Schwarzman Hopes to Hold James

Photograph by Victor J. Blue/Bloomberg

Stephen Schwarzman, chairman and chief executive officer of Blackstone Group LP.

Steve Schwarzman doesn’t want to lose his right-hand man.

Asked whether his chief operating officer, Hamilton “Tony” James, could be the next Treasury secretary, the Blackstone Group CEO told CNBC this morning that such a prospect worries him — not because James wouldn’t fit the role, but because of his loss to Blackstone.

“That would be terrible for us for sure,” said Schwarzman, co-founder of what is today the world’s largest private-equity and alternative-asset manager. “It’s the last thing I would want.”

James, a supporter of President Barack Obama who held a campaign fundraiser for the president earlier this year, has been rumored to be a contender for the position that will be left by Treasury Secretary Tim Geithner after January, as Obama says he would “love” l to pick a business leader for his economic team.

Schwarzman — who in 2002 hired James in somewhat of an act of faith, yielding some power within rapidly growing Blackstone — said his No. 2 “would be terrific” in the role. “He’s a terrific guy,” Schwarzman said, smiling.

That said, James might not be the absolute best choice, given conditions in Washington. In Schwarzman’s thinking, Obama will probably choose someone already involved in the current fiscal negotiations, such as White House Chief of Staff Jack Lew.

“It would be somebody who is dealing with these types of complex issues,” he said, “because I don’t think they’ll all get resolved.”

Among the rumored, Lew remains a likely choice. Erskine Bowles, who co-chaired Obama’s fiscal commission, told CNBC last month that he wouldn’t be the next Treasury secretary, and Larry Fink, co-founder and CEO of the money manager BlackRock, said last week he won’t leave his job for a role in Washington.


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