WASHINGTON -- Former Treasury Secretary Paul O'Neill, who painted an unflattering portrait of President Bush in a book in January, received 140 government documents for the book that should not have been released after he left office, the Treasury Department's inspector general says.

The report yesterday from Jeffrey Rush Jr. said no federal laws had been violated in the release of the documents but that Treasury needed to improve the way it handled sensitive documents.

In response to a Freedom of Information Act request by The Associated Press and other news media, Rush's office released its investigation report on how O'Neill received some 19,000 government documents that were used to write a book highly critical of President Bush.

The new report found that 140 of those documents had not been marked classified, even though they contained national security or sensitive but unclassified information.

"Had these 140 documents been properly marked as classified, the documents would not have been entered into Treasury's unclassified computer system, and O'Neill would not have received them," the report said.

Treasury Secretary John Snow, O'Neill's successor, told Congress yesterday that Treasury was making substantial progress in correcting problems in document handling identified by Rush's report. He said the department was conducting a separate damage assessment of the release of the documents.

Treasury began its investigation in January after CBS's "60 Minutes" showed a document marked "secret" during an interview in which O'Neill promoted the new book, "The Price of Loyalty."

O'Neill, the former chairman of Pittsburgh-based aluminum maker Alcoa who was fired in December 2002 when Bush decided to shake up his economic team, put in a request after leaving office for all the documents that had crossed his desk that he was entitled to have. He turned the 19,000 documents he received over to former Wall Street Journal reporter Ron Suskind, the man O'Neill had selected to tell the story of his two years in the Bush administration.

The book depicted Bush as a disengaged president who oversaw a White House in which major decisions were made by Bush's political team and Vice President Dick Cheney.

One of O'Neill's major accusations was that from its earliest days in office, the Bush administration was looking for ways to remove Saddam Hussein from power in Iraq, a contention that has also surfaced in another book by a former insider, Richard Clarke, who served as Bush's counterterrorism coordinator.

Author Suskind yesterday said his attorneys and Treasury were in discussions over the 140 documents, but that no decisions had been made on whether to return any of the documents.

In addition to the book, Suskind has set up a Web page so the public can review selected documents used in the book. he said more than 40 documents have been posted to the Web site, but that none of the 140 documents in dispute has been put on the Internet.

"These are documents that help people understand why the government does what it does," Suskind said, adding that O'Neill's aim in doing the book and the goal of the Web site were to provide more information, so people could make informed decisions about actions the Bush administration has taken.