Brady May Take Treasury Helm : Would Replace Baker, Who Will Aid Bush

Nicholas F. Brady is expected to be named by President Reagan to replace Treasury Secretary James A. Baker III when he leaves to take over Vice President George Bush’s presidential campaign, and he would continue in that position if Bush wins the election, sources said Friday.

Administration officials said Baker’s long-awaited departure is likely to occur next week, once the White House receives assurances from congressional leaders that Brady can be confirmed quickly by the Senate.

“It’s not done. It’s getting done fast,” said a former White House official close to Baker and the Bush campaign. “It all relates to if Brady can get in quickly.”

Brady--a longtime friend of Bush who headed the presidential commission that examined last October’s stock market crash--would join Baker, who would like to be secretary of state, and Reagan’s recent nominee as attorney general, Richard L. Thornburgh, as Reagan Cabinet officials who are all but certain to assume top positions in a Bush Administration.

There is a remote chance that Brady’s appointment could be derailed, officials said, but only if it appears that a prolonged background check of his extensive financial holdings--Brady, a former Republican senator from New Jersey, is head of the Wall Street firm of Dillon, Read & Co.--would significantly delay his taking the reins of the Treasury Department.

In that case, Deputy Secretary of State John C. Whitehead is the top candidate to be named to the post just for the final few months of the Reagan Administration because he already holds a high office and could be named acting Treasury secretary while awaiting Senate confirmation.

Baker, who has recommended Brady as his replacement, is concerned that financial markets might react negatively if there is a lengthy period between his departure and the time his successor takes office. In the interim, the Treasury Department would be under the temporary stewardship of Deputy Secretary M. Peter McPherson, who is not well-known in international financial circles.

Avoiding ‘Ripples’

“This has to be very carefully handled,” a top Administration official said. “The economy is in such good shape that it doesn’t really matter who runs the department for a while, but we don’t want to do anything that might cause even a few ripples in the markets out there.”

At the same time, Bush campaign officials are pressing for a quick decision because they are counting on Baker’s arrival to strengthen the organization before next month’s Republican convention. As Bush trails Democratic presidential nominee Michael S. Dukakis in opinion polls, the vice president’s campaign has been beset by internal problems.

Bush has boasted of the campaign’s collegial nature, but officials worry that the decision-by-group nature of the current operation has led to inaction. Baker, according to GOP political consultant Eddie Mahe, has a stronger personal relationship with Bush that do other campaign officials.

“The advantage of Jim Baker is that he comes in big enough to be the final arbiter,” Mahe said recently. “Baker eliminates the need for consensus decisions. He has Bush’s total support.”

Ran 1980 Campaign

In 1980, Baker ran Bush’s losing presidential primary struggle with Reagan. He then became a senior adviser to Reagan in his victorious general election campaign.

The personal and political ties between Baker and Bush were forged during the 1970 Texas Senate race between Bush and the current Democratic vice presidential nominee, Lloyd Bentsen. Although Bush lost that race, Baker--then a Houston lawyer--was his most successful local campaigner, even slightly exceeding the goal of reaching 60% of the vote in the metropolitan Houston area.

Baker also steered Gerald R. Ford’s 1976 presidential campaign against Jimmy Carter from a post-convention position where he was almost 30 percentage points behind in the polls to near-victory. That strong fall campaign drive has not been lost on Bush, who also trails his rival but by a significantly smaller margin of about 10 to 15 percentage points.

Staff writers Jim Gerstenzang and Cathleen Decker contributed to this story.