Friday, Jan. 03, 1969

Meyer's Triple Play

Just as the Nixon Administration will draw heavily from private business to fill important public jobs, so U.S. business is busily recruiting key members of the outgoing Johnson Administration. Because they pay some of the highest salaries of all, with $100,000-plus fairly common, Wall Street's investment banking houses are in a very strong position to pick off Washington's brightest talent. Last week one firm signed up three high-ranking Government officials as general partners. Manhattan's Lazard Freres & Co. recruited Commerce Secretary C. R. Smith, Under Secretary of the Treasury Frederick L. Deming and Assistant Budget Bureau Director Peter A. Lewis.

Friendly for Years. Lazard Freres owes its capital coup to the network of personal contacts carefully constructed by its French-born senior partner, Andre Meyer, 70. A close friend of World Bank President Robert McNamara and of outgoing Treasury Secretary Henry Fowler,* Meyer has been an adviser to Jacqueline Onassis, a trustee of Joseph Kennedy's estate and an economic consultant to President Johnson. He has long been friendly with both Smith and Deming and is particularly close to Lewis, who worked for Lazard Freres for eight years before going to Washington in 1966.

Investment bankers can always use men who know their way around Washington. Lazard's newcomers have additional qualifications. Smith, 69, was a commercial aviation pioneer and chairman of American Airlines until his Cabinet appointment last March. He will be particularly valuable to Lazard in working with U.S. airlines. They will require huge amounts of capital to finance their forthcoming jumbo jets and supersonic transports and will spend about $9 billion on new equipment in the next two years alone. Deming, 56, who oversaw international monetary affairs at the Treasury, will probably help on foreign loans and the other international deals, which are a large part of Lazard's business. Lewis, 38, an aide in the Housing and Urban Development Department before he joined the Budget Bureau last April, is likely to assist on urban real estate projects, another active area for Lazard.

Million-Dollar Fee. Though Meyer has a formal title only at Lazard Freres in New York, he also guides two other loosely linked Lazard banking houses in London and Paris. A onetime Paris stockbroker who became one of Lazard's most influential partners, Meyer fled to New York when Hitler invaded France in 1940. In the years since, he has helped negotiate some of Wall Street's biggest deals, including the 1966 McDonnell-Douglas merger, for which his firm's fee was $1,000,000. Besides serving as investment banker to such companies as ITT and Owens-Illinois, he is a director of RCA and Allied Chemical in the U.S., Fiat and Montecatini Edison in Europe.

Even more reticent than most investment bankers, Meyer declined to say much about his three latest partners, aside from reporting that Smith will be based in Washington while Deming and Lewis will work in Manhattan. As for salary, the Government paid Smith $35,000, Deming $29,500 and Lewis $28,750. Meyer allowed that all will be "much better-paid" in their new jobs--a disclosure that, for him, almost amounted to giving away house secrets.

-Another new investment banker, Fowler left the Government recently to become a partner of Manhattan's Goldman Sachs.

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