Smith Bagley, a prominent Washington investor with ties to the Carter administration, has accused The Washington Post of bias and unethical conduct in its coverage of an Atlantic City hotel casino proposal in which Bagley had participated.
In an interview published yesterday by The Washington Star, Bagley focused his criticism partly on Washington Post reporter Maxine Cheshire, who wrote a front-page story about the hotel plan. "Ever since Maxine Cheshire asked me for a $25,000 personal loan and I turned her down," Bagley asserted, "I have felt my family and I have been under a magnifying glass with Washington Post eyes looking through it." Cheshire has denied that such a loan was ever discussed.
In addition, Bagley charged in the Star interview that Washington Post editors had "verfied through a third party the truthfulness" of the allegation. He said The Post "irresponsibly" assigned Cheshire to investigate her own alleged conflict of interest. He asserted that Post executive editor Benjamin C. Bradlee had decided to "cover up" evidence of the Post reporter's misconduct.
Bradlee, Cheshire and assistant managing editor Harry M. Rosenfeld, who edited Cheshire's story, all disputed Bagley's allegations yesterday. Bradlee said The Post had examined the allegation that Cheshire was refused a $25,000 loan before it published the story. "We determined that it was false," he added.
Bagley's allegations were prompted by an article, published Thursday by The Post, in which Bagley and one other Washington investor with Carter administration links, Nathan Landow, were reported to have been involved in a proposal to build hotel and gambling casino in Atlantic City, with Washington gambling kingpin Joe Neslie as a consultant.
Nesline's involvement in the vengure, The Post reported, became known Jan. 14 when authorities made a gambling raid at Nesline's Bethesda apartment and FBI agents seized documents describing a proposed $85 million deal involving Bagley and Landow.
Bagley, a Reynolds tobacco heir, was quoted as denying he had ever met or "heard of" Nesline.Landow, a multimillionaire builder, acknowledged knowing Nesline. Bagley could not be reached for further comment yesterday. One of his lawyers, Irvin B. Nathan, declined to comment.
The accuracy of The Post's account has not been disputed. The Washington Star published a similar article yesterday, but Bagley and his lawyer, Nathan, have contended that the story was prompted by Post reporter Cheshire's alleged bias.
The "third party," who Bagley claimed had verified the allegation that Cheshire had sought a $25,000 loan, was apparently Michael C. Balentine, a fund-raiser for the Kennedy Center described by center officials as employed on a "trial basis." Ballentine declined to comment yesterday.
Ballentine has given conflicting accounts about the alleged request by Cheshire for a $25,000, according to Post editors.
In the Star's article yesterday, the "third party," apparently Ballentine, was quoted as saying he had listened while Cheshire told Bagley in March, 1976, about financial problems she had had at a liquor store that she owned in Frederick, Md. "She needed $100,000 but had covered some it herself," he was quoted as saying. "She specifically stated that she needed money very badly."
According to Post editor Rosenfeld, Ballentine had previously told The Post that he did not recall hearing Cheshire ever ask Bagley for money. And in a tape-recorded phone conversation with Cheshire, Ballentine said, "I told Harry Rosenfeld last night that I never remember a mention of money."
Rosenfeld said yesterday that Ballentine has given three differing accounts of his role in the meeting at Bagley's Georgetown house. In one of Ballentine's versions, Rosenfeld said, Ballentine was present throughout the meeting. In another, he was not present at all. In a third, Rosenfeld said, Ballentine was present except for a brief interlude.
Rosenfeld disputed Bagley's charge that Cheshire had been assigned to investigate her ownlalleged unethical vestigate her own alleged unethical had investigated the allegations.
Cheshire said yesterday that she had visited Bagley's Georgetown home at Ballentine's request in 1975 or early 1976. Ballentine brought up the subject of Cheshire's liquor store, she said, and they discussed it briefly. "I did not ask him for a $25,000 loan," she said. "I did not ask him for any money."