Top Justice Department officials said yesterday that they have completed their investigation of former budget director Bert Lance but are continuing a separate inquiry into the related financial affairs of the Carter family peanut business in Plains, Ga.
Government lawyers now face critical decisions on both matters: whether to seek criminal indictment of Lance, on the one hand, and whether to appoint a special prosecutor or outside review panel to deal with the sensitive matter of the Carter warehouse.
In a meeting with Republican members of the House Juiciary Committee yesterday, Attorney General Griffin B. Bell left his options open on the Carter warehouse inquiry, though he indicated that he was generally inclined against the use of people outside the Justice Department in investigations.
Those attending the meeting, however, said Bell appeared receptive to some form of external review of the department's warehouse investigation.
Assistant Attorney General Philip Heymann told the eight House members present that he would report back to them in two weeks on the handling of the warehouse probe, after he has reviewed a recently completed FBI report on loans to the warehouse from the Georgia bank Lance headed in 1975-76.
Ranking committee Republican Rep. Robert McClory (R-Ill.) said the minority members would hold off on any formal demand for a special prosecutor during the two-week period. "That seemed to satisfy all of our members," McClory said in an interview.
The peanut business in Plains is owned 15 percent by Billy Carter, 63 percent by the president and 22 percent by their mother, Lillian Carter.
The Justice Department began looking at the loans to the Carter warehouse from Lance's bank -- the National Bank of Georgia -- during a grand jury investigation into possible breaches of banking laws by Lance.
In a memorandum sent to McClory by Bell, the Justice Department said, "These 'Carter warehouse' transactions raised some questions about the predicate for the extension of credit, the terms of the loans, and the administration of the loans... Investigative steps regarding these transactions were undertaken and are continuing."
Some Republicans in the House and Senate raised the question of a special prosecutor after news reports of the warehouse investigation. They noted that the Ethics in Government Act, signed in October by President Carter, set up a mechanism for the appointment of a special prosecutor.
Bell told the Republicans yesterday, however, that the department has determined that the act does not apply to the Carter warehouse investigation because the probe was under way before the bill was signed. In addition, Bell noted that the act p'rovides exemption for grand jury investigations begun within 180 days of the effective date of the law.
The attorney general can, nevertheless, appoint an outside prosecutor on his own. But, according to Justice Department sopkesman Terry Adamson, Bell reportedly said tha the department has adequate stfeguards for the handling of sensitive cases, such as the Carter warehoude inquiry, and that he had confidence in the ability of department lawyers to handle them.