Bill And Mack: A Long Way From Miss Mary's Kindergarten

Richard Nixon had Robert Abplanalp and Bebe Rebozo. Ronald Reagan had Alfred Bloomingdale and his millionaire buddies. And President-elect Bill Clinton has . . . Mack McLarty.

Many Presidents form fast friendships with successful business executives. But Thomas L. McLarty III, chairman of natural-gas giant Arkla Inc., is a First Friend with a difference. McLarty, 46, long has straddled the worlds of business and politics. Now, his longtime association with Clinton has landed him a job as a director of the President-elect's transition team, where he'll try to recruit top business talent for the new Administration. "I think most people would strongly support a fresh, businesslike approach to government," McLarty says.

If McLarty sometimes sounds like Clinton, it's no accident. The two budding bubbas met in Miss Mary's Kindergarten, a private nursery school back in Hope, Ark., and have been friends ever since. "I doubt if there'll ever be any other Presidential nominees graduating from Miss Mary's," McLarty says.

Although McLarty's childhood was far more comfortable than Clinton's, the two have followed paths that have crissed and crossed. When Clinton made his life-changing trip to John F. Kennedy's White House as a participant in the 1963 Boys' Nation, McLarty was elected president of Arkansas Boys' State.

When Clinton took off for Georgetown, Oxford, and Yale, McLarty traveled up the road to the University of Arkansas in Fayetteville. After that, he served a term as the youngest state representative in Arkansas history, then returned to Hope to help his auto-dealer father build a car- and truck-leasing business--which eventually made the McLartys rich.

The senior McLarty, who died in 1977, was close to many of Arkla's directors. So, in 1974, 28-year-old Mack was elected to the board of the company, which at the time was little more than the local gas utility. "I tried to look wise and nod at the right times," he says of his early board tenure. In 1979, he went to work for Arkla full-time, at a subsidiary company. The politically astute McLarty rose swiftly through the company, becoming president of the Arkansas gas distribution operation in 1983. By 1985, he had risen to chairman and chief executive of the parent company.

Arkla, like the rest of the gas-pipeline industry, has been hurting in recent years. In the early 1980s, the $2.8 billion company signed long-term "take-or-pay" contracts to buy gas at prices that turned out to be well above the spot market. Because its purchasing commitments were larger than its customer demands, McLarty then snapped up local gas utilities along the gulf coast and in Minnesota to create markets.

But the acquisitions left the company saddled with debt, and a string of warmer-than-normal winters in its service areas turned the tap down on cash flow. Profits have tumbled from $133 million in 1988 to $18 million last year. The stock has fallen from nearly 30 in 1983 to less than 9 recently.

HELPING A PAL. Despite Arkla's problems, analysts give McLarty mostly glowing reviews--when they're on the record. But one analyst who takes a particularly dim view of his leadership suggested that the reason "he hasn't been criticized more is because he's such a nice guy." Adds a former employee, who also wished to remain anonymous: "I think he's a politician in a corporate role. His best asset is that he can remember the name of every person he has ever met."

McLarty takes pains to say he's not angling for an Administration job. "I'm just here to be supportive of my oldest friend," he demurs. But he has been rumored for several posts, including Energy Secretary and Transportation Secretary. Clinton has been tight-lipped about appointments, but as the only executive among the lawyers and politicians on the transition team, McLarty is sure to be deluged with resumes. Even if he doesn't come to Washington, he could become an important business pipeline into the Oval Office. And it all began in a place called Hope.

      PERSONAL Born in Hope, Ark., June, 1946--two months before boyhood pal Bill 
      PROFESSIONAL Joined family business, McLarty Leasing, in 1969. Moved to Arkla 
      Inc. in 1979. In 1984, became Arkla's CEO
      POLITICAL Served two years in the Arkansas House. Former member of Democratic 
      National Committee. Chaired Clinton's 1978 gubernatorial campaign
      NEW AMBITION A policymaking job in the Clinton Administration?
      DATA: BW
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