President Carter today accused the men who allege Hamilton Jordan used cocaine of dreaming up the story and "telling all kinds of lies."
Carter, talking to reporters in a field near his Plains home, appeared interested in news reports that a drug dealer named "Johnny C" had told the FBI he did not give cocaine to White House Chief of Staff Jordan.
The reported denial contradicted claims by the owners of New York's Studio 54 discotheque, Steve Rubell and Ian Schrager, who contend "Johnny C" gave Jordan the illegal drug at the discotheque last year.
When a reporter told Carter the mysterious "Johnny C" had denied giving Jordan cocaine, the president said, "Oh, really." Then he made an okay sign with his hand and said, "Right on, right on."
Meanwhile, Attorney General Benjamin R. Civiletti said today that he would not feel pressured to ask for appointment of a special prosecutor because of the political sensitivity of charges against Jordan.
In a phone interview from the Greenbrier in White Sulphur Springs, W. Va., Civiletti said his decision "will depend entirely on the facts and whether the case is substantiated enough to really merit appointment of a special prosecutor."
He noted that the accusation was made by "two defendants under severe jeopardy." He said he would consider the standards of the new Ethics in Government Act as well as the law allegedly violated and the evidence. A first offense of possession of cocaine seldom is prosecuted by federal attorneys.
Civiletti asked the FBI to investigate the charge, made by Schrager and Rubell as their attorneys sought to get prosecutors to lower several felony tax charges filed against the men in June.
The investigation was required because Jordan is a high-ranking official covered under the special prosecutor provisions of the new ethics act.
Sources close to Jordan expressed concern yesterday about the fairness to Jordan and the Justice Department of appointing a special prosecutor in a case triggered by men facing indictment.
Later in the day, Carter again asked a reporter about the case.
Then, in a clear reference to Jordan's accusers, he said, "I think they just dreamed up the story and now they're getting caught . . . "
Rosalynn Carter, at her husband's side, interjected, "Yes."
Carter completed his sentence, " . . . telling all kinds of lies."
Both The New York Times and The Washington Post reported today that Johnny C told federal agents he was not at Studio 54 the night of June 27, 1978, when Jordan was alleged to be at the discotheque, and that he has never sold cocaine to Jordan.
But at the same time, the newspapers reported sources said that a tape recording has been made of Johnny C describing how he gave Jordan cocaine and watched him use it.
Jordan has denied the whole incident, and the White House contends the accusers, Schrager and Rubell, are making inaccurate charges in an attempt to get federal prosecutors to settle the tax case against them.
White House spokesman Rex Granum, asked about reports that Jordan would take a leave of absence if a special prosecutor were appointed, said Jordan had not made any such decision.
"That would be extraordinarily hypothetical," Granum said. "No public official should be forced out of office by the mere making of an allegation against that official, most especially when the people making the allegation are indicted for a felony tax evasion charge.
"We expect Hamilton Jordan to continue to carry out his duties as chief of the White House staff."
Jordan's advisers hope the case never gets to a special prosecutor. If Civiletti dismisses the allegation as unsubstantiated, they will not have to face the prospect of an investigation hanging over the Carter administration into a presidential election year.
They also would not have to face the possibility of Jordan's resigning because he had become a political liability.
Lawyers for Schrager and Rubell, however, are trying to push the case. Mitchell Rogovin, Schrager's attorney, has said he has "tangible evidence" corroborating the charge against Jordan that he will turn over only to a special prosecutor.
If that strategy works it would open a new defense for criminal defendants, one its doubtful the drafters of the special prosecutor bill ever considered: charging a high official with a crime to trigger the special prosecutor act.
Contributing to this article were staff writers Charles R. Babcock and Martin Schram.