(9 of 10)
Double Collateral Though Percy appeared bumbling and inept on procedural matters during the hearings, he persuasively showed that Lance had received a $2,625,000 loan from New York's Manufacturers Hanover Trust Co. in 1975 and signed a note pledging 148,118 shares of National Bank of Georgia stock, plus any future income from that stock, as collateral. After Lance received an N.B.G. stock dividend of 14,657 shares in December 1975, officials of the New York bank futilely sought to get Lance to deliver those 14,657 shares, to which it was entitled. Insisting that the value of stock already given Manufacturers Hanover fully collateralized the loan, he did not turn over the dividend. Instead, he tried to "negotiate" with the bank and, in fact, pledged the disputed 14,657 shares to New York's Chemical Bank in 1976 as collateral on a $150,000 loan. He did not reveal that fact to Manufacturers Hanover.
Lawyer Clifford eagerly pounced on an ill-advised invitation from Percy to clarify the matter. Clifford argued that Lance had merely bargained with Manufacturers Hanover over supplying the stock dividend and, when he and the bank could not reach agreement, ended the matter by paying off the loan. Indeed, Lance did so last January, drawing yet a third loan—for $3.4 million—from the First National Bank of Chicago. Clifford failed to point out that this was a full year after Lance first received the stock dividend. Percy was correct in insisting that Manufacturers had had a right to demand the shares, and Lance was wrong to use them to get another loan from a different bank before the first loan was paid off.
As Lance ended his first day of testimony last week, Clifford smiled and said, "I think that we started to turn it around today." At the White House, Carter aides were ecstatic. "Superb," said one about Lance's performance. Presidential Assistant Hamilton Jordan jumbled sports metaphors: "Bert hit a home run. They never even laid a glove on him. It's what we've been waiting for." The man who counted, Jimmy Carter, later watched video tapes of Lance's appearances. Said the President of his friend: "He did well."
Any gains for Lance were not the result of any effort by the President's aides. The normally cool Press Secretary Jody Powell blundered atrociously by phoning several newsmen with the sly tip that Senator Percy might have used corporate aircraft owned by Bell & Howell Co. for personal purposes. The Chicago Sun-Times exposed Powell's ploy after finding no truth to the report.
Powell limited the damage by apologizing to Percy, who graciously accepted, saying he understood that "emotions were running high" at the White House. Powell reported that he had told Carter that his action had been "inappropriate, regrettable and dumb—and the President did not disagree with my assessment." As Powell also apologized to the Washington press corps, Hamilton Jordan slipped a chrome-plated artillery round onto the podium. Attached was a note: "Although you get close to getting lead poisoning from biting the bullet, you won't. This, too, shall pass." It was signed, "Bert."