Brady called `solid' Treasury choice. Wall Street, Reagan connections will ease transition
Nicholas Brady's family made its early fortune in the oil filter business. Now, Mr. Brady's efforts, if he is confirmed as the nominee for Treasury secretary, will be to make sure the financial system does not get gummed up. President Reagan on Friday nominated Brady to replace James Baker III, who will chair Vice-President George Bush's presidential campaign. Brady, a Wall Street executive and, for a brief time, a former United States senator, is a friend of the vice-president and of Mr. Baker, who recommended him to the President.
``He is part of the classic Eastern establishment,'' says one Wall Street source.
Brady is best known for his presidential appointment to study the Oct. 19 stock market crash. The Brady Commission report recommended the securities markets be regulated by the Federal Reserve Board and that ``circuit breaker'' mechanisms be set up to ensure that the market does not drop as sharply as it did last October. Although some changes were enacted, Fed chairman Alan Greenspan torpedoed the idea of the central bank regulating the markets.
Brady is currently the co-chairman of Dillon, Read & Co., a prestigious Wall Street investment banking firm, which is largely owned by the Travelers Insurance Companies. Brady has worked for Dillon, Read since graduating from Harvard Business School in 1954. At Dillon, Read, Mr. Brady developed a reputation as a shrewd banker. ``He's been in a lot of dog fights, and ended up top guy at the end,'' says investment banker John Castle of Castle Harlan.
The Dillon, Read connection has been a good one for Brady. He knows the Bechtel family, the owners of the huge international construction firm, who also owned Dillon, Read at one point. Secretary of State George Shultz and former Defense Secretary Caspar Weinberger were formerly Bechtel executives. Brady is also on the boards of NCR Corporation, the MITRE Corporation, and H.J. Heinz Company.
Although Brady's holdings are not public, he is a wealthy man. When the family business, Purolator Courier, was acquired by Emory Airfreight, Brady received more than $15 million for his 313,000 shares.
Brady left investment banking in April 1982 for eight months after he was appointed to serve out the unexpired term of Sen. Harrison Williams of New Jersey, who had quit his job after his conviction for accepting a bribe.
The Senate experience, says Sen. William Armstrong (R) of Colorado, will benefit Brady. ``He'll have wonderful access and rapport on the Hill.'' Sen. William Roth (R) of Delaware likewise applauds Reagan's choice but says that Brady will have to make arrangements to comply with conflict-of-interest laws because of his extensive financial holdings.
It will be important that the financial markets have confidence in Brady as Treasury secretary. On this score, it appears he is on solid ground. Says Alan Reynolds, chief economist for Polyconomics, ``He's just another good solid mainstream guy.'' Edward O'Brien, chairman of the Securities Industry Association, calls Brady ``the type of individual you can have a dialogue with - he both talks and listens.''
Few people expect Brady will face much of a challenge between his confirmation and the presidential election. ``The economy is pretty well decided between now and November,'' says Richard O'Brien, chief economist for American Express International Bank in London. The Latin American debt problem has eased somewhat, and other agencies are handling the thrift problem.
Should Bush be elected, however, Brady may get the nod for a full term. In that case, the markets will look closer at his views. ``Nobody has a good feeling yet whether he has the will or ability to continue some of the dramatic initiatives Baker started,'' says Mr. Reynolds.
Monitor Intern Hilliary Chura contributed to this story.