that Mr. Bush’s tax cuts were ill-advised. In previous government stints, Mr. O’Neill had been involved in matters ranging from tax policy, health care and welfare reform to food stamps, busing and housing.
In fact, Mr. O’Neill noted in an interview for this obituary in 2017, his Washington experience had been “more than that of anybody at the table.” That experience included intimate involvement in most of the major domestic controversies of the Nixon years as a high-ranking official at the Budget Bureau. (It was renamed the Office of Management and Budget during his tenure, which included appointment as deputy director.)
He and three others at the budget office — Roy L. Ash, Frederic V. Malek and Frank G. Zarb — were reported to have largely run the government in 1974 at a time when President Richard M. Nixon was weakened by the Watergate scandal.
“That’s basically correct,” Mr. Zarb, a longtime friend of Mr. O’Neill’s, recalled many years later. Mr. O’Neill, he said, “knew more about government life than most people in government.”
Mr. O’Neill acknowledged that he had misjudged the influence he could have in the Bush administration. “I thought I knew the players well enough, and that we were like-minded about fact-based policymaking,” he said. “It turned out that was all wrong.”
Paul Henry O’Neill was born on Dec. 4, 1935, in St. Louis into a military family and grew up on bases in the Midwest and West with his two brothers and a sister. His father, John Paul O’Neill, was a master sergeant in the Army Air Forces. His mother was Gaynold (Irving) O’Neill.
He attended Anchorage High School in Alaska, where he met Nancy Wolfe. They married in 1955. She survives him, as do his son; three daughters, Patricia Wilcox, Margaret Tatro and Julie Kloo; 12 grandchildren; and 15 great-grandchildren.
Mr. O’Neill enrolled at California State University, Fresno, with ambitions to be an engineer but left for a time to take road survey and site engineering jobs in Alaska. When he returned to Cal State, he graduated in three years. It was there, he said, that he “decided that economics was a lot more interesting than engineering.”
Changing course, he began a five-year doctoral program in economics at Claremont Graduate University in Pomona. While there, on a lark, he took an exam for midlevel government jobs, passed it, and wound up at the Veterans Administration (now the Department of Veterans Affairs), where he spent five years as a computer systems analyst.
He was later dispatched to Indiana University, where he earned a master’s degree in public administration. He joined the budget office in 1967. There he integrated more than two dozen health-related government programs in rising to deputy director.
With a daughter in college, a financially pinched Mr. O’Neill was recruited by the International Paper Company in 1977 to be vice president of strategic planning. To his amazement, he found the company had no systematic knowledge of its strengths and weaknesses; the framework Mr. O’Neill created set him on the path to become president of the company.
Probably his biggest career success was at Alcoa, which had suffered after making a series of poor acquisitions before he joined as chief executive in 1987. When he retired in 2000, the company’s revenues had nearly tripled, and its stock that year was the best performer on the New York Stock Exchange.
His tenure began with what Mr. Suskind called “management havoc” — discharging many top executives and revamping operations. At the same time, he won praise for improving worker safety and labor relations, increasing productivity and fostering an egalitarian open-door policy with his employees.
Mr. O’Neill had been friendly with President George H.W. Bush and, just after joining Alcoa, turned down an offer to become his secretary of defense. Mr. O’Neill later encouraged Mr. Bush to break his pledge not to raise taxes. When Mr. Bush did raise taxes, which proved politically damaging to him, and was rebuked by the United States Chamber of Commerce for the move, Mr. O’Neill pulled Alcoa out of the organization.
After he left George W. Bush’s cabinet, Mr. O’Neill served on many boards and returned to the Pittsburgh Regional Healthcare Initiative, a consortium of hospitals, associations and business that he had helped found in 1997.
One of the most unlikely episodes of Mr. O’Neill’s Treasury tenure was his four-nation trip to sub-Saharan Africa in the company of Bono, the lead singer of U2 and anti-poverty activist.
“I don’t have time to be a ballerina barre for a rock star,” Mr. O’Neill complained to an aide when Bono first asked for his help. “I’ll give him a half an hour.”
But he soon decided that he needed to see what programs worked if he were to support sending more money to Africa, and the pair set off, accompanied by a sizable international media contingent.
“Come on, let’s step up for a picture,” he said to Bono at one point in Ghana after they had donned Ghanaian robes and hats. “So what if we never live this down.”
Peter Keepnews contributed reporting.