Vesco's Latest Caper

PLEASE SEE SPENCER LEE FROM ALBANY WHEN HE REQUESTS AN APPOINTMENT. This terse handwritten note from Jimmy Carter to Attorney General Griffin Bell lay forgotten for 19 months in a filing cabinet at the Justice Department. Last week it emerged at the center of a mystery that threatened to embarrass Carter and some of his closest associates.

At first, the flap seemed to have some of the ingredients of a first-class scandal. The evidence seemed to suggest that Financier Robert Lee Vesco had masterminded a well-funded campaign to buy influence from some of the President's advisers. Vesco's purpose: to get them to call off the Justice Department's attempt to extradite him from Costa Rica, where he had lived in exile for six years to escape prosecution for fraud. But as more details emerged last week, one critical thing was missing: any evidence that the President or his aides had done anything for Vesco or even listened to his proposals.

The origin of the caper dates back to 1972, when Vesco fled the U.S. after being indicted on charges of looting $224 million from Investors' Overseas Services, a mutual fund based in Geneva. Almost immediately, he began trying to persuade the Department of Justice to drop the case. He even contributed $200,000 to Richard Nixon's 1972 re-election committee, but to no avail.

Vesco tried again in late 1976, soon after Carter's election. According to court depositions, the financier met in Costa Rica with a trio of Georgians, Attorney Fred E. Bartlett and Businessmen Jerry Dorminey and R. L. Herring. Dorminey and Herring are now awaiting trial in Georgia on charges of fraudulently obtaining $277,000 in loans. At a farmhouse in the mountains, Vesco outlined a preposterous plan. If the Carter Administration would promise him leniency, he would order six Latin American countries under his "control" to support the Panama Canal treaty. Back in the U.S., Bartlett and his law partner, Harry Wingate, conveyed the offer to Secretary of State-designate Cyrus Vance, who rejected it.

Vesco's emissaries tenaciously tried a new approach. Herring went to Attorney W. Spencer Lee IV of Albany, Ga., and offered him a $10,000 retainer--in addition to a fee of $1 million--if he would set up a meeting with top White House Aide Hamilton Jordan, a school chum and tennis companion of Lee's. Vesco meanwhile told Herring and Dorminey that he would arrange for them to acquire $10 million worth of stock in a Panamanian company for $42,000, if they could get to somebody at the White House on his behalf.

In early February 1977, Lee dined in Washington with Georgian Richard Hardin, a special assistant at the White House. Lee told Hardin about the "large sum of money" he had been offered to set up the meeting with Jordan. But Hardin, as he recalls it, told Lee that the advance would be improper. In fact, Lee now says that Hardin persuaded him not to pursue the matter further.

A week later Hardin decided that he should tell Carter about the offer. During a five-minute meeting, Carter urged Hardin to report any future contacts with Vesco's emissaries to the Justice Department and scrawled a message to Attorney General Bell--the same note that surfaced last week. Then, so the White House says, the President pushed the matter from his mind. What happened to the note next is unclear. Bell says he never received it. Neither Lee nor any other Vesco representative ever called on Bell.

In the spring of 1977, the Justice Department stepped up its efforts to return Vesco to the U.S. The department withdrew its request for his extradition and urged Costa Rica instead to expel him, hoping to nab him as he crossed the border. The strategy misfired. When Costa Rican President-elect Rodrigo Carazo threatened to cut off the financier's residence privileges, Vesco escaped to the Bahamas, where he now resides, safe from extradition to the U.S.

There the Vesco case rested until earlier this year, when the Securities and Exchange Commission began delving into more of his complicated stock schemes. The probe led to Dorminey and Herring. The SEC also obtained unsigned copies of letters and telephone logs of purported contacts in early 1977 between Lee, Jordan and Carter Adviser Charles Kirbo.

Early in September, Syndicated Columnist Jack Anderson published a story hinting that the Justice Department's decision to stop trying to extradite Vesco was proof that his influence-buying scheme had succeeded. Anderson also obtained sworn statements from Herring's secretary, Geralynne Hobbs, that she had typed and mailed to Jordan and Kirbo several letters about Vesco's proposals.

Jordan angrily denounced Anderson's story as a "fabrication and a despicable lie" and said he had never discussed Vesco with anybody. Kirbo branded Anderson's report "an absolute lie by an irresponsible reporter." He insisted that the letters typed by Hobbs were forgeries. At an unusual Sunday press briefing, Jordan disclosed that Hardin had talked Lee out of pursuing the Vesco advance 19 months ago.

But the question remained of whether Hardin, who declined comment, had ever informed law-enforcement agencies about his talk with Lee. On further checking, White House aides said they found that the only person Hardin had reported the offer to was the President. A search of Justice Department files then turned up the message from Carter to Bell. If nothing else, the lost note and the persistent friends of Mr. Vesco were causing the kind of contretemps the White House could do without.

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