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Peter G. Peterson, 91, was a financier who wielded great power in Washington

Peter G. Peterson made his biggest mark as the rescuer of investment firm Lehman Bros., long before it went bankrupt.

Larry Downing/REUTERS

Peter G. Peterson, the billionaire financier and philanthropist who combined a spectacular career in industry and Wall Street with public policymaking and dogged advocacy of government fiscal prudence, died on Tuesday at his home in Manhattan. He was 91.

Mr. Peterson was one of the few captains of business whose reach extended into the public sphere. Forbes magazine described him as having "one of the most distinguished résumés in America." He was secretary of commerce under U.S. president Richard Nixon, led government commissions and advisory bodies and, for 22 years, was chairman of the influential Council on Foreign Relations in New York, succeeding the late David Rockefeller.

As a fiscal watchdog, he created a well-financed foundation that addresses a spectrum of fiscal issues and holds conferences that draw America's top financial and political leaders.

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He wrote a half-dozen books laying out his vision for economic prosperity while critiquing entitlement spending, the Social Security system and the impact on the economy of partisan politics in Washington.

His career in business and finance gave weight to his voice in the national discourse. After starting out in advertising, Mr. Peterson, while still in his 30s, went on to head the Bell & Howell Corp., a Chicago maker of cameras and audiovisual equipment.

He made his biggest mark as the rescuer of the giant investment firm Lehman Bros., long before it went under in 2008.

Then, in his late 50s, he launched a new career as a founder, with Stephen Schwarzman, of the Blackstone Group, which pioneered a new breed of financial engineer. Mr. Blackstone would become a major player on Wall Street and provide the means for Mr. Peterson, the son of a once-penniless immigrant, to earn a fortune. Forbes put his net worth this year at US$2-billion.

Peter George Peterson was born June 5, 1926, in Kearney, Neb., one of three children of George and Venetia Peterson, who had come from southern Greece. (An uncle had changed the family name from Petropoulos.) His father had arrived in the United States at 17, speaking no English and without any money. He eventually opened a Greek diner in Kearney, which he ran for 25 years. Young Peter began working the cash register at the age of 8. He won admission to the Massachusetts Institute of Technology, but had no aptitude for engineering and soon transferred to Northwestern University, from which he graduated summa cum laude in 1947. Mr. Peterson began his business career at Market Facts, a Chicago research company. In 1951, he received an MBA from the University of Chicago Booth School of Business before returning to Market Facts as an executive vice president.

The ad agency McCann-Erickson hired Mr. Peterson in 1953, as director of marketing services; a year later, at 27, he became a vice-president. He eventually turned down the McCann-Erickson presidency to become executive vice-president at Bell & Howell. There, under Charles Percy, later a senator from Illinois, he helped the company regain ground from its rival Eastman Kodak.

At 34, Mr. Peterson was named president of Bell & Howell. Two years later, he was named chairman and chief executive, succeeding mr. Percy. He held both positions until 1971.

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Years of marketing coups at Bell & Howell brought Mr. Peterson to the attention of Mr. Nixon, who invited him to Washington. There, he served as a presidential assistant on international economic affairs before becoming commerce secretary in 1972.

That job lasted only a year. Mr. Peterson was an outspoken liberal Republican who enjoyed socializing with journalists and Democrats and, when the Nixon White House began suspecting his loyalties, he left town. Mr. Peterson was soon peppered with job offers. He chose the chairmanship of Lehman Bros., which was flirting with bankruptcy. Mr. Peterson encountered hard times as he set about restructuring the firm and drawing on his corporate contacts to win new business.

His turnaround efforts resulted in five straight years of record profit and a merger.

After 11 years, a senior rival, Lewis Glucksman, suddenly insisted on becoming the sole No. 1. Mr. Peterson decided to leave rather than fight a battle for control.

In 1980, Mr. Peterson married Joan Ganz Cooney, the founder of the Children's Television Workshop, producers of Sesame Street. She was his third wife and he leaves her. His first two marriages ended in divorce.

Besides Ms. Cooney, Mr. Peterson leaves five children, John, Jim, David, Holly and Michael Peterson; a brother, John; and nine grandchildren.

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Mr. Peterson and Mr. Schwarzman, a Lehman managing director working on mergers and acquisitions, teamed up to create Blackstone in 1985, starting with nothing more than two assistants, US$400,000 of their own capital and two Rolodexes.

Blackstone grew into a world-class manager of more than US$88-billion by the time it went public in 2007.

Although Mr. Peterson's business career often overshadowed his intense focus on public policy, he campaigned for decades to restore what he regarded as America's lost fiscal integrity.

He tackled tax reform and government entitlements in 2004 by writing Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It, a best-selling indictment of Democrats for overspending and Republicans for excessive tax-cutting.

"I remain a Republican," he told Businessweek that year, "but the Republicans have become a far more theological, faith-directed party, not troubling with evidence."

After Blackstone went public in 2007, he created the Peter G. Peterson Foundation to raise public consciousness about long-term "politically untouchable" national challenges involving entitlements, foreign borrowing, health-care costs, national savings, education, energy and nuclear proliferation.

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