Lance’s Bank Seeks Source of U.S. Leak : Offers $10,000 Reward Concerning Report by Federal Regulators

Bert Lance’s Georgia bank is offering a $10,000 reward for information leading to the arrest and conviction of the person who leaked a federal regulators’ report accusing the former budget director of illegal banking practices.

In an advertisement published this week in several Georgia newspapers and a national banking daily, the Calhoun First National Bank said the June leak to the Atlanta Constitution was a crime and had damaged the bank’s stockholders and directors. The bank solicited information about the source of the leak and promised anonymity to any informant.

The Constitution’s June 28 story detailed the findings of an eight-month investigation by the Office of the Comptroller of the Currency, which regulates national banks. According to the newspaper, the still-unreleased report said Lance and other bank officers had engaged in check kiting, insider loans and other “unsafe and unsound” transactions.

A bank spokesman said the resulting unfavorable publicity had derailed a proposed merger between Lance’s bank and the larger Georgia Railroad Bank of Augusta. The deal would have doubled the value of the Lance family’s 35% interest in the Calhoun bank, the spokesman said. The bank’s stock is privately held.

Resigned Party Post

In addition, Lance announced 10 days after the report appeared that he was resigning as chairman of the Georgia Democratic Party to prevent his problems from tainting the party and to devote himself to fighting the comptroller’s office.

Lance was forced to leave his post as President Jimmy Carter’s budget director in 1977 after similar allegations of shoddy banking practices. Two years later, he was indicted by a federal grand jury on bank fraud and conspiracy charges involving more than $20 million in loans for himself and several friends and family members. A federal jury cleared him on nine counts while deadlocking on the other charges. At the time, Lance said the liberal lending practices that benefited himself, his family and friends were typical of banking in small Southern towns.

Lance is chairman of the Calhoun bank, and his son, David J. Lance, is president and chief executive. Both are members of the board of directors. The bank has two branches and $109 million in assets.

Lance could not be reached for comment on the reward offer, but Mike Jones, head of public relations at the Calhoun bank, said the bank is convinced that the leaker works in the comptroller’s office.

“We asked the Justice Department to investigate and we asked the Office of the Comptroller to investigate, and nothing happened. So we started our own investigation,” Jones said Thursday.

The bank hired Ordway Hilton, a documents verification expert, who concluded that the source of the leak “must have been an official, employee or agent of the Office of the Comptroller of the Currency,” according to an affidavit that he submitted in the Calhoun bank’s lawsuit against the government agency.

Hilton, a handwriting expert at the University of South Carolina, had been called in to examine documents in the Hitler diaries scandal, the case of Clifford Irving’s bogus Howard Hughes autobiography and the Alger Hiss affair, Jones said.

In the bank report case, Jones said, Hilton examined the paper and ink on the copy received by the newspaper and concluded that it had come from the same photocopying machine as those received officially by the bank.

A spokeswoman for the comptroller’s office confirmed that release of the information in a bank examination is illegal.