TIME: Almanac 1995

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<text id=89TT0574> <title> Feb. 27, 1989: Raining On Baker's Parade </title> <history> TIME--The Weekly Newsmagazine--1989 Feb. 27, 1989 The Ayatullah Orders A Hit </history> <article> <source>Time Magazine</source> <hdr> NATION, Page 18 Raining on Baker's Parade </hdr><body> Who said being Secretary of State would be easy? Secretary of State James Baker is renowned for keeping his boss out of deep doo-doo and never stepping into any himself. But Baker's surefootedness was notably lacking last week. In his first frantic foreign foray as the nation's top diplomat, the up-close-and-personal touch that has served Baker so well with Congress and the press did not play very well. And a new accord by five Central American Presidents caught the Secretary uncharacteristically off-stride. Baker's most surprising slip last week was not realizing that Reagan-era ethical laxity is Out and more rigid Bush-era ethics are In. Four days after a story broke that he owned shares (worth $7 million in 1981 and an undisclosed amount today) in Chemical Bank New York Corp., which has huge loans to Third World nations, he announced that he would sell them. As Reagan's Secretary of Treasury, a qualified blind trust (whose owner knows what assets it contains, though he has no say in when they are bought and sold) was deemed sufficient. But after White House ethics chief C. Boyden Gray, who had also run afoul of the stricter rules, focused the zeal of the newly converted on the Baker portfolio (and conveniently deflected attention away from his own problems with the new rules), nothing short of complete divestiture would do. Though Baker said the sale of the stock would have his grandfather "turning over in his grave," this was not a close call: there is no way for a Secretary of the Treasury to deal with Third World debt and not significantly affect the fortunes of Chemical Bank, and there is no way for a Secretary of State to steer completely clear of the issue. Harvard economist Jeffrey Sachs pointed out last week that after Baker refused to accept a Brazilian proposal that would have forced American banks to write down billions of dollars in debt in 1987, Chemical's stock rose nearly 40% in six months. Otherwise, Baker was like someone on an all-you-can-visit tour, racing through 14 European capitals (not to mention Ottawa) in eight days. His visit was long enough for him to see that Western Europe is in the grip of Gorby fever: in response to Mikhail Gorbachev's disarming foreign policy, leaders there are awaiting something more substantive in the way of a U.S. response than the singing of Moscow Nights during the Soviet leader's White House visit. Flying into Bonn, Baker vowed to find out "exactly what the German position is" on a U.S. plan for upgrading 88 Lance nuclear missiles (range: 80 miles), most of them based in West Germany, with new longer-range weapons. That is a touchy subject for West German Chancellor Helmut Kohl. Modernization has become a hot-button issue in German politics, and Kohl would like to postpone modernizing the weapons until after national elections in December 1990. Already Kohl's Christian Democrats have suffered thrashings in six recent local elections, and his government might not survive an unpopular pledge to accept new nuclear weapons. Bush will try to nudge Kohl into a compromise before the NATO summit this spring. A few more sprinkles fell on Baker's parade when five Central American Presidents agreed to a plan that would disband the anti-Sandinista contras now holed up in Honduras in exchange for new guarantees of democracy by Nicaraguan President Daniel Ortega. Though Baker had met with the Foreign Ministers of Honduras and Costa Rica only a week before, the State Department was caught flat-footed. Spokesman Charles Redman could only declare, "We weren't at the meeting. We'd like to find out more about it." Back in Washington, the revolving door was buffeting Baker's nominee for Deputy Secretary of State, Lawrence Eagleburger, a former high-ranking diplomat who most recently was the $200,000-a-year president of Kissinger Associates. The firm's global list of clients (including Britain's Midland Bank, South Korea's vast Daewoo Group and Hunt Oil projects in the Middle East) is so extensive that he may have to cross off entire continents to avoid the appearance of a conflict of interest. Eagleburger, who would be in charge when Baker is out of the country, proposes to solve the problem by recusing himself from any decision affecting former clients, but that could leave him with a lot of time on his hands. On top of that, there is grumbling aplenty along the corridors of the State Department over Baker's quick appointments of political allies and slowness to install career diplomats in key positions. No doubt Baker will have better weeks. It's a mad, mad, mad, mad world out there, and a Secretary of State can scarcely be expected to have mastered every corner of it in three weeks on the job. Up to now Baker has led a charmed official life. It may have taken a pair of striped pants for him to realize that even he puts his trousers on one leg at a time. </body></article> </text>