TO GREAT REVELATIONS sprang out of the Comptroller's report on the intricate finances of Bert Lance, director of the Office of Management and Budget. Generally speaking, the report confirmed confirmed under official imprimatur and with precision and detall, the accounts that have already been printed. The Comptroller concluded that Mr. Lance as violated no major laws. President Carter and Mr. Lance immediately and hungrily seized on that finding as a sweeping vindication of Mr. Lance. But, of course, it was a good deal less than that. From the beganning the Lance affair has been a matter not of legality but of propriety. And to break no laws is, you might say, the minimum in public conduct.
As the Comptroller's report sets it out, the portrait one of a man who cuts a lot of corners as he hustles to the path. But, as the Comptroller acknowledges, some of those corners are not well marked. Take, for example, the large loans to Mr. Lance from the other banks with whick his Georgia National Bank had accounts. The report quotes memos from the other banks making it altogether clear that they used the personal loans to Mr. Lance as a means to encourage further business from his bank.
Mr. Lance did not deposit his bank's money in order to secure those loans; but that would have been allegal. You may remember that examiners found a memo in the files of a New York bank, Manufacturers Hanover, that seemed to say something of that sort. The writer of the memo has told the Comptroller's investigators, under oath, that she was simply thinking of an overall relationship that [the banks] hoped to have one day, not discussed . . . ." But if these losely coincident relationships between the bank's deposits and the bank president's personal loans violate no law, what about propriety? The Comptroller commented that the pattern "raises unresolved questions as to what constitutes acceptable banking practice."
Mr. Carter marched firmly into a press conference yesterday with Mr. Lance to deliver a ringing endorsement of Mr. Lance's record, his character and is honor. The President hopes that his unqualified language will end the matter. But shortly it will dawn on the White House that the endorsement serves to define not Mr. Lance's conduct, but rather Mr. Carter's standards.
When Mr. Lance ran for governor of Georgia in 1974, the campaign was financed in part by heavy overdrafts on accounts at the Calhoun, Ga., First National Bank, of which he was also president. The bank never collected interest on some of those overdrafts. In effect, the bank's stockholders involuntarily helped to pay for Mr. Lance's campaign. When examiners discovered the overdrafts in 1975, they reported them to the Justice Department. We have the word of the former U.S. Attorney in Atlanta, a republican, that the evidence there would not have supported a criminal prosecution. But those overdrafts certainly were what the Comptorller's report yesterday called them: "unsafe and unsound banking practices."
On another point, the Comptroller noted that a banker is supposed to report his personal borrowings to the regulators. The examiners found 50 loans to Mr. Lance that he should have reported, under the stature, but did not.
The Comptroller's report covers only the past. When the Senate Governmental Affairs Committee reopens its hearings next month, it might usefully inquire into the future. Mr. Lance came to Washington with assets larger than his $5.4 million in debts, but since then the value of some of his stock has fallen. The senators need to assure themselves, and everyone else, that Mr. Lance's outstanding debts will not exert an undue pressure on him in the months ahead.
There's nothing in the Comptroller'e report, or in Mr. Lance's finances, that is serious enough to force him to resign. He has the record of a man whose custom it is to cut very close to the line and sometimes to get on the wrong side of it. That record is not one to rejoice over, but neither does it suggest willful corruption. Nevertheless, if Mr. Lance stays in Washington, it will be at a certain price. Part of that price will be paid by Mr. Carter, who will have to avoid for a while all references to new moralities, fresh winds blowing, hounds' teeth and similar uplifting topics. part of the price will be paid by Mr. Lance, who will have to brace himself for a ripple of inquiry and doubt with every business fluctuation that could affect his investments and debts. It is not a negligible price. But neither is it intolerably high, and the administration is evidently prepared to pay it.