The Carter peanut warehouse operation in Plains, Ga., is up for sale, according to President Carter's trustee, Charles Kirbo, who is overseeing the business.
The operation has had financial difficulties in recent years, some of them attributable to a costly expansion program. Moreover, the finances of the warehouse have been under scrutiny by the Justice Department because of suggestions -- so far unsupported -- that funds may have been diverted to Carter's presidential campaign.
The president's brother, Billy Carter, offered to buy the business in mid-1977, but Kirbo found his terms unacceptable and turned him down.
During an interview Monday at his Atlanta office, Kirbo made it clear that the recent adverse publicity about the investigation contributed to his decision. But he added: "When I first took it over, I was considering selling it."
The warehouse records have been subpoenaed by the Justice Department as an offshoot of the grand jury probe into the finances of former budget director Bert Lance. Lance, while head of the National Bank of Georgia, arranged loans of some $6.5 million to the Carter operation in 1975 and 1976.
"I have not yet had a satisfactory offer from a satisfactory buyer," Kirbo said.
"I could have sold it some time ago to foreigners," he continued. "But there's been enough bad publicity about it already without selling to them."
Kirbo emphasized that the would-be foreign buyers were not Arabs.
An Arab investor paid a premium price for NBG bank stock owned by Bert Lance, who has become associated with Arab interests since being forced from office.
And Billy Carter's budding relationship with the Libyans has stirred controversy and caused the Justice Department to inquire if the president's brother was acting as a lobbyist for that country.
Not long after he became the president's trustee, Kirbo appointed Gold Kist Inc., an Atlanta-based management firm, to run the warehouse.
Under terms of the contract with Gold Kist, that firm must be given the first chance to buy the warehouse. "But I'm free to sell it to anyone," said Kirbo, who suggested he had a few interested parties.
The peanut warehouse operation, which was begun by Lillian Carter's husband, is now held in a partnership. Roughly, Billy has a 15 percent interest, Jimmy 63 percent, and their mother 22 percent, according to Kirbo.
Kirbo said President Carter had not been consulted about the proposed sale, since the operation is part of a "blind" trust.
Asked if Billy Carter has been given another chance to buy out his mother and brother, Kirbo said: "I haven't discussed it with Billy."
As for Mrs. Carter, he said: "She's agreeable to anything the boys want to do."
Kirbo said he did not want to discuss the price he was asking for the operation.
Kirbo said, during the interview, that taking on the ambitious expansion of the warehouse at the time Jimmy Carter was running for president may have been poor planning. But he said he was confident "we're going to come out well financially."
The business had been profitable over the years, Kirbo said. Even when he was governor of Georgia, Jimmy Carter got monthly statements on the business. "He had a lot of technical appreciation of the operation," Kirbo said.
The expansion -- adding a peanut sheller and a new warehouse -- was contemplated before Carter decided to run for president, Kirbo said.
The sheller and warehouse, financed with a $1 million loan from the NBG, were completed in late 1975. But Kirbo said the operation continued having trouble with the new equipment into 1976.
In 1976-77, the peanut crop was hit by a drought, which meant that the costly new equipment could not be profitably utilized, according to Kirbo.
At that time, Billy Carter was running the operation.Apparently he suffered from a combination of adverse weather conditions, his own poor administrative abilities and his free-spending ways.
"Billy had never had anything more than a job at the warehouse," Kirbo said. "Jimmy and his mother were hopeful that Billy would eventually run the thing."
In addition to the loan for the warehouse and sheller, the bank also extended about $6.5 million in commodity loans to the Carter operation. These were to help finance the purchase of peanuts from the farmers and storage of the peanuts until they could be sold to processors.
Kirbo said that Billy got into trouble when he took IOUs from farmers who were buying seed and other supplies at the warehouse. These farmers promised to deliver their peanut crop to the Carter operation.
These accounts receivable were pledged as collateral on the NBG loans. But because of the drought in 1977, some of the farmers harvested only about half the expected peanuts; others had their crops wiped out completely.
According to a recent report by the NBG's outside directors. Which was prepared as part of the settlement of a suit by the Securities and Exchange Commission last April, Billy often was overdrawn in repaying the warehouse's credit line.
The report said his checks to pay down the loan would sometimes bounce. Kirbo says this was caused by a poor cash flow resulting from the loans to the farmers.
The Justice Department is investigating not only the NBG loans but also the whole financial operations of the warehouse under Billy Carter.
But Kirbo said that he has great faith in the warehouse operation's accountant in Americus, Ga. "We got all the records -- and we followed the money coming in and we followed the money going out," he said.
Billy Carter, who drew a salary of $20,000 annually from the warehouse, has heavy expenses for his eight children, and spending habits -- such as building what is described as a "mansion" in Plains, and a personal farming operation that Kirbo said proved "unsuccessful."
As partners, the Carters were free to draw funds from the retained earnings of the warehouse, according to Kirbo. Jimmy and his mother never overdrew, but Billy was overdrawn every year, Kirbo said, and recently he borrowed about $148,000 from Carter Farms Inc., to pay off his account receivable at the warehouse.
Kirbo says that Billy has apologized for his recent public criticisms of Kirbo. "Billy has a drinking problem," Kirbo observed.
The sale of the warehouse operation will leave Jimmy Carter with Carter Farms Inc. Its main assets, according to Kirbo, are 2,000 to 3,000 acres of valuable farmland in several counties around Plains.