NOT LONG AGO, a senior administration official got his secretaries of state mixed up. The official was in his office, some three months after Alexander Haig resigned and George Shultz had replaced him, when a call came in from the State Department. He grabbed the phone, fast.
"Yes, Al!" he said.
"This is George," said the secretary of state.
"George," said the official, embarrassed. "I'm sorry. How many times have I done that to you?"
"Infrequently," said Shultz, chuckling.
The official was appreciative of Shultz's good nature. "He was cute about it," he says now. "Typical of his whole attitude toward life."
It was certainly a switch from the volatile Haig. To Shultz, a man whom friends describe as "distressingly normal," minor faux pas don't seem to matter.
What matters is this:
"I had an experience back in 1968 that had a big impact on me," he says. "I went to the Center for Advanced Studies out in Stanford. They invite 50 scholars a year to come there. You don't have any duties at all. Nobody to report to. No nothing."
On his first day there, Shultz was led to his study by Meredith Wilson, the center's former director. The study had a view of San Francisco Bay. "Not all bad," Shultz continued, speaking at a recent breakfast with editors and reporters. "I had a desk, a chair by the desk, another chair if you had a visitor. And that was it. I said to him, 'Where's the telephone? . . . I can't do without a telephone . . . He said, 'Well, we don't believe in telephones. You have a little buzzer thing here . . . Then you go to a booth and you take your call.'
"So I went and I looked at the booth . . . No place to write anything down. It was clammy. It was the only really unpleasant place in the whole shebang. And basically he said, 'Try it, you'll like it.' And after a couple of weeks, I settled in on that and got hooked . . .
"What I found was happening was . . . you're working from the inside out. You have your problem, you're working at it, and gathering your materials, and writing about them and so forth. And it's solely up to you how hard you work . . . In administrative jobs, your time is dominated by what somebody does to you . . . you know what happens to your life. You spend it coping. You're working from the outside in.
"But after a couple of weeks of that I suddenly realized . . . 'I am working from the inside out. I'm setting my own agenda . . . If I want to go play tennis in the middle of the afternoon, so be it. Or if I want to stay up all night trying to finish a chapter, I do that . . . And life isn't like that. But maybe it's possible to capture a little piece of it.' And that's what I've tried to do." Island of Calm
George Shultz became secretary of state when that department and the White House were at war. Five months later, he's calmed the tone of American foreign policy. He uses none of the personal pyrotechnics of intense "A" types, instead operating as a deft "B." He cleverly got Ronald Reagan to reverse his position on the Soviet pipeline, the dispute that was ripping up the NATO alliance. At the same time, he gave Reagan a face-saving way out. But he apparently has no foreign policy of his own, only that of his president. Many say it's difficult to know what he stands for.
Friends say he's an old shoe. "He's a really interesting dull person," says one. It's difficult to find anyone who dislikes him, but it's even more difficult to find someone who thinks it's possible to plumb his soul.
Shultz is a former Marine who met his wife, Helena (who friends call O'Bie), in the Pacific during World War II; friends describe their courtship as if it's something out of "From Here to Eternity." At his house in California, he still uses a set of second-hand dining room furniture he bought 20 years ago for $300 from his friend, the Nobel Prize-winning economist George Stigler. But there's a hot tub, too. In the late '60s, as dean of the University of Chicago business school, he threatened to quit over a showdown between students and Dow Chemical, a manufacturer of napalm.
Essentially, Shultz sided with Dow. It took two days of pleading from Stigler and others to get him to change his mind and stay.
He was the longest-serving member of the Nixon administration, holding three Cabinet posts in five years--a period in which he opposed wage-price controls, then ran the program after the decision was made. But he refused to use the Internal Revenue Service to go after administration opponents, as Richard Nixon demanded. For that, Nixon can be heard calling him a "candy ass" on a White House tape. Nixon also said he'd hate to play poker with him.
"There are times when I've had conversations with him and have presented my argument as strongly as I can," says one State Department official. "And he'll respond, 'That's very interesting. Thank you.' You haven't a clue how he thinks."
"He's great for substantive conversation," says John Jeuck, a professor at the University of Chicago business school who's known Shultz for 25 years. "But he doesn't waste time on those lay-therapeutic sessions you have with some other friends. I'm sure I could go lay something on him, but I don't think he'd say anything back."
He enjoys knowing the right people and being in the right places. (Former West German Chancellor Helmut Schmidt was his guest last summer at the Bohemian Grove, the controversial retreat for corporate and political giants -- but not women -- in the California redwoods.)
Yet he flaunts neither his money nor ambition, and both are considerable. Friends say he badly wanted to be secretary of state, but not badly enough to lobby the president's Kitchen Cabinet cronies before Reagan took office. Although Reagan called him during the transition and vaguely offered him a spot in the administration, friends say Shultz was hoping for -- and would only have said yes to -- an offer to be secretary of state.
When he got the job, he spent his first months at his desk in his favorite Foggy Bottom cubbyhole. But now he's beginning to do what secretaries of state always do: climbing aboard planes and flying around. After five days in Latin America, he left Monday, 39 hours later, for a two-week, grand tour of Europe. Yesterday, on his 62nd birthday, he met with both Pope John Paul II and Egyptian President Hosni Mubarak in Rome. He also told reporters that Poland's moves to end martial law weren't significant enough to end U.S. sanctions. "What we have seen so far is some words, but nothing of substance," he said. In February, he may visit Peking.
He's also doing things secretaries of state don't usually do. Drawing on his background as economics chief in the Nixon administration, he's helping his friend, Treasury Secretary Donald Regan, with international financial policy. And last month, he was over at the White House for budget meetings.
He looks massive, authoritative and somber. But he also has a puckish, baggy-eyed face, and often looks as if he's just crawled out from hibernation, quizzically sniffing the air. He seems more inner-directed than most people, with little apparent need to be defined by the outside world. It often intrudes. When he was secretary of labor in the Nixon administration, he amazed everyone by closing his door an hour a day to think.
He's determined not to become a personality and wouldn't be interviewed specifically for this article. But 60 people who know him did agree to interviews--including four of his five children, several White House advisers, numerous State Department officials and many close friends.
"The question is," says one of his colleagues at State, "is George Shultz too good to be true? Everybody thinks he's smart, and he is. Everybody thinks he's very amiable, and he is. But there are a lot of smart and amiable people out there who aren't secretary of state. There's got to be more to it than that." The New Boss
"The level of tension is down," says one State Department official. "People spend a lot less time worrying about the psyche of the boss. With Haig, there was a lot of concern about what sort of a mood he was in that day, about how you were going to reach him. I never do that with Shultz. You just draw up your best argument. He doesn't seem to be turned on by certain countries or words."
He is nearly the opposite of his predecessor. Haig sometimes saw the world as divided between darkness and light; Shultz sees it more as a problem of management. Haig used his staff meetings for, in the words of a State Department official, "rather paranoid monologues"; Shultz assigns staff members to prepare 10-minute talks on, say, U.S.-Japanese relations. Haig had plenty to say to journalists at Washington social functions; Shultz is one of a handful of people in town who ignores the press on the cocktail circuit. "You know, I don't like being interviewed at parties," he recently told a reporter, his blue eyes set in an icy stare.
Haig had well-publicized battles with Secretary of Defense Caspar Weinberger; State Department officials say that Shultz, although mad enough to try to stop Weinberger's Middle East trip after Reagan's peace initiative speech last summer, never took it to the president -- who would have been forced to decide between advisers. (Weinberger denies any disagreement with Shultz. "If the implication was that there was some big fight, that's absolutely wrong," he says. "When it was understood that my trip had no connection to the president's peace initiative, there was no problem.")
Haig always used the secretary of state's magnificent office, a formal antique-filled expanse with a view of the Lincoln Memorial and the Washington Monument; Shultz uses the office only for meetings and foreign visitors, preferring to work in a smaller room nearby.
Haig usually stayed within the confines of his quarters on the department's seventh floor; Shultz has been taking a goodwill tour through Foggy Bottom corridors, a bit at a time. When he visited the human rights bureau, Assistant Secretary of State Elliott Abrams pointed out that, "as you see, it's a pit." Abrams had been waiting for months for some office improvements. The very next day, workmen appeared to spruce up and carpet.
This doesn't mean that Shultz is a mere Mr. Chips. Three days before his confirmation testimony on Capitol Hill, he asked his staff to prepare a draft of his opening statement. It was 8 p.m., but he wanted it later that evening. They persuaded him to wait until 7 a.m., then worked until dawn -- when it was rejected, without explanation.
When Shultz first came to the State Department, no one knew what to make of the new boss. "The first Saturday I worked with him, I had no idea of how to dress," says one official. "The usual State Department weekend outfit is a tie with a sweater or a tweed sport jacket. But with Shultz, I wasn't sure. So I wore a coat and a tie. And what did he have on? A turtleneck--and the most astonishing pair of pants I have ever seen in my life. They were grayish cords, embroidered all over with . . . bumblebees. They made your loud, madras country club pants look modest. Obviously, he dresses down."
Another time, several officials were called to a meeting in Shultz's office because, his secretary said, Shultz was talking to a young staffer from the office of Sen. Jesse Helms (R-N.C.). Nobody could believe it. A secretary of state just doesn't give a private audience to a Capitol Hill aide. Sure that it must be Helms himself in Shultz's office, the officials dutifully went to the meeting and saw 22-year-old Deborah DeMoss, Helm's new legislative assistant for foreign policy.
"Finally, I couldn't take it anymore," says one official. "I had to ask -- 'What is he doing, seeing this girl?' " As it happened, there'd been a fund-raising dinner for the department's diplomatic reception rooms the week before. The seating was drawn by lot, and DeMoss found herself next to Shultz. When she told him she was about to visit Guatemala, he asked her to brief him when she came back. "Haig would never have done that," says one official. Helms has blocked numerous State Department appointees, and Shultz couldn't have been unaware of the need to get on his good side from the start.
"He's a good psychologist," says James Baker, White House chief of staff. "That's 50, 60, 70 percent of these jobs."
Recently, Shultz arrived in the West Wing for a meeting, only to be told that because of a White House mix-up, he was a half hour early. "If that had been Al Haig," says one senior White House official, "he would have blown up and blamed everyone at the White House." Not Shultz, who got the congeniality prize. "Oh, I'll just go into the Roosevelt Room and do some work," he said. And there he sat, burrowed into his papers like a conscientious graduate student.
So far, Shultz has had no full-scale wars with the White House, as there were under Haig. He always checks with the president or National Security Adviser William P. Clark before making a move. On the Latin American trip, after Reagan talked with Colombian President Belisario Betancur, Shultz met with him afterward -- and took notes. With Haig, the student-teacher role was usually the other way around. "Haig tended to lecture," says one White House adviser. "He's not hung up on turf, perks, or whether he wins or loses," says another administration official. "Every time he presents something to the president, it's not the end of the western world as we know it."
But this adulation can't last forever. "It's going to blow up one of these days," says George Stigler, the economist. "Not because of him, but because American foreign policy doesn't exist . . . He's going to get blamed, I assume, for the fact that we changed tack suddenly, or failed at something. But he's not going to lick his wounds. He's going to see what can be saved from it . . .
I don't think he has the kind of big, epic dream like, 'Boy, oh boy, if I'm the man who finally settles the Middle East. . .' " Before the Affairs of State
Shultz spent his childhood in Englewood, N.J., "a little bit on the outs," in the words of Norman Cook, who grew up with him. His father's income as dean of the New York Stock Exchange Institute, the training program for exchange employes, didn't buy the family a place on "The Hill," the most affluent section of an affluent suburb. "Thus, we were not full of self-confidence," says Cook. "It was sort of a struggle."
Shultz went to prep school at Loomis, then Princeton University. In the late '30s, the campus was a womb for the conservative sons of American industrialists, little touched by the war in Europe or Franklin Roosevelt's New Deal. Shultz's friends in the Quadrangle Club, an eating club that wasn't for rich kids, were different. Many of them wrote for the Daily Princetonian and supported FDR. But Shultz, whom a few recall as apolitical, spent a lot of time in the library.
"Maybe he's brilliant now," says John Brooks, a college roommate of Shultz's at Princeton. "He wasn't then. He had a steady, plodding intellect." Brooks, an author and a New Yorker writer, would sit around deciding the fate of the world with Shultz and Cook, the childhood friend who went with him to college and eventually became director of NBC Nightly News. "We used to have endless discussions," Brooks says. "Norman Cook and I would say sort of half-baked, wisecrack things and he would think a long time and take them very seriously."
His friends called him "Dutch" after the Chicago gangster. ("Dutch" was Reagan's boyhood nickname, too.) Shultz graduated cum laude in 1942, a good student who played varsity football. But he didn't start. "It's just been awesome over the years how he's progressed," says Cook. "He and I were pretty average kind of kids. But he just kept growing."
Part of it was the war. Shultz and his friends were isolationists until Pearl Harbor when, in the words of one, "he got religion in a hurry." He enlisted in the Marines, became a captain and served three years in the Pacific -- where it took an adult experience to discover a dormant skill.
"He tells a story," says his eldest daughter, Margaret, 35, "about being in a landing, I can't remember what island, and they got on a beach, and everything was a mess. Chaos. And he said, 'I just started organizing. I started telling people where to put things and what they should do.' It was a significant event for him. You just couldn't wait for someone to tell you what to do."
Back from the war, Shultz got his PhD in industrial economics from MIT, taught labor economics there, then left for the University of Chicago, where he eventually became dean of the business school. He lived in a three-story brick town house, cluttered with children and books, just a 10-minute walk from the campus. Given to bow ties and tweeds, by then he'd struck up a friendship with Arthur Burns, the economist who'd been impressed after he asked Shultz to help solve a labor dispute.
"George Shultz will practice the rule of giving the decision to one party, as he has to, and giving all the praise and the honor to the other party," says Burns, now the U.S. ambassador to Germany. "He understands human nature." Burns recommended Shultz to Nixon, who made him his labor secretary in 1968.
He wound up as the president's long-distance runner. By the end of the Nixon administration, Shultz had become the president's economic chief, serving as director of the Office of Management and Budget, then Treasury secretary. Against the backdrop of Watergate and an economic crisis, he learned to play Washington. In April 1974 he quit, untainted by Watergate. "I think he just felt -- 'enough,' " says his 33-year-old daughter, Kathy Jorgensen. "He was burned out."
He was recruited by the Bechtel Corp., the international construction conglomerate that built the Hoover Dam and the District of Columbia's Metrorail, and became president of the Bechtel Group Inc. He traveled extensively for Bechtel in Arab countries, which put him in intimate contact with Saudi leaders. In 1975, Weinberger joined Bechtel as a vice president and general counsel. In 1980, a mutual friend arranged for Shultz and his wife to have Ronald Reagan, the GOP front-runner, over for dinner; afterward, Shultz became an economic adviser to the campaign and a top candidate for secretary of state.
But there was a feeling among Reagan advisers that a Cabinet with both Shultz and Weinberger, a long-time Reagan friend who was locked in at Defense, would aggravate supporters of Israel. Bechtel has billions of dollars in construction contracts in the Arab world and, in 1976, was sued by the Justice Department for allegedly refusing to do business with U.S. companies blacklisted by the Arabs because they did business with Israel. (Shultz defended the right of a nation to decide which subcontractors it considered undesirable.) Shultz also had questioned Reagan's pro-Israel politics. "If I have any differences with Reagan," Shultz said during the campaign, "it's about Middle Eastern policy" -- as set forth by Reagan in a B'nai B'rith speech. It's Still Romance
"The fall of 1945 was a wonderful time," says Harriet Baldwin, an old friend of the Shultzes. "The war was over, and the group gathered at the Princeton-Yale game. We hadn't seen each other for four or five years, and we'd been all over the world. After the game, we all sat around in a room and kept wondering whether George and O'Bie would get married. Then he stood up and said, 'I'd like to propose a toast to my fiance'.' And O'Bie had been sitting there with her gloves on, so the ring wouldn't show. It was a romance. It's still a romance . . . She's still likely to blush and say, 'Oh, isn't he wonderful?' "
The Shultzes live in Bethesda, in a modest white house that better befits an upwardly mobile young couple than a former executive who once made some $500,000 a year. They seem determined not to let Washington get the better of them. The day after Thanksgiving, they had a party -- for the neighbors. O'Bie Shultz, when asked recently if her husband's new job had an effect on her life, replied: "We still sleep in the same bed." Big Decisions
Now watch George Shultz move Washington's knight and pawns:
He usually didn't say much at the White House budget sessions, where he surprised some by supporting Reagan's now-dead hopes of accelerating next year's tax cut. (It had been the idea of OMB Director David Stockman and Richard Darman, a White House aide, to bring Shultz in, on the theory that he'd have some historical expertise. If they were counting on him to argue against the president -- in favor of defense cuts and tax increases -- he didn't.) Only occasionally would Shultz amble into the shorthand staccato of the budget wizards. His questions were usually basic -- too basic, some say -- but they quickly shut everyone up. "He's like E.F. Hutton," one White House adviser says. "When he talks, everyone listens."
Consider the dispute with the European allies over the construction of the Siberian natural gas pipeline. Reagan imposed sanctions in June against European companies who supplied the Soviets with pipeline parts -- a decision which some considered the 2-by-4 that broke Haig's back. Shultz not only inherited a policy that, in part, caused his predecessor to quit, but it was a policy that he himself, an economic free-trader who criticized "light-switch" diplomacy, was known to oppose. But four months later, the decision was reversed. What happened?
First, Shultz publicly supported the president. Then, while the rift between the United States and its allies worsened, he went to work.
In October he met with the president before attending the U.N. General Assembly. At that meeting, in the words of a State Department official, Shultz essentially said to Reagan: "Mr. President, there's a chance we can work out something. Do you want me to go ahead and try?" With the president's go-ahead, Shultz had a hunting license. In New York, he had a long talk with French Foreign Minister Claude Cheysson, as well as the other allies. Then, just before leaving for a NATO meeting in Canada, he produced a document that became the basis for an alternative to the sanctions. Interestingly, the White House says it was the allies, not Shultz, who produced the paper of alternatives. The State Department confirms it was Shultz. As one official puts it: "I'm not sure the White House even knows what happened." Playing the Game Right
"He loves to win at a game," says his daughter, Kathy Jorgensen. "Even if he's playing Parcheesi. Mom swears he cheats."
Then there's golf. Peter Peterson, chairman of the Lehman Brothers investment banking firm, has been playing with Shultz for a quarter century. He thinks his game tells you a lot.
On the first tee, where everyone negotiates bets for the game, Shultz, Peterson says, "always understates his capabilities, and very quietly. But you always know when the negotiating is over. He sends out very strong nonverbal signals.
"Then he'll hit the ball 20 yards farther than anyone else, and straighter than anyone else." He invariably wins. "But with no fanfare," says Peterson. "He collects the money and goes home."
Another golf partner of Shultz is his 23-year-old son Alex. "We played one time, my brother and I and this other friend of his." Shultz set up an elaborate set of bets that bewildered his partners. "It was a complex game," says his son. ". . .It always seems like you're winning, and then at the end, you owe him money . . . One time, I finally beat him. The next day he played the best game of golf I've seen him play in two years."