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. Last Updated: 07/27/2016

Eccentric's Guise a Cruel Deception

The troubles of Treasury Secretary Paul O'Neill can be divided into the categories of those that were self-inflicted and those he seemed to invite gratuitously.

When he confronts his tormentors, he must have a beastly time separating his natural enemies from his natural friends. Would that O'Neill's disposition to attract detractors were signs of an authentic eccentricity, an aversion to platitude, an admirable tendency to say the wrong thing when it is right.

When O'Neill described the stimulus package approved by Republicans in the House of Representatives as nothing but a piece of "show business," he earned credits for courage and candor. When the right-wing National Review denounced O'Neill last month as a man "who inspires confidence neither on Wall Street nor in Washington," it seemed to cement his reputation as something better than a tool of Wall Street.

None of these qualities has saved O'Neill at those times when he seems to be pounding on his own foot with a sledgehammer. This is because he's a man who carries in his baggage a lot of weird pet peeves. One of these is the corporate income tax, which he'd like to abolish. Another is messy desks at the Treasury Department. O'Neill can't abide them, always the sign of a meddlesome fussbudget with an old biddy's obsession for neatness.

And high on the peeves list are Medicare and Social Security, which he says should be unnecessary because "able-bodied adults should save enough on a regular basis so that they can provide for their own retirement and, for that matter, health and medical needs."

O'Neill has even spoken favorably of offshore tax shelters, typically Caribbean islands that invite bank deposits that can be laundered and then repatriated to the U.S. mainland. It's not that he favors the fraud this is likely to involve. He just believes that corporations and individuals should be free to seek the lowest level of taxation they can find anywhere in the world. And this is the man whose duties include presiding over the Internal Revenue Service, someone who presumably ought to want people to pay their taxes. His position would be quaint if it wasn't scary at a period when the federal budget is moving from surplus into deficit and the government is taking on vast new fiscal obligations to fight terrorism abroad, preserve airline safety, expand the military and promote homeland security.

Anyway, guess which corporation didn't pay any income tax in four of the past five years? The answer: a highly infamous one, one whose name you'd recognize instantly, one that until recently was reporting a running embarrassment of profits and a steadily rising share price. I don't mean to draw this out, but the irony of it is just too rich, too smelly, too symmetrical in its coarseness. By now you must have guessed it was Enron.

This was discovered last week when it was reported in The New York Times. The belated revelation only suggests there are a lot of other shoes to drop before the final story of Enron is told and the vastness of its political influence is fully examined. And even if Secretary O'Neill is found to be one of the more innocent actors, he must suffer certain embarrassment from the way in which Enron escaped taxation. It involved the use of 881 foreign subsidiaries, including 629 in the Cayman Islands, a favored tax haven with a population of 40,000, and 119 in the Turks and Caicos Islands, which have only 17,000 inhabitants. Both have a convenient fetish about bank secrecy and are colonial dependencies that, besides making a sport of twitting U.S. tax authorities, suffer the added distinction of being what's left of the British Empire.

As head of Alcoa, the world's largest aluminum maker, O'Neill had a record of uncommon achievement. He reorganized it in 1991, reduced costs, shed debt and greatly expanded aluminum's penetration of the automobile market. When he was nominated as treasury secretary, he saw no reason to unload his Alcoa stock before being convinced by Bush administration officials that it would be unseemly not to do so. His obtuseness is at once one of his most refreshing charms and debilitating weaknesses.

Robert Reno is a columnist for Newsday, to which he contributed this comment.