The President's News Conference

RESIGNATION OF BERT LANCE

THE PRESIDENT. I would like to read first a letter that I have just received from Bert Lance.

"My Dear Mr. President: There is no need for me to go into the events of the last few weeks. You know them well as do the American people.

"You also know that previously I had said three things to you about the importance of the so-called 'Lance affair.' I will recall those for you:

"First, it was and is important that my name and reputation be cleared for me, my wife, my children, my grandchildren, and those who have trust and faith in me; and, I believe that this has been done. As I said at the Senate hearings, my conscience is clear.

"Second, it was and is important for me to be able to say that people should be willing to make the necessary sacrifices and be willing to serve their government and country. This I can still say, and say proudly.

"Third, I believe in the absolute need for government to be able to attract good people from the private sector. We must find ways to encourage these people.

"As to my position as Director of the Office of Management and Budget: I hope the American people feel that during my eight months in office I have met well my responsibilities and performed well my tasks. This has been an important aspect of the entire matter.

"However, I have to ask the question at what price do I remain? My only intention in coming to Washington in the first place was to make a contribution to this country and to you.

"I am convinced that I can continue to be an effective Director of the Office of Management and Budget. However, because of the amount of controversy and the continuing nature of it, I have decided to submit my resignation as Director of OMB. I desire to return to my native State of Georgia.

"It has been a high privilege and honor to be a part .of your administration. Hopefully, I have made a contribution which will be of lasting value. Respectfully yours."

Signed, Bert Lance.

Bert Lance is my friend. I know him personally, as well as if he was my own brother. I know him without any doubt in my mind or heart to be a good and an honorable man.

He was given, this past weekend, a chance to answer thousands of questions that have been raised about him, unproven allegations that have been raised against him, and he did it well. He told the truth. And I think he proved that our system of government works, because when he was given a chance to testify on his own behalf, he was able to clear his name.

My responsibility, along with Bert's, has been and is to make sure that the American people can have justified confidence in our own Government. And we also have an additional responsibility which is just as difficult, and that is to protect the reputation of decent men and women. Nothing that I have heard or read has shaken my belief in Bert's ability or his integrity.

There have been numerous allegations which, I admit, are true, that a lot of the problem has been brought on Bert Lance by me, because of the extraordinary standards that we have tried to set in Government and the expectations of the American people that were engendered during my own campaign and my Inauguration statement and as has been so strongly supported by Bert in his voluntary sacrifice, financially and otherwise, to come to Washington.

It was I who insisted that Bert agree to sell his substantial holdings in bank stock. Had he stayed there, in a selfish fashion, and enriched himself and his own family financially, I'm sure he would have been spared any allegations of impropriety. But he wanted to come to Washington and serve his Government because I asked him to, and he did.

I accept Bert's resignation with the greatest sense of regret and sorrow. He's a good man. Even those who have made other statements about Bert have never alleged, on any occasion, that he did not do a good job as the Director of the Office of Management and Budget. He's close to me and always will be, and I think he's made the right decision, because it would be difficult for him to devote full time to his responsibilities in the future. And although I regret his resignation, I do accept it.

I would be glad to answer any questions you might have about this or other matters.

Ms. Thomas [Helen Thomas, United Press International].

QUESTIONS

Q. Mr. President, there have been reports that you knew early on what the charges were, that Mr. Lance had told you some of the allegations last January. Is that so, and can you tell us what you knew? And also, did you ask for his resignation or encourage it, and what made you accept it?

THE PRESIDENT. I did not ask for Bert's resignation. Bert Lance and I communicate without embarrassment, without constraint, and without evasion of issues. I thought Bert did a superb job Thursday, Friday, and Saturday in answering all the questions that had been leveled about him and against him.

Monday morning about 6 o'clock, Bert came to my office, and we spent about 45 minutes going over all the present questions that still remained, the prospects for the future. I told Bert I thought he had exonerated himself completely, proven our system worked, and asked him to make his own decision about what his choice would be.

He told me yesterday afternoon that he had decided that it would be best to resign. He wanted to talk to his wife again. He wanted to discuss the question with his attorney, Clark Clifford, before he made a final judgment. Mr. Clifford was in Detroit, came back this afternoon, and that was why the press conference was delayed.

This was a decision that Bert made. I did not disagree with it, and I think he's made a very unselfish and wise judgment.

The other question that you asked was whether and when I knew about charges that were made against Bert. The only thing that I ever heard about before Bert became OMB Director was last fall I knew that there had been questions about the Calhoun National Bank and overdrafts. My understanding at that time was that the overdraft question referred to his 1974 campaign debt.

The first time I heard about it was when Bert mentioned it to me in Plains about 2 weeks later. I think the date is now determined to be the 1st of December. I was called from Atlanta and told that the matter had been resolved by the Comptroller's Office and by the Justice Department.

On that date was the first time that either Bert or I knew that the Justice Department had been involved at all. And my understanding then was that it was an oversight and, had the oversight not occurred, that the Justice Department would have resolved the issue long before.

So, I would hope that in the future the complete FBI report might be made available. That's a decision for Bert Lance to make. But I think if any of you would read it, you would see that approximately a hundred people were interviewed--three of them from the Justice Department, three of them from the Comptroller's department. All of the analyses of Bert Lance's character and ability were good and favorable.

And I don't think that any mistake was made. I think he was qualified then; I think he's qualified now. And there was no attempt to conceal anything from me nor my staff.

Q. Mr. President, you've spoken so highly of Mr. Lance again this afternoon. I wonder if you feel that he was unfairly drummed out of the Government?

THE PRESIDENT. That's a difficult question for me to answer. I have had personal knowledge of many of the statements and happenings that have been widely publicized. Some of them were greatly exaggerated; some of them were actually untrue. On some occasions, the report of an incident was not unbiased, but unfair. In general, I think the media have been fair. There are some exceptions. In general, I think that the Senate committee has been fair.

Bert has now had a chance to let his own positions be known, and I think that at this point, his resignation is voluntary. He needs to go home and take care of his own business. I think it's obvious that if he stayed here he couldn't serve completely and with full commitment to his job. And I think his honor and his integrity have been proven.

Q. Mr. President, Mr. Lance was in charge of some very important subjects: the Federal budget, of course, and Government reorganization. What are your plans for short-term continuity in those areas, and in the long term, do you have a successor in mind?

THE PRESIDENT. I've not thought about a successor because the vacancy has just become apparent to me recently. I haven't given any thought to that yet.

If there's one agency of the Government in which the President is daily involved, not only with the director but also with immediate subordinates, it's the Office of Management and Budget. This is, in effect, an extension of the Oval Office.

And I happen to know Bert Lance's immediate subordinates much better than I do the subordinates of any other department in Government. They are highly competent. They've been chosen by him and me or are long-time professionals there, and there has been in the past few weeks absolutely no slippage in the schedules that Bert and I and others had evolved earlier this year.

There has been no instance where a major question has been ignored nor where responsibility has been delayed. And for the time being, I and those assistants that Bert and I have chosen together will continue.

I have not yet had a chance to talk to Bert about how quickly he can leave, how long he can stay. I would guess that he'll be wanting to leave fairly shortly. But there will be an orderly transition, and I will decide beginning after today on who a successor might be.

Q. Mr. President, you said, sir, that you did not ask for the resignation. But you said it was, you felt, the right decision. Does that mean, sir, that you really came down to feel that he could no longer be an effective advocate for the administration on Capitol Hill?

THE PRESIDENT. No, I think it would be a mistake to attribute Bert's decision to the fact that he could not be an effective advocate of the administration's positions. There are so many advocates that even if one were completely incapacitated, other advocates could put forward the arguments for the administration's position.

I think that it would be better to let Bert answer this question, because some of it involves his own personal affairs back home. But he has suffered greatly in a financial way. The value of his stock, if purchased, in his major holdings in the National Bank of Georgia is quite greatly above the market value, because it involves a substantial controlling interest in the bank itself. Several would-be purchasers, I understand, in the last few days, have come forward wanting to buy the stock but are reluctant to do so because of the high focus of publicity on the sale. They would be scrutinized thoroughly. And I think, perhaps, that's expectable; I don't deplore that. So, they've been reluctant to do it.

I think Bert can very quickly get his own financial affairs back in order if he takes care of them himself. He has complied stringently in removing himself from his own affairs in the blind trust arrangement. He could have cheated on that arrangement; he did not. So, part of his reasons for resigning, with which I have an understanding, is to help himself, to get his own family affairs and financial affairs back in good shape. I don't know what the future might hold if he couldn't do that. I'm afraid it might get even worse than it is now. This is no fault of his. If there's any fault there, it's mine because of the strict requirements we placed on him.

Obviously, it takes a great deal of Bert's time to look up ancient data that goes back to '72, '73, '74. Did you have a power of attorney? How many overdrafts did your in-laws have? How many trips did you take on the plane to your home in Sea Island, and so forth. This has required an enormous amount of Bert's time.

And my expectation, along with Bert's, is that this kind of investigation and demand on his time might continue. Bert is the kind of person who comes to work at 5 o'clock in the morning. He puts in, even in these past few weeks, I'd say, 12 hours a day or more on his OMB job.

But it obviously is disconcerting to him. And I think, to be perfectly frank, the constant high publicity that has accrued to this case, even if completely fair and unbiased, creates doubt among the news media, among the people of this country, about the integrity of me and .our Government, even though I think there is no doubt about Bert's being a man of complete integrity.

So, there are multiple reasons for his decision. And I don't think any of them should be interpreted as being a reflection on him.

Q: I suppose there's an obvious followup, Mr. President, and that is, if he had not offered to resign, would you have wanted him to stay on?

THE PRESIDENT. That's hard to say. As I have said several times in brief, impromptu news encounters in the last few weeks, the decision that Bert Lance and I make together will be acceptable to the American people. And I have had large numbers of people who have asked me not to let Bert Lance resign. A group from Tennessee and North Carolina were in the White House this afternoon for a briefing on the Panama Canal Treaty. They rose, and the Governor of Tennessee said, "We all hope that Bert Lance will not resign." I had twelve speakers of the house of State legislatures here last Friday. They unanimously voted and importuned me not to let Bert resign. I felt, and still feel, that it's basically a decision for him.

I don't know the details of Bert's financial dealings back home. I don't have the time nor the inclination to learn them. All I know about it is what I have had a chance to read in the news media. So the decision was Bert's. And when he discussed it with me, it was not from a posture of a subordinate talking to a superior; it was in the posture of friends who understood one another, discussing mutually what ought to be done about a difficult situation.

I think it was a courageous and also a patriotic gesture on Bert's part to resign.

Q. Mr. President, how much has your credibility been damaged by this incident and by Mr. Lance's resignation?

THE PRESIDENT. I don't know. I think that as best I could from one hour to another, one day to another, and as best Bert could from one hour and one day to another, we've done what was right, as judged by what we knew at that time.

We've been. partners in every sense of the word since he's been here, and you, having covered the government of Georgia, know that we were equally close partners in Georgia.

I have never known the head of a State or Federal agency who is more competent and has better judgment and who understands me better and can work in closer harmony with me. But whether my own credibility has been damaged, I can't say. I would guess to some degree an unpleasant situation like this would be damaging somewhat, but I just have to accept that if it comes.

Q. How will you replace the kind of close relationship that you've had with him, and how much does that concern you?

THE PRESIDENT. I don't think there's any way that I could find anyone to replace Bert Lance that would be, in my judgment, as competent, as strong, as decent, and as close to me as a friend and adviser as he has been. And obviously, the Government will continue, and I hope to do a good job as President, and I'm sure a successor will be adequate.

But there has been a special relationship between me and Bert Lance that transcended official responsibilities or duties or even governmental service over the last 6 or 7 years. So, he has occupied a special place in my governmental career, in my political career, and in my personal life, and I don't think there's any way anyone could replace him now.

Q. Mr. President, apart from Mr. Lance's reasons for resigning, can you share more of your thoughts for accepting his resignation? You said that your belief in his integrity has not been shaken.

THE PRESIDENT. That is correct.

Q. Just recently, House Speaker O'Neill said he can be an effective Budget Director in the future. Why do you feel, sir, that Mr. Lance did have to go?

THE PRESIDENT. I've described to you my assessment of Bert Lance's reasons, and I have read his letter, which I'm sure was very carefully prepared by Bert to emphasize the most important reasons for his resignation. I don't have any way to know anything further beyond that answer.

Q. Mr. President, you referred to the high standards you set for your people during the campaign. You said often that you would not tolerate impropriety or even the appearance of impropriety.

Sir, I think now a lot of people are looking at your standards against the Bert Lance case. You now know what the charges and allegations were. I'd like to ask you whether you, today, still feel that Mr. Lance has avoided the appearance of impropriety or whether a new standard is now in operation?

THE PRESIDENT. The standards were high at the beginning, the standards are still high, and the standards have been high in the service of Bert Lance. There has been not even one allegation that I have ever heard of that Bert Lance did not perform his duties as Director of OMB in a superlative way.

There's not been one allegation that he violated his responsibility or his oath when he was sworn in, that he's done anything improper at all, that he's violated any law. And even those allegations that were made about his life several years ago, in my opinion, have been proven false and without foundation.

I think there has been an adequate opportunity for Bert, after some unfortunate delay, in presenting his answers in the Senate hearings this past week. So, I don't think that any blame should accrue to Bert Lance for having acted improperly or having lowered the standards of our Government.

Q. Mr. President, I would like to follow that up with a little more specific question. During the campaign, you not only campaigned on the promise that your appointees would avoid the appearance of impropriety but you also campaigned against the privileged few who had too much influence and against expense account padders and that sort of thing.

Mr. Lance, by his own admission--I think this isn't in doubt---overdrew his checking accounts by thousands of dollars on a regular basis. He flew on corporate planes for what appear to be political and, perhaps, personal reasons. What I think many of us are interested in, sir, is your justification for reaffirming your belief in his integrity, given the positions you took as a candidate.

THE PRESIDENT. My impression is that I've answered that question already, but I would be glad to reaffirm what I've said. I have seen the statements about him. I've read the charges against him. I've heard the allegations about him of even criminal acts. I've seen some of his accusers apologize publicly for having made a serious mistake, for having made a peremptory and a preliminary judgment without hearing his explanation which, when it came, was adequate.

I just don't feel that I can preserve just the appearance of the White House to the exclusion of everything else. I also have a responsibility as President to be interested in justice and fairness and in giving someone who is accused erroneously a chance to answer the questions.

There has always been a possibility that in the last week's Senate hearings that Bert could not answer the allegations adequately, that he would prove to have violated a law. That was not the case. And I think my judgment that Bert had a right to officially answer every question, in 3 hard days of interrogation by highly competent Senators and well-qualified staffs after they've had months to prepare, was justified.

He's answered them adequately. So, it would not be possible for me, just because one of my leaders or employees Was accused of something, to discharge them or demand their resignation on the basis of an accusation about which I had doubt and which later proved to be false.

Q. Mr. President, sir, I'd like to ask you about your statement, repeated statement that Mr. Lance never did anything illegal. The Comptroller of the Currency reported that Mr. Lance's overdraft loans of more than $5,000 violated the banking law, and Mr. Lance, I think, conceded that his failure to report loans to board of directors of the two banks he ran also was an infraction of the banking statutes.

It's true there are no civil--they are civil statutes and there are no criminal penalties. But how do you justify this with your statement that he never broke any law?

THE PRESIDENT. Well, my assessment is that you are trying to succeed where the Senate committee failed. There was no judgment made that Bert Lance did anything illegal. The only Comptroller's report that I saw specifically said that he had done nothing illegal, and I think that he's adequately explained his position. He had 3 days to do it in. I think he did it well. And I have no information to add to what Bert has already revealed to the Senators and to the public.

Q. Mr. President, I'd like to follow up on Judy's [Judy Woodruff, NBC News] .question, not directly, on how this may have damaged you. At the first meeting of your Cabinet appointees, Cabinet designees at St. Simons Island--there was a meeting which Mr. Lance attended, and you were there--it was pointed out to every member of this Cabinet a feeling on your part and those of some of the staff closest to you, that because of the recent past' political history in the country and partly because of the expectations that had been raised by your campaign, that this was sort of a last chance; that if the public became disappointed and disillusioned in your administration, that the result would be very, very damaging.

Early in this press conference, you said Bert Lance is my friend, I have known him personally as well as my own brother and without any doubt in my mind or heart that he could be, that he was a good and honorable man.

THE PRESIDENT. That's correct.

Q. Do you think that you may have been, if only slightly, less than fully prudent and diligent .because of your feeling towards Mr. Lance in the way you read some of these things, when he talked to you on November 15, when he talked to you on December 1, when the FBI report, which I understand has also an appendix with some of these judgmental matters about the propriety of some of Mr. Lance's banking practices--in retrospect, do you feel that in effect two standards were applied: one, a very firm, strong standard which you set, and one for Mr. Lance, who you knew so well that you felt you didn't have to examine it that closely?

THE PRESIDENT. No. I don't think I've been remiss in that incident at all, even looking at it from this retrospective point of view.

Obviously, you can make a much better judgment on someone who comes in as a member of a Cabinet if you yourself have known that person for years, if you know that person's general reputation, if you've worked intimately with that person in times of stress and matters of challenge and have seen the basic competence, courage, honesty, unselfishness there. This existed in Bert Lance.

And I don't think there's any doubt that the FBI check of Bert Lance was just as thorough as was the FBI investigation of any other member of the Cabinet. I think that if you examine the entire FBI report now, that you would confirm that if that was all you knew about him and had never seen Bert Lance before, you would agree that he was superlatively qualified to be a Cabinet-level officer.

So, I don't think there's any feeling on my part that my friendship with him distorted my point of view in assessing his competence. My friendship for Bert Lance, my long knowledge of him just confirmed a very favorable assessment of his qualifications by those who did not know him.

Q. Has the Lance case diverted your attention at all away from important matters at home and abroad? Has there been a price that you've had to pay there and the American public has had to pay because of the Lance case and the heavy attention being placed upon it?

THE PRESIDENT. Well, I have to admit that there has been some diversion of my attention. I've been deeply concerned about the case. I've been concerned about Bert Lance personally. I've been concerned about the impact on my administration if some of those serious allegations proved to be true. And it hasn't taken nearly so much of my own time as it has that of, say, Jody Powell, who's had to face this questioning every day, which I think was a good thing.

Bob Lipshutz on my staff has had to confirm the accuracy of the answers to questions that were raised 'by the Comptroller's report and by other testimony that has come forward. Some of my staff have put a lot of time on it. I don't think their effort was misplaced. I think it was good for us to be informed. I think it was good for Jody, in his daily briefings to you, to be accurate. And I think had we, through error or through neglect, given you a false statement, even though it might have been completely unintentional, that would have been a very serious matter.

But as far as my own time and effort was concerned, it's had a slight but detectable effect of diverting me from some things. I don't think the country has suffered, and I think that's one of the reasons that Bert decided to resign--not for his own benefit, but to make sure that I didn't have this potential problem in the future.

Q. If Mr. Lance had not decided to resign, were you prepared to have him stay on or would you have tried to persuade him to resign?

THE PRESIDENT. I can't answer that question because it's, first of all, hypothetical. As I said before, it wasn't a matter of Bert Lance operating in isolation from me. We had thorough discussions about the matter. I left it completely up to him. He and I talked about the advantages of his staying, the disadvantages of his staying to him, to my administration, to the Government, to his family. And Bert consulted with his own attorney, he consulted with several Members of the Congress, he consulted with the people back home.

He talked it over with members of his family, and he came to me and said he had decided it was best for him and for me if he resigned. And as has always been the case between me and Bert, I was honest with him. I didn't artificially try to talk him out of it, because as we discussed the sane facts and the same issues and the same prospects for the future, I think that our minds were working in the same direction.

But I have always trusted Bert Lance to do the proper and the unselfish thing. And my guess is that he was much more concerned about me and my administration and the reputation of the Government and the diversion of our attention to his case away from things that were important for the people. I think that was by far the most important factor in his decision.

Thank you very much.