The Man Who Offers Pain

Secretary Schlesinger's abrasive tactics can cause trouble

At the very center of the dispute over Mexico's vast oil and gas reserves is the autocratic and intellectual Energy Secretary James Schlesinger. TIME'S Washington bureau chief Robert Ajemian talked to Schlesinger and others in the energy field about the controversy that keeps swirling around the Secretary. His report:

The man Jimmy Carter has grandly described as his most important appointment, James Rodney Schlesinger, has succeeded in alienating the whole Mexican government and jeopardizing negotiations with a country whose energy resources the U.S. will surely need. For those who have watched the onetime economics professor routinely offend the Congress, the oil and gas industry, consumers and even his own Department of Energy, that news is hardly a surprise. But this time Schlesinger may have gone too far. His loyal sponsor, the President, finds Schlesinger's public hard line toward the Mexicans a liability, and when the energy czar last month repeated his view that Mexico's price for natural gas was too high, Carter was furious. His aides swiftly dissociated the President from the Secretary's speech.

Schlesinger's running war with the Mexicans started in December, 1977 when Foreign Minister Santiago Roel and Petroleum Chief Diaz Serrano came to Washington to seek approval of an already negotiated deal between their government and U.S. pipeline companies for Mexican natural gas. The tentative agreement would have delivered 2 billion cu. ft. of gas per day to the U.S. at $2.60 per thousand cu. ft. More important, the deal would have helped speed up the development of the Mexican oil industry. But Schlesinger dumbfounded his visitors by stating that the proposal was unacceptable; the Mexican price was too high, he said. When his callers asked if he had a counteroffer to make, Schlesinger gruffly said he had none.

The meeting collapsed. Outside the White House, the Mexicans told their U.S. escorts they had been treated extremely rudely. "For half an hour, he gave us a pompous lecture," one of them said. The talks lay dead for eight months while Schlesinger spent 45 hours a week on Capitol Hill, lobbying to get his riddled energy bill through the Congress.

Last fall Mexico's President Jose Lopez Portillo tried to reopen the negotiations, dispatching ex-President Miguel Aleman to make contact with Schlesinger. Unable to meet the Secretary, Aleman went around him and spoke with White House aides. Schlesinger contends that he tried to keep the talks alive but that the Mexicans turned him down; the Mexicans vehemently say this is untrue.

For months the U.S. embassy in Mexico reported nervously that Schlesinger's obstinacy was worsening the situation. Warned the embassy: "Because of the breakdown, the Mexicans have reversed their field completely on gas and oil development." The State Department and National Security Council were both anxious about Schlesinger's inflexibility and told the President so. Nonetheless, Schlesinger held to his bargaining position that the Mexican price would be unfair to U.S. and Canadian producers. That view was disputed by many, but the chief criticism of Schlesinger was that his approach was aloof and arrogant.

Here was an extraordinary spectacle: one highly intelligent man operating at the pleasure of the President and disrupting sensitive nation-to-nation negotiations. Yet Schlesinger remained in charge, and now the burden was on the President himself to patch things up and move ahead with the Mexicans. The discord contrasted sharply with Carter's desire to project an image of consistency and competence within his own Administration. Then last week Schlesinger set off still another tempest: his pessimistic warning that the present curtailment of oil from Iran is prospectively more serious than the 1973 Middle East embargo sent a shock wave through the stock and gold markets and drew an immediate challenge from Treasury Secretary Michael Blumenthal (see BUSINESS).

Schlesinger, 50, has long had problems of this sort. Before Jerry Ford took over the presidency, he doubted that he could work with Schlesinger, who was then the Defense Secretary. Schlesinger at the same time told friends he thought Ford was a lightweight. One day Schlesinger sat in the Oval Office and carefully lectured the President about how House Appropriations Chairman George Mahon must be dealt with on the defense budget. Ford, who considered himself the master tactician on the Hill, where he had worked with Mahon for 25 years, was appalled at this condescension. He soon fired Schlesinger.

It was that kind of Schlesinger approach that weighed down the 18-month struggle to pass the energy bill. Unlike Ford, Carter had no expertise in the Capitol; as an engineer he especially valued Schlesinger's technical ability and his tough intelligence. Schlesinger was allowed to operate independently on the Hill, and before long the haughty technocrat was in real trouble. "There was no consultation," said a member of the White House political team, who recalls Schlesinger sitting in at the Capitol and stonily waving off compromises. "He has a contempt for the political process."

The energy committee had its own hard time with Schlesinger. "Whenever he dealt with anybody," remembers one swing Senator, "he lost a vote." When it appeared that the bill was totally failing, the Administration rushed in reserves --political operators Hamilton Jordan, Robert Strauss, John White, Anne Wexler --for a rescue. Schlesinger views the matter differently: he contends that the White House staff panicked and that its help was never needed.

Some of Schlesinger's associates argue that he should be kept out of negotiations, since he deals more comfortably with concepts than with people. One close friend suggests that the Secretary should be planted in a room, fed information and let out every three months to offer ideas. "Jim can identify problems," says the friend, who admires Schlesinger, "but he can't implement solutions." There is not much disagreement with that description at Schlesinger's Energy Department, where he is regarded as a poor administrator. Even Schlesinger concedes that he functions better in an established structure--like CIA or Defense--than in setting up a new organization.

He often intimidates his staff. Not long ago, he coldly dismissed an Assistant Secretary, a man whom he had talked into coming from California to join him, with barely a word. Stories about his superiority complex are numerous. "I saw him melt the stars off a four-star general, one at a time," remembers an aide with awe. The aide recalls something else: a Schlesinger mean streak that sometimes puts people into paralysis. One night a Schlesinger bodyguard noticed as he drove his boss to a formal dinner party that the Secretary had forgotten to put on his black bow tie. Even as Schlesinger walked in the door, the man considered calling him back, but he was just too scared to do so.

To paint Schlesinger as unrelievedly difficult is too harsh. His intimates say that to see him cross-legged on the floor, guitar in hand, singing his own self-mocking lyrics, is to know a different person. And there is no doubt about his capacity to analyze and understand the complex issues of energy; he is the match of any expert in the field. It is his ability to lead that is questioned.

Last week, sitting in his long, gold-carpeted office overlooking the Capitol, Schlesinger stoutly rejected criticism of his performance. He had his familiar rumpled look, shirttail out, socks limp over his ankles, but as he got up to stand by the window, his tall, flat body looked powerful. "It's convenient to make me the fall guy," he said sourly. Close friends say he is really bored now with his energy job and yearns for his past engagement in foreign affairs or national security. One of them called recently to talk about the price of gas, and all Schlesinger wanted to discuss was the Middle East. After being fired by Ford, Schlesinger became Ronald Reagan's principal foreign policy adviser for the six months before the 1976 convention. Reagan aides called him a couple of times a week, and Schlesinger asked only that his advice not be made public. When Reagan lost, Schlesinger, the honideological pragmatist, moved easily to Carter.

Now the Secretary paced the room and talked about his work. "This is the toughest job I've ever had, a no-win job," he said. Schlesinger declared that no area of Government involved such a multitude of self-centered interests: "Every Congressman on the Hill has a gasoline station on some corner that he wants taken care of." Telling Americans to cut down on energy, he shrugged, is not easy. "I'm trying to sell an unpleasant future by offering pain today."

Perhaps it is Schlesinger's misfortune that the pain he offers--and the pain that Americans surely need--is too often made intolerable by the way he offers it.

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