U.S. News

State Department Courts Morgan Stanley Executive

By Francesco Guerrera, Justin Baer and Daniel Dombey

Tom Nides, Morgan Stanley’s chief operating officer and a long-time aide to the bank’s chairman, John Mack, is in discussions to take a senior post in Hillary Clinton’s state department.

Secretary of State Hillary Clinton (AP Photo/Kevin Glackmeyer)
Kevin Glackmeyer

US officials have approached Mr Nides, who served in the administration of Bill Clinton and on Capitol Hill, as a candidate to succeed Jacob Lew as deputy secretary of state for management and resources, people familiar with the matter said.

His departure from Morgan Stanley would deprive Mr Mack of a key lieutenant, leaving a void that James Gorman, who succeeded Mr Mack as chief executive in January, could fill with an ally of his own.

People familiar with the matter said that while Mr Nides had held talks with government officials about the state department job, no decisions had been made, and he remained a Morgan Stanley employee.

The post is still occupied by Mr Lew, who is Barack Obama’s choice as the next head of the office of management and budget. Mr Lew will leave the state department if the Senate confirms his new role.

Mr Lew has played a key role in providing resources for the state department’s mission in Afghanistan. His position near the apex of the department’s 60,000-strong bureaucracy has allowed him to funnel personnel and funding, as part of the Obama administration’s “diplomatic surge” to the country.

Mr Nides’ public service, Democratic party allegiance and ties to the Clintons have kept his name near the top of the list of Wall Street executives likely to head to Washington.

Morgan Stanley and the White House declined to comment.

Mr Gorman surprised some observers by promoting Mr Nides from chief administration officer as part of his inaugural management team. While Mr Gorman was Mr Mack’s handpicked successor and the two men remain on good terms, some Morgan Stanley insiders had expected the new chief to choose his own candidate.

Mr Nides was part of the team that steered Morgan Stanley through its near-death experience in late 2008 and its subsequent conversion to a bank holding company. His political connections and savvy helped Mr Mack to persuade regulators to temporarily halt short selling in some stocks, in an effort to stop the bank’s shares sliding.