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Vol. LXXXVIII, No. 8
Ann Arbor, Michigan-Friday, September 16, 1977
Ten Cents
14 Pages
; ;
Lance: 'Conscience
as Senate hearing I
WASHINGTON (AP) - Declaring
that "my conscience is clear," Bert
Lance mounted an item-by-item
defense yesterday of his dealings as a
Georgia banker and then underwent
cross examination by senators.
Members of the Senate Govern-
mental Affairs Committee repeated-
ly pressed the Carter administration
budget director to explain the over-
drafts he and his family once had on
their accounts at the Calhoun, Ga.,
National Bank and the allegation that
he once pledged the same collateral
for two loans.
WHILE LANCE was on Capitol Hill
to tell his side of the story, President
Carter said at the White House that
he is keeping an open mind about his
friend's future.
The President said he has no
reason to believe Lance is "dishon-
est, incompetent, or that he has acted
unethically."
Lance, beginning what promised to
be several days of intensive examin-
ation, said repeatedly that the liberal
overdraft'policy of the Calhoun bank
was applied to all customers, not just
the Lance. family. The practice was
stopped after it was criticized by
federal bank examiners.
"SEN. CHARLES Percy, (R-Ill.),
pressed Lance for his interpretation
of a note he signed pledging stock in
the National Bank of Georgia as
collateral for a $2.6 million loan from
Manufacturers Hanover Trust Co. of
New York.
Lance_ subsequently pledged a 10
per cent dividend on that stock as
collateral for a loan from Chemical
Bank of New York. Percy touched off
a dispute among committee mem-
bers when he tried to introduce an af-
fidavit from a lawyer for the bank. In
the affidavit, the lawyer, George
Balamut, said the note obligated
Lance to turn over to Manufacturers
Hanover any dividends on the stock
already pledged as collateral.
Sen. Lawton Chiles, (D-Fla.) ob-
jected to Percy's attempt to intro-
duce the Balamut affidavit while
Lance was testifying. Percy eventu-
ally succeeded in reading portions of
it despite Chiles' objections.'
LANCE RESPONDED that he and
Manufacturers Hanover disagreed
over the status of the hividend and
that he resolved the matter by
repaying the loan and getting back
his collateral.
Lance, saying that he intends to re-
main on the job, asked the American
people to be "the jury in this pro-
ceeding," a hearing before the Sen-
ate Governmental Affairs Commit-
tee.
Carter's comments, in a telephone
question-and-answer session with the
Radio-Television News Director As-
sociation, said he will make a
decision on the future of his budget
chief after the hearings are com-
pleted.
"I am sure that the decision that I
make along with Bert Lance at the
conclusion of the hearings will be
satisfactory to the American peo-
ple," he said in long-distance com-
ments to the broadcasters' conven-
tion in San Francisco.
clear
)egin.s
THE JUSTICE Department cur-
rently is investigating Lance's use of
bank-owned aircraft. Lance said he
sold his personal plane to the
National Bank of Georgia and con-
tinued using it but primarily for bank
business. He said he paid for per-
sonal trips on the plane.
Speaking slowly and looking directs
ly at the senators, Lance said, "I
have worked hard these past eight
months in Washington, and I am
proud of the job I have done in the Of-
fice of Management and Budget."
But he said it would be unfair to-be
pushed out by unproven charges and
that other businessmen would be
discouraged from seeking govern-
ment jobs.
VA nurses sent away for
'testing'; defier sentence
-AP Photo
Budget Director Bert Lance addresses members of the Sen-
ate Governmental Affairs Committee who are investigating
his financial affairs. Lance told the committee yesterday
he may have made some mistakes in running his Georgia
bank but engaged in no wrongdoing and no cover-up.
Stone: Carter is
just another Nixon
By KEITH RICHBURG
Special to The Daily
DETROIT-Filipina Narciso
and Leonora Perez were order-
ed yesterday to surrender in
seven days to the federal peni-
tentiary for women at Alder-
son, West Virginia, for "obser-
vation and study."
Federal district Judge Philip
Pratt deferred Sentencing and
continued the women's $75,000
bond. He told them they would
be sentenced following their in-
terim stay at the prison in Vir-
ginia.
NARCISO AND PEREZ, the Vet-
erans Administration (VA) Hospital
nurses convicted of poisoning patients
at the facility in 1975, stood passively
before Judge Pratt as he read his order.
He allowed them to report to Alderson
themselves, at their own expense,
rather than be taken to the facility by
U.S, marshals.
The women's stay at Alderson, where
they will undergo "behavioral observa-
tion," cannot exceed 90 days. They will
be under the custody of the United
States attorney there for as long as the
tests take.
Both the defense and the prosecution
told reporters that in Alderson; Narciso
and Perez will be treated "just like
regular prisoners."
"IT'S AN OBSERVATION and study
to find out more data," said assistant
U.S. Attorney Richard Delonis at a
news conference immediately following
Judge Pratt's ruling. "This is complete-
iy within the judge's discretion."
Delonis said he was not disappointed
with the ruling only because he had no
say in the matter. "It wassa matter that
the court advised us was going to be
done."
Delonis insisted that the order was
not unusual in a criminal case. "The
court still has the option of sentencing
to any degree," he said.
See SENTENCE, Page 9
By GREGG KRUPA
"I sincerely believe that Carter is
playing to the same crowd that Nixon
did-the country club crowd, those who
have made it," journalist I.F. Stone,
told some 1,500 listeners last night.
"They don't want to be bothered with
the problems of the poor and the have-
nots. That's a terrible attitude."
The never-say-die liberal delivered a
speech at Hill Auditorium that was an
indictment of the domestic and foreign
policies of the Carter Administration.
The address was the first in a series of
"Viewpoint" lectures that will be
delivered on campus this fall.
STONE PORTRAYED the Carter
administration as a mere continuation
of the past two Republican ad-
ministrations.
"Carter's message is the same
message conservatives have given us
for years," said Stone. "Cut down on
hope, because hope is dangerous.
Discourage high expectations and foster
benign neglect, because your gover-
nment cannot solve all of your
problems.
"This is not the first period of crisis in
this country. But always before we
have mustered the strength to solve the
problems. We've received a heritage
and reaped the benefits from the work
of past generations. It is our right and
our duty to carry on."
of the staunchest supporters of the New
Deal, one of the few journalists to sup-
port the liberal president.
His book, The Hidden History of the
Korean War, was called "one of the
most devastating indictments of Ugited
States foreign policy," forewarning the
See STONE, Page 8
Se
rejects TV
saccharin-,
warnings
WASHINGTON (AP) - The Senate
yesterday rejected a proposal to
require a cancer warning to be
included in television and radio
advertisements of products contain-
ing the artificial sweetener sacchar-
in.
The action came as the Senate
moved toward expected approval of
legislation delaying the Food and
Drug Administration's proposed ban
on saccharin in food products - such
as diet sodas - for 18 months while
additional studies are made to deter-
mine whether saccharin causes can-
cer in humans.
SACCHARIN, the only artificial
sugar substitute remaining on the
market, has been linked with bladder
cancer in laboratoryanimals. The
Senate rejected the broadcast adver-
tising warning by a 55-39 vote.
The legislators also were consider-
ing a proposal to require this warning
on products containing saccharin:
"Warning: This product contains
saccharin which causes cancer in
animals. Use of this product may
increase your risk of developing can-
cer."
The warning, supported by the
Carter administration, would have to
be placed "in a conspicuous place"
on vending machines selling prod-
ucts cnntaining the suhtance and in
A 2 News
files suit
against'U
By JULIE ROVNER
The Ann Arbor News filed suit
Wednesday against the University
Board of Regents, charging that the
Regents have violated the Michigan
Open Meetings Act in holding a num-
ber of closed sessions in the past few
months.
On Sept. 30, a hearing will be held
in Washtenaw County Circuit Court
to decide whether or not a temporary
injunction will be granted against the
Regents.
THE OPEN MEETINGS Act, which
requires virtually all meetings of
public bodies to be open to the public,
took effect on April 1 of this year.
The newspaper's suit charges that
the Regents are using a provision of
the Freedom of Information Act,
another recent statute, to circumvent
the spirit of the Open Meetings Act.
It charges further that the provision,
Section 13, is itself unconstitutional
because it permits prior restraint,
which is in direct violation of the first
and fourteenth amendments.
Section 13 of the Freedom of
Information Act states in part that
any material which would "consti-
tute an unwarranted invasion of
personal privacy" can be withheld
from the public.
SECTION 8 of the Open Meetings
Act contains wording which allows
a meeting to be closed by a two-thirds
vote to consider material exempt
from disclosure under another law.
Roderick Daane, the University
counsel, contends the Regents can
therefore close any meeting which
Daily Photo by ANDY FREEBERG
'U' OFFICIALS confer at yesterday's first Regents meeting of the term. Topics ranged from
faculty salaries to labor practices and South African investments. Pictured from left to
right are Vice-President for University Relations and Development Michael Radock, Vice-
President for Student Services Henry Johnson, James Brinkerhoff, vice-president and chief
financial officer, and Regent Thomas Roach.
First Regents i
By BRIAN BLANCHARD
It began like yesterday's dreary afternoon rain.
But before the Regents wound up their first meeting of
the semester, they were asked to stop the "erosion" of the
faculty by paying it more, withdraw an appeal made by
the University on an unfair labor practice ruling, and
"live up to (their) own ideals" by giving up South African
investments and questioning the presence . of a white
professor from that country on campus.
MEETING LATER in the evening, the Regents also
heard plans for the use of St. Joseph Hospital if the
Michigan legislature approves the $6 million price tag for
the 11.5 acre property on the corner of Ingalls and
meeting hectic
aid were the principle topics.
"The recession in Michigan and the recession in the
nation have passed," according to Professor Bill Neenan,
and the faculty needs more than this year's 5.75 per cent
pay increase "to attract and keep scholars of the first
rank."
Neenan, representing the faculty's Committee on the
Economic Status of the Faculty before the Regents, noted
that the cost of living index of the Detroit area rose 7.7 per
cent last year. Tuition hikes and state funds are sufficient
to keep up with inflation, he added.
NEENAN ASKED the Regents for a salary increase of
StoneffJ