Former Reagan Official to Head Financing of Iraq Reconstruction

WASHINGTON – Michigan State University President Peter McPherson, who served as the second-highest Treasury Department official in the Reagan administration, is being tapped as the government's point person on financial matters related to the rebuilding of Iraq.

A government official speaking on condition of anonymity Thursday said McPherson will serve as a liaison between Treasury Secretary John Snow and military officials in charge of the rebuilding effort.

The Treasury Department is working to come up with ways to revive Iraq's devastated economy.

For starters, Treasury officials have been working on ways to get Iraq's banking system working again. They want to develop a plan for transforming the country's financial institutions to a free-market economy after years of operating under a system tightly controlled by Saddam Hussein's government.

Treasury also wants to help a new Iraqi government come up with a new currency.

Two international lending agencies-- the International Monetary Fund and the World Bank -- recently endorsed a U.S. request to send fact-finders to Iraq to assess rebuilding costs.

Finance officials from the world's richest countries wrapped up meetings Sunday that were dominated by divisions over post-Saddam Iraq.

McPherson has been serving as president of Michigan State University since 1993. It wasn't immediately clear whether McPherson would take a temporary leave from that post as he assumes his new government duties, the government source said.

University spokesman Terry Denbow would not comment.

However, Peter Magrath, president of the National Association of State Universities and Land Grant Colleges, who had a brief telephone conversation with McPherson about the Iraq-related job, said: "It is my understanding that he is not leaving the university. It's my understanding that this is temporary."

McPherson has extensive government and financial experience. He served as an executive at Bank of America in the early 1990s. McPherson was deputy secretary of the Treasury Department from 1987 to 1989, where he focused on trade, tax and international issues.

And he served as the administrator for the Agency of International Development from 1981 to 1987, where, among other things, he oversaw U.S. aid to Africa during the country's food crisis.