Treasury Secretary John W. Snow, who has helped lead Bush administration efforts to tighten regulation of Fannie Mae and Freddie Mac, unwittingly held more than $10 million worth of securities of those and other government-sponsored housing finance companies until recently, a Treasury spokesman said last night.

Snow's bond holdings were discovered by the Treasury Department this month during preparation of his annual financial disclosure form, and Snow quickly sold them for about $10.4 million, taking a loss of $477,467, said spokesman Rob Nichols.

Snow had orally instructed a financial adviser to invest the money in Treasury securities, but "because of a misunderstanding or miscommunication," Nichols said, the money was instead invested in bonds of Fannie, Freddie and the Federal Home Loan Banks. The secretary's "clear intent was somehow lost in translation."

The holdings were listed on periodic brokerage statements that Snow received but did not read, Nichols said. "Probably four or five were sent to his home and he simply did not look at them," he said.

Treasury ethics officers found that no conflict of interest had occurred, and Snow has asked the department's inspector general to review the matter, Nichols said. Under ethics rules, Snow is allowed to hold Treasury securities, his intended investment, if he does not sell them until he leaves the department, Nichols said.

On Wall Street, the bonds issued by Fannie Mae and Freddie Mac are generally regarded as being almost as safe as Treasury securities. There is a widespread perception that the Treasury would pay the bondholders if either company faltered, and that has helped the companies borrow at a discount compared with other private companies, Snow has said.

The confusion in Snow's investment portfolio highlights the notion that Snow has been trying to dispel.

"You know that there is that perception. And it's not a healthy perception and we need to disabuse people of that perception," Snow said in a March 9 speech.

Snow's stance would make Fannie and Freddie bonds appear riskier, potentially hurting their value.

Snow's spokesman described the matter of his bonds in a conference call with reporters last night as the department released the first annual financial disclosure form that Snow, a former chief executive of the railroad company CSX Corp., has filed.

The disclosure form listed $72.2 million of income from CSX in 2003, including $10.2 million of salary and other compensation and $33.2 million from a special retirement pension. In addition, Snow's stake in a CSX deferred compensation plan was valued at $5,000,001 to $25 million.

Snow was sworn in as Treasury secretary on Feb. 3, 2003. The bonds, then worth almost $10.9 million, were purchased on his behalf that day and the following day. Snow sold nine of the bonds on May 14, "a few days after he was alerted that he owned them," and the other one matured that same day, Kenneth R. Schmalzbach, a department ethics official, wrote in a recent memorandum. Snow took a loss because the value of bonds generally has been declining due to rising interest rates.

Department ethics officials "concluded that during the period I owned the . . . debt instruments, my actions did not have a direct and predictable effect on this financial interest and thus were not inconsistent with the applicable laws or regulations," Snow wrote in a letter yesterday to Treasury's acting inspector general seeking further review.

Schmalzbach wrote that the key question in his legal analysis was whether Snow's role in the administration's initiative to strengthen oversight of the companies "has directly and predictably affected the Secretary's financial interest" in the bonds, and Schmalzbach found no conflict.

Since an accounting scandal at Freddie Mac last year, the administration and members of Congress have been trying to create a new agency to oversee the mortgage finance companies, but the effort has bogged down amid disagreement over the particulars. The Senate Banking Committee recently drafted a bill, but the Treasury rejected it as too weak and has since pursued ways to tighten regulation administratively.

John W. Snow said he acquired Freddie Mac and Fannie Mae bonds through a misunderstanding by his financial adviser.