The man In the mirror

Erskine Bowles, UNC’s new CEO and our Mover and Shaker of the Year, reflects what people want to see in him — for now.
By Tim Gray

Much ballyhoo — some of it even believable — accompanied the hiring of Erskine Bowles as the new president of the University of North Carolina. Brad Wilson, chair of the UNC system’s Board of Governors, lauds his “governmental and private-sector experience, strong intellect and business acumen.” Former Gov. Jim Hunt hails him as “the best man they could find,” adding, “He has the talents to lead the university to become even bigger and better for the people of North Carolina.” And Phil Kirk, who is stepping down as president of North Carolina Citizens for Business and Industry, rhapsodizes that he’s “a superb choice who has wide bipartisan support.”

Bowles’ selection does seem a safe, sensible call. He’s smart, disciplined and discreet, with experience and contacts ranging from the gilded executive suites of Charlotte and Wall Street to the grubby corridors of power in Raleigh and Washington. And he combines the strengths of his predecessors: Bill Friday’s diplomatic deftness, C.D. Spangler’s financial insight and Molly Broad’s national experience. That’s why he’s Business North Carolina’s Mover and Shaker of the Year.

But he’s not without shortcomings. He’s a manager assuming a job that often calls for a leader — more a competent Michael Bloomberg than a courageous Rudy Giuliani — and a bureaucrat in a position that sometimes needs a politician. Bowles thrived as head of the U.S. Small Business Administration and chief of staff in Bill Clinton’s White House but faltered in two attempts to win a U.S. Senate seat.

But more important — and perhaps the reason for his selection — is that Erskine Bowles, who declined to be interviewed for this story, has managed to be a mirror, reflecting what everyone wants in the university president. Native North Carolinians see his Tar Heel roots. UNC Chapel Hill grads, his Carolina cred — he earned his bachelor’s there. Dollars-and-cents con-servatives, his business career and MBA. Lefty academics, his service with the Clinton administration.

Thanks to his discretion and aw-shucks earnestness — imagine Mister Rogers in a Brooks Brothers suit — Bowles, 60, hasn’t disabused any of their illusions. For now, it gives him time and allies, both of which he’ll need to pick his way through the briar patch of demands that he’ll confront after his inauguration Jan. 1. A description of the enterprise he will be leading shows how daunting the task is. The university system employs about 37,000 people and enrolls nearly 200,000 students a year. Its 16 campuses include 11 television stations, two medical centers, a veterinary school and even a fish farm. Layer atop that the demands from a raft of constituencies.

Partisans of Carolina and N.C. State want more money devoted to those two schools. Supporters of the other 14 campuses want more, too. Parents want tuition kept low. Taxpayers without school-age kids want it higher. State lawmakers want the schools to corral the claptrap that sometimes passes for scholarship. Professors want to publish and teach as they please.

Paul Fulton, chairman of Bassett Industries and former dean of UNC Chapel Hill’s Kenan-Flagler Business School, exemplifies the folks who would like to see Bowles do more for Carolina. He says that he has spoken with Bowles and that the incoming president understands the school’s needs. “If our flagship institutions are going to be as good as they can be, they need some flexibility,” he says. Fulton is a Chapel Hill alumnus who helped form a pro-Carolina political action committee called Citizens for Higher Education. He helped lead a failed push last summer to get the General Assembly to let Carolina and State set their tuition independent of the rest of the system.

Wilson argues for the opposite. “It’s no longer a prerequisite to attend Carolina to go to law school or State to be an engineer, and that brings a certain competition among the campuses,” says the Board of Governors chair, who got his bachelor’s at Appalachian State. “It’s the role of the president and the board to keep all of that energy aligned. Some people would say that’s a negative and it’s holding some of our campuses back. I don’t think so.”

Bowles may enjoy a honeymoon in balancing these contradictory demands that Broad didn’t. From the beginning, some North Carolinians, especially in the General Assembly, distrusted her just because she wasn’t from around here. Some early moves compounded their suspicion. She didn’t surround herself with native Tar Heels to compensate for lack of local contacts. “To be a successful lobbyist you have to know people,” Kirk, for many years a successful one himself, points out.

As chief of staff, he brought focus to a famously undisciplined but bright, politically agile president.

One of her first hires was J.B. Milliken as senior vice president for university affairs. A Nebraskan, he served as the university’s main liaison, besides Broad herself, with the General Assembly, and his style didn’t mesh with the legislature’s small-town ethos. “J.B. wore these British shirts, double-breasted suits and cuff links. It took awhile for folks to warm up to him,” a prominent lobbyist says.

Pretense, real or perceived, doesn’t sit well in North Carolina. A whiff hung around Broad, too, at least to some noses in Raleigh. “She was a little too regal for some of us,” one top lawmaker complains. He points, for example, to her edict that university employees call her division the Office of the President rather than its traditional name, General Administration.

A Broad supporter, Bill Burns, a retired banker who’s a member of the Board of Governors, admits that she didn’t forge anything but the most businesslike relationship with many lawmakers. “They didn’t look at her as somebody they could have a drink with.” Even so, Broad achieved plenty. She led the campaign for a $3.1 billion bond issue, which passed in 2000. That money has spurred an overdue spate of rehabilitation and construction on the campuses. She focused on reviving the system’s historically black schools. And she spearheaded the push to rework the system’s enrollment policies to head off the sort of anti-affirmative-action lawsuits that have bedeviled other state schools.

Bowles should have better luck placating nativist naysayers. Besides being a Tar Heel, he excels at the bonhomie that’s part of any politically sensitive job. He was Clinton’s confidante and golf buddy. And his appeal cuts across partisan lines. His collegial relationship with former Sen. Jesse Helms endured even through Clinton’s impeachment; Helms and Bowles’ father, Skipper, were boyhood friends in Monroe.

Plus, Bowles eschews pretense. While serving in the White House, he insisted on greeting visitors in the West Wing lobby rather than having them escorted to his office. In the office itself, he surrounded himself with photos of his family, not trophy shots with prominent pols. At night, he retreated to his Georgetown townhouse rather than attend parties and fundraisers. He talked so often about his eagerness to return to North Carolina that, according to The Survivor, John Harris’ book about the Clinton presidency, other White House staffers found it tiresome.

Even if Bowles didn’t feel at home there, Washington is where he acquired the experience that may have best prepared him to lead the university, though not in the place that many folks claim. Much attention has been lavished on his White House service. But his role there was that of a chief operating officer, not CEO. He brought focus to a famously undisciplined but bright and politically agile president. But Bowles didn’t have to puzzle out the country’s direction or even how to get there — Clinton and his policy advisers did that. He just had to make sure that the rest of the staff followed the map that Bubba and the wonks drew.

Bowles’ more pertinent Washington experience was his time at the top of the SBA. Both it and the university are bureaucracies that lumber, not sprint. And both are staffed by thousands of folks who’ll remain long after their politically appointed boss leaves. Senior professors are tenured, and university staffers, like federal workers, are protected by elaborate personnel rules. A president has to guide them by persuasion and example, says Friday, the first president of the unified university system. “You don’t dominate by force and intimidation,” he says. “The whole notion is that you’re in a community of intelligent, rational people who work together by talking things out.”

In addition to that, Bowles’ White House work did include at least one experience that he’s sure to draw on in his new job. He acted as Clinton’s lead negotiator in budget talks with congressional Republicans. Together, the two sides hammered out an accord that balanced the federal budget and erased the deficit. “Anybody who could negotiate a budget deal between Newt Gingrich and Bill Clinton has great political skills,” Kirk, a Republican, quips.

Bowles honed his negotiating abilities as an investment banker, which is how he began his career. After getting his MBA at Columbia University in 1969, he worked for Morgan Stanley, one of Wall Street’s leading firms. He then returned to North Carolina, starting his own company, Bowles Hollowell Conner, in Charlotte. There, he and his partners helped midsize Southeastern companies raise money and do mergers and acquisitions. Later, between stints in Washington, Bowles helped start Carousel Capital, a Charlotte-based merchant bank. After leaving the White House, he split his time between Carousel and Forstmann Little, a New York buyout firm.

Like the SBA, UNC is a bureaucracy staffed by folks who’ll remain after their appointed bosses are gone.

Wall Street might not seem an ideal training ground for running a public university, but in at least one way the venues resemble each other. Investment bankers chase the same scarce resource that university presidents do — money. Bankers have to persuade investors to cough it up, while public university presidents have to squeeze it out of lawmakers. What’s more, investment bankers spend a lot of time studying financial statements — it’s one way that they gauge a company’s worth. Balance sheets and income statements will keep Bowles busy, too. One of the president’s key duties is setting spending priorities.

As UNC president, Bowles also will be the system’s public face. When the university needs something big, he’ll have to take the appeal directly to the people, just as Broad did for the construction bonds. This sort of politicking is a place where Bowles has yet to prove himself. He hasn’t fared well on this score so far, losing senatorial bids in 2002 and 2004.

On one level, the outcomes almost didn’t matter. His campaigns were like rites of purification — public efforts to reconnect with North Carolina after his stints in Washington and New York, two places that more than a few Tar Heels view as little better than Sodom and Gomorrah.

With Dole, he squared off against a politician with greater name recognition and greater ease with the gripping-and-grinning of campaigning. “I don’t think Jesus Christ could’ve beaten Elizabeth Dole in North Carolina,” a Democratic political consultant says. Dole may come across to some as a plastic person. But like Barbie, at least she retains her form. Bowles was like Mr. Potato Head — a guy trying to fashion a politically palatable persona from random parts. He pitched his management savvy (oddly, since senator isn’t an executive job), experience in Washington (but not too much) and Tar Heel roots. He appeared uncomfortable with the folkways of the job — he was, at times, awkward on the stump and didn’t attack Dole aggressively.

Two years later, when he ran against Richard Burr, he seemed more comfortable and more willing to land partisan punches. But President Bush was running for re-election. A Tar Heel Democrat faces a slog in a presidential year when the dominant themes are war and patriotism as opposed to, say, economic security or health care.

In one way, though, Bowles already has shown that he’s at least more politically attuned than Broad. That’s the matter of the president’s pay. The millionaire financier will take the $425,000 annual salary but donate $125,000 to scholarships for needy students. That leaves him with a smaller paycheck than Broad, who made $312,504 a year. By doing that, he has sidestepped an issue that made Broad look insensitive to the problems of many North Carolinians. During her presidency, the Board of Governors several times raised the president’s pay in an effort to bring it up to the level of peer institutions. She likewise pushed for raises for the chancellors of the system’s schools.

Undoubtedly, to Broad’s way of seeing the world — she has spent her career in universities — that sent the message that UNC intended to compete nationally for talent. Trouble was, it also revived the notion, used to great effect by Helms, that the university was out of touch with average North Carolinians. While the administrators’ salaries rose, thousands of factory workers were losing their jobs.

For Bowles, figuring out what to do about Carolina’s and State’s independent streaks won’t be so easy to finesse. Plenty of alumni of both schools say the jewels of the UNC system have lost some of their luster as resources have been directed toward the less prestigious campuses.

“[The Board of Governors] put a medical school at East Carolina,” a prominent State alum grouses. “There was no need to do that. Carolina already had a fine one. They put an engineering school in Charlotte, and now East Carolina wants one. All of the campuses want to be like State and Carolina. We have two research universities. The other schools should concentrate on helping the economic development of the areas they serve.”

Truth is, Carolina and State need dis-proportionate funding if they are to maintain their national reputations. Bowles, therefore, will have to persuade the General Assembly to give them a lot more money, which seems unlikely, or he’ll have to direct a bigger share of the state’s higher-education budget to them. (They, of course, could raise more money privately. But that’s a game at which public schools often find themselves at a disadvantage when compared with private ones.)

With Bowles being so shrewdly noncommittal, North Carolinians don’t know where he stands on this question or, for that matter, on any of the other tough ones confronting the system. But his mirror soon may crack. Given the conflicting demands, he won’t be able to keep everyone happy for long.