The comptroller of the currency is seeking to remove former Office of Management and Budget director Bert Lance as chairman of the Calhoun First National Bank in Georgia for engaging in "unsafe and unsound" banking practices.
Documents filed by Lance's attorneys in U.S. District Court here indicate that Lance is under investigation by a federal grand jury and the Securities and Exchange Commission.
The documents show that he also is the subject of a separate administrative proceeding by the comptroller's office. All four actions involve alleged irregularities at the Calhoun bank.
Last August, Lance and the bank were sued by the comptroller for alleged violations of federal securities law.
The documents also show that Lance almost reached a settlement with the comptroller's office -- the unit that enforces federal banking laws -- last summer, under which he was to pay a civil penalty of $30,000 to the government and pay $5,000 to Calhoun First. Those negotiations were broken off when Atlanta newspapers published articles based on a leaked report by the comptroller's banking examiners accusing Lance of numerous banking irregularities.
One of Lance's lawyers, Gary G. Grindler of the Atlanta firm of Chivilis & Grindler, said he would not elaborate on the information in the documents.
"To the extent there is something in the public record, you have it before you, but I am not going to be able to interpret it for you. . . . One of the policies we have in our law firm is to refrain from discussing our cases," Grindler said. Lance could not be reached for comment.
All of the government investigations are said in the documents to concern the alleged irregularities at Calhoun First. In August, the comptroller's office said in a civil suit that Lance and the bank, a separate defendant, had failed to report numerous instances of check-kiting -- which is using a check drawn on one account to cover checks written on another account when there are insufficient funds to cover the payment -- and questionable loans to Lance, his family and friends.
At the time, officials in the comptroller's office said they had the power to pursue private administrative proceedings as a result of the violations themselves, as well as going to court over the failure to report them. The comptroller's office would not confirm then that such proceedings were taking place.
In a motion filed in September to delay the proceedings in the civil case, Lance's lawyers said a court battle would deprive him of his rights under the law in the other actions.
"Mr. Lance is currently under investigation, or in litigation with, the comptroller, the Justice Department and the Securities and Exchange Commission, all while Mr. Lance is being represented by a three-person law firm in Atlanta, Ga.," the motion says. "This basic inequity shifts the balance when considering the staggering amount of litigation initiated by the government."
In an earlier case that ended in 1980, Lance was acquitted on all but three charges of bank fraud. The jury deadlocked on the three charges, which were dismissed. Those charges had led to his resignation in 1977 from the OMB job in the Carter administration.
The current round of allegations led Lance to quit his position as chairman of the Georgia Democratic Party in August. He has filed suit against the comptroller's office, accusing it of illegally leaking the confidential bank-examiners' report.
Here are the details of the actions against Lance as described in the court documents:
*The comptroller contends that Lance should be removed from his posts as chairman and director of Calhoun First and restrict his involvement with any other bank because he "engaged or participated in unsafe or unsound banking practices; committed or engaged in acts, omissions or practices which constitute breaches of his fiduciary duties as a director and/or officer at . . . Calhoun and/or committed violations of law, rule or regulation." The comptroller declined to supply further details.
*Attorneys for the comptroller are quoted in documents supplied by Lance's lawyers as having referred Lance's case to the Justice Department for criminal investigation. One government attorney acknowledged in a transcript included in the documents that a grand jury subpoenaed records from the comptroller's office during the summer. The location of the grand jury was not revealed in the documents.
*The administrative proceeding undertaken by the comptroller will be tried before an administrative law judge in January. The comptroller is seeking monetary penalties for the alleged violations. Because the schedule for that case is running behind the civil suit, Lance contends the civil suit will "totally circumvent and frustrate the timetable established in the administrative proceedings."
Few details were available regarding the substance of the SEC investigation. Lance signed an agreement with the SEC in 1978 not to engage in further violations of securities laws. SEC spokesman Chiles Larson said the agency, following standard procedure, would not confirm or deny the existence of an investigation.