President Carter's 1976 campaign committee claims to have paid off more than 200 debts - totaling more the $300,000 - without submitting the requisite documentation showing that the payments were made.
Officials at the Federal Election Commission noticed most of the discrepancies this fall and called for an accounting in a letter last month to the 1976 Democratic Presidential Campaign Committee, Inc., the key organization for Carter in last year's general election campaign.
White House aides in charge of the committee's affairs declare there is a perfectly innocent explanation and say they are in the process of refining their campaign arithmetic for the FEC.
"We might be inaccurate but we're not dishonest," White House Counsel Robert J. Lipshutz explained with a laugh.
By fare the biggest debt in question was $91,140 that the Carter campaign still owed at the end of 1976 to Citizens & Southern National Bank in Atlanta, the residue of nine loans aggregating more than $1,155,000 that the influential Georgia institution provided for Carter last year.
The unpaid $91,140 balance simply disappeared from the books in the Carter campaign's first accounting for 1977, covering Jan. 1 through March 31. In a report certified by Lipshutz as treasurer, the 1976 Democratic Presidential Campaign committee, Inc. listed all the loans it had been gotten from Citizens & Southern - a total of $980,785 following Carter's election in November - as having been reduced by now to zero. The payment should have been listed in detail in the 119 pages of itemized expenditures in the quarterly report, but it was not. Similarly there was no sign of payment of the additional $7,119 that Citizens & Southern loaned the committee on Jan. 2 or cover much of the interest due the bank.
Lipshutz told a reporter that despite the lack of documentation in the report, the Carter campaign made a final payment of $100,396.25, including all interest still due, on Jan. 18. He and another White House aide, Richard Harden, said it didn't turn up on the report to the Federal Election Commission because of the nature of the C&S loans.
"We used the 'Accounts Receivable' money owed to the Carter campaign as collateral for the loans," Lipshutz said. These consisted primarily of transportation bills sent to the press and the Secret Service for travels with the candidate.
As these checks came in, Harden said, "We booked them in as receipts, listed them and sent them direct to the bank. So we, in effect, never deposited the checks." Citizens & Southern, he said, didn't want the Carter campaign to cash them since they were collateral for the loans. Instead, he said, the bank took charge of the payments when they came in and automatically reduced the loans until the debts were paid.
In addition to short-term loans from Citizens & Southern, which Lipshutz said were made in the spring of 1976 and again last November at a rate of 8 per cent, the Fulton National Bank of Atlanta helped the Committee for Jimmy Carter - the key campaign organization organization during the Democratic primaries - with eight other loans last April, May and June aggregating $1,350,000. Some of these were paid off before others were taken out, but at times the Carter campaign owed the Atlanta banks a total of approximately $1 million.
The loans from the Georgia banks during the primaries have been critized in some quarters as having given Carter a remarkable edge over other hardpressed Democratic candidates who reportedly could not get similar bank credit. But White House officials have defended them as "completely proper." Harden maintained the terms were no different from "the loans that companies and others would normally get." He added that the Carter campaign spent some $7,000 on legal advice from the banks to make sure the loans were proper.
As for the more than 200 other campaign debts in question, FEC staff director Orlando B. Potter told Lipshutz in a Nov. 16 letter that they had not been properly liquidated. In it, Potter listed a sampling of those that needed to be explained, such as $2,205 owed to Carter confidant Charles H. Kirbo for travel expenses; $1,570 to "Mobil Johnny of Albany" for"vote getting," and $700 to Heart of the North Aviation.
Harden said all these debts had also been paid although there was a different explanation for the lack of documentation. Although federal election laws require explicit itemizations of all expenditures of $100 or more in any given year, the Carter campaign's computers, Harden said, weren't programmed that way. Instead, he said, as many of the final debts were reduced to zero, "the computer dropped them down from 'Itemized Expenditures' to 'Unitemized'
The checks are now being tracked down one by one in Atlanta to Satisfy the FEC, Harden said.
"The best we can figure is that there was a programming error," he said. "Evidently computers do what you tell them to do even when when we tell them to do something wrong."