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Bert Lance, Carter confidant and former U.S. budget chief, dies at 82

ATLANTA (Reuters) - Bert Lance, a Georgia banker and long-time friend of former President Jimmy Carter who served as Carter's budget chief until being forced to resign in 1977 amid bank fraud allegations over which he was later cleared, has died at age 82.

Lance, who coined the phrase "if it ain't broke, don't fix it" and was an adviser to Democrat Carter during the 1976 campaign in which he beat incumbent Republican President Gerald Ford, died on Thursday in Calhoun, Georgia, according to a statement from a local funeral home.

Lance was named director of the Office of Management and Budget (OMB), one of the most powerful government agencies and a Cabinet-level post, when fellow Georgian Carter took over the White House in January 1977.

He moved to Washington with a Carter inner circle that included Georgians Jody Powell, the White House press secretary, and Hamilton Jordan, White House chief of staff.

On September 21, 1977, after weeks of controversy about Lance's alleged past mishandling of the funds of two Georgia banks he headed, Carter fought back tears as he announced his friend's resignation. Ultimately, Lance was cleared of charges in 1981.

"Bert is my friend," Carter said at the time. "I know him personally as well as if he was my own brother. I know him - without any doubt in my mind or heart - to be a good and honorable man."

For four years, Lance battled federal investigations and prosecutions of his financial affairs. A jury acquitted him on nine counts and deadlocked on three others, which were then dropped by the Justice Department.

The banker had handled loans of several million dollars to the Carter family peanut business. At one point, the president and his brother, Billy Carter, were drawn into the probe, but were cleared of any wrongdoing.

After Lance's death, Carter issued a statement saying: "Bert Lance was one of the most competent and dedicated public servants I have ever known. ... Bert was one of the closest personal friends I have ever had, and was always a fountain of sound advice about the most detailed issues of our state and nation."

A 1984 COMEBACK

Lance attempted a comeback when he was named as chief of Walter Mondale's presidential campaign in July 1984. Mondale, vice president under Carter, miscalculated the adverse response and Lance resigned after little over two weeks, saying the dispute had made him a "source of diversion" for the campaign.

In the 1988 campaign, however, Lance secured a role as an influential elder statesman of the Democratic Party. He was a key advisor to Jesse Jackson, chief rival to eventual nominee Michael Dukakis, and played a crucial role at the Atlanta convention, helping the two men overcome their differences and preserve party unity.

The charges that led Lance to leave the OMB were that he made hundreds of thousands of dollars in unsecured loans to family and friends with the intent of defrauding the banks and that he lied on financial statements.

He always maintained his innocence. His defense portrayed him as a populist banker who cut corners to help ordinary people. It acknowledged huge bank overdrafts, but said no illegality was involved.

One government report said Lance's wife, Labelle, had average overdrafts of between $25,000 and $110,000 in 1974 and 1975 and that nine relatives were overdrawn by a total of $450,000 at one point during the same period.

During the trial, Lance sold his 60-room mansion, called Butterfly Manna, for $1.4 million and moved into smaller quarters with his wife, three sons and a daughter.

Lance came to Washington with experience as head of the Georgia Transportation Department from 1970 to 1973 while Carter was governor of the state.

As OMB director, he had hoped to balance the national budget by 1981 and to reorganize the executive branch of the federal government on a more efficient basis.

After leaving Washington, Lance worked for a time as a commentator for a Georgia television station, but he never cut ties to Carter and other national party officials who respected his political savvy.

(Reporting by Steve Holland in Edgartown, Massachusetts, and David Beasley in Atlanta; Editing by Will Dunham)

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