The Unions, the Secretary and Jerry

Buoyed by large and rousing crowds on his first extended campaign swing since he won his party's nomination, Gerald Ford opened the week with a three-day foray into the South. In Alabama and Mississippi, his audiences --mostly white and affluent--cheered his attacks on Carter's vow to cut the growth in defense spending and roared approval of the President's opposition to gun controls.

On both issues, the President show-boated crassly. As he warmed to his defense of the Pentagon, he claimed that the Democratic Congress had slashed $50 billion from the military budget over the past decade. Aides explained that Ford meant the Congress had cut that much from increases in the budget proposed by the Ford and Nixon administrations; in fact, the budget rose $32 billion in that period. The President increased Carter's promised cuts to $15 billion; in fact, the Democrat has never suggested more than a $7 billion reduction. In decrying gun controls, Ford implied that Carter wants limits on both handguns and rifles. Carter actually favors the registration of the first, but opposes restrictions on the latter.

But when Ford returned to Washington, trouble was waiting. Late in the week he was acutely embarrassed by the revelation that Agriculture Secretary Earl Butz, who has long suffered from galloping foot-in-the-mouth disease, had made some obscene and scatological remarks about what he genially referred to as "the coloreds." Ford promptly called Butz into the Oval Office and chewed him out, and Senator Robert Dole, the President's running mate, called the remarks "stupid" and "ill-conceived." G.O.P. Senator Edward Brooke, a black, demanded Butz's resignation. Jimmy Carter declared that Butz's crack was "disgraceful," and repeated his view that the man was not fit to sit in the Cabinet. Some White House insiders expected that Butz would resign as a result of the furor.

Ford was also hounded by a shadowy and unsubstantiated charge against his character that interrupted his momentum and put him uncomfortably on the defensive. The Watergate special prosecutor was still looking into a mysterious allegation by an unidentified informer that Ford had misused union contributions to his congressional campaigns some time between 1964 and 1972. Ford's position was awkward. No charge had been brought against him, so he could not even inquire of Special Prosecutor Charles Ruff about the investigation without implying improper presidential pressure.

The Informant. Almost no one in Washington believed that Jerry Ford would ever pocket campaign funds. Yet neither would anyone accuse the highly respected Ruff, a Democrat, of acting rashly or for partisan purposes. A polio-paralyzed associate law professor at Georgetown University, Ruff, 37, belonged to the staff that dug into illegal corporate political contributions during Watergate and brought Richard Nixon's top aides to trial. He also successfully prosecuted United Mine Workers President W.A. (Tony) Boyle for illegal campaign contributions.

TIME learned that the informant was someone associated with the maritime unions. He went to the FBI last July and claimed that Ford had diverted union political contributions to his personal use. The FBI dutifully passed the information on to Attorney General Edward Levi. Quite properly, Levi turned it over to Ruff, whose charter gives him the power to investigate any matter "which he consents to have assigned to him by the Attorney General."

Ruff subpoenaed all campaign-contribution records since 1964 from the Republican committee in Ford's home Kent County, Mich., and its affiliated Kent County Finance Committee. In agreement with the highly cooperative G.O.P. county officials, Ruff added a subpoena for records of the Republican Committee of Michigan's Fifth District, which Ford represented from 1949 through 1973.

Nothing There. Meanwhile, the FBI has been interviewing officials of two highly politically active unions: the National Marine Engineers Beneficial Association, which represents some 15,000 ships' officers, and the Seafarers International Union, which has 85,000 unlicensed seamen as members. FBI agents have also quizzed local Michigan Republican officials, including leaders of Ford's congressional campaign committees, and examined ledgers and checks.

Last week the FBI neared completion of its field investigation in Michigan. TIME has learned that it will report to Special Prosecutor Ruff that it has turned up no substantiation of the informant's charges. "There is nothing out there at all," said one Justice Department official. That does not mean the case is closed. It will now be up to Ruff to decide whether he is satisfied that all leads have been pursued or whether he wishes further investigation in Michigan or elsewhere. The political situation puts Ruff under heavy pressure to make a final decision quickly.

Ford had long been a supporter of the maritime unions and the shipping industry, appearing at many union and maritime industry conferences to back the fleet. In return, he got both speaking fees and political contributions. The sums are unknown, but probably were small.

Public records in Grand Rapids show that the Marine Engineers gave two checks totaling $4,500 to the Kent County Republican Party in 1970 and $7,500 in 1972. Michigan G.O.P. officials said it was not uncommon for Ford to ask contributors to send money to his home district to help other Republican candidates when his own re-election seemed assured. The Seafarers' veteran lobbyist, Philip Carlip, who claims that he has passed out $2.5 million in political contributions over the past 25 years, says that about $4,500 of it went to Ford's campaigns from 1968 to 1972.

The maritime unions turned against Ford after he became President and vetoed in 1974 a bill requiring 20% of all U.S. oil imports to be carried in American ships. Ford objected that the bill would raise fuel costs. The unions have since swung behind Carter. He assured the Marine Engineers last May that he wants to strengthen the U.S. cargo fleet and--the key point--"assure our U.S. flag merchant marine a fair share of all types of cargo."

In any case, Jesse M. Calhoon, president of the Marine Engineers, sponsored a $ 1,000-a-person fund-raising dinner in Washington on June 30 that raised $150,000 for Carter's primary campaign. This more than matched some direct Seafarers' donations to other recent presidential candidates: $100,000 to Lyndon Johnson and Hubert Humphrey in 1968; $100,000 to Richard Nixon in 1972. Now, in election year 1976, had some maritime union leader or industry informer brought a false charge against Ford?

Back in Michigan, Republican officials were confident that nothing would come of the investigation. As for the union leaders, Calhoon claimed: "I'm completely mystified by the whole thing. I don't know what the investigation is about."

Ford finally yielded to persistent press inquiries and public needling from Carter that he at least meet with the press. Last Thursday he summoned White House reporters to his office. At first, reporters could not get a clear-cut denial from a somewhat nervous President. Asked if he could "say categorically that there has never been any misuse of campaign funds when you ran for Congress," Ford predicted that "when the investigation is completed, I will be free of any allegations such as I have read about." Reporters tried twice more. Finally, Ford denied flatly that he had received "any campaign funds for personal use."

Newsmen also asked about Ford's acceptance, while he was a Congressman, of free golf outings and overnight stays at private clubs. The bills were paid by several corporations, including U.S. Steel, Bethlehem Steel, Alcoa and Firestone. The matter was hardly of great significance, since such freebees were common, at least in preWatergate Washington. Carter, in fact, has conceded that he and his family were guests of Brunswick (Ga.) Pulp &Paper Co. at its showcase "pine plantation" for several days in 1972, when he was Governor of Georgia. He had been invited there, the company said, to discuss his plans to merge the state forestry commission with the Georgia department of natural resources. Carter acknowledged last week that "it would have been better not" to have made such visits, and promised he would not do it again.

Casual Talk. Speaking of his corporate golfing partners, Ford said: "These are close, personal friends and have been for many years, and I have never accepted--or I don't believe they have tendered--any special privileges or anything that was improper." Ford said he had returned the hospitality at his Burning Tree Golf Club or at his home. He did concede, alter some hesitation, that on such outings "certain matters" of political interest to his hosts were discussed "in a casual way."

At week's end there were reports that the special prosecutor was about to clear Ford completely on the campaign fund probe. Hearing of Ford's denials of fund misuse, Carter did not press the question. Said he: "That ends the matter as far as I am involved."

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