Replace Miller For the Fed

G. WILLIAM MILLER, Jimmy Carter's nominee to replace Arthur Burns as chairman of the Federal Reserve Board, seems to have run into some serious obstacles in his search for confirmation by the Senate Banking Committee, which has already postponed a vote twice. The Committee said last week it wants to hear more testimony from Miller about sales by Textron, Inc., the conglomerate Miller currently chairs, to the government of Iran. Apparently, Textron paid a $2.9 million commission to an Iranian sales agency on a deal involving 500 helicopters made by a Textron subsidiary. Members of the Committee staff claim it is common knowledge that the owner of that sales agency was none other than the commander of the Iranian Air Force and the Shah's brother. In previous testimony, Miller denied knowledge of the involvement of the Shah's brother with the commission, but the seemingly minor incident raises some questions about the man who, if confirmed, would become the most powerful man in the Federal financial structure. Immediately striking is the somewhat shadowy connection between Textron and the repressive Iranian dictatorship. And Miller's contention that he did not know of the kickback-smacking connection seems strange and slightly incredible. If Miller did not know, and there is no concrete evidence against him, it is reasonable to expect that he should have, or else his managerial skills come into question.

Were the Iranian helicopters the only thing in Miller's way, he would probably be confirmed in the near future, but another obstacle, perhaps not of his own creation, looms even larger. Textron's operations are currently under investigation by the Securities and Exchange Commission involving foreign bribery, secret bank accounts and questionable billing practices. At the time that some of these alleged practices were performed, they were not illegal, but Textron never reported any of them once the SEC called for corporate statements. The SEC investigation may take up to six months, and while Miller himself may be cleared of any wrong-doing in his nine years as Textron chairman, the lingering doubts about his firm preclude the possibility of confirmation until the details are clear. The Carter administration should therefore drop Miller as its nominee. Clearly, there are other qualified persons to head the Fed, and six months is too long to wait in the face of mounting economic strain.

The Miller situation once again raises questions about Jimmy Carter and his continuing series of shaky appointees. He, and his administration, can be criticized for not knowing enough, or ignoring things, about the men they recommend for powerful positions--Bert Lance and now G. William Miller being cases in point. The administration should forget about Miller for the Fed, and Carter should worry about yet another gaffe.