A U.S. District Court judge today said he would order former federal budget director Bert Lance and three codefendants acquited of criminal conspiracy charges.
The decision by Judge Charles A. Moye Jr. came during the 12th week of Lance's bank fraud trial, just as the government was preparing to rest its case.
Lance and the others still face 32 criminal counts of falsifying bank records, misapplying bank funds and filing false financial statements to get loans.
In announcing his decision, Moye said: "I don't believe evidence would support the finding of a generalized conspiracy."
The judge told prosecutors that he would listen to any further evidence of a conspiracy before the government rests its case, probably in about two days. But Moye added that he didn't foresee that the government could come up with any convincing evidence.
Late tonight, the chief prosecutor said the government would not argue the conspiracy count further.
Outside the courtroom, Lance, grasping the hand of his wife, LaBelle, who had attended the entire trial, said: "The government had no conspiracy to prove because there wasn't one."
Chief Justice Department prosecutor Edwin Tomko maintained that losing the conspiracy count would not be fatal to the government's case.
"I'm not really disappointed," Tomko said. "Conspiracies are always difficult. It's difficult to establish an agreement between people, especially in fraud cases."
Moye also ruled today that the government could not use six elaborate charts to show the defendants' illegal use of bank loans and overdrafts.
Defense attorneys had objected to the generalized nature of the displays, claiming that they unfairly tended to lump the defendants together. Prosecutors had planned to use the charts to illustrate points made by its six summary witnesses -- federal bank examiners and FBI agents -- who on Friday are expected to begin testimony at the end of the government's complex case.
Besides, Lance, the defendants are Thomas M. Mitchell, who handled Lance's business affairs in Georgia during the nine months Lance was in Washington as President Carter's budget director; Richard T. Carr, a onetime northwest Georgia banking associate of Lance, and H. Jackson Mullins, a former druggist in Calhoun, Ga., who purportedly lent his name to a variety of Lance's alleged financial manipulations.
Moye, who had raised the questions about the strength of the government's conspiracy allegations, ordered the jurors to stay home today while attorneys for both sides argued the merits of the conspiracy count.
Defense attorneys said the government, in its broadly drawn conspiracy count, failed to show a conspiratorial agreement among the four defendants. The conspiracy count in the indictment consists of 218 separate overt acts allegedly committed by the four men.
Defense attorneys, while not denying the acts, maintained that their clients did not have any conspiratorial intent. "How can people conspire to do something that is perfectly legal?" asked Lance's attorney, Nickolas P. Chilivis.
Prosecutor Tomko described the conspiracy as having "three spokes," which he said were that the defendants conspired to borrow money to buy stock in banks, "to live well," and to repay the debts Lance incurred in his unsuccessful 1974 gubernatorial campaign.
But Moye, unhappy with Tomko's presentation, told him that "you've got to put it in a mold."