President Carter said yesterday he is keeping an "open mind" about budget director Bert Lance's future in the government but still has no reason to feel that Lance "is dishonest, incompetent or has acted unethically,"
The endorsement was less forceful than Carter's "Bert, I'm proud of you" at a news conference almost a month ago. But it was an endorsement nonetheless, suggesting that the President and his advisers may still believe they can salvage Lance in his job as director of the Office of Management and Budget.
Carter criticized Lance for running up overdrafts on his bank account, saying there is "no way" that could be excused, but said he will wait until Lance completes his testimony before the Senate Governmental Affairs Committee to make a decision on the budget director's future.
"I am sure the decision I make along with Bert Lance will be satisfactory to the American people," he said. The President made the comments while speaking via a telephone hook-up to the annual convention of the Radio and Television News Directors in San Francisco.
He began his remarks by mentioning a number of foreign policy issues and his energy and welfare reform proposals. But it became clear almost immediately that the minds of the news directors in San Francisco, like those of people in Washington, were focused on the Lance affair. Five of the first six questions he received dealt with the matter.
As the President spoke, television sets throughout the White House-Executive Office Building complex were tuned to the broadcast of Lance's testimony. And the general reaction was that Lance, particularly during the morning segment when he read a lengthy prepared statement, had handled himself well.
Hamilton Jordan, Carter's chief political adviser, smiled when asked about Lance's chances of surviving in office.
"We'll just have to wait and see," he said. "It's not my decision, it's the President's." Of Lance, Jordan said, "I think he did well this morning."
Carter was not shown an advance copy of Lance's opening statement, but Jordan was. Jordan said he suggested some changes of which some were accepted and others ejected. He characterized his input into the statement as "minor."
Robert Dietsch, Lance's press spokesman, said it was his opinion that the budget director has not even considered resigning.
A White House official said Lance's forceful opening statement, with its criticism of the Governmental Affairs Committee, was a deliberate tactic that, in effect, wrote off any hope of regaining support from committee chairman Abraham A. Ribicoff (D-Conn.) and ranking Republican Charles H. Percy (I11.). Both senators told the President on Labor Day that Lance should resign.
Congressional reaction to Lance's testimony was sparse, largely because most members of Congress did not see the televised hearing. But one Senate Republican, referring to Democrat Sens. Lawton Chiles (Fla.) and Thomas F. Eagleton (Mo.), commented:
"I have the sense that someone has asked Chiles and Eagleton to gather the wagons round and protect Lance. But it's a mistake. The crowd was with him this morning but not this afternoon. The longer it lasts, the longer John Q. Public out there is going to think it's another Watergate."
Answering questions from the news directors, Carter said, "If I believed all the allegations against Bert Lance I would have discharged him immediately." But he said that he knew some of the charges to be false and that there had been some "distortions" in news reports.
On the whole, however, the President said news coverage of the Lance affair has been "fair" and marked by "committed digging."
Carter also said he did not believe a more thorough investigation of Lance's background might have turned up information that would have persuaded him not to appoint his close friend to the OMB post.
"He built up a reputation as a businessman in Georgia that is superb," the President said. "I don't think there is any indication that a more thorough scrutiny of Bert Lance's past record or his reputation among those who knew him would have changed my mind that he was well qualified to be the OMB director."
Earlier yesterday, the Lance affair intruded into a breakfast Carter hosted for Republican senators.
The President assured the Republicans the White House is not keeping an "enemies list" or compiling dossiers on the opposition. This was clearly in response to White House press secretary Jody Powell's acknowledgement Wednesday that he tried to spread politically harmful rumors about Percy to several news organizations.
Carter told the news directors that Powell's behavior was "regrettable" and "embarrassing" and was reason for Powell to show more caution in the future. He said he agreed with Powell's assessment that the episode was "inappropriate, regrettable and dumb."
Jordan encountering Powell outside the presssecretary's office, cracked, "Hello, Dumbo."