August 24, 1977

Lance-Carter Statements Need Explaining

Of all the astounding statements about the financial shenanigans of Budget Director Bert Lance - and there have been some beauts - the one by President Jimmy Carter gives me the shakes:

"Bert, I'm proud of you!"

This emotional outburst during a nationally televised press conference last week followed release of an investigation of Lance's affairs by the Comptroller of the Currency.

Lance, a Carter appointee, was judged by John Heimann, another presidential appointee, not to have done anything "warranting prosecution."

The budget director declared the statement was "a very favorable report on my activities."

Carter helicoptered in from a Camp David vacation to back up his crony: "My faith in the character and competence of Bert Lance has been reconfirmed."

Though the two good old boys from Georgia professed to find exoneration in the findings, Heimann gingerly pointed out three unresolved difficulties:

1. Mr. Lance's "recurring pattern of shifting bank relationships and personal borrowing needs raises questions as to what constitutes acceptable banking practice."
2. "The management of the Calhoun First National Bank (including Lance as president) from 1972 to 1975 permitted officers, directors and some employees and their families to overdraw checking accounts in substantial amounts for considerable periods of time."  For example, the Lance-For-Governor campaign account was $100 thousand overdrawn at one point.
3. Mr. Lance failed to "file with the banks of which he was an officer certain reports of outside business interests and personal borrowing, and of borrowing of his affiliates, as required by statute or regulation."

These improprieties will have to be sorted out by the Senate Governmental Affairs Committee early next month.

It was this committee, you will remember, that earlier looked into Lance's multimillion-dollar stock purchase loans during his confirmation hearing and gave him a hearty round of applause after the vote.

Senator Abraham Ribicoff, Democrat from New York, stated then, "You have been smeared from one end of the country to the other, in my opinion unjustly.  We can just imagine what this has done to you and your family."

This time around, Senator Ribicoff is significantly silent.

The circumstances surrounding a loan of $2.6 million from Manufacturers Hanover Bank in New York City, with which Lance bought a large block of stock in the National Bank of Georgia, is still not explained satisfactorily.  Was the deposit of a million dollars by NBG in a no-interest "correspondent" account an illegal requirement of the loan, or just a subsequent act of mutual cooperation?

The same question must be answered in regard to a similar loan of $3.4 million from the First National Bank of Chicago obtained by Lance to pay off Manufacturers after falling behind in his interest payments.

The most important question to be resolved is one so far ignored by government authorities:

What was Jimmy Carter doing in the office of Lew Jenkins, head of correspondent banking for Manufacturers, on June 9, 1975, the day Lance was there with another officer negotiating his personal loan?

It was just two months earlier that Carter borrowed $708,000 from Lance's bank to help finance a presidential campaign.

Those addicted to comparative analysis are intrigued by the standard of ethics applied here and in a similar conflict of interest by Bo Calaway, discovered while the latter was campaign manager for President Gerald Ford.

It was disclosed that Callaway, while secretary of the Army, met with Agriculture Department officials to discuss a Forest Service decision concerning federally owned Snodgrass Mountain in Colorado.  He and others wished to develop a ski resort there.

The uproar was so stridently orchestrated that Callaway retired from politics in disgrace.  Months later a Senate investigation unanimously confirmed that in no way did Callaway "offer ... anything of value or threaten or pressure" anyone in regard to any decision affecting Snodgrass Mountain.

Despite these "findings" the Senate committee report went on to say, at the insistence of the Democrat majority, that Callaway's "behavior was a sorry history of partiality and favoritism with the appearance of impropriety."

If it was then, so it is now.

Not only must Lance go, but Carter's role in the tangled web must be explained.  Aside from legalities involved, this inflation-plagued nation can't afford a budget director whose notion of sound economics is a chain-letter scheme of borrowing to create wealth, and a president who is proud of it.

Author: Lindsey Williams