Behind the Painful Decision to Quit

Praying with Bert, visiting with Byrd, persuading La Belle

In public, Jimmy Carter permitted himself a rare display of deep emotion. In private, the President and Bert Lance, both born-again Christians, read from the Bible, bowed their heads in the Oval Office, and prayed. All the while, the Budget Director's proud wife LaBelle insisted that her husband had brilliantly cleared himself of wrongdoing, and appealed directly to the President that her husband stay in office. But the close-knit Georgians turned in the end to the advice of shrewd Washington veterans and wisely ended Lance's eight-month career as Director of the Office of Management and Budget.

If Lance's resignation had long seemed inevitable to many outsiders, that conclusion penetrated the inner circles of the White House Georgia clan only in early September. By the eventful Labor Day weekend, Carter had signaled to his top aides that he was not totally against Lance's leaving office. But the decision, he insisted, must come from Bert. At the time, Lance was determined to remain. On his own initiative, Presidential Assistant Hamilton Jordan flew that Saturday to Lance's vacation home in Sea Island, Ga., on the delicate mission of telling Lance that the continuing controversy threatened to cost the President and Lance too much. Recalls Jordan: "It was like going to see someone who was seriously ill in the hospital."

But as Jordan and Lance debated the matter for two days through meals and tennis matches, Jordan found the subject less painful than he had expected. Though the two men sometimes intensely argued the pros and cons of resignation, there was no rancor. Jordan made clear that he was not speaking for the President, but that his views were shared by other White House advisers. Lance contended that he was being unfairly accused by his critics and that to quit would be to abandon the principle that the mere leveling of charges should not force a man out of office. He wanted a chance to state his defense fully. LaBelle, who sat through all the discussions, was more vehement: Bert should not resign. Nevertheless, Jordan flew back to Washington feeling that his warning about the affair's corrosive impact on the President had affected Lance.

Then, ironically, two Washington Senators urging Lance's removal actually delayed any decision to resign. Democrat Abraham Ribicoff, chairman of the Senate Governmental Affairs Committee, which in January had unanimously confirmed Lance as OMB Director, and the ranking Republican, Charles Percy, visited Carter on Labor Day. They told waiting reporters, who had been tipped off about the visit by senatorial aides, that they had learned of "new allegations of illegality" against Lance. The Senators confirmed that the committee staff had interviewed convicted embezzler Billy Lee Cambell, who had claimed vaguely (and apparently never under oath) that Lance was "part of" the thefts at Georgia's Calhoun First National Bank when Lance was its president or chairman.

That same Monday evening, Sept. 5, Lance hurried to the White House, strongly argued the case that he could not resign without having a chance to refute the irresponsible embezzlement charge. Carter readily agreed. Atlanta Lawyer Charles Kirbo, who is close to both Lance and the President, suggested that Lance get an attorney to whom he could look for full-time assistance. Said Lance: "I always look to you, Charlie." But Kirbo pointed out that he was often asked for advice by the President and could not serve both men without potential conflict, and Lance said he understood.

Wisely, he called on Clark Clifford, the epitome of Washington political shrewdness and a longtime adviser to Democratic Presidents, to help shape his defense. As it unfolded at the Senate committee hearings, the strategy proved brilliant, effectively refuting the unsupported embezzlement allegation and destroying a reckless suggestion by Percy that Lance may have backdated checks to gain an illegal tax deduction. Lance had much less success in dispelling more reasoned charges: that his massive personal and political overdrafts at the Calhoun bank and his use of an aircraft owned by the National Bank of Georgia when he was its president amounted to gross violations of banking ethics and perhaps of the law. But he was a cool and engaging witness, whose chances of survival in office had gained new life.

For a short time, there was an unrealistic euphoria at the White House over Lance's performance at the hearings. Carter aides thought perhaps Lance and Clifford had pulled off a miracle in reviving the nearly buried Bert. "Lazarus was up and walking around for a little while," Clifford later agreed. But to his credit, Lance was not content to listen to only his fellow Georgians. Even before completing his testimony, Lance, on Friday, Sept. 16, asked West Virginia's highly independent Robert Byrd, the Senate majority leader, to stop by his OMB office.

When Byrd dropped in, Lance said that he thought he had defended himself well and asked the Senator's opinion. "You made a fine witness," Byrd agreed. "But we're going to have more hearings. There are unanswered questions. The press is going to continue to explore this." Byrd said he still felt that Lance should resign to lift the cloud that was spreading over Carter.

At the White House on Sept. 18, the President's four closest aides held an extraordinary four-hour Sunday afternoon meeting to weigh the impact of the Lance hearings and shape a recommendation for Carter. Present were Jordan, Press Secretary Jody Powell, Presidential Counsel Robert Lipshutz and Kirbo, who flew in from Atlanta. The advisers decided that the wisest course was for Lance to resign. They informed Bert of their feelings, then told Carter.

He, too, pondered the impact of Lance's televised defense--and he also consulted Byrd that weekend. When the telephone rang in Byrd's home in McLean, Va., the same day, the Senator was surprised to hear Carter seek his opinion. Byrd told the President that Lance had been "a good, affable, strong witness" and that he had made "a good public relations performance." But he warned again that "this matter is not going to go away. Mr. Lance will not be able to give full attention to his job. You're being distracted from more important things." Byrd said he knew the two men were close friends, that the situation was "agonizing" and "painful." But Byrd advised: "The presidency is bigger than any man. This is the time when Mr. Lance, having done so well before the committee, should resign." Byrd asked for time to get a better reading of Senate sentiment for the President. "Fine," said Carter. "I wish you'd do that."

As last week began, the bouncing Lance ball was back in Carter's court. The political decision hinged on a few key questions: Had Carter already sustained as much damage as the affair was likely to inflict on him? Had Lance been so effective, perhaps even built up a sympathetic national following, that Carter could safely embrace him once more and win points for loyalty and consistency? Or was the Lance defense widely viewed as feisty but flawed? If Carter did stick with Bert, would the press and the investigators lose interest and leave Lance alone? Or would the hammering continue to divert both the Budget Director and the President from their duties?

The answers were still being sought on Monday morning, when Lance went to the White House, carrying his personal Bible under his arm. He had looked up three passages of Scripture that he thought might help both the President and himself as they agonized over their decision. He read them to Carter. They included I Peter 2: 20: "For what glory is it, if, when ye be buffeted for your faults, ye shall take it patiently? But if, when ye do well, and suffer for it, ye take it patiently, this is acceptable with God." Then the two men prayed. When they discussed Lance's fate, they considered all of the political realities. Carter did not push for resignation. He left that option up to Bert.

In Congress, some of the Lance supporters began building pressure for his staying in office and hoping to ride out the storm. Oklahoma Congressman James Jones circulated a supporting petition in the House, eventually getting 69 signatures from the 90 Representatives he approached. Lance stopped by to see his most ardent champion on the Senate committee, fellow Georgian Sam Nunn. He assured Lance that he had picked up considerable backing in the Senate, and that if Lance wished, some members would willingly call the President or make speeches in his behalf.

Byrd, meanwhile, made a more methodical reading of the Senate. He sounded out his Democratic colleagues, asked his key staff aides to give him their unsigned opinions on paper--and then sought a White House appointment. Carter and Byrd met cordially at 9 p.m. last Monday in the President's study just off the Oval Office, the President obligingly fetching matches and an ashtray for the Senator's cigar.

The majority leader was candid. He said Democratic Senators were still concerned about increasing "injury to the President," especially in view of Carter's campaign statements about high ethical standards in Government. Said Byrd of Lance: "This is the best time for him to go. The longer he waits, the more difficult it will become for you and for him. You have been fair. It's a matter that must be resolved before the week's out." After the meeting, Byrd telephoned Lance to tell him what he had told the President.

Next day, the Budget Director was still undecided. He talked to Congressman John Flynt Jr., dean of Georgia's delegation in the House. "Hang in there!" Flynt implored Lance. Reassuringly, Bert replied: "I didn't come to Washington to resign before I completed my work."

But the Ribicoff committee was not letting up on Lance. It released an affidavit from Michael Patriarca, a low-level attorney on the staff of the Comptroller of the Currency, which belatedly contradicted assertions by Lance that he lad never asked anyone in the Comptroller's office to lift sanctions against the Calhoun bank so his record would be cleaner as he faced confirmation hearings. Patriarca claimed that last Nov. 22 Lance had asked Donald Tarleton, the Atlanta regional director for the Comptroller, to do just that. (Tarleton had also denied any such overture by Lance.) Clearly, the assault on Lance would continue.

On Tuesday afternoon Carter and Lance teamed up on the White House tennis court for a strenuous 90-minute match against Jordan and Speechwriter James Fallows. After the younger men left, the two friends sat in earnest conversation on a courtside bench for 45 minutes. By all accounts, this was the climactic moment. Lance said he would resign. The President did not challenge that decision.

After dinner with Rosalynn, Carter returned to his private study and Jordan came in. The President told him about Lance's offer to step aside. Lance wanted only two things before the announcement was to be made: a further chance to convince his reluctant wife and time to work out a resignation letter with Lawyer Clifford. Jordan was relieved. On Wednesday the end unfolded rapidly but painfully for both Carter and Lance. Lance telephoned the President in the morning, reporting that LaBelle was still adamantly opposed to the resignation. She thought her husband had gained wide support and had fully vindicated himself. Carter asked Bert and LaBelle to come and see him. They did so at 1:15 p.m., staying for 45 minutes. The President told LaBelle that however reluctantly, he had to conclude that Bert's decision to resign was the best course for the welfare of the Lances and the nation. She did not seem convinced.

As Lance summoned Clifford back to Washington from a business meeting in Detroit, Carter prepared for a scheduled 3 p.m. press conference which had been postponed until 5 p.m. Press Secretary Jody Powell prepared a written statement for Carter. The President resisted the idea. "I don't feel right about reading a statement about Bert," he told Powell. "I just want to talk."

Just 20 minutes before the press conference, LaBelle called to say that however much she regretted the decision, she had appreciated Carter's support of her husband. When Carter hung up, he was engulfed by a combination of sadness and anger at the situation. Powell and other aides worried about whether he could control his emotions when the TV cameras bunked on. "It's going to be a difficult time for you," Powell told the President. "You might need something to read, or to glance at." Answered Carter: "No, if I can make it through the letter [Lance's letter of resignation], I'll be all right after that."

With two pauses, he did get through the letter. And as questioning by reporters continued, he took firm control, even managing a smile at times. As read by Carter, Lance's spare letter gave only one reason for resignation, citing "the amount of controversy and the continuing nature of it." The President explained further, conceding that the affair had diverted some of his own attention from more pressing duties and predicting that it would have prevented Lance from devoting full time to OMB if Bert stayed there. Moreover, said Carter, "he needs to go home and take care of his own business"--a reference to Lance's heavy debts and financial obligations. Carter did not lash out at Lance's critics, although he said some of their charges "were greatly exaggerated" and some were "actually untrue." With a few exceptions, he said, "the media have been fair." Yet as Carter warmed to the defense of his friend, he went much too far in claiming that Lance "had exonerated himself completely" in defending himself against all charges, that all such charges had been proved "false and without foundation" and that Lance had not violated any laws.

In fact, federal bank examiners and Comptroller of the Currency John Heimann had found that Lance had violated civil statutes banning loans of more than $5,000 from a bank to any executive of that bank, and in failing to file reports to his two banks' directors on his many loans and his outside business interests. Heimann had concluded only that prosecution was not warranted. The Justice Department, the IRS and the Federal Election Commission, moreover, are investigating Lance's frequent use of a National Bank of Georgia airplane for apparently personal and political purposes.

White House aides argued that Career's unyielding defense of Lance was deliberate, since any admission by the President of wrongdoing by Lance would only needlessly inflict further damage on beleaguered Bert and raise the question: "Well, if he let down the President's high standards, why was the decision to resign left up to him?"

In fact, Lance had violated those standards in private life, and Carter was invoking both a protective double standard and an unpresidential bit of sentimentality in refusing to say so. Repeatedly the President praised Lance as "a good and honest man," and, not making the selection of a successor at OMB any easier, predicted that no one could be found who would be "as competent, as strong, as decent and as close to me as a friend and adviser as he has been."

The search for a successor obviously will be extremely careful. The next confirmation hearings will certainly be painstaking. However necessary, the ordeal of Bert Lance has not made it easier for successful business executives to move out of the protective privacy of their past and into the post-Watergate glare of public service--even though few would have financial indiscretions on the Lance level to worry about.

For Lance, the reverse movement may prove equally difficult. He must not only struggle to untangle his finances, but the multiple investigations into his pre-Washington days will have to run their course. Yet the lingering problems were temporarily set aside as LaBelle and their longtime neighbors in Calhoun met in a joyful and rousing reunion at week's end. A welcoming band played I Did It My Way, and Lance declared: "It's mighty nice to be home again."

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