Attorney General Griffin B. Bell yesterday appointed a Republican exprosecutor as special counsel to complete the Justice Department investigation of National Bank of Georgia loans to the Carter warehouse.
Bell said the selection of Paul J. Curran, 46, a former U.S. attorney for the Southern District of New York, was warranted because the warehouse investigation touches on a business in which the president and his brother and mother hold partnership interests.
"It is important to the American public's confidence in the administration of justice that they be assured that the ultimate resolution of the investigation... was reached fairly and impartially without even the possibility of deference to high office," Bell told reporters.
Bell said Curran's appointment will be a "special guarancee" that the investigation will be "full, vigorous and impartial."
The appointment stops short, however, of giving Curran the full powers of a Watergate-style special prosecutor. Republican congressional leaders immediately attacked the difference and called for a special prosecutor.
Any "prosecutive decisions" by Curran to seek indictments of suspects or immunity for witnesses must be approved by Philip B. Heymann, the head of the department's Criminal Division.
Heymann said he would overrule Curran only if the special counsel's recommendation were "so grossly inconsistent with well-established prosecutorial standards as to render the decision unconscionable." Any reversal of Curran would be reported to the public and Congress, Bell said.
Curran was appointed under the same statute used in the appointment of Archibald Cox as the first Watergate special prosecutor. Cox, a Harvard Law School professor, declined in a telephone interview yesterday to say what he thought of Curran's mandate. But, he said, "Certainly nothing went to [Henry] Petersen [the Criminal Division chief during Watergate] when I was special prosecutor... We didn't get approval for indictments."
The investigation of the Carter warehouse loans grew out of a federal grand jury inquiry into the banking affairs of former Office of Management and Budget director Bert Lance. In 1975, Lance, then president of NBG, arranged for loans to the Carter warehouse that grew to $6.5 million over the next three years.
A recently completed FBI preliminary investigation of the NBG loans to the Carter warehouse in Plains, Ga., reortedly uncovered technical violations of banking laws because repayments were late.
The key question facing investigators is what happened to the money in warehouse accounts that wasn't being used to pay back the bank. There has been no indication -- and the White House has denied strenuously -- that any of the loan money was diverted to the Carter presidential campaign.
"Don't holdyour breath waiting for another Watergate on this one," one FBI official said yesterday.
Curran, who is in private law practice in New York, said at the Bell news conference yesterday that he was satisfied he would have "total independence" to pursue the warehouse investigation. "I'm satisfied that should Mr. Heymann and I have an ultimate disagreement under the charter which Judge Bell read there are ultimate safeguards," Curran said.
He said he would begin the new full-time job next week and bring in a couple of assistants from outside the department to help him.
"As I understand it, my mandate is to look at those loan transactions and see where the money went and follow that situation wherever it deserves to be followed," Curran said.
Bell's decision not to give Curran full special prosecutor authority immedidately led to allusions to Watergate by Republican leaders. Howard H. Baker Jr. (R-Tenn.), Senate minority leader and a likely presidential contender next year, said, "The parallel with Watergate is inescapable."
Baker called Curran "a good man in the wrong job," and said the Senate Republican Conference, the policymaking body for GOP senators, had recommended that its Judiciary Committee members call for a special prosecutor under a new law enacted in 1978. "It is the only way to establish credibilitye," Basker said. "To do otherwise would suggest a double standard."
In a letter to Bell yesterday, the seven Republican members of the Senate Judiciary Committee urged Bell to appoint a special prosecutor under provisions of the new Ethics in Government Act.
They said the "special counsel" appointment was inadequate because Curran would't be independent, and because he has no tenure provisions or charter outlining his authority.
Heymann said in a telephone interview last night that a charter will be published in a few days. He said it will be "morally and, I think, legally binding on the attorney general and everyone who works for him."
Curran will be "just about as absolutely independent as the Justice Department can decently authorize, he said.
The Justice Department position is that the new ethics law doesn't apply because the warehouse investigation was started before the law was enacted. The GOP Justicieary Committee members, led by Sen. Strom Thurmond (R-S.C.), noted that this was just a technicality that could be waived.
Asked wahy Bell hadn't headed off criticism by just naming a fully independent special prosecutor under the longstanding authority of the attorney general, Heymann said: "He didn't want to give away the last thread of unconscionability."
Bell told the news conference: "I know it's very disappointing to the media that we will not use the term prosecutor... You assume that if we use the term prosecutor, we're going to prosecute someone. We believe in due proscess of law, and we don't announce in advance... that we're going to prosecture."
Bell has disqualified himself from the NGB investigations because he was a stockholder of the bank.
He said he informed the White House of his decision to appoint Curran, but did not consult with the president beforehand.
Heymann said he had never heard a word from Bell or the White House about the Lance-warehouse investigations. "I have never said anything but "'Go, Go, Go,'" he said.