The voluminous report the Comptroller of the Currency issued Thursday on Bert Lance not only cleared the budget director of any criminally prosecutable offenses in his previous financial dealings, but also provided numerous insights into the way banker Lance handled his personal finances.
The report provides a particularly detailed anatomy of a $2.6 million loan Lance obtained April 24, 1975 from the Manufacturers Hanover Trust Co. of New York and the difficulties Manufacturers Hnover had in administering the loan.
Manufacturers Haover officers sent Lance eight "Dear Bert" letters between July 11, 1975 and November 5, 1976, repeatedly asking him to provide the documentation needed on his loan. The bank also requested additional collateral to bring the loan into compliance with its internal rules. In particular, more than 14,000 shares of National Bank of Georgia stock, which Lance had received as a stock dividend, were requested for collateral purposes.
On March 12, 1976, Lance received another letter from the bank requesting $21,911.46 "so that we can clear your loan from the past due interest list." The amount eventually was paid.
And on Sept. 30, 1976, the Lance loan was flagged as a "special mention" in a "Problem/Classified Loan Report" prepared by Manufacturers Hanover senior vice president Frederick A. Rager because of "heavy concentration of collateral and the temporary undermargined condition" of the credit.
On Jan. 6, 1977, Lance paid his Manufacturers Hanover loan off. At that time he sent the bank a letter authorizing the release of his collateral to the First National Bank of Chicago which had issued him a large replacement loan of $3.4 million.
Asked about the apparent laxity with which Manufacturers Hanover dealth with Lance, bank vie president and spokesman James Hambleton said. "Maybe the treatment appears different from what you or I would get, and it probably is, but there was nothing improper about it."
"The bank was paid off, which was the ultimate test," he said.
As to the consistently undermargined status of the Lance loan. Hambleton said, "it wasn't a hideously huge amount of money you're talking about. At the time it was undermargined, but not seriously so, and not sufficient to warrant much concern."
He also noted that "special mention" was the least significant of four categories which his bank uses to describe loans with problems.
The series of letters to Lance from the bank began July 11, 1975 with a note from vice president and account officer Betsy Jo Viener stating: "It seems we still have some paper work to complete in line with our loan to you." There was the matter or 4,000 shares of Calhoun First National Bank stock that had not been properly pledged as collateral and a form Lance sent back that "was signed but not completed."
She followed up on August 7 with a short letter, including a copy of the July 11 letter, several forms that still needed to be filled out and advance thanks for "your taking care of these documents as well as the additional collateral."
More forms were forwarded on Oct. 2 by Viener. On Oct. 14 her letter mentioned the American Bankers Association 100th anniversary convention which had just taken place in New York, saying "I am sorry we missed you during the ABA for we did hope you would have time to come by to visit with us. I imagine you were quite busy participating in all the activities and didn't have a moment free." She again cited the collateral question.
Letters followed on Oct. 20, again on June 2, 1976 after a lapse of several months, and on Aug. 10, all including similar requests to Lance.
The final letter is dated Nov. 5, 1976, just after the presidential election.
"Now that the votes have been counted, the time and effort you devoted to Jimmy Carter's candidacy have certainly been justified," Viener began. "I know you must be thrilled and very eagerly looking forward to continuing your close personal and working relationship with him.
"For the moment, though, perhaps your attention can be diverted to more mundane but nonetheless important matters." She continued, citing the still unfilled forms and a shortfall in collateral, largely due to the bank's not receiving more than 14,000 NBG shares Lance had received as a stock dividend the previous Dec. 31.