Have job, Kissinger will travel, and travel ...

Special for USA TODAY

WASHINGTON — Leaving government hardly slowed Henry Kissinger.

He'll go Saturday with former President Ford to the Far East to tape interviews for Japanese TV. Before leaving he'll make political appearances for statewide candidates in two states.

Last week he signed on as an ABC News foreign affairs analyst. In August, he announced formation of an international consulting firm.

A few other resume entries:

■ Diplomacy professor, Georgetown University's School of Foreign Service.

■ Counselor, Georgetown's Center for Strategic and International Studies.

■ Director, Foreign Policy Association.

■ Counselor, Chase Manhattan Bank.

■ Trustee, Rockefeller Brothers Fund.

■ Trustee, Metropolitan Museum of Art (New York).

■ Chairman of the board, International House.

AP

KISSINGER: Former secretary of state still on the go

USA Today - 9/22

dealers had complied with the amnesty offer as of the government's June 15 deadline. The IRS promised not to examine records from previous years if dealers reported their current income so it could be taxed.... The Bureau of Land Management will withdraw all its water rights applications in Nevada, Secretary of Interior James Watt told ranchers Tuesday. He said the policy change will permit ranchers to file for range improvement funds, especially for water wells, without interference from the BLM.... Carson City — Nevada's major utilities have been told to implement the PSC's plan aimed at boosting home energy conservation. The program requires Nevada Power and Southwest Gas, both based in Las Vegas, and Sierra Pacific

and a Brink's guard not down and testified that he pursued and apprehended Kathy Boudin. Koch said Boudin was referring to one of the men who jumped out of the rear of the van she was driving. Preliminary hearings in the case continue today... **Albany** — A judicial oversight panel admonished a state Supreme Court justice from the Bronx for accepting favorable travel arrangements from a man who was serving as receiver in several mortgage foreclosure cases before the judge. The Commission on Judicial Conduct ruled that Justice Alexander Chananau had “created an appearance of impropriety.”

## NORTH CAROLINA

to a juvenile detention home in Medford. ... **Portland** — The state Wildlife Heritage Foundation has signed a one-year option to buy 3,220 acres of frontage along the Deschutes River. If the $1.6 million sale goes through, it will guarantee public access to 13 miles of the scenic waterway now owned by the Eastern Oregon Land Co.

## PENNSYLVANIA

**Pittsburgh** — More than 1,000 people are competing in a second round of interviews for 170, mostly minimum-wage jobs, at a soon-to-be-opened discount store. Eight recruiters from Hills Department Store interviewed 50 applicants an hour. ... **Montesiori Hospital** is the first hospital in the

By Art Buchwald

Henry Kissinger has gone into the consulting business with a company called Kissinger Associates. One of his partners is Lord Carrington, the former foreign minister of Great Britain. The minimum charge for Kissinger's services is $250,000.

The question everyone is asking in Washington is, what can someone hope to get for his money?

"I would like to see Mr. Kissinger."

"Whom shall I say is calling?"

"Edridge Dresser of Dresser Industries."

The secretary announces the caller. Then she says, "You can see Mr. Kissinger now, but - if you speak to him it will cost you $250,000."

Dresser hands the secretary a certified check.

He goes into Kissinger's office, and finds Henry on the phone. "My

# The Quarter-Million-Dollar Man

advice is to tell the Italian government you'll move to Lourdes if they keep badgering you about your bad loans. Yes, Your Holiness, I'll talk to the finance minister today. Bless you." He hangs up.

"I'm sorry. The pope has a banking problem I'm trying to straighten out. Please be seated."

"Mr. Kissinger, you are no doubt aware that Dresser Industries is having trouble. Our French company supplied pipeline equipment to the Soviet Union, and President Reagan will not allow us to do any business with France."

"I am aware of the embargo," Kissinger says. "I spoke to Mitterrand this morning."

"What do you advise us to do?"

"The first thing we have to do is set up a lunch with Mitterrand and Reagan."

"Can you do that?"

"Of course," Kissinger says. "But I don't think you should be there. During lunch I'll point out to Rea-

## Capitol Punishment

gan that the Soviets are going to build their pipeline with or without American equipment, and an embargo will hurt the United States more than it will the Soviet Union. It could also destroy NATO. On second thought, I'll invite Margaret Thatcher to go to the lunch as well. Reagan is more frightened of Thatcher than he is of Mitterrand."

"Will Reagan listen to you?"

"He has to if he wants me to support his new Mideast policy. Kissinger Associates represents all the major parties who have to go along with it."

"I'm glad I came to you," Dresser says. "My company didn't know where to turn."

"That's what I'm here for, to help the people who have no place to turn."

Dresser leaves happily and Henry says to his secretary over the intercom, "Set up a lunch date for me with Reagan, Mitterrand and Margaret Thatcher for next Wednesday. Anyone call?"

"The president of Argentina just telephoned and wanted to know if you had any good news on the Falk-

lands."

"That's Lord Carrington's account. Tell him to call London."

"Indira Gandhi wants to know when she's going to get her nuclear breeder reactor."

"Did I promise her a breeder reactor?"

"I think you did. You said you could either get her one reactor or the Vale of Kashmir."

"Okay, get me the Department of Defense."

"Taiwan called and wanted to know if you didn't think there was a conflict of interest if you represented both the People's Republic of China and them at the same time."

"The answer is no. What I tell Taiwan is one thing, what I tell the People's Republic is something entirely different. Why do they think I was such a successful secretary of state?"

© 1982, Los Angeles Times Syndicate

Kissinger: Mideast peace
is still ripe for pursuing

9/21/82

Washington

Former Secretary of State Henry Kissinger said that despite the "tragic, inexcusable" killings in west Beirut, the opportunity for making progress to a Middle East peace has never been greater.

Speaking to the Center for Strategic and International Studies, Mr. Kissinger said he believed all nations must now feel that the continuation of the cycle of violence in Lebanon could not serve anyone's interests.

08

Tuesday, September 21, 1962

THE WASHINGTON POST

# Kissinger Calls for Fast Global Financial Action

KISSINGER, From D7

that an emergency international conference should be scheduled, out of which "something like Bretton Woods should emerge." That conference, at the end of World War II, established the World Bank and the IMF to guide the world economic system.

The Georgetown conference, which is concerned with threats to the industrial democracies in the 1980s, is being attended by key public officials and business people from Europe, Canada, Japan and the United States. It will conclude tomorrow with discussions of relations with the Soviet Union and China, including a speech by Defense Secretary Caspar Weinberger on "the Soviet threat" during this decade.

In another address yesterday, U.S. Trade Representative Bill Brock said that international financial difficulties are intertwined with trade problems, and that none of the nations represented at the Georgetown conference would be able to reverse protectionist trends unless economic growth can be restored in those countries.

Brock again assailed proposed "local content" legislation to protect U.S. auto industry jobs, saying it was "one more way to shoot ourselves in the foot." Coincidentally, a report by the Institute for International Economics released here warned that congressional reciprocity bills, also intended in large part to protect the auto industry, would wind up "severely hurting the U.S. economy itself."

Brock stressed the importance of the November ministerial meeting of the General Agreement on Tariffs and Trade in Geneva, where the United States hopes the GATT will agree to set a timetable for establishing international rules governing investment and the export of services—comparable to rules now in effect for trade.

But he was warned by Sir Roy Denman, the new Common Market ambassador to the United States, that there will not be an easy path to a successful GATT negotiation. "There are dangers" in insisting on "too much litigation in a system that depends so much on conciliation," said Sir Roy. "GATT will never be a Supreme Court" because that would impinge too closely on "delicate areas of sovereignty."

Kissinger brought up the question of the growing international financial crisis at the end of a list of major problems facing the Western World. His inventory included the escalating Middle Eastern situation revolv-

ing about Beirut, and a number of economic problems between the United States and Europe, including East-West trade in general, and the Soviet gas pipeline in particular.

On that issue, he supported the administration's sanctions against all companies, including European firms, now making deliveries for the pipeline. Kissinger was sharply critical of "the confrontational reaction" in Europe to the American sanctions. He suggested bluntly that Europe merely wanted to sustain its business relationships, "hiding behind its contractual obligations."

He said the West must be able "to exact a political quid pro quo for economic benefits bestowed on the Soviet Union..."

"The question raised is fundamental, and I'm not a willing supporter of grain sales either. I don't believe in a boycott of the Soviet system, or that the aim of the West should be to bring that about. But I wouldn't go into mourning if it happened."

# Major Move On Mideast Made by U.S.

By Don Oberdorfer
Washington Post Staff Writer

President Reagan's surprise announcement of a Middle East peace initiative last night represents a major new U.S. commitment, the first of his administration, to break the deadlock on the Palestinian issue, which has long been at the center of the Arab-Israeli dispute.

As explained by senior administration officials, Reagan took the step without advance agreement by any of the major parties in the Middle East, including the leaders of Israel, Egypt, Jordan and Saudi Arabia, who were informed Tuesday by U.S. ambassadors of the plan which now has been made public.

Some of Reagan's proposals, especially the freeze on Jewish settlements on the West Bank and the eventual return of Arab territory, are anathema to Israeli Prime Minister Menachem Begin's government, which already has made known its deep opposition. Official sources here said Reagan's speech had been planned for tonight, but was moved up 24 hours at the last minute to

See MIDEAST, A18, Col. 1

## MIDEAST, From A1

Preempt a strongly adverse public reaction from Israel.

Other Reagan statements, especially U.S. opposition to creation of a Palestinian state on the West Bank and Gaza, cut across longstanding positions of the Arab parties.

In addition, King Hussein of Jordan, who is assigned a key role in the peace plan outlined by Reagan, has made no commitment in advance to play such a role, a senior U.S. official said in a State Department briefing on the U.S.initiative. Hussein refused to take part in the Camp David process as forged by President Carter, but officials expressed the hope that Hussein will consider the Reagan plan different enough to change his mind.

The main hope, as outlined by Reagan, is that the dramatic events in Lebanon will provide a new reason and opportunity for the Middle East actors to rise above their bitter disputes in the common and overall interest of eventual peace.

But officials did not explain how they expect to convince nations and people involved to accept positions that had been opposed, in some cases adamantly, during earlier rounds of diplomacy.

Asked about the next step, the senior State Department official briefing reporters said this would await the "considered reaction" from Mideast parties, after they have had time for reflection.

There is no expressed expectation among informed officials that Begin will accept the key elements of Reagan's plans initially, and only a slim hope for eventual acceptance. Begin regards the West Bank as the legitimate "land of Israel," and only temporarily suspended his claim to it during the Camp David negotiating process at the urging of Carter.

The reactions of the Israeli public, including the Labor Party, which preceded Begin's Likud Bloc in power, give promise of being more positive in the long run, in the view of American, officialdom. Some of the ideas expressed by Reagan, especially that of peace based on a territorial compromise with Jordan, had been adopted in the past by elements of earlier Israeli governments.

The Arab reactions are likely to take weeks or even longer to develop in authoritative fashion, according to U.S. specialists. One of the reasons for announcing a definite U.S. position now was to do so before an Arab summit conference, which is to begin next week in Fez, Morocco, and thus possibly affect the future direction of Arab leaders at a crucial moment.

Many of the positions taken by

really be expected to provide leadership for the Superior Court and the U.S. attorney's office, both independent institutions?

Mrs. Jarvis has not made crime a major area of attention for her campaign, preferring to concentrate her limited campaign resources on economic development and housing, her areas of greatest involvement through her role on that council committee. She does, however, share with the other challengees a judgment that the mayor has squandered some opportunities at a time of crisis.

If there is to be any progress in the next administration, then, the next mayor—even if it should be the present one—must make a heavier investment of personal leadership to combat the rise in crime.

## d Panic

The government believes that if it can only stop the panic and the flight of capital, with even the most temporary of means, the basic strength of the economy will shortly reassert itself. Otherwise the falling currency feeds the inflation, currently somewhere around 100 percent a year, and that in turn incites greater panic.

From the United States and Europe, Mexico urgently needs loans to restore at least a temporary balance while it tries to rectify the deeper dislocations in its economy. Here the Reagan administration deserves credit for having risen rapidly and ably to its responsibilities. That represents a triumph of friendship and wisdom over the administration's professed doctrine of nonintervention.

But for the Mexican people, the hardest part still is months in the future. When the outpouring of capital, and the fall of the peso, are finally halted, Mexicans will have to begin coming to terms with the realities that started it all in the first place. Those realities are the imports that far outran exports even in the years of the oil boom, and the incomes that shot far beyond anything that the country could afford. Then come the unpleasant questions about cutting back, and where and at whose expense. Mexico is still in the financial and technical phase of dealing with a great cycle of overspending. The political and social phases still lie ahead.

political pressure in an effort to disade these countries from a more sensible use of limited funds?

The Pharmaceutical Manufacturers Association's argument that blocking the "flow" of drugs would open the

tional state we were in 150 years ago; because there are few health workers who know how to prescribe appropriate drugs; because to most people in those countries drugs are perceived as a sort of magic created by the "haves."

## The Danger of Rabies

We agree with your Style Plus article ("Pets: When Dog Bites Man," Aug. 10) that "dog bites are one of the most serious and underrated health problems in the United States today." We also feel that the beneficial effects of pet ownership are much greater and should not be ignored due to the small risk of dog bites. However, in light of their seriousness other facts should be taken into consideration with respect to Washington:

* The Center for Disease Control in Atlanta has reported that animal rabies has more than doubled in the last three years.

* To the best of my knowledge, the District of Columbia is the only jurisdiction in the United States where no veterinarian is on the government payroll to monitor animal-related public health problems. In fact, an untrained person decides whether the animal shows signs of rabies,

* There were 857 dog bites reported in 1981 in the District, approximately 75 percent of which were by dogs previously unvaccinated against rabies,

* Although rabies has not been diagnosed in the District for over a decade, surrounding jurisdictions in Maryland and Virginia have reported increased numbers of cases closing in on the District. Should the District, for budgetary reasons, jeopardize the

health of a single child (the most likely dog-bite victim) with a layperson diagnosing this deadly disease in pets? Especially when approximately 75 percent of those bites in 1981 were inflicted by unvaccinated potential rabies carriers.

The question of whether or not a dog is rabid, and therefore whether a child will have to undergo the painful series of treatments, should be answered only by a qualified, trained individual.

S. A. MELMAN, V.M.D.

Petowners Association
of Metropolitan Washington, D.C.

Washington

parties to become involved in.

ANN GUIDICI FETTNER

Washington

*(The writer was senior adviser in health education to the government of Kenya during 1979-81.)*

## A Pleasure to Read

While Joan Coley's article on children learning to read [Style Plus, Aug. 24] emphasized the giving of messages that communicate information about reading, she failed to head the list with the most important message: mainly, "reading is pleasurable."

In his recent autobiography, "Hunger of Memory," Richard Rodriguez tells of his mother's repeated question to him, "What do you see in books?" Despite his struggle through remedial tutoring, one message came through to him—the pleasure reading afforded him. It helped assuage loneliness, gave him self-confidence and, above all, pleasure.

DOROTHY A. GLASER

Washington

## Fallaci-Sharon-Kissinger (Cont.)

In regard to yesterday's letter from Henry Kissinger about the interview with Gen. Ariel Sharon: the words, "Last night Henry Kissinger called me," etc., are on the tape, clearly pronounced by Gen. Sharon. Dr. Kissinger can have a copy of it for Christmas.

In order to find out who of the two illustrious politicians is lying, I have sent a cable to Gen. Sharon, and I have called in Tel Aviv his adviser, Uri Dan, who was with me during the whole interview and who taped it, those words included, with

his tape recorder. Very embarrassingly, Uri Dan has answered me that Gen. Sharon was sorry about the mistake, that in saying to me to have been called by Dr. Kissinger he did not really mean it, and that he had already expressed his regret to Dr. Kissinger.

If Dr. Kissinger has already received Gen. Sharon's regret, I don't see why he makes such a fuss. We all recall very well that he exists.

ORIANA FALLACI

New York

## AIM and Human Rights in El Salvador

In his letter published Aug. 7, Reed Irvine of Accuracy in Media states: "The Legal Aid Office [Socorro Juridico] . . . has been disavowed by the Catholic Church [of El Salvador] and . . . evicted from its office. . . . the Episcopal Conference gave full support to the earlier criticisms of the Legal Aid Office that had

that the guerrillas were not responsible for "a single death," as Mr. Irvine strongly implies. They simply felt it was not their function to report on that information.

As a result of this difference of opinion, Msgr. Rivera reorganized the

cused on one side of the problem."

It is unfortunate that an organization devoted to promoting accuracy in media chooses to tell only a part of a newsworthy story. By acting in this manner, AIM helps to make untenable the position of human rights organizations in troubled countries.

THE NEW YORK TIMES, MO

BOSTON — Donald B. Sole was South Africa's Ambassador to Washington for five years. Just before going home last May he wrote a letter to The New York Times objecting to a comment about South Africa's "violent racism."

"I leave with a deep love and respect for the United States and its people," he said, "but unfortunately here as in other countries one encounters racism and racists in many forms. Here racism is more subtle than at home, but it is my impression that it is no less wounding on that account. Americans who are prone to prescribe to others how they should conduct their affairs would enjoy greater credibility if they were sufficiently humble to remember the beam and the mote."

Yes, racism persists in the United States. No black person escapes its wounding pain. Americans have no right to preach haughtily to South Africa or anyone else about race.

But it does South Africa no favor, and no honor, to pretend that the problem of race there is no more profound than in America. In South Africa it is the fundamental question, going to the legitimacy of the system.

The premise of the South African political system is that 75 percent of the people — those born black — may have no part in it. Blacks are not allowed to vote. And governments elected by the white minority have imposed on them legal disabilities that it is hard for Americans to imagine, even given our history of racial discrimination.

South African blacks are barred by law from entering any "white" area — 87 percent of the country — unless they have a permit, which is extremely hard to get. They may have to live apart from wives or husbands. For violating these rules, hundreds of thousands are jailed every year. And the Government right now has legislation pending to tighten the rules. It is called the Orderly Movement and Settlement of Black Persons Bill.

The most appalling work of white

ABROAD AT HOME

The Beam
And
The Mote

By Anthony Lewis

supremacy in South Africa may be the practice of uprooting entire black communities because they are within areas declared "white." Three million people have suddenly, without recourse, been taken from their homes and dumped in remote locations without jobs or land suitable for farming.

The dumping grounds are tribal "homelands" — impoverished rural areas that South Africa says are, or will be, independent states. The idea is that blacks will have their political rights there — by force, since most blacks want to remain South Africans. Several of the homelands have been declared independent. No other country recognizes them, but there they are: rife with malnutrition and disease, totally dependent on South Africa.

Such manipulation of millions of human beings without their consent has inevitable consequences for another aspect of society: the law. Enforcement of white supremacy has made the law in South Africa increasingly an instrument of police oppression. Anyone who disagrees with the racial system may find himself or herself detained without trial, held in solitary confinement without access to family or lawyers, subjected to brutal interrogation.

In the last 20 years 47 men have died while being held in prison, and interrogated, without trial. The death last

February of Dr. Neil Aggett, a white union official who worked with blacks, illuminated security police methods. An inquest brought out, over determined official attempts to suppress the facts, that Dr. Aggett was interrogated for 62 hours in a row and, according to an affidavit he made before his death, given electric shocks and subjected to sexual humiliation.

Last week a report based on statements by 70 former detainees showed that Dr. Aggett's treatment was not unique. It said many of these detainees were given electric shocks and kept naked during interrogation. It said at least 20 officers up to the rank of major in the security police engaged in torture.

The differences between South Africa and the United States should not make Americans smug, but we can properly be grateful for some things. One is the rules that limit the power of the police and give legal recourse to the victim of official abuse. Another is a Constitution, enforced by judges, that forbids racial discrimination — that offered hope through the bad years and eventually helped bring about political change.

Ambassador Sole said in his letter that South Africa is changing. That is true, and critics should recognize as much. Prime Minister P.W. Botha has called for extending some political rights to the small minorities of coloreds and Asians — and in doing so has stirred white backlash.

But the changes, actual and proposed, do not touch basic injustices. Even Henry Kissinger, no radical critic, said in Pretoria last month that they should go farther: to assure all South Africans "human dignity, civil rights and full political participation."

When blacks have a voice in the system, when the pretense that they have rights in homelands is dropped, when black communities are no longer transported, when detentions and banings and police abuse end, then change in South Africa will be serious.

Kissinger Says
U.S. Erred on
Sale of Grain

By James L. Rowe

Washington Post Staff Writer

ATLANTA, Oct. 18—Former secretary of State Henry Kissinger said today that the Reagan administration erred last week when it offered to sell substantial quantities of grain to the Soviet Union without trying to extract political concessions from Moscow.

Kissinger said that the offer of an additional 15 million metric tons of U.S. grain also gives Europe more ammunition for its charge that the U.S. is hypocritical when it penalizes European companies that sell gas pipeline equipment to the Soviet Union at the same time it encourages American farmers to sell grain to the U.S.S.R.

He told the annual meeting of the American Bankers Association here, however, that the gas pipeline would be built no matter what the U.S. posture on its own trade with the Soviet Union.

Kissinger, now a consultant on international affairs, said the West must increase its use of trade as a lever to get the Soviet Union to agree to such changes in policy as mutual arms reduction, abandonment of support for terrorist groups, use of "proxy" troops in faraway areas like Africa and a commitment not to use its own army outside its borders.

The former secretary of state conceded that some level of grain sales is mutually beneficial to both Moscow and Washington. The United States and the Soviet Union have agreed that Moscow will buy at least six million tons of grain a year. Last week, in an attempt to bolster sagging U.S. grain prices, the administration announced that it would be willing to sell up to 23 million tons to Moscow.

President Reagan also guaranteed that grain bought within the next six months would not be subject to any embargo; the administration might find necessary to impose in the future.

Reagan has been criticized by leading Democrats for using the grain sales issue as a political ploy three weeks before the November

See BANKERS, C12, Col. 3

JST

Kissinger Says Administration
Erred in Soviet Grain Deal

BANKERS, From C7

elections. He has been criticized by some farm groups for now removing all restrictions on grain sales to the Soviet Union.

Kissinger, in his speech today, sidestepped both those issues.

But, he said, by refusing to extract some political concessions from the U.S.S.R. in return for the grain Moscow needs so much, the administration is "giving away one of our assets too cheaply."

He said the Soviet economy is in such terrible shape that the leadership can put "no more pressure on [its] consumers without returning to a police state," a reversion the Soviet system presumably could not tolerate.

Instead, Kissinger said, careful use of the trade weapon could force the Soviet Union into a reform of both its internal and external policies.

U.S. problems, he said, are solvable. The difficulties the Soviets face are "systemic," Kissinger said.

By sharply boosting grain exports, Kissinger contended, the United States strengthens the Soviet capability "to solve its domestic problems" without facing the questions of what it must do about its heavy military spending, its stagnating consumer and farm economies and its aging leadership.

The United States and its Western allies must reach an agreement on what items are appropriate for purely economic trade with the U.S.S.R., what credits and concessions should be granted on exports to the Soviet Union and how Western trade policies with the East can be made homogeneous, he said. "If we stick to or guns, there is an opportunity for a fundamental change in East-West relationships."

See BANKERS, C12, Col. 3

ST

BANKERS, From C7

KAI ARTICLES

Newsweek - Periscope - "Ford and Kissinger: On the Road Again"
9/6/82

London Sunday Times Magazine - "Dr. K. Goes Commercial" - 9/25/83

New York Times Magazine - "Kissinger Means Business" - 4/20/86

Time - "Fingerspitzengefuhl" (Firms pay top dollar to hear the world according to Kissinger) 2/17/86

US News and World Report - "Information Boutiques - Intelligence for a Price" - 5/20/85

New York Times - "Travels with MacFarlane" - 12/19/85

Business Week - "The Big Business of Being Henry Kissinger"
12/2/85

London Sunday Times - "Carrington signs for Kissinger, Inc."
8/8/82

New York Times - WASHINGTON TALK - "Kissinger Turns to Business"
6/19/82

Washington Post - "Kissinger's New Team" - 8/83

Wall Street Journal - "H. Kissinger & Co.: A Stately Approach to Doing Business" - 8/25/82

New York Post - "Dr. Henry's diplomatic vets--help for fat cats"
8/25/82

Christian Science Monitor - "Kissinger sets up firm for global consulting" - 8/25/82

Newsday - "Kissinger Heads Advisory Firm" - 8/24/82

Chicago Sun-Times - "Kissinger signs superstars" 8/25/82

Chicago Tribune - "Kissinger & Co.: Advice for a Price" - 9/5/82

UPI - Chicago - :Kissinger, associates set up consulting firm" 8/25/82

Washington Post - "Professional Services" (Re: Davignon) 1/14/85

Nation's Business - "Kissinger Firm Hopes to Make Its Mark As Risk Advisers to Corporate Chiefs" - 6/22/85

PERISCOPE

Masselli's Murder and the Donovan Case

The Federal Bureau of Investigation seriously doubts that the
murder of Nat Masselli was an attempt to intimidate his father,
William, a self-styled mafioso involved in the special prosecutor's
investigation of Labor Secretary Raymond Donovan. One man has
been arrested for the shooting; federal officials believe that the
execution was too sloppy to have been the work of top mob
professionals. In addition, federal investigators say that if anyone
wanted to silence William Masselli, killing Nat would be the worst
possible tactic. Masselli, now in prison, is known to have been
very close to his son. Some lawmen even suggest that his bitterness
over the loss may lead him to tell the government what he knows.
Masselli became involved in the Donovan inquiry because of a
wiretapped phone call during which he told his son that he would be
seeing Donovan at a party. The special prosecutor's investigation of
Donovan is still under way.

Assad's Mission Was Kid Stuff

The arrival of Syrian President Hafez Assad's brother Rifaat in Washington last week set off a sandstorm of diplomatic rumors. Rifaat, who controls the Syrian internal security forces, is "the No. 1 mystery man in the Mideast," according to one Arab watcher. The most intriguing speculation was that Assad was trying to arrange a secret meeting with Israeli Defense Minister Ariel Sharon, who was also in Washington last week. But the explanation turned out to be academic: Assad was in Washington to enroll two of his children in an American university.

Mr. Smith Takes a Drug Trip

Attorney General William French Smith will take a world tour of opium-smuggling centers this fall. Smith will fly in an Air Force jet to Thailand, Hong Kong, Pakistan and Italy. Pakistan is among the world's leading opium producers; Hong Kong and Thailand are major opium processors, and Italian gangsters are believed to control heroin delivery to New York. U.S. officials hope that face-to-face meetings with Smith, one of President Reagan's closest advisers, will persuade foreign lawmen to cooperate with the United States in choking off illegal drugs at the source.

Stockman Will Return

As soon as the largest tax bill in United States history became law, David Stockman got out of town. The director of the Office of Management and Budget went off on his first real vacation in at least three years: two weeks in the Bahamas. The grueling pace that Stockman has kept during his 19 months in the Reagan administration has contributed to the rumors that he would leave office at the end of the year. But aides report that Stockman is just beginning to get his teeth into the 1984 budget. "I see no signs that he's thinking of leaving," says a Stockman colleague. "Unless he enjoys his vacation so much that he doesn't want to come back."

Nader on Campus

Ralph Nader has a scheme that could keep university faculties busy even in days of declining enrollments. "We know more than we're applying," says the veteran social activist, who hopes to set up an organization of college professors to promote Nader causes. The Progressive Faculty Leadership Network would be a kind of data

bank in tweeds, says Nader, "alerting the populace to issues,
providing expert assistance to communities under pressure and
helping to develop effective solutions to problems." Nader has sent
outlines of the proposal to professors all across the country: he says
that he has received more than 10,000 positive responses.

A U.S.-Canadian Truck Stop?

The United States and Canada are barreling toward a head-on
collision over international trucking. Sen. John Danforth has
obliged the American trucking industry by sponsoring a rider to an
interstate busing bill that imposes a two-year moratorium on new or
renewed U.S. operating licenses for Canadian trucking firms (the
president is permitted to grant exemptions). Domestic truckers
argue that Canadian law discriminates against them and contend
that the new rule will pressure Ottawa into negotiating a fair
agreement with Washington. The Trudeau government has taken
the unprecedented step of asking President Reagan to veto the bill,
but he is unlikely to do so. Canadian provinces are threatening a
reciprocal ban, which could create an international traffic jam with
trucks forced to stop at the border to transfer their cargo to native
rigs. Two-thirds of all Canadian-American trade is carried by
trucks, at an annual freight bill of $1 billion.

Healing the Hemispheric Rift

A special study group is about to begin an examination of the deteriorating relations between Latin America and the United States. The 40-member commission will be led by diplomatic troubleshooter Sol Linowitz and Galo Plaza of Ecuador, a former secretary general of the Organization of American States; 20 conferees will be from Latin America and 20 from the United States. The panel hopes to produce specific suggestions for thawing the intrahemispheric chill. Funded by the Ford and Rockefeller foundations, the group will hold its first session in Washington sometime in October.

They probably won't make anyone forget Hope and Crosby, but two other famous world travelers are hitting the road again. Former President Gerald Ford and former Secretary of State Henry Kissinger will tour Japan in October under the well-paying aegis of the Kansai Telecasting Corp. Their itinerary includes stops in Tokyo and Osaka for panel discussions of international affairs, a meeting with Emperor Hirohito and several receptions with business and government leaders. For Kissinger, the trip will be a chance to promote Kissinger Associates, his new consulting firm for international corporations.

Howard Hectors the Hill

The National Football League's drive for broader protection from antitrust laws will get a body block in Congress next month from America's best-known sports authority, Howard Cosell. A nonpracticing lawyer who teaches sports law part time at Yale, Cosell will testify against a bill that would define the NFL as a "single business entity," thereby giving it blanket antitrust immunity. But ABC television commentator Cosell won't be the only controversial witness: also testifying on the bill will be "Los Angeles Raiders" owner Al Davis.

ERIC GELMAN with bureau reports

NEWSWEEK/SEPTEMBER 6, 1982

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want to know if they go into country X what kind of access they have to the region, is X the right place to go in, what are the opportunities to use that as a base for expanding in the region, what are the trends there towards foreign ownership, foreign business, in terms of controls?"

In fields like light petroleum - where long-term investment is necessary to build a refinery - or minerals, he explains, "they need to know the prospects for stability. A lot of it, of course, is common sense, but many developments can only be understood in the light of background about the history of the country; it has to be set in context in order to come to any sound conclusions.

"International business opera-

tions have come to play a much bigger role, especially for American corporations, than ever before. American business has been focused by and large on our great domestic market. They haven't had to worry about

anything else. That's all very dif-

"They may be very intelligent with good staffs, but this is still a very new business. Businessmen by and large tend to be domestically orientated and they project that experience into the foreign market - where it may not be applicable. Some of them may want it just to confirm their judgements, to have the comfort of knowing someone else agrees with you. But I think they owe their stockholders that!"

Kissinger calls his firm "minor league compared to Volvo," the Swedish motor company of which Pehr Gyllenhammar is the moving force. They met in 1977, and Kissinger describes the Swede as "one of the most thoughtful and philosophical businessmen that I have ever met."

Gyllenhammar visits New York regularly on Volvo business, and also to attend to his "outside" directorships with United Technologies and Kissinger Associates. He says that the firm has two Swedish clients, which he has helped to bring in. "I think every director should be

prepared to help with the acquisition of clients."

He does not act as a consultant, he points out, but is very much in tune with the objectives of Kissinger Associates. In a world where countries are changing so fast, he says, such services are necessary: "Most countries are in debt. Most of them have political problems that were unforeseen 10 years ago. It's a very different environment, one that requires people that are skilled in how to deal with it." Projections are now more difficult, "but you do not have to project events. You can also deal in sensitising management to the problems they have to face. Businesses traditionally were not sensitised to political factors but dealt

with return on investments, productivity, availability of labour, infrastructures relating to technical development and manufacturing. Now the political environment is equally important to success.

Still welcome in the White House - though
Reagan is no great Kissinger fan

"And you needn't be thinking of the Third World - you can think of Europe, where there are changes in labour law, in economic environment, incentive, protectionism." Identifying problems and educating decision-makers, he concludes, is the direction Kissinger Associates is taking.

Washington abounds with international consultants. Some are lawyers. Some are former officials. What they have in common is reliance on the international reputation of the individual who heads each operation. It is their personal judgement such people sell.

Cynthia Helms - whose husband Richard Helms, the former CIA director, is an international consultant - says the business isn't easy: "It's difficult for a corporation to know what it wants, and difficult to know what to give them - particularly in the $100,000 or $150,000 fee category."

"That fee is obscene," says Donald McHenry, former UN Ambassador, who charges less. Certainly it is hard to assess the value of Kissinger's advice, although → 77

the cachet of his name is very considerable. "If a mystique," observes a "If a baseball star is a million, a former Secretary certainly worth $150,000."

The massive failure of IRIS (International Research Systems) in its to create a giant computer bank of information countries and corporations that Kissinger's low-cost may serve him best.

In contrast with the Iger's firm cannot have cost up, one observer notes: "on a $100,000 fee multi-clients, that's two million

year. The principals will probably get $150,000 each and divvy up the rest after expenses, with perhaps 20 per cent of the balance for Kissinger and 10 per cent each to the rest. And if they don't get their clients, it will be easier to drop it."

Anthony Stout, chief executive of the Government Research Corporation and one of the founders of IRIS (he left a year before it folded), says are "a number of business strategic advice rather basic, important to distinguishing judgement, which Kissinger and data-based information you something, you do evidence. You take it or leave it."

One firm that is known on for Kissinger's services is the giant Fluorine, which builds petrol refineries, oil rigs and gas (like Statoil's new pipeline) all over the world. Manhattan Bank is an American Express-Shearman-Moroccan government formed likelihoods.

"Client relations discussed," says Bob Goldman Sachs, a New York-based firm. "Henry Kissinger, our international advisor

T 1 481

KISSINGER continued from page 52

the cachet of his name as an adviser is very considerable. "Kissinger has mystique," observes a stockbroker. "If a baseball star is worth five million, a former Secretary of State is certainly worth $100,000 or $150,000."

The massive failure in January of IRIS (International Reporting Information Systems) in its $15m effort to create a giant computerised data bank of information to sell to countries and corporations suggests that Kissinger's low-key approach may serve him best.

In contrast with the IRIS, Kissinger's firm cannot have cost much to set up, one observer notes: "If you work on a $100,000 fee multiplied by 20 clients, that's two million dollars a

year before it folded), says that there are "a number of businesses that need strategic advice rather badly. But it's important to distinguish between judgement, which Kissinger offers, and data-based information. If he tells you something, you don't ask for evidence. You take it or leave it."

One firm that is known to have signed on for Kissinger Associates' services is the giant Fluor Corporation, which builds petroleum plants, refineries, oil rigs and gas pipelines (like Statoil's new North Sea pipeline) all over the world. Chase Manhattan Bank is another client. American Express-Shearson and the Moroccan government are unconvinced likelihoods.

"Client relations are not discussed," says Bob Hormats of Goldman Sachs, a New York investment firm. "Henry Kissinger is on our international advisory board, to

which he gives assessments of the international situation that are extraordinarily valuable. But we are not a client of Kissinger Associates."

Kissinger himself admits to a broadened interest in economic affairs, the Third World and the relationships between economics and foreign policy. Increasingly he writes articles and speaks about the world economy.

"Once you are out of office you're bound to get a better perspective on yourself and on the things you did. In office you act athletically, and usually you get into office too early or too late. You're either not yet ready or you're burned out a little bit," he reflects. "My interest in the Third World is evident in some of my speeches of the mid-Seventies. But it is true that I came to it late in my government career and I did not understand when I made those speeches the economic substructure-which I've had a chance to study in the interval since. In that sense I've broadened myself. And I was aggressively anti-economics in my early days. Certainly the thing I've learned most being out of

office, technically, is economics."

Another consultant concludes about Kissinger's firm: "Fifty per cent of your judgement is good for ever. Three or six years out of government you see an erosion of your data base, because you simply don't have the current reporting from the CIA and other intelligence agencies available. Heads of government abroad have changed, foreign ministers have changed.

"It's judgement and judgement alone that they're selling. But that can be very valuable to big corporations - collective judgement based on a lifetime of experience at macro levels. Consider the devaluation of the Mexican peso last year. Incidentally, a number of big U.S. companies didn't know - and this wasn't Iran, it was a neighbour within an inch of bankruptcy. But Kissinger knew, I bet you dollars to doughnuts."

"If Kissinger tells you something, you don't ask for evidence"

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Knights

the secretary. Most of them that go. It's a one that killed in action are not also involved to face. Not sent out dealt with return investment, productivity, ability of, and, infrastructure tochnical development, manufacturing. Now political environmentally important to us. Earning of think of changes in environmentism." Educating states, is the

with some are officials. Common is oral reputations each

husband and CIA consultant: easy: ration to difficult to particu- lated, 0,000 fee

UN, " says certainly value of

77

By Leslie H. Gelb

ON THE CORNER OF PARK Avenue and 52d street in New York City sits an office building whose lobby contains the First American Bank of New York, Chase Private Banking International and, embedded in a marble post, a computerized building directory. Punch "U" and such names as Peter Ueberroth, the commissioner of major-league baseball, come up. But punch "K" and you will not find Kissinger Associates, for Henry A. Kissinger still receives threats, so, for security reasons, you have to be invited to learn what floor his firm is on.

I had been invited, and the elevator sped to its destination. The doors opened onto a reception room and a receptionist, but no identification of the firm. Only when the receptionist answered the phone and said "Kissinger Associates" was I sure I was in the right place. "Governor Cuomo's office?" the woman said. "Yes, I'll put you through."

I was ushered into a windowless inner waiting room, nothing particularly elegant. On a coffee table were The New Republic, American Heritage and Fortune. Words drifted across the hallway from Alan Stoga, the firm's one and only economist, who was on the telephone talking about Saudi Arabian oil strategy. He was apparently sharing with a client the insight that the Saudis were seeking to maximize their profits.

Mr. Kissinger walked out of his office, reading a sheet of paper. He

greeted me and said he would see me shortly. The former national security adviser and Secretary of State is chairman and sole owner of Kissinger Associates, which, he said in the interview a little later, dispenses "geopolitical-economic advice" and helps clients "with their international planning."

The clients of Kissinger Associates include Shearson Lehman Brothers and the American Express Company, which retain the services of the firm for a fee of $420,000 annually. For this, Mr. Kissinger speaks about four times a year at luncheons and dinners for Shearson Lehman and makes himself and his associates available for periodic contacts with the top leadership of the investment banking firm's parent, American Express. A more typical fee — for far less service — runs about $150,000 annually, and the chief executive officers and presidents of the various business institutions that have signed on seem glad to pay it.

The Kissinger firm provides no written analyses, but it seems clear from talking to clients that in addition to oral analyses they are buying Mr. Kissinger's instantly recognizable face and his famous German-tinged basso voice — his stardom and the status that goes with it, if you will.

The two other top members of the firm are Lieut. Gen. Brent Scowcroft, President Ford's national security adviser, and Lawrence S. Eagleburger, who was an Under Secretary of State in the Reagan Administration.

Mr. Kissinger, of course, is not by any means the only former Government official to have gone into business for himself. Others in recent years include Alexander M. Haig Jr., who was chief of staff for

Richard M. Nixon and Secretary of State for President Reagan. Two former Directors of Central Intelligence, Richard M. Helms and William E. Colby, also went into business for themselves. Donald F. McHenry, chief delegate to the United Nations under President Carter, and Richard V. Allen, President Reagan's first national security adviser, made the same decision, as have a host of others.

By all indications, these prime international consultants are doing quite well, as corporations move away from having in-house staffs to do political-risk analysis — predicting the political fate of a country or region or issue. It is this function that is the lifeblood of the international consultants. These consultants are not lobbyists in the strict sense of the word, spending their time persuading American officials to help their clients. And yet, some of them are involved in selling their influence at home and almost all do so abroad.

Mr. Kissinger and his associates are by all accounts the most successful of this new breed of former senior Government officials who have decided to advise big businesses rather than join them. Their predecessors, many of whom found the doors of their banking and law firms still open when they left Government service, beat a path back. Robert A. Lovett, for instance, went from being President Truman's Secretary of Defense back to Brown Brothers Harriman & Company, and Secretary of State Dean Acheson returned to Covington & Burling after serving Presidents Roosevelt and Truman.

Although David A. Stockman left the Office of Management and Budget for Salomon Brothers, big

(Continued on Page 32)

Leslie H. Gelb is The Times's national security correspondent, based in Washington.

business is too small for
many of the new generation
of Government superstars.
Defense Secretaries in recent
times have been responsible
for millions of people and
budgets in billions. Secre-
taries of State not only run
American foreign policies but
also are news media stars.
Not even the most Gargan-
tuan multinational company
can compete in scale with
these Government opera-
tions. At the same time, most
big businesses do not want
these former officials, at
least not as chief executive
officers, and the officials
want nothing less. "What do
they know about our
businesses?" one senior oil
executive asked rhetorically.

So, many of these former
Government leaders asked
themselves, why not capital-
ize on our stardom, interna-
tional contacts and inside
knowledge to make large in-
comes on our own? At the
same time, they sought some-
thing more. "I wanted to pre-
serve freedom for myself and
do lots of different things,"
said James R. Schlesinger,
who held senior Cabinet posts
in the Nixon, Ford and Carter
Administrations and who now
spends some time on the pay-
roll of Shearson Lehman,
some with the Washington-
based Center for Strategic
and International Studies,
and some freelancing.

No one does more different
things with the freedom af-
forded by his consulting busi-
ness than the 62-year-old Mr.
Kissinger. He lets his name
be floated as a candidate for
the Governorship of New
York. (The day of my visit
and of the call from Governor
Cuomo's office was, in fact,
the day Mr. Kissinger issued
his statement saying he
would not seek the nomina-
tion for Governor of New
York.) He writes a column
for The Los Angeles Times
syndicate and presents analy-
ses for ABC television. He
gives free speeches at Repub-
lican fund-raising events for
such people as Representa-
tive Jack F. Kemp of Buffalo
and Vice President Bush. He

is greeted by the French
President at Elysée Palace
and by the Chinese leader
Deng Xiaoping in his inner of-
fice. He gets involved in be-
hind-the-scenes battles at the
very establishment New
York-based Council on For-
eign Relations. And there
seems to be plenty of time left
over for socializing with the
beautiful people, including
the designer Oscar de la
Renta. The television appear-
ances, the socializing, the
politicking, the international
consulting — all reinforce
each other.

But it is very difficult to pin
down what Mr. Kissinger and
the others are really doing in
the business end of their
lives. None will say for attri-
bution who their clients are or
discuss the specifics of what
they do, although they do talk
about their work with the un-
derstanding that they not be
identified, and their accounts
of their business activities
are suprisingly similar. Kis-
singer Associates requires a
clause in its contracts stating
that neither the firm nor its
clients will divulge a business
connection, although in prac-
tice some clients do acknowl-
edge the relationship.

It is known that Kissinger
Associates' client list in-
cludes H.J. Heinz, Arco and
American Express and
Shearson Lehman. It is said
that the roster also extends to
Fiat, Volvo, the Fluor Corpo-
ration, the International
Energy Corporation, ASEA
and L.M. Ericsson of Sweden,
Midland Bank of Britain and
Montedison of Italy. With
very few exceptions, how-
ever, those who agreed to talk
about their business offered
little detail. Almost none had
a bad word to say about Kis-
singer Associates.

AS I STOOD PEERING
out of the Kissinger
Associates waiting
room, Mr. Eagleburger
walked in. The 55-year-old
president of the firm had
served as an Under Secretary
of State for Political Affairs.
He said that the freedom and
the money involved in being a

consultant were wonderful,
and he hastened to add, "It's
not like going from the State
Department to selling tooth-
paste. I'm still dealing with
subjects I think I know some-
thing about."

The firm, he said, was
started in 1982 with loans
from places like E.M. War-
burg, Pincus & Company, the
investment bankers. All the
firm's personnel, save Mr.
Kissinger as sole owner, are
salaried. (None will say what
those salaries are.) The New
York staff totals 11, including
Mr. Eagleburger, Mr. Stoga
(formerly of the First Na-

tional Bank of Chicago) and two other
consultants. The Washington office
is run by General Scowcroft and has
three researchers and four clerks. In-

cluding Mr. Kissinger's bodyguards,
this brings Kissinger Associates to
about 25 people. In addition, Mr. Kis-
singer has a separate Washington of-
fice from which he runs his "private"
affairs, such as speechmaking. He
speaks for a fee about 20 times a year
— his charge is usually $20,000 — and
makes another 20 or so free appear-
ances for various causes and political
fund raising.

The firm's board of trustees reads
like an international "Who's Who." It
includes William D. Rogers, a former
Under Secretary of State and now a
Washington lawyer; Saburo Okita,
former Japanese Foreign Minister;
Pehr Gyllenhammar, chief executive
officer of Volvo; William E. Simon,
former Treasury Secretary; Sir Y.K.
Kan, former chairman of the Bank of
East Asia; Robert O. Anderson, for-
mer chairman of Atlantic Richfield;
Lord Roll, chairman of S.G. Warburg
& Company, and Edward L. Palmer,
former chairman of the executive
committee of Citibank. Many of the
trustees help the firm obtain clients.

According to various members of
the firm, it has 25 to 30 clients, each
paying slightly more than $150,000
yearly for varying services. Gross in-
come thus apparently approaches $5
million a year.

The maximum amount of service
seems to be four planning meetings a
year between Kissinger Associates
and the top management of a client,
plus telephone calls. That is the case
with the H.J. Heinz Company, accord-
ing to sources there. The minimum
appears to be $150,000 for a few tele-
phone calls plus a visit by a chief ex-

ple at these affairs love it when "Henry reveals some aspects and facets of the things which are not normally part of the public domain."

Peter J. Solomon, vice chairman of Shearson Lehman, says, "Henry is helpful to us not in specific transactions, which he may be, but because part of the reason one uses an investment banker like Shearson Lehman is the company they keep." Having him speak is a way of saying "I'm affiliated with these guys."

Moreover, Mr. Solomon continues, "Henry adds a little perspective" to people who "are driven by microexperiences. And we can afford to have people who make us think about the world."

Stephen J. Giovanisci, vice president of public affairs for Atlantic Richfield, acknowledged that Arco was a Kissinger client and said that "it is awfully difficult to measure value" when it comes to consultants, especially in "public affairs, and I put Kissinger in that category." Like all others interviewed, he noted that Mr. Kissinger dealt only with the president or chairman of the corporation.

The fullest picture of what Kissinger Associates does for a client was painted by Anthony J.F. O'Reilly, chief executive officer of Heinz. "Kissinger and his associates make a real contribution, and we think they are particularly helpful in countries with more centrally planned economies, where the principal players and the dynamics among the principal players are of critical importance," he said. "This is particularly true in China, where he is a popular figure and is viewed with particular respect.

"On China, basically, we were well on our way to establishing the baby-food presence there before Henry got involved. But once we decided to move, he had practical points to offer, such as on the relationship between Taiwan and Peking. He was helpful in seeing that we did not take steps that would not have been helpful in Peking.

"His relevance obviously varies from market to market, but he's probably at his best in helping with contacts in that shadowy world where that counts." In this category he included Africa, and cited a recent meeting he had held with President Felix Houphouët-Boigny of the Ivory Coast, who "was well aware of Henry's intervention and support."

Asked if he would like Mr. Kissinger to participate in negotiating an actual transaction, he answered, "Not at all." This was much the same response given by Mr. Robinson. "It would be an unnecessary distraction," Mr. O'Reilly added.

"Henry is not a man who's lived his life in commerce," Mr. O'Reilly said. "His strength is analyzing people and their power base. He has a durable and great inventory of contacts. To say that he is a door opener sounds mildly disparaging, but it is helpful in countries with rusty hinges."

Mr. O'Reilly also made clear that he did not use Mr. Kissinger for help in Washington, where he employs the William Timmons lobbying firm. This was a typical response from Kissinger clients, who apparently have concluded that his clout is far greater abroad than in Washington — particularly in the Reagan Administration's Washington. Their general view is that Mr. Eagleburger and General Scowcroft have greater standing there than their boss. In Washington, Mr. Kissinger still has many enemies among strong conservatives and liberals alike.

Echoing a sentiment of other Kissinger clients, Mr. O'Reilly commented that "Henry's contacts are durable, but by their very nature they are a diminishing asset." Mr. O'Reilly feels that Mr. Kissinger "must see that substantial sums of money come from contacts and business deals in which he is not a participant," so maybe "Henry is thinking of merchant banking" and making deals.

Mr. Kissinger, when told others think his contacts may be of waning value, says, "Well, they may be right." He goes on to say that when he has been approached and asked to make business connections, "We pass it on to somebody who is qualified to do it, but we are not promoting deals and our income doesn't come from deals."

According to sources at Shearson Lehman and American Express, however, Kissinger Associates has been trying to negotiate deals. One persistent report is that Mr. Kissinger is trying to get American Express together with a Hong Kong-based conglomerate, the Ever Bright Industrial Company, run by Wang Guangying, a businessman sent by Peking to the island to arrange for high-technology imports to China.

In response to a question, Mr. Kissinger said that he "absolutely" did not see himself as a "door opener," using his Government service to arrange meetings for clients with governmental leaders.

I pointed out that "There are people at H.J. Heinz who say you opened some doors for them in Africa and elsewhere."

"Maybe one case," he said. "Didn't you also arrange meetings for the C.E.O. of Heinz to meet several African leaders such as Robert Mugabe and Houphouët-Boigny?" (Robert Mugabe is Prime Minister of Zimbabwe.)

"Mugabe he knew before I did, and maybe Houphouët-Boigny indirectly," Mr. Kissinger said. Mr. Eagleburger added, "Even in the case of Houphouët, you said 'I'm not going to do it, but I'll put you in touch with someone who can.'"

Mr. Eagleburger interrupted again: "If you're going to take specific cases like this, Henry, you have to be protected and not say Kissinger says so-and-so is a client." Mr. Kissinger said, "Of course."

"But," I said, "according to O'Reilly, you also arranged a meeting for him

> 'If you don't understand the relationship between economics and politics, Kissinger says, 'you cannot be a great statesman.'

with Ozal." (Turgut Özal is Prime Minister of Turkey.)

"I don't believe in fact we did this," Mr. Kissinger replied.

"Let me explain our policy," Mr. Kissinger went on. "We will not take on someone as a client who says, 'Will you introduce us to somebody for a fee?' I don't say we will never do it. What I resist is the proposition that if somebody wants to go to Turkey, for example, we will introduce them to Ozal. Only as part of an ongoing relationship, when we have a continuing interest in a company, do we do this, growing out of that continuing relationship. But it is not the major part of our effort.

"I literally could have made millions when I left Government with my name alone. There was one where somebody offered me a million dollars for meeting the finance minister of Iran, who at that time was a close friend of mine. I waited six years out of office before I set up this business. We are hired on the basis of our knowledge of geofinancial international affairs, our planning abilities, and in nine cases out of 10 the issue of introductions does not arise."

The question of possible conflicts of interest arises because of such activities as Mr. Kissinger's chairmanship of President Reagan's Commission on Central America; Kissinger Associates is known to have banking clients with interests in that part of the world. Mr. Kissinger simply asserted that there was no conflict, that he kept his policy recommendations separate from his business interests. He is also a member of the President's Foreign Intelligence Advisory Board, a group of private citizens who review in-

telligence. Mr. Kissinger said the meetings of this group covered only intelligence personnel and procedures, and "what our clients are interested in, the conditions in countries, is for all practical purposes never discussed." He went on: "There may be one or two exceptions occasionally, but literally none come to mind."

General Scowcroft bridles at the conflict-of-interest issue. He was chairman of the President's Commission on Strategic Forces, which made recommendations on new nuclear weapons and arms control. "People aren't asked to work on a commission unless they know what they're talking about," he said. "It takes a tremendous amount of time and it is done gratis for the national interest." He says that he has only one client that is a major defense contractor, and he talks to that corporation not about arms but about "the future of arms control and Soviet-American relations."

Mr. Kissinger says that he does not have to be on commissions to get inside information, that he could at any time telephone the national security adviser or use his wide range of contacts.

Reminded of his well-known disdain for matters economic, he noted that this began to change at the end of his tenure at the State Department. Now, he says, "I think that in the modern world, if you don't understand the relationship between economics and politics, you cannot be a great statesman. You cannot do it with foreign policy and security knowledge alone." ■

Ex-CIA official Andrew Falkiewicz now sells intelligence to businesses.

# "Information Boutiques"—
Intelligence for a Price

Former government agents, academics are striking gold by selling guidance about foreign developments to business.

NEW YORK

A few years ago, an ex-CIA agent walked into the headquarters of Security Pacific Bank in Los Angeles and said his new company could provide useful information. He knew, for example, that Spanish officials were lying about their country's inflation rate. "I was amazed," recalls Richard Kjeldsen, the bank's international economist. "I thought he would be talking about people running around with Molotov cocktails—not economic affairs."

Now, such visits are commonplace as former State Department officials, academics and espionage agents, plus business executives with international connections, sell their expensive insights into the twists and turns of foreign economic and political events.

For companies needing guidance about foreign lands, there is no lack of sources—

* A dozen large corporations pay $2,000 a month for Oxford Analytica, an Oxford, England, service that issues electronically a daily news analysis.

* InterMatrix Group of Westport, Conn., charges $400,000 a year for a data-base service giving in-depth assessments of specific issues and countries.

* For something over $100,000 a year, Henry Kissinger will explain nu-

ances of international affairs to corporate chieftains. His firm cloaks itself in mystery—the door to its Manhattan offices says merely “Suite 1100.”

In Washington, a multitude of one-time Central Intelligence Agency directors and operatives have formed similar companies. Former CIA Director William Colby spends part of his time working for International Business-Government Counsellors, Inc. Richard Helms, another ex-director, advises clients such as the Bechtel Group on Mideast security matters. Andrew Falkiewicz, once

assistant director of the CIA under George Bush, runs a company called Dunedin Corporation with five former CIA analysts.

Alexander Haig, former Secretary of State, likewise trades his knowledge of foreign leaders for a fee, as do many lesser ex-State Department officials.

Cox, Lloyd Associates, a New York research house, estimates that businesses in 1984 spent 3 billion dollars on news and information—a figure that increases about 10 percent each year. Though the bulk of that money goes for conventional news and financial-information services, Connie Cox, president, notes that scores of "information boutiques" with revenues of less than 2 million dollars now offer what could be described as private intelligence. Observes Cox: "It's enough to keep a number of people living comfortably."

What information is worth that kind of money? A Long Beach, Calif., organization called Business Environment Risk Information predicted in December of 1980 that President Anwar Sadat of Egypt would be assassinated within a year or two. Ten months later, the prediction came true.

BERI also forecast an Iraqi invasion of Iran nine months before it occurred. Yet it said India's Prime Minister Indira Gandhi stood only a 10 percent chance of assassination—adding that if she were killed, a military takeover would ensue. Gandhi was later murdered, and there was no military coup. BERI charges $144 a year for a newsletter and $400 per country for specific reports.

**Humble pie.** Dunedin Corporation correctly forecast the results of local West German elections that led to the victory of Chancellor Helmut Kohl in

Staff meeting at Oxford Analytica in England. Its reports cost $2,000 per month.

72

U.S.NEWS & WORLD REPORT, May 20, 1985

1982. Bank clients of Dunedin were interested in local elections because of business dealings at those levels. But Dunedin did not expect Mikhail Gorbachev to take over the Kremlin leadership. "Despite the fact that we spend a lot of time dealing with the U.S.S.R., I am humble in our ability to predict things that come out of the Politburo," says Falkiewicz, who served in the Foreign Service in Moscow.

Kissinger gave Merck & Company advice that France under François Mitterrand would be tough on foreign businesses. At that time, the Rahway, N.J., drug firm was considering a substantial investment there. Despite Kissinger's warning, says William Van Buren, vice president and secretary of Merck, "we decided it warranted additional private investment."

Sometimes, these information services wield too broad a brush for their clients. James Bisch, a senior vice president of Chase Manhattan Bank, says he would like Oxford Analytica to focus more on the business ramifications of its reports. But, in general, "we're quite satisfied," he adds.

Though former CIA and State Department people abound in these organizations, they disclaim use of clandestine methods to gather information, or reliance upon contacts at Langley or Foggy Bottom. "If asked," says Thomas Bolle of Dunedin, "we tell clients we are not a conduit for confidential information." He says that Dunedin relies on the experience of senior associates "who have spent a lot of time in their specific areas of responsibility."

Kissinger obtains insights from his continual global travels and friendships with influential figures. Others such as InterMatrix have local contacts they query for analyses.

**Timing a key.** Corporations pay well for information though it may be available for 50 cents—the cost of a business newspaper. Timing is one reason. Many services claim to have contacts inside governments. They say they can alert clients to events before they become public. "Since day one," says Walter Wriston, former Citicorp chairman, "people have wanted to know something first, whether it's a crop failure in Argentina or the amount of money the Treasury is going to raise." Citicorp is often solicited by private intelligence experts but relies on its own staff abroad.

Yet many businesses do need guidance on unfamiliar topics or nations. Daniel Sharp, director of international relations at Xerox, says the appeal of information-consulting services is that they help his company follow the business environment abroad. A good ser-

vice, Sharp says, plugs into resident experts who make subtle judgments about trends and events.

A Munich-based asset manager, Unicorn G International, has its own group of 90 "stringers" who provide it with intelligence. Unicorn, for example, is tracking 47 separate wars and violent conflicts. "There is such an overwhelming amount of information out there," says Walter Peters, the chairman, "that we built these sets of filters so we would not suffer from information pollution."

One recent piece of intelligence told Peters that former Japanese Premier Kakuei Tanaka's illness was more seri-

ous than reported. Peters decided that Prime Minister Yasuhiro Nakasone, who counts on Tanaka for advice, would be in trouble and sold his clients' investments in Japan before the Tokyo stock market took a tumble.

Kjeldsen at Security Pacific says outside services provide political insights missed by his own economics department. "You need the broadest base of information possible so you can attack a problem from every angle," insists Kjeldsen.

That is what many services claim to provide. "What we are doing," says Paul Sacks, head of Multinational Strategies Group, Inc., "is acting as a translator or analyst of the meaning of events."

Former Under Secretary of State Lawrence Eagleburger of Kissinger Associates says: "Very large companies often use us as a double check on what their staff is doing. In addition, Henry

and I have a broad acquaintance with the movers and shakers of the world and how they are likely to approach any issue."

**Major league.** Kissinger's firm has hired some of Washington's heavy hiters, including Eagleburger and Brent Scowcroft, national-security adviser to President Ford. Kissinger's board of directors, which helps attract new customers, includes former Treasury Secretary William Simon and William D. Rogers, once under secretary of state.

One of Kissinger's competitors is a former aide, David Young, who was so impressed with the daily briefing President Nixon received that he set out to do "for the private sector what we did for the President."

Young, who founded Oxford Analytica last fall, taps Oxford University's prime asset—it's teaching staff—to provide analyses ranging from the pricing strategy of the Organization of Petroleum Exporting Countries to elections in India to the future direction of the deutsche mark.

"What's marvelous about this," he says, "is that out of this historic back street comes this modern product beamed by satellite to subscribers all over the globe." Each day, three of Oxford's dons write a "story" of 500 to 1,000 words. These articles are then edited in tight narrative style by ex-journalists from the *Times* of London and sent electronically to subscribers of Telerate Systems.

The information business has seen some failures. Four years ago, Washington, D.C., publisher Anthony Stout began a service called International Reporting & Information Systems. IRIS was built around a computer program, designed by a former CIA analyst, that turned out

CIA-style scenarios on economics and politics. Former British Prime Minister Edward Heath came aboard as a consultant at a reported salary of $100,000. But IRIS, housed in swank quarters across the Potomac River from Washington, spent more than it took in and went out of business.

Chase Manhattan Bank also was unsuccessful at selling country-risk information. Recalls an employe: "Countries who were clients of the bank did not appreciate having the bank hawk reports on their finances."

Even so, the information sellers are optimistic. Many businesses still remember being caught by surprise—and hurt—by the revolution that toppled the Shah of Iran. It only takes one Iran to remind the corporate world that surprises can be expensive. ☐

Kissinger: Still connected to White House.

By RON SCHERER

U.S. NEWS & WORLD REPORT, May 20, 1985

1985

73

People

POWER BROKERS

THE BIG BUSINESS
OF BEING HENRY KISSINGER

For decades, he has been counselor and confidant to the world's most powerful leaders. From his early days as a Harvard history professor to his tenure as Secretary of State, he has carefully nurtured an air of traveling in rarefied circles, of dealing only at top levels, of moving smoothly through the concentric worlds of politics, cafe society, and the international corporate aristocracy. Wherever he goes, he offers in his unmistakable basso profundo his advice, his opinions, and his wit. That combination once brought him power and fame. Now it has made Henry A. Kissinger, 62, a very rich man.

He is not the only former government official to sell his wisdom to the private sector. But he is certainly one of the most expensive. Through his three-year-old company, New York-based Kissinger Associates Inc., some 28 U.S. and foreign multinational corporations and banks pony up $150,000 to $250,000 of their stockholders' money to put Kissinger himself on retainer. The company's gross revenues stand at $4 million and have been growing by 35% a year. "We act as a mini State Department," says Lawrence S. Eagleburger, former Under Secretary of State for political affairs.

> 'We want to stay modestly profitable from consulting. But there's a hell of a lot of money in deal-making'

HENRY A. KISSINGER
Kissinger Associates

"We have clients who want a discussion of the future of U. S.-Soviet relations," continues Eagleburger. "We provide the global strategic-economic analysis."

That's not all that Kissinger Associates can provide. Need to disinvest from a politically volatile country without causing a nationalistic backlash? Call Henry. Have commodities you want to barter? Call Henry. Want to know which communist country poses the least risk for investment? Call Henry. Or call one of his well-connected staff. Eagleburger served under Kissinger when he was national security adviser to Richard Nixon, as did Brent Scowcroft. Eagleburger, Scowcroft, and Alan Stoga, an economist who was on Kissinger's Central America Commission,

make up the core of the company's staff.

Although Kissinger won't admit it, such corporate leaders as Anthony J. F. O'Reilly, CEO at H. J. Heinz; Robert O. Anderson, CEO of Atlantic Richfield; Giovanni Agnelli, chairman of Fiat; and Pehr Gyllenhammar, CEO of Volvo, have already dialed.

Kissinger's reputation as adviser to the mighty is staggering. Indeed, he sometimes appears to have no source of power other than the aura of power. It is an aura many will pay dearly to bask in, hoping to grow powerful as well.

**RESPECTFUL TONE.** Yet it is unclear whether CEOs are getting anything special for their money. Competitors charge that Kissinger Associates provides little foreign policy insight that is not available elsewhere for a smaller fee. "No one, McKinsey or anyone else, charges anywhere near their prices," says a rival. "There's a reasonable amount of skepticism as to whether it's worth the money. After all, there are lots of people who can offer the same kind of geopolitical junk. There are lots of ex-CIA directors and ex-ambassadors around."

But if competitors ridicule the consulting side of Kissinger Associates, they reserve a more respectful tone for the vast network of contacts Kissinger has built. Drawn from his years in Washington and his lifelong association with the Rockefellers, the contacts form a power grid of global proportions—the “celestial level,” as one client puts it. Of course, many of the people in the Kissinger Connection are a bit long in the tooth. China’s Deng Xiaoping is 81, and David Rockefeller is retired. And some of them, such as Anwar Sadat and the Shah of Iran, have passed from the scene. But as long as most of them remain in power, the network functions. “His China contacts are excellent,” says O’Reilly. “His status is extremely helpful to anybody hoping to create a commercial enterprise there.” Before H. J. Heinz Co. began its own China operations two years ago, it consulted with Kissinger Associates.

When American Express Co. CEO James Robinson III decided last January to make a swing through Asia, he wanted to go to both Japan and China. Kissinger told him that he knew Beijing

LAWRENCE BARNES

76 BUSINESS WEEK/DECEMBER 2, 1985

PEOPLE

Could be offended if Robinson did not make a special visit just to China. Going to Japan as well would be seen as de- meaning. So Kissinger volunteered to set up a meeting in Hong Kong with Wang Guangying, chairman of China Everbright Holdings Ltd. Wang is one of Hong Kong's biggest "red capital- ists" (BW—Mar. 5, 1984). He is also the brother-in-law of the late Liu Shaoqi, China's head of state in the 1960s, and he has a direct line to Beijing. Robinson and Kissinger flew out on the American Express corporate jet. Four others were aboard: a bodyguard for Kiss- singer, an assistant for Robinson, and both men's wives. They flew to Japan, where Kissinger set up a se- ries of meetings for Robinson with Liberal Democratic Party and gov- ernment officials. They then went on to Hong Kong, where Robinson met with Wang. Was the advice against antagonizing China worth- while? Yes. Could another foreign policy consultant have offered the same advice at a lower price? Prob- ably. Could the same consultant have set up the meeting with Wang? Not likely.

EXTREME DISCRETION. At least part of Kissinger's appeal stems from his place in history. He was at the center of the key foreign events of the 1970s—Vietnam, China, détente, the Middle East, Chile—and re- ceived the rare honor of being hated by both ends of the political spec- trum. Out of office, his books, tele- vision appearances, and a genius for self-promotion have kept him con- stantly in the public eye. That pres- ence is bolstered by a disarming, self-deprecating wit. "Henry tells a sto- ry against himself," says Heinz's O'Reil- ly. "When he was at my house, Castle Martin, in Ireland, I introduced him as the only Secretary of State to have two Presidents serve under him." Kissinger came back with his own favorite story. "He said he was introduced by a man who said Henry Kissinger was a legend in his own mind," says O'Reilly.

Kissinger's network offers more than just contacts. For a few CEOs who need extreme discretion, Kissinger is quietly adding another service—brokering deals. "We've run into a number of cases where a client feels the need for a personal relationship, not an institutional one," says Eagleburger. "They get to know Henry or me or Alan. They say, 'Here's a particular thing I want to do. I want confidentiality.' We then go to an- other client and see if we can match them up."

Kissinger Associates has completed a number of transactions for client corpo- rations that embody the traditional mer- chant banking function—bringing buyer

and seller together. By using the net- work and sometimes going outside it, the consulting firm has acted more like Kissinger & Cie than Kissinger, Scow- croft, Eagleburger, and Stoga.

Why do companies go to Kissinger As- sociates instead of an investment bank? "Because they know you keep your mouth shut," says Kissinger. Each con- tract his firm signs with a corporate cli- ent contains a clause pledging mutual confidentiality. Neither party is sup- posed even to acknowledge it has any

Doing deals has great allure for ev- eryone at Kissinger Associates. The company is not a partnership. Kissinger owns it all. Everyone is on salary and receives bonuses based on profit-shar- ing. "The secretaries can make 25% more than their salaries in a good year," says Kissinger in his role as corporate boss. "The close associates get more than 25%. Every year the bonuses have exceeded the salaries." The money is certainly good, but not great by the standards of investment bank partner-

ships on Wall Street. Deals hold the promise of really big bucks. They are not part of the contract, and the commission for brokering transac- tions varies. "We want to stay mod- estly profitable from the consulting business," says Kissinger. Yet, warming to the deal-making idea, Kissinger smiles: "It's a great temp- tation. There's a hell of a lot of money in deal-making."

Not all of Kissinger Associates' corporate clients are impressed by its ability to put together deals. "When you talk to the staffers, you get the notion that they do want to move into investment banking and advice," says one European client. "But we do not use them for that. Frankly, we don't think they have the necessary knowhow to move in that direction."

It may be that Kissinger's ser- vices have more value for less-so- phisticated CEOs or for corporate of- ficials with little international experience. For the up-and-coming chief executive, having Kissinger on the payroll can enhance his image on the international social circuit.

Repeating a Kissinger joke, dropping an "inside" political tidbit, belonging to a group that includes such corporate ce- lebrities as Agnelli and David Rockefel- ler may be just the thing for the multi- national arriviste.

The "celestial" network itself is deri- ed by many, particularly by firms that specialize in quantifying political risk and delivering their information on com- puter printouts. "Kissinger Associates is in the business of providing introduc- tions," says an executive at one such firm. "If you need to meet with a Rajiv Gandhi, go to Henry. It's considered part of the retainer."

A DOOR-OPENER? Accusations that he serves merely as a "door-opener" infuri- ate Kissinger. "When I left government, I was approached by many investment banks and offered large sums of money. But investment bankers want door-open- ers. We are not door-openers." However, he adds, "this is a gray area. We answer questions about who would be the best partners in a country. If we can con- tribute something, we do. It's not an

<table><caption>A SAMPLING OF KISSINGER'S CONFIDENTIAL CLIENTS</caption><thead><tr><th>Company</th><th>Areas of consulting and service</th></tr></thead><tbody><tr><td>AMERICAN EXPRESS</td><td>Geopolitics, Asia</td></tr><tr><td>ARCO</td><td>Geopolitics, Latin America, Third World debt</td></tr><tr><td>ASEA (Sweden)</td><td>Washington policy</td></tr><tr><td>CHASE MANHATTAN BANK</td><td>Geopolitics, Middle East</td></tr><tr><td>L. M. ERICSSON (Sweden)</td><td>Washington policy, Eastern Europe</td></tr><tr><td>FIAT (Italy)</td><td>Washington policy, Eastern European trends</td></tr><tr><td>GENERAL ELECTRIC (Britain)</td><td>Washington policy and geopolitics</td></tr><tr><td>H. J. HEINZ</td><td>China, Middle East, Africa; contacts</td></tr><tr><td>MERCK</td><td>Japan, France</td></tr><tr><td>MIDLAND BANK (Britain)</td><td>Geopolitical trends</td></tr><tr><td>MONTEDISON (Italy)</td><td>Washington policy</td></tr><tr><td>SHEARSON LEHMAN</td><td>Deal referrals, geopolitics</td></tr><tr><td>VOLVO (Sweden)</td><td>International currency trends, Washington policy</td></tr><tr><td>S. G. WARBURG (Britain)</td><td>Washington policy; contacts</td></tr></tbody><tfoot><tr><td colspan="2">DATA: BW</td></tr></tfoot></table>

ties to the other. "The big investment houses are too big and too impersonal and perhaps not as discreet as one might like," says Stoga.

Kissinger Associates brokers the deal and takes its cut—it doesn't even try to complete the transaction. Yet even there, the network comes into play. The company simply outsources the deal to another client. For example, Kissinger is on the American Express board as an individual, and he is the personal foreign policy adviser to the chairman. "I work mostly with Robinson," he says. "I fun- nel this through Kissinger Associates."

His company also has a close rela- tionship with Shearson Lehman, Ameri- can Express' investment banking arm. "When some of our clients have prob- lems that require an investment bank, and they can provide the service, we give it a benevolent push toward Shear- son," says Kissinger. It works the other way as well. "Conversely, when they see an oppor- tunity for us, they recommend us. We advise to each other. Referral is not quite the word."

PEOPLE

BUSINESS WEEK/DECEMBER 2, 1985 77

People

easy distinction to make," he concedes.

In fact, the blending of his public and private networks is crucial to the way Kissinger Associates does business. "To make this work, access is really important," says Eagleburger. "There's a short half-life to information if you don't work at it. Scowcroft was on the MX Commission. When Henry went on a trip to Asia, the Prime Ministers of Japan and India saw him. Henry has access which keeps going."

Even though the company refuses to be on retainer for foreign governments, ties to foreign leaders are essential for business. At the same time, such links often raise questions as to just whom Kissinger and his company are working for. When the Third World banking crisis was boiling over in 1984, for example, Kissinger hosted a lunch. "The Argentines called me and said that Alfonsín did not want to be seen as a supplicant going to the bankers," recalls Kissinger. "He wanted to explain his position, his political problems to the bankers."

But the banking community immediately wondered whether or not Kissinger was on retainer to the Argentines for his services. Kissinger vehemently denies it. "I paid for that. We charged

nothing. I did it as a public service." Yet the ability to attract President Raúl Alfonsín and choose a handful of bankers to join him for lunch is clearly an exercise in power that rubs off on the commercial side of Kissinger Associates. "It may have done the business some marginal good," he concedes.

If there is one great fear in Henry

> If there is one great fear in Kissinger's life, it is of becoming irrelevant

Kissinger's life and in the institutional life of Kissinger Associates, it is the fear of irrelevancy—of becoming a has-been after so many years in the political wilderness.

When Kissinger was arranging Robinson's meetings with Japanese party leaders, a number of them openly questioned Kissinger's current status and wondered aloud whether they should even meet with his client. They did, in the end. And

when the heir to Sweden's corporate dynasty, Peter Wallenberg, went to the Department of Commerce recently to check up on a high-tech export problem one of his companies, ASEA, was having, he was politely told that dropping Kissinger's name was not the most efficacious way of expediting matters.

For Kissinger, the need to be seen as a power broker is as important as being one. Appearing on television as a commentator for ABC on the summit meeting has benefits that transcend the analysis of U. S.-Soviet relations. It's good business to burnish the image.

Kissinger is now in the process of trying to create a legacy. He is attempting to transform Kissinger Associates into a company that does not depend entirely on his personality. "I wanted to have a back-up, to create something where clients could be serviced systematically," he says. "I'm confident it can survive my retirement." But the company remains dependent on Kissinger's connections. Only as long as "Henry has access which keeps going" is he likely to avoid becoming merely a legend in his own mind.

By Bruce Nussbaum in New York with bureau reports.

The ad on the next four pages doesn't belong in this magazine. So tear it out.

Where this ad really belongs is in the hands of the people who make information management decisions for your company.

So tear it out and route to:

☐ MIS Management

☐ Telecommunications Management

☐ Finance Management

☐ Office Automation Committee

If someone already took the ad, take the time to circle Northern Telecom on the reader service card in the back of this magazine and we'll see that you get information on the Meridian* line of products.

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*Registered Trademark of Northern Telecom.
© 1985 Northern Telecom

80 BUSINESS WEEK/DECEMBER 2, 1985

Kissinger Heads Advisory Firm

By Don Oberdorfer

The Washington Post

Washington — Former Secretary of State Henry A. Kissinger has lined up a team of diplomatic and economic superstars, including former British Foreign Secretary Lord Carrington, to support "Kissinger Associates Inc.," an international consulting company that is offering its services to blue-chip clients.

The Kissinger firm, for a retainer reported in economic circles to be $250,000 per client, plans to provide "strategic planning" advice to a small number of large corporate clients.

Kissinger is chairman of the new company, which was formed last month. Its president is retired Gen. Brent Scowcroft, who succeeded Kissinger in November, 1975, as White House national security adviser to President Ford.

Scowcroft said yesterday that the company plans to supply expert advice on making international business decisions. He said it expects to work closer with its clients than risk-assessment groups do. Risk-assessment groups advise companies on the political and financial policies of foreign nations.

Some clients have already been signed up for the service, according to Scowcroft, but he declined to identify them.

According to Scowcroft, members of the board of directors of Kissinger Associates include:

Henry Kissinger

Brent Scowcroft

Lord Carrington

Robert Anderson

* Lord Carrington, who resigned in April as Britain's foreign minister to take charge of the British military response to Argentina's invasion of the Falkland Islands.

* Robert O. Anderson, chairman of Atlantic-Richfield Co.

* Per Gyllenhammer, president of Volvo, the Swedish automobile manufacturing company.

* William D. Rogers, who was assistant secretary of state for Latin American affairs and undersecretary of state for economic affairs while Kissinger was secretary of state. Rogers is now a lawyer in Washington.

Scowcroft said Kissinger Associates, with offices in New York and Washington, will have a staff of about

eight persons. Jeff Cunningham, formerly with a Chase Manhattan Bank-affiliated company in the European currency market, is to be its secretary, Scowcroft said.

Since leaving office as secretary of state in early 1977, Kissinger has served on the international advisory committee of Chase and of Goldman Sachs, a New York investment firm, as well as other business ventures. He has been affiliated with Georgetown University's Center of Strategic and International Studies and has written two lengthy volumes of his memoirs of government service.

After George P. Shultz was nominated as secretary of state in late June, Kissinger was among the first persons Shultz consulted.

DOM
MIL

CHICAGO SUN TIMES
Wed., Aug. 25, 1982

HENRY A. KISSINGER

LORD CARRINGTON

Kissinger
signs team
of superstars

Washington Post

WASHINGTON—Former Secretary of State Henry A. Kissinger has lined up a team of diplomatic and economic superstars, including former British Foreign Secretary Lord Carrington, to support "Kissinger Associates Inc.," an international consulting firm offering its services to blue-chip clients.

The Kissinger firm, for a retainer reported in economic circles to be $250,000 per client, plans to provide "strategic planning" advice to a small number of large clients in the corporate world.

KISSINGER IS chairman of the firm, formed last month. Its president is retired Gen. Brent Scowcroft, who succeeded Kissinger in November, 1975, as White House national security adviser to former President Gerald R. Ford.

Scowcroft said Monday that the firm plans to supply expert advice on making international business decisions. He said it expects to work more closely with its clients than risk assessment groups, which advise firms on the political and financial policies of foreign nations.

Several clients have been signed up for the service, according to Scowcroft, but he declined to name them or to disclose the fees being charged.

Among the members of the board of directors signed up for Kissinger Associates, according to Scowcroft:

* Lord Carrington, who resigned as Britain's foreign minister in April to take responsibility for the Argentine invasion of the Falkland Islands.

* Robert O. Anderson, chairman of Atlantic Richfield Co.

* Per Gyllenhammer, president of Volvo, the Swedish automobile manufacturing firm.

* William D. Rogers, who served as assistant secretary of state for Latin American affairs and undersecretary of state for economic affairs while Kissinger was secretary of state. Rogers now is an attorney in Washington.

Scowcroft said Kissinger Associates, with offices in New York and Washington, will have a staff of about eight people. Jeff Cunningham, formerly with a Chase Manhattan Bank-affiliated firm in the Eurocurrency market, is to be its secretary, according to Scowcroft.

SINCE LEAVING office as secretary of state in January, 1977, Kissinger has served on the International advisory committee of Chase and of Goldman Sachs, a New York investment firm, as well as other business ventures. He also has been affiliated with Georgetown University's Center of Strategic and International Studies and written two lengthy volumes of his memoirs of government service.

Kissinger was among the first to be consulted by George P. Shultz after Shultz was named secretary of state by President Reagan in late June. Kissinger was called in to advise Shultz on the Middle East and subsequently joined Shultz, West German Chancellor Helmut Schmidt and Singapore Prime Minister Lee Kwan Yew at Shultz' California home.

INTERNATIONAL REPORT

Is Kissinger Associates merely selling access to the former Secretary of State or is it
providing useful business advice to companies at home and abroad?

BY CHRISTOPHER MADISON

One of Henry A. Kissinger's former State Department associates, Joseph L. Sisco, himself a Washington consultant, summarizes the guts of the issue: "The phrase consultant can mean a great deal or it can mean practically nothing."

In the case of Kissinger Associates, a New York-based firm begun in 1982, that statement can be reworked into a question. As an international consultant and chairman of the firm, is Kissinger doing a great deal or practically nothing?

Kissinger's fellow consultants, who are skeptical, suspect he is merely selling his access to foreign leaders and his broad knowledge of world affairs.

They view the former Secretary of State as a door opener, a hand holder and a philosophizer for the chief executive officers of U.S. and foreign corporations and see these consulting services as of questionable commercial value in the long run. This view makes them more than a little condescending toward the most prominent entrant in the consulting field.

"I'm fascinated by international political trends, but I can't make a living at that," said Harald B. Malmgren, a for-

mer government official and now a private consultant who specializes in trade and international economic trends.

Naturally, Kissinger and his associates, most of whom first worked for him in the Nixon Administration and have kept up their relationship since, hope to surprise the skeptics. They mean to fall into the "great deal" category by, in effect, transforming themselves from former foreign policy advisers into international businessmen.

Why? If for no other reason than that they, like Malmgren, realize that this is the only way to make a living in their trade.

Kissinger is frank on this point. In a recent interview in his art-filled Park Avenue offices in Manhattan, he said: "When I left government, I had endless opportunities. But they wanted Henry Kissinger for one thing: I should make the introductions and someone else would do the work.

"My knowledge of business was minimal. For me to become a senior partner [in an investment banking firm], every one said it would be easy. But I did not want to sell my contacts."

After a while in such a role, he said, he would become "a nuisance."

Kissinger emphasized what his firm will not do: It will not represent foreign governments and will not lobby in Washington on behalf of clients, although it will, if asked, recommend a good lobbyist in the capital for its clients.

"We don't sell introductions. We don't advertise. . . . All of our clients have walked in the door," he said.

In short, Kissinger Associates aims to do more than peddle its past. In addition to offering broad-brush pictures of political and economic conditions in particular countries and regions, the firm is using its ability to analyze political and economic trends to help clients make concrete business decisions.

By assessing the political outlook in Greece over the next five years, for example, the firm could help a client decide whether to make new investments there or whether to prepare to be forced out by an increasingly hostile socialist government.

In the same way, it could advise companies doing business in the Middle East on the prospects for peace, and, in the case of Eastern Europe, assess U.S.-Soviet relations for the next five years.

In addition, Kissinger's firm aims to be involved in the kinds of international fi-

1452 NATIONAL JOURNAL 6/22/85

nancial deals—helping manufacturers locate markets, helping foreign clients find U.S. companies to acquire, locating merger partners—that have usually been the exclusive territory of Wall Street.

Kissinger's lack of business and economic expertise is well known, and neither of his principal partners, former undersecretary of State Lawrence S. Eagleburger, the firm's president, and former White House national security adviser Brent Scowcroft, its vice chairman, has any economic or financial credentials. (See box, p. 1456.) So the firm has brought on John Haley, an investment banker from Chase Manhattan Bank NA, as deputy chairman and Alan Stoga, an economist from First National Bank of Chicago, to fill in the gaps.

It's a long way from Foggy Bottom to Park Avenue, not so much in geography as in a way of thinking. But Kissinger and his colleagues, none of them excessively modest, show little doubt that they can find their way.

"You come out of government, and you quickly realize that what's relevant for a business is not the same as what's relevant if you're sitting in the State Department," Eagleburger said. "The one element that you have to keep bringing into your head is that there is a thing called profit and loss," he said.

## MEASURING RISK

Part of the skepticism in international consulting circles about Kissinger's firm is related to the doubts about the niche that the former Secretary of State and national security adviser has carved out—political risk analysis.

The concept is relatively simple: An analyst with broad knowledge of political conditions in a particular country attempts to assess the chances that foreign investments in the country will be jeopardized by political, economic or even military upheaval.

It is a field that came into vogue after the fall of the Shah of Iran in 1979. The international business community had established extensive economic stakes in Iran, based on the widely held belief that it was the pillar of security in an otherwise hostile Middle East. The Iranian revolution turned those assumptions into ashes, and business executives have been searching for solutions ever since.

"At the time Kissinger started to do this, U.S. companies were going through a period of considerable turbulence in international developments: oil shocks, exchange rate troubles, protectionism, debt crises," Malmgren said. "Behind all of those things were political trends—shifts to the left and the right."

This led in the late 1970s to an interest among businesses in asking outside consultants to analyze the risks that political upheaval posed in various countries, particularly developing nations.

"A number of firms tried to quantify political risks. But it was not very useful. You can't do it very scientifically," Malmgren said.

In *Managing International Political Risk: Strategies and Techniques* (Georgetown University, 1983), Georgetown professor Theodore H. Moran wrote: "Broad social revolution, while the greatest single source of injury to international investors, still accounts for much less than half and perhaps as low as 30 per cent of the losses due to the deliberate political actions of host authorities. Much greater damage ... comes from business-

> *Some critics view Kissinger as merely a door opener, a hand holder and a philosopher for the chief executive officers of U.S. and foreign corporations and see these consulting services as of questionable commercial value.*

as-usual economic nationalism in the Third World....

International consultants point out another essential difficulty in trying to make a living as a political risk adviser. "General analysis is not sufficient for most companies today," said Helmut Sonnenfeldt, a former Kissinger aide who is now a part-time consultant as well as a fellow at the Brookings Institution. "This type of advice is somewhat less in demand for high fees," he said, "than it was immediately following the crisis in Iran."

And it is available in newspapers and "tipsheets" at lower prices, Sonnenfeldt added.

William D. Rogers, a former undersecretary of State and now a lawyer at the Washington firm of Arnold & Porter, as well as Kissinger Associates' general counsel and a member of its board of directors, said: "Clients are fascinated for 5 or 10 minutes about the problems posed by succession in the Kremlin. What they

want to know about are the prospects for their product."

To some extent, large international banks and oil companies have been doing political risk analysis for years by virtue of their activities in other countries, particularly developing countries.

Kissinger Associates tapped into that expertise last year by bringing on Stoga as senior associate. Stoga, who met the former Secretary of State when he served as a consultant to the Kissinger-led National Bipartisan Commission on Central America during 1983, established and directed the First National Bank of Chicago's country-risk department.

"I think the work that has attempted to quantify risk has not been successful or good," Stoga said. "But it is possible to analyze risk and design a corporate strategy in the context of understanding the risk and managing the risk. What you're not trying to do is tell companies to avoid risks."

Skepticism aside, political risk analysis remains a going concern, and not just for Kissinger. Former Central Intelligence Agency directors William E. Colby and Richard A. Helms have been advising clients on political risk for more than a decade, and the hundreds of former government officials who have entered the consulting business practice some form of risk analysis. (See box, p. 1454.)

There is even an Association of Political Risk Analysts, which is based in Washington and has about 500 members.

There are practical reasons for the increase in risk assessment that fall under the blunt heading of "covering your ass" in consulting circles.

"These days, in case an investment goes sour, it is useful for a company to be able to say, 'We got this expert advice and acted on that basis,'" said Robert D. Hormats, another former Kissinger associate and now a vice president of Goldman Sachs & Co., a New York investment bank. They have to show "due diligence" in exercising their fiduciary responsibility, he said.

Political risk analysts are "performing a very useful service," Hormats said. "It's a perspective that companies don't have already. If you're investing today, you want a judgment, 'Is this a politically stable country?' You're basically paying for good judgment."

But an official of a major oil company that does not use outside political risk consultants said, "Hiring consultants today is often a matter of getting someone outside to confirm judgments already made inside."

And Georgetown's Moran said, "People are paying $10,000-$40,000 to be able

NATIONAL JOURNAL 6/22/85 1453

to tell the board that Kissinger said it was
not too risky."

"I couldn't say it isn't true," Eagleburger said. "I would still argue that the CEO was able to make a more informed judgment after listening to us than before."

STARTING OUT

When the firm was established in
1982, Kissinger Associates had a limited
scope. "When we started out, we did
broad-brush advice on the political condi-
tions in the countries in which our clients
had to operate," Kissinger said. "We
would tell them the risks. But to keep it at
that level of abstraction is not fair to the
client."

Consulting for corporate clients was
blended in with Kissinger's many speak-
ing engagements and, to an extent, the
young firm, prestigious board of directors
or not, was merely selling Kissinger him-
self, even by Kissinger's and
Eagleburger's estimation.

But this began to change by the time
Eagleburger joined the firm late last
year. Although he was long
associated with Kissinger—he
served as an aide on the Na-
tional Security Council staff
during the first years of the
Nixon Administration and
later helped run the State De-
partment for Kissinger—
Eagleburger is energetic, am-
bitious, successful in his own
right and in need of greater
challenges than could be
found in merely keeping Kis-
singer on schedule and out of
trouble.

It is clear that Eagleburger
would not have joined the firm
if it were to be a limited opera-
tion.

"We turned it from a one-
man show into a professional
organization," Kissinger said,
referring to Eagleburger's
role. "He's trying to institu-
tionalize the operation," Eagleburger
said of Kissinger.

Eagleburger is also trying to unwrap
some of the cloak of secrecy surrounding
the firm, urging Kissinger to agree to
more press interviews and to give a gen-
eral picture of its operations.

Client identities and fees, however, are
still closely guarded secrets, an arrange-
ment aided by a standard mutual agree-
ment between Kissinger Associates and
the client not to make the relationship
public. It not only protects the client but
it also protects Kissinger from having his
name bandied about by boastful clients.

At least two companies—Atlantic
Richfield Co. and Fluor Corp.—have in

the past confirmed that they are clients
but declined to discuss details. It can be
inferred from discussion with
Eagleburger and others in the firm that
they also count a major U.S. auto com-
pany as well as other oil companies, a
European manufacturer or two and more
than a few banks among their estimated
30-35 clients.

Annual fees are reportedly in the vicin-
ity of $200,000.

Another trademark of the firm's opera-
tions is that most consultations are con-
ducted at the highest level. Kissinger,
Eagleburger and Scowcroft usually meet
about three times a year with a client's
top officers.

According to Rogers, the risks of be-
coming "Henry Kissinger Inc." were
identified early on, when ideas were first
being put on paper. Rogers was involved
in that planning.

"The conclusion was that if the group
was only able to continue to discuss im-
portant global political and economic
trends in the abstract without getting
involved in the decisions of each client,

ment, getting to this point is usually a
two-step process.

"My main asset at the time I started,"
Sonnenfeldt said, "was that I had judg-
ments about particular countries. I main-
tained a certain level of information
through a network of contacts among
government officials and journalists. I
still have those contacts. But a lot of the
companies have more access to that kind
of information" through various other
sources.

Sonnenfeldt said that his value to his
clients now is in his ability to help them
make concrete business decisions and is
derived as much from his knowledge of
their operations and options as it is from
his general knowledge of world affairs
and contacts.

WHAT THEY DO

Kissinger said his firm is moving in the
same direction. "What we do now . . . is
get involved in the strategic decisions that
[clients] have to make, how to accomplish
[their objectives] based on our knowl-
edge," he said. "Our specialty is the rela-

> Some international
> consultants say that
> getting foreign policy
> information is not a
> mysterious process.
> "Everything you need is
> in the public domain,"
> says consultant
> Joseph L. Sisco.

that would run thin pretty fast," he said
in an interview. "The clients would be-
come disinterested rapidly. You could do
the same 'dog and pony show' for only so
long."

That's a conclusion echoed by other
international consultants.

According to Sonnenfeldt, who does a
limited amount of international corporate
coconsulting, there are two points at which
a consultant can be involved: at the plan-
ning stage and in the decision stage.

To be worth his fee, a consultant has to
get involved in the decision making, and
to do that, has to learn about the client's
business.

For a consultant coming out of govern-

tionship between political and economic
conditions."

The firm still does the broad-brush
analysis of world affairs that was its stock
in trade when it began. Although Kissin-
ger won't disclose client names,
Eagleburger said a typical client is a
foreign-based international bank that
calls Kissinger in several times a year for
a "strategic overview" not aimed at spe-
cific commercial issues but as a way to
keep the bank's senior staff up to date.

The next level of specificity might in-
volve Kissinger Associates in helping a
large U.S.-based multinational firm eval-
uate its business potential in places such
as Eastern Europe in which international

NATIONAL JOURNAL 6/22/85 1455

Kissinger's Associates at Kissinger Associates

Henry A. Kissinger's key colleagues at Kissinger Associates, the consulting firm that he chairs, were his top aides almost from the beginning of his government career during the Nixon and Ford Administrations.

Lawrence S. Eagleburger, president of the firm... First worked for Kissinger as his executive assistant when the latter became President Nixon's national security adviser in 1969... After a tour at NATO and at the Defense Department, rejoined Kissinger at the State Department in September 1973, again as his executive assistant... In 1975, named undersecretary for management, a position from which he was said to "run" the department for the Secretary... Served as ambassador to Yugoslavia during the Carter Administration and then, during the Reagan Administration, as undersecretary of State for political affairs under Alexander M. Haig Jr. and later George P. Shultz. ... Has reputation for being smart, affable and an effective bureaucratic infighter... Now 55.

Brent Scowcroft, the firm's vice chairman... Stayed behind to run the National Security Council staff when Kissinger left the White House in 1973 to become Secretary of State but did not inherit Kissinger's title of assistant to the President for national security affairs until November 1975... A career Air Force officer, he joined the White House staff in 1972 as Nixon's military assistant and became Kissinger's deputy a year later... Always portrayed as the intensely loyal staffer.

... Graduate of the U.S. Military Academy and taught Russian history there before being assigned overseas.

... Later served as special assistant to the Joint Chiefs of Staff.

... Resigned his commission in 1975.

... Joined Kissinger in setting up Kissinger Associates in 1982.

... Now 60.

William D. Rogers, though not a full-time member of Kissinger Associates, remains a close adviser to the former Secretary of State and has been active in helping shape the firm from the outside... Member of its board of directors and its general counsel... Washington lawyer at Arnold & Porter since the early 1950s... Specialist in Latin American policy... Held several foreign policy posts, including assistant secretary of State for interAmerican affairs and undersecretary of State for economic affairs under Kissinger... Also a senior counselor to Kissinger's National Bipartisan Commission on Central America where, incidentally, he recruited economist Alan Stoga, now senior associate at the firm, to serve as a consultant... Helped draft commission report... Now 58.

political trends, such as East-West relations, have a great impact on business opportunities.

Although this type of work does not involve Kissinger's firm deeply in specific business decisions, it does require a knowledge of the client firm's goals.

On an even more specific level, Kissinger Associates might advise a U.S. company on its dealings with a Middle East country with which it is contemplating a specific transaction or project.

Kissinger, whose credentials in the region are unsurpassed, might help a U.S. oil company with limited Middle East experience in its attempts to negotiate

and work with a government in the region for the first time.

Consulting sources said the Kissinger firm also bills itself as a specialist in understanding world oil markets and world energy outlooks, both useful tools for businesses that are trying to plan intelligently. Stoga is a specialist in oil markets as well as international debt.

What Kissinger Associates is doing, in one sense, is very general—it will not, for example, negotiate financing for projects, although it may help a client find someone to do that.

On the other hand, the information is useful because it is coming from Henry

Kissinger and from those close to him, who have their own reputations as policy insiders. "People are buying big-name expertise," said Georgetown's Moran.

"They're advising on major political trends and questions," Hormats said. "If you're General Motors and you want to invest in Spain or Portugal or Italy, Kissinger's firm would sort out the likely political scenario over the next 10 years and predict how it would affect economic conditions. It's macro stuff, political risk assessment of the broadest sort."

Stoga said some companies, particularly oil companies and big banks, are more inclined than others to factor geo-

1456 NATIONAL JOURNAL 6/22/85

political strategies into their decisions.
"If companies are going to operate on the
world stage, they have to have that kind
of analysis and are usually comfortable
thinking in those terms," he said.

In other instances, Stoga said, the firm's "country knowledge and expertise" is combined with the client's "product knowledge" to help a large European-based company evaluate new markets. Kissinger Associates will help devise the firm's risk-management strategy, he said.

Strategy has to be based on informa-
tion. "We have a singular ability to find
out what top people around the world are
thinking," Kissinger said.

In fact, one of the advantages of being
Kissinger is access: Whenever he travels
abroad, he tries to see the head of state, if
possible, to get a briefing on current
trends and concerns. Eagleburger
calls this keeping his "mental capital"
current. It certainly ensures a differ-
ent perspective from that held by the
average Washington analyst who gets
most of his information from public
sources.

"No one can predict the future," Eagleburger said. "What makes us unique is a feel for the sensitivity of the situation and where it is likely to go."

He and Kissinger also maintain that
it is not very difficult to stay plugged
in, as long as you don't try to guess
what will happen from day to day.

"When you leave Washington, the single most important lesson is to stop monkeying around in day-to-day decisions," he said. "You can't compete with government officials. On the other hand, if you have been in government and maintain a number of contacts, together with newspapers and other sources of information, you can get a 98 per cent accurate picture of the three-year situation.

"If you've been with it long enough in Washington, since the limits on anyone's foreign policy are fairly clear, you can be reasonably confident in predicting how things will be dealt with. I found that the [foreign policy] experience was transferable in ways I hadn't expected," Eagleburger said.

Other consultants agree that getting
the information is not a mysterious pro-
cess. "Everything you need is in the pub-
lic domain," said Sisco, who adds that
Washington is an ideal place to operate
because there are "experts" on every
conceiveable subject, as well as ample
information.

Kissinger Associates has four research-
ers to comb newspapers and other sources
for information, three of them Washing-
ton-based, as is Scowcroft, who preferred
to continue living in the capital.

CHANGING HATS

Making the transition from Kissinger
the geopolitical strategist to Kissinger the
international businessman is not without
its trials. An understanding of business
and economics is something the former
Secretary of State and other firm mem-
bers have been picking up haphazardly in
contact with clients. Sitting on corporate
boards also helps, Eagleburger said.

Rogers said Kissinger has become im-
mersed, for example, in the Latin Ameri-
can debt crisis. "He's radically beyond
where he was before," Rogers said, and
he is persuaded that what happens in the
economic realm has a major impact on
world events. That's not something Kis-
singer would have necessarily accepted a
decade ago, he added.

"When we started out, we
did broad-brush advice on
the political conditions in
the countries in which our
clients had to operate,"
Kissinger says. "We
would tell them the risks.
But to keep it at that level
of abstraction is not fair
to the client."

But can Kissinger think like a business-
man instead of a diplomat? Said Stoga: "I
don't know that I would say he thinks like
a businessman because I think clients
want him to think like Henry Kissinger
and [help them] understand the conse-
quences of that thinking. It's not a transi-
tion from foreign policy to business as
much as it is an addition to his interests.
He has been adding a dimension, not
shedding the past."

Ultimately, Stoga said, whether the
firm continues to attract clients will prove
whether it is giving corporations useful
information or merely interesting foot-
notes to recent history.

There always will be an element of the
firm's business that is based exclusively
on Kissinger's name recognition. Said
Georgetown's Moran, "A certain amount
of it is the people who simply want to hire
Henry, want to have lunch with him."

Are some clients signed up only so that
they can have access to Kissinger?

"Maybe 10 per cent," Eagleburger said.

It is also inevitable that the firm will
use its Washington knowledge and con-
tacts to do business. While Kissinger and
Eagleburger said they don't "milk" their
former associates still in the government
for information, they are not averse to
asking their Washington contacts for in-
formation about events they are analyz-
ing for a client. And while they don't
"open doors," they can certainly advise a
client on how to get them opened himself.

"Washington is, after all, the heart of
the foreign policy business," Scowcroft
said.

One of Scowcroft's tasks is to advise
clients on the atmosphere for arms con-
trol and of U.S.-Soviet relations. While
these events do not affect many specific
business decisions, he said, it is "part of
the international setting" for business.

On a more specific level, some for-
eign clients are interested in potential
business from the Strategic Defense
Initiative ("Star Wars") being devel-
oped by the Reagan Administration.
Even though he has publicly criticized
aspects of the program, Scowcroft
may advise clients "not on how do
they get a piece of the action but what
it means, how it might be affected by
the arms control negotiations and how
they can usefully participate yet pro-
tect themselves against the political
vagaries."

China could be another source of
lucrative business for the firm. Kissin-
ger, of course, was the central figure
in reestablishing U.S.-Chinese rela-
tions during the Nixon Administra-
tion, and Eagleburger said clients are
seeking the former Secretary's help in
developing commercial ties there.

"Henry's been very reluctant to get
involved," he said. His contacts there
are "not something he wants to trade on."

Perhaps not surprisingly, the most dif-
ficult aspect of the transition from gov-
ernment to business for Kissinger Asso-
ciates may be understanding the profit
motive of the corporate world. Scowcroft
called it "the most challenging" part of
the switch.

"Some of us who were in the govern-
ment felt it was important for the U.S.
national interest to maintain close rela-
tionships with Eastern Europe—to loosen
Eastern Europe-Soviet ties—through
economic relations," Eagleburger said.
"But when you change roles and advise
someone in business on whether to invest
there, [you have to say that] it's not the
best place to invest.

"It's the difference between a national
objective and a business priority. I would
have real trouble being involved in trying
to increase trade with the Soviet
Union."

NATIONAL JOURNAL 6/22/85 1457

PEOPLE MAGAZINE

April 5, 1982

# AFTER OPEN-HEART SURGERY, HENRY KISSINGER MARCHES BACK ON THE ROAD TO HEALTH

"If another doctor had come along with a better explanation, I would have happily seized it," joked Henry Kissinger, after explaining why he had entered Massachusetts General Hospital for heart surgery. Bothered by shoulder pains, the former Secretary of State had learned he faced a life-threatening situation: All three main arteries supplying blood to his heart were at least partially blocked. On Feb. 10 the 58-year-old diplomat underwent a four-and-a-half-hour triple bypass operation during which doctors used 18 inches of vein taken from his right leg to detour around the clogged arteries. Displaying remarkable calm and good humor in the face of his ordeal (it proves "I do have a heart," he quipped), Kissinger had spent the evening before surgery working with a TIME magazine editor on excerpts from the second volume of his memoirs, Years of Upheaval (Little, Brown, $24.95).

Three weeks after the operation—one of approximately 100,000 bypass procedures that will be performed in the U.S. this year—Kissinger flew to Palm Springs, Calif. with his wife, Nancy, 47, to continue his convalescence. There, in the home of his longtime friend MCA President Lew Wasserman, he met with PEOPLE's Gall Jennes and recounted his potentially deadly affair of the heart. Three days later the Kissingers were suddenly summoned back to New York. Henry's father, Louis, had died at age 95.

I had constant pain in my right shoulder and neck from two separate injuries for about a year and a half. At one point I went to a doctor about the shoulder and he wanted to operate, thinking it was an orthopedic problem. I was working on my book, so I didn't want to face surgery. Then last fall an acute pain developed right next to it, down my shoulder blade and across my right collarbone. I made an appointment at Massachusetts General Hospital. They found there was something amiss orthopedically but not enough to explain the severity of the pain. The doctor suggested I return for a stress test to

see if the heart might be involved.

A week or two later there was a blizzard in New York. I had to abandon my car at the U.N. and walk about six blocks to my apartment. On the way, the pain became excruciating. Also, for the first time, I noticed a shortness of breath. I told this to Nancy. We were going to Acapulco, but she said she wouldn't go unless I had another checkup. She called Dr. W. Gerald Austen, an old friend and one of this country's noted heart specialists. He arranged for me to return to Mass General for two days.

They did two things, a bone scan to check the orthopedic part and a stress test to determine the condition of my heart. I passed the bone scan and flunked the stress test appallingly. I mean really dangerously. The test also involves injecting radioactive isotopes to show blood circulation in the heart muscle. Dr. Austen explained that I had a serious problem, but he could not tell without an angiogram whether it would respond to drugs or whether it would require an operation. He suspected it required a heart operation.

They took an angiogram the morning of Feb. 8 and found that one artery was 100 percent blocked. So I only had two functioning, and one was 60 percent blocked. They felt I'd better get an operation as quickly as possible.

My first reaction was incredulity. I've never been sick—except for flu or a cold—a day in my life. I'd never stayed in a hospital except for an appendix operation 30 years ago. Now I had an unbelievable schedule ahead of me, and I began bargaining with poor Austen to see whether he could operate next July 15. Then I remembered I had something on July 20. Well, maybe Aug. 1, I thought. Then I remembered I wanted to go to Africa in September. And to China in October. I was trying to treat surgery like an event that had to be put on my schedule. This was, of course, nuts, because the penalty of delay is a heart attack.

They acted wisely. The doctors didn't argue with me until they had all the facts and the angiogram showed the blockages. Then they said there was no way I could last until July 15 without

risking a major heart attack. They said that this operation doesn't really change your life, but a major heart attack changes everything. There was no further controversy. I said: "Let's do it as quickly as possible."

I have no way of knowing what caused my heart problem. I've never smoked, I almost never drink. I always

46

Kissinger (striding through the California desert at Palm Springs) was "enormously touched" by mail from "ordinary people wishing me well."

had the idea I had enormous endurance. When more work needed to be done, I just added three or four hours to the day or worked through the night. Four or five hours sleep was average. I certainly hadn't been taking care of myself, and I certainly didn't watch my food intake. I didn't spend enough time on exercise. The best I ever managed

was an occasional swim or walk. I suppose all these factors contributed, but I don't know.

The night before surgery I was working on some 15,000 words of copy for TIME while the nurses were prepping me, shaving my chest and putting this yellowish antiseptic solution on my body. One of my two surgeons, Dr.

CONTINUED

Photographs by Steve Northup

Mortimer J. Buckley, came in, and I said, "I'd like to talk to you, but I've got to get this material to TIME tonight." I was antagonizing the guy who had my life in his hands! Still, I talked to the TIME editor for an hour and a half. What else could I do? The alternative was to lie around contemplating the operation.

All the doctors said that I was going to have a hellish two days after the surgery, but that I'd never remember a minute afterward. It's true I had a bad two days, but I remember it all. You come out of that operation with some 12 lines and drainage tubes connecting you to such things as the IVs, the electrocardiographic and blood pressure monitors. Because of the respirator, you have a gag down your throat and cannot make a sound. That's not pleasant. As soon as I came out of the anesthesia, I began writing notes to Nancy and the doctors asking when the gag would be removed and urging Nancy to go to the hotel for some sleep.

It was a new experience for me to be absolutely dependent on people. I couldn't even turn over without nurses helping me because the pain would have been too great. I had to be turned

regularly, and my vital signs had to be taken every half hour. So I would just doze off, and then somebody would wake me up, give me a pill or take my pulse. All I wanted was to be left alone. They asked Nancy what music I hated most. She said rock 'n' roll, so they put on some rock 'n' roll music just to get the juices flowing again. Then they put a movie on television. I was still so doped I couldn't fully understand it. But they kept me alert through that first night.

One of the least pleasant aspects of recuperating is that they make you cough after they've broken your breastbone in order to get at your heart. They make you cough seven or eight times a day to prevent pneumonia. One person wrote me that you think the terrible time is when you cough; in fact, it's that first sneeze. My first sneeze was no joke, but luckily it came three weeks after surgery.

I owe a lot to Nancy for getting me through the first few days of my recovery. She stayed with me the whole time, when things were the most painful. I don't really know why I've healed so well. I credit some outstanding doctors, a basically strong constitution

and my refusal to be an invalid. I called from Secretary of State Hall, from four American Presidents—Reagan, Ford, Nixon and Carter. Considering what I said about Carter in the last elections, his was an act of great human generosity! Three days after the operation I was having visitors and trying to stay as close to my normal concerns as I could. In the intensive care unit I threw them for a loop by saying I wanted to read. They hadn't had anybody do that. And I did read a little bit, mostly magazines.

I didn't begin to work until I left the cardiac care section eight days after surgery. I don't want to give you the wrong impression. I was working maybe an hour a day then, not eight hours a day—although I will be in another couple of weeks. Eight hours is about two-thirds of what I usually do. I have tried to treat the illness like a nuisance to be gotten rid of. With my new schedule of walking and physiotherapy, the sort of work that I usually could knock off in one afternoon now takes me a day or more. I'll have to take a nap every afternoon for a few weeks. I started out walking about 20 minutes, and now I'm up to 40 minutes twice a day.

I weighed more than 200 pounds at the time of the operation but have lost 19 since then and have another 15 to go. All the things I like are bad for me. I like sausage. I like whipped cream. I like lots of eggs. Lately I have been eating a lot of salads—not my favorite—and chicken. Still, I can't do better than lose three or four pounds a week. But I have to keep it off. I don't want to go through this again.

I would think by the middle of April I will be close to a normal work schedule. I am not yet writing the next volume of memoirs—on the Ford years—but I am reading the research material.

There is no question that when you learn that you have physical limits, that is something important in your life to think about. But although surgery was a painful experience, there is not going to be a traumatic change in my life. I return to Mass General on April 16 for a postoperative checkup. The day before, I am going to take all the doctors on my case and their wives, 17 people, to dinner at Locke-Ober—and I will break their hearts by breaking my training in the most egregious fashion. ☐

Though Henry's eager to get back in the swing, Nancy blames "accumulated fatigue and stress" for his heart problem.

48

* * * SEP 1 5 1982

Kissinger as analyst

(ABC News, counting on a Foggy Bottom veteran to help make the news clearer, plans to hire former Secretary of State Henry A. Kissinger as a news

analyst and information contact.

Kissinger is to be available to contribute to such shows as "Nightline" and "This Week with David Brinkley."

The contract with Kissinger, which became known Tuesday, is expected to be signed later in the week.

ABC already has two other Washington notables in its stable: former White House press secretary Jody Powell and columnist George Will.