Iowan's FBI file details fizzled Carter probe

IOWA CITY, Iowa — Newly released FBI memos detail a sensitive investigation into fundraising in the Carter White House that started with a comparison to Watergate but fizzled after uncovering special access for donors but no criminal wrongdoing.

The memos were released from the file of Charles Manatt, an Iowa native and former Democratic National Committee Chairman who was interviewed during the investigation. The records became public after Manatt died in July at age 75 in Richmond, Va.

Manatt grew up on an Audubon farm and studied rural sociology at Iowa State University before ascending to the top of the fields of law, business and politics.

While the investigation into whether President Jimmy Carter or aides improperly raised money at the White House received attention at the time, experts said the memos provide an intriguing look at one of the first major campaign finance investigations after Watergate.

Before his death, Manatt pushed Iowa State University to create the Harkin Institute of Public Policy, which was founded last year to house Sen. Tom Harkin's papers. Its director, Dave Peterson, said he'd never heard of the Carter case and the records provide "an interesting window into some of the early enforcement of the campaign finance laws."

According to the memos:

The case started when a source described as reliable and prominent called an FBI agent in Los Angeles in November 1978 to say he had knowledge of a scandal "of greater magnitude in consequence than Watergate," which had brought down President Richard Nixon. The source said several leading businessmen had been solicited for donations to the Democratic Party during a luncheon in the White House family dining room on Aug. 10, 1978, violating the ban on political fundraising on government property.

Attendees including oil magnate Armand Hammer, who had been convicted of concealing donations to Nixon's 1972 campaign, and entertainment executive Lew Wasserman were pressured to pledge $100,000 to retire $1.5 million debt the party had carried since the 1968 presidential campaign of Robert Kennedy, the source claimed.

Because of the "sensitive nature of this investigation," an FBI official told agents not to start until cleared by the Justice Department. An article in New York magazine titled "A Secret White House Meeting: Carter's Fat Cats," questioned whether the meeting was improper and Justice requested a limited investigation that soon expanded.