The Sharpening Battle Over Bert Lance
In Georgia he was Jimmy Carter's friend, sharing his triumphs, helping him borrow money for his peanut warehouse. As a New South go-go banker, he made himself a millionaire, and he was one of the first men whom Carter appointed to a Cabinet-level position. Now the director of the Office of Management and Budget—who cruised around Washington during Inaugural week in a black Cadillac bearing special license plates with BERT on the front bumper and LANCE on the back—might be the first man to go. Last week Bert Lance was rapidly becoming an embarrassment to the Administration, a threat to its whole aura of stern moral probity, and the target of an investigation by the U.S. Comptroller of the Currency.
Unexpectedly, the deeply indebted man, who is one of the Government's most powerful economic policymakers, was also in trouble in the Senate. Lance had asked for more time before he had to sell his 200,000 shares of National Bank of Georgia stock (TIME, July 25), and it had seemed assured that the Senate Governmental Affairs Committee would grant the delay. But last week, after newspapers covered Lance with the appearance of new improprieties, the committee stalled and invited him to testify this week. That forced Lance, as Tennessee Democrat James Sasser put it, "to twist in the wind for a few more days."
According to the newspaper stories, Lance may have: 1) misused funds of the Georgia bank, when he was its president, in a loan deal with the First National Bank of Chicago; and 2) mortgaged his political influence to get large personal loans. In addition, TIME has learned that Lance prodded the Carter Administration to help the chairman of a Tennessee bank that had lent him $443,000.
All of the charges were promptly denied and, at week's end, the evidence concerning Lance's loans was inconclusive—and in some respects plainly on his side. But the charges were so serious—and so well publicized—that Democratic Senator Abraham Ribicoff, chairman of the committee, called for an investigation; the committee will decide this week whether to begin a probe. "If we just drop this thing," said Ribicoff, "we would be doing a disservice to Mr. Lance, a disservice to the President and a disservice to the country." Meanwhile, investigators from the U.S. Comptroller's office gathered up the records of Lance's big loan from the First National Bank of Chicago.
Breathless Claim. This loan was the focus of the most sensational of the charges. New York Times Columnist William Safire, a former Nixon speechwriter, raised the question of whether the $3.4 million loan that was granted on Jan. 7, after Lance had accepted the sensitive OMB job, was a "sweetheart loan." Safire claimed rather breathlessly that the deal was an opportunity for the bank's chairman, A. Robert Abboud, who is extremely influential in Chicago Democratic politics, "to gain life-and-death financial control over the man closest to the President."
In 1975 Lance had borrowed $2.7 million from Manhattan's Manufacturers Hanover Trust to buy 21% of the stock in the National Bank of Georgia (NBG). It was to refinance this loan, and to repay other debts, that he sought his $3.4 million loan late last year.