The White House yesterday portrayed President Carter's knowledge of the financial affairs of budget director Bert Lance as sketchy and vague at best until this summer, when Lance came under investigation by goverment agencies.
Seeking to answer questions about how much the President knew of Lance's tangled affairs. White House press secretary Jody Powell said he attempted to piece together a chronology from the recollections of both men.
According to Powell. "The only thing that sticks in his [Carter's] mind' is that he knew before he appointed Lance about overdrafts on campaign accounts during Lances unsuccessful race for governor of Georgia in 1974.
Powell said the President assumes he learned of the campaign overdrafts during a meeting in Plains. Ga. with Lance in November. He said Lance recalls telling Carter then about problems with loan losses at the Calhoun, Ga., First National Bank, which Lance had headed.
"Neither of them felt the problems were a matter of concern." Powell said.
He said the president also "assumes" from the statements of others but does not remember that a proposed press release about some of Lance's problems was read to him Dec. 1, two days before Lance's appointment was announced. That press release, however, mentioned only overdrafts on the campaign accounts and "certain other accounts"and said the matter had been corrected.
Not until well after Lance's appointment, Powell said, did Carter learn that the campaign overdrafts had been referred to the Justice Department and that Justice Department and that Lance and members of his family had run up overdrafts of more than $500.000 on their presonal accounts. But when Carter learned of these matters. He assumed they were closed. Powell said.
The state of Carter's knowledge about Lance has been a subject of interest at the White House, particularly since it was learned that Powell White House counsel Robert Lipshutz and Hamilton Jordan. Carter's chief political adviser. All read an FBI report in January that detailed many of Lance's questionable financial practices.
Powell said yesterday that the President did not read the FBI report until after Aug. 18 - the day he flew from Camp David, Md. to Washington to make a ringing endorsement of his budget director.
Asked if Carter is disppointed that Lance did not tell him more. Powell said. "I'm sure he does not feel disappointment or that Mr. Lance let him down."
Powell also denied a report by a Chicago television station that the FBI is already making background checks on possible Lance successors and said he does not expect Lance to announce his resignation when he appears before the Senate Governmental Affairs Committee on Thursday.