When Billy Carter got his $200,000 from the Libyans in April, he started writing checks so fast that some of them bounced.
The president's brother left what Senate investigators regarded as a clear financial trail, using the money rapidly to pay off debts, including $45,000 to the IRS, but the Justice Department didn't pick up a clue.
This was among the heretofore unpublicized nuggets of detail made public yesterday as a special Senate subcommittee summarized a nine-week investigation of Billy Carter's activities as a foreign agent over the past two years.
As expected, the subcommittee rebuked Billy Carter for his Libyan dealings, and it criticized both President Carter and a number of his top advisers for poor judgment in connection with the controversy.
Billy Carter, the subcommitee said in a 249-page report, "merits severe criticism" for his steady pursuit of money and oil from "a nation whose interests are often inimical to ours." Billy Carter's conduct, the senators unanimously concluded, "was contrary to the interests of the president and the United States."
The president was taken to task primarily for his "ill-advised" use of his brother as a go-between with the Libyans during the start of the Iranian hostage crisis last fall. Other administration officials came under stronger fire for their performances in the complicated chain of events that led to Billy Carter's forced registration as a foreign agent July 14.
Perhaps the harshest words were reserved for White House appointments secretary Phillip J. Wise Jr., whose repeated testimony of "I don't recall" before the subcommittee was scored in the report and then excoriated by a number of individual senators expressing their own views.
"Either the man is not extraordinarily bright, or he has one of the most forgetful natures I've ever seen, or one can reach a different conclusion," said Sen. Patrick J. Leahy (D-Vt.).
Issuing its report in the face of a Senate-imposed deadline, the subcommittee said it found no violations of law during the course of its nine-week inquiry. But it was careful to present its findings as only an "interim" study, leaving a variety of loose ends, to be pursued.
Subcommittee Chairman Birch Bayh (D-Ind.) emphasized, in particular, that a special Justice Department investigation, "which may produce relevant information," is still under way.
"The subcommittee cannot say, therefore, with any assurance, that the final chapter has been written," Bayh added in a joint statement with Sen. Strom Thurmond (R-S.C.), the subcommittee's vice chairman.
The president responded with a statement saying that "even in the light of hindsight," he feels that each decision criticized by the subcommittee was correct.
Acknowledging no shortcomings, the White House said, "No wrongdoing was found by the subcommittee."
In Chicago for the taping of a television program, Billy Carter was quoted as telling reporters there: "I did nothing illegal and I did nothing morally wrong, but my morals are probably different than anybody else's."
Asked about the subcommittee's criticisms of Attorney General Benjamin R. Civiletti, the president's brother said: "The senators probably don't like Civiletti because he's Italian. I like Italians."
Civiletti was chastised in the report for withholding top-secret intelligence reports about Billy Carter's activities from Justice Department subordinates last spring and then for assuring the president in June "with what amounted to a prediciton" that Billy Carter would not be prosecuted if he would register belatedly as a foreign agent.
The release of the subcommittee's report at a meeting in the Senate Caucus Room was somewhat anti-climatic, since an earlier and slightly more strongly worded draft of its conclusion had leaked earlier in the week. But the fact-finding section of the report was full of new detail.
The subcommittee disclosed, for instance, that one of the Georgians enlisted in 1978 to put Billy Carter together with the Libyans asked the Libyans for a $50,000 advance to "defray expenses," apparently before Billy Carter had even agreed to travel to the Arab country. The Libyans, the report said, were indignant at the request.
According to the subcommittee, the revolutionary, pro-terrorist Libyan regime of Col. Muammar Qaddafi decided to minimize direct contact with U.S. officials because of strained relations, and decided instead, around 1977, "to go directly to the American people in order to modify U.S. policy."
The approach to Billy Carter apparently started in Sicily in March 1978, when an Atlanta real estate broker, Mario Leanza, happened to meet a Sicilian corporate lawyer named Michele Papa, toward the end of a five-week visit.
Papa, who had founded the "Sicilian-Arab Association" to promote Italian-Libyan trade, suggested to Leanza that "if he could get Billy Carter to come to Libya, Leanza could make a lot of money."
When Leanza returned to Atlanta, the report said, Papa kept calling, and at one point wrote that he had "spoken with my Arab friends. I invite you with the brother of President Carter to Libya at my expense. You won't waste your time."
Leanza didn't know Billy Carter, but he called Atlanta real estate broker Thomas L. Jordan, who called someone else, and eventually contact was made through Floyd Hudgins, a Georgia state senator who called Billy Carter's sidekick, Randy Coleman. On the July 4 weekend in 1978, Gibril Shalouf, the former Libyan ambassador to Italy, traveled to Plains and extended an invitation to Billy Carter.
Less than three weeks later, Thomas Jordan, the report said, sent Shalouf a mailgram with a tentative list of participants and a request for a $50,000 advance. Shalouf expressed anger, but, the report said, eventually gave Leanza $3,000 in cash for his and Jordan's "expenses," apparently without the knowledge of either Billy Carter or Randy Coleman.
Billy Carter's first trip to Libya, with Coleman, six other Georgians and Shalouf, took place from Sept. 25 to Oct. 1, 1978. Leanza, who was one of the guests, later told the FBI that at one dinner the Libyans mentioned their frustrations over the U.S. government's refusal to permit shipment of eight C130 military air transports the Libyans had paid for years earlier. o
The Senate report noted that Leanza also told the FBI that Billy Carter, who was drinking at the time, replied that he would try "to do something about it."
Thereafter, the report said, Billy Carter's supposed efforts to get the planes released became the focus of the Justice Department investigation, initiated in early 1979 by Joel Lisker, the head of the Justice Department's Foreign Agents Registration Unit.
In fact, the report made clear, Billy Carter was much more interested in getting a $500,000 loan and brokering an oil deal with the Libyans, but "no interviewee mentioned any prospect of Libyan financial aid to Billy Carter, or oil deals, or any other deals involving Billy Carter, and Lisker's investigation did not get into Billy Carter's finances."
Actually, the president's brother began asking the Libyans for a half-million-dollar loan at an Aug. 6, 1979, meeting in a Washington hotel with a Libyan official named Mohammed al-Burki "and a Libyan banker named Sudi." That same month in anticipation of a second trip to Libya, Billy Carter also entered into a tentative arrangement with the Charter Oil Co. of Jacksonville, Fla., to secure it an additional supply of Libyan oil, as much as 100,000 barrels a day, for a multimillion-dollar commission.
The FBI, the report said, learned from intelligence channels as early as November and December of 1979 that Billy Carter was trying to negotiate both a loan and the oil deal, but the information was churned up by "a completely seperate FBI investigation." Lisker's office knew nothing about it until late May or early June of 1980.
Meanwhile, Civiletti had been told in April about top-secret reports from another U.S. intelligence agency concerning both the Charter Oil deal and and expected $200,000 payment by the Libyans to Billy Carter.
Civiletti testified that he kept the reports to himself, reasoning that "if the [$200,000] transaction went through, it would kick up dust . . . There would be deposits made . . . bills paid off . . . talk about Billy being flush again. And we would pick that up in our investigations."
The trouble with that line of reasoning, the report said, was that "Lisker was not investigating Billy Carter's finances" and he was not doing so "because Lisker had no leads suggesting Libyan financial involvement."
The $200,000 did, indeed, kick up "dust" the report made clear. Billy Carter pressed the Libyans for the money in April, telling an associate that the IRS wanted $130,000 by April 16. Coleman picked up a $200,000 check at the Libyan Embassy here a few days earlier. Billy deposited it on April 15 in the People's Bank of LaGrange, Ga., and then began transferring it to other checking accounts.
"Bank records . . . show that Billy Carter began writing a large number of checks on his bank accounts so quickly that some of his checks were rejected for insufficient funds," the report said. He paid the IRS $45,000, not enough to lift a tax lien on his house and property. American Express got $7,380; three banks that had loaned him some $50,000 were paid off; his lawyer got $3,122; his accounting firm, $5,000, and Coleman, $5,000. By mid-August, the report said, Billy had only $11,700 left.
Despite all that, "none of Billy Carter's creditors -- including the Internal Revenue Service -- provided leads to Lisker," the report said.
Instead, the Justice Department lawyers in charge of the case actually learned of the Libyan payments to Billy -- $20,000 last Dec. 27 and $200,000 in April -- "much later through intelligence sources." In fact, the first clues came from the dusty FBI reports of the previous November and December, along with, sources indicate, FBI confirmation of the $20,000 payment on Dec. 27. Appraised of all this, Civiletti then obtained and produced the top-secret reports he had been sitting on.
The report did not indicate how the FBI reports finally came to Lisker's attention, or why it took so long for this to happen. The subcommittee said only that it had "explored" the matter and was satisfied that "no favoritism or special treatment for Billy Carter" was involved.
When all the intelligence information was finally put together in June, the report said, "investigators made use of it by confronting Billy Carter with the assertion that they knew of the payments he had received from Libya."
The report implied that it was a lucky thing he thereupon admitting getting the money. Justice Department officials have indicated that they could never have used the intelligence reports in an open courtroom.