When Jimmy Carter was elected president in 1976, he put his peanut farm into a blind trust.
But that representation of what Carter did doesn’t really capture the complexity or scale of his private business interest. It’s a longer story than that, involving two fairly large businesses (particularly for the time), a cozy relationship with the guy put in charge of his business, and, at one point, the appointment of a special counsel to dig into loans one of his businesses received — from a bank whose president ended up serving in Carter’s administration.
We can start with the scale of that “peanut farm.” What was really at stake was a pair of businesses. Carter Farms owned between 2,000 and 3,000 acres of land, with Carter controlling 91 percent of the corporation. He also had a majority stake in Carter Warehouse, a peanut warehousing business based in his hometown of Plains, Ga.
In the years before his presidential run in 1976, day-to-day operations at the warehouse were managed by his brother, Billy Carter. Billy Carter would end up being a perpetual thorn in President Jimmy Carter’s side, a tendency which began even before Carter took the oath of office. During those years before the presidential bid, for example, Billy Carter took out loans from the National Bank of Georgia to expand warehouse operations — at a time which overlapped with a peanut drought. Those loans ultimately totaled $6.5 million, about $31 million today.
Before Jimmy Carter was inaugurated on Jan. 20, 1977, he announced a broad set of rules meant to dictate the behavior of administration officials. After all, he was the first president elected in the post-Watergate era, and scrutiny of presidential ethics was robust.
“According to the plan announced today,” the New York Times reported, “Mr. Carter will sell all his personal stock, divert the royalties from his autobiography, ‘Why Not the Best?’ into a foundation that will establish a future library to house Presidential papers, and transfer to the trust his interest in Carter’s Warehouse and Carter Farms Inc.”
“The intent of this plan, Mr. Carter told reporters this morning,” the report continued, “is to insure that ‘whatever happens here in Plains, based on my decisions concerning agriculture, will not affect my income one way or the other.’ ”
It didn’t take long for the administration to face ethics questions, however. Carter’s nominee to serve as the head of the Office of Management and Budget was Bert Lance, an adviser to his campaign — and the president of the bank that gave Carter’s company that large loan. Lance resigned under an ethics cloud in September 1977, facing questions about his management of the bank.
Shortly after his inauguration, Carter announced that the blind trust that would manage his businesses would be run by Charles Kirbo, a longtime associate and confidant. In early February, he fleshed out the structure of the trust in more detail. At that point, Carter handed over control to his trustee Kirbo, asking that he consider possible effects of any decisions on Billy Carter and the possibility that his son would someday be involved in the business.
“Above all,” the document outlining the trust articulated, President Carter “wants the trustee to arrange the assets of the trust so that no one should reasonably assert that [his] actions as President were motivated by a desire to foster his own personal monetary gain or profit.”
Shortly afterward, Billy Carter announced that he planned to buy out his brother’s share of the warehouse business. Kirbo, now in charge, rejected the proposal, eventually pushing Billy Carter out of the business that September. Billy Carter would later publicly bash Kirbo — but quietly also received a $250,000 loan from the separate farm business.
In June 1979, President Carter released personal financial documents, including the revelation that his net worth had declined.
“White House officials, arguing that the trust is ‘blind’ and that neither they nor Carter is informed its operations,” The Washington Post reported at the time, “said they could not explain the loss. However, White House Counsel Robert Lipshutz said it is probable that the loss involved transactions of the Carter family peanut warehouse business which represents a major share of the trust.”
In February 1979, Kirbo had put the warehouse business on the market.
“I could have sold it some time ago to foreigners,” Kirbo told The Post. “But there’s been enough bad publicity about it already without selling to them.”
“Kirbo emphasized that the would-be foreign buyers were not Arabs,” The Post reported at the time.
That was important in part because of tensions between the United States and Arab countries at the time. It was also important because Billy Carter had been in the news in January, cozying up to Libyan nationals and decrying the “Jewish media” for disparaging Arab countries.
The next month, a warehouse employee told The Post that the loans President Carter’s business received from National Bank of Georgia were secured with peanuts that were sold by Billy Carter instead of being held as collateral. A special counsel, Paul J. Curran, was appointed to investigate the loans and see if any of the loan money went to Carter’s campaign.
Carter was also subject to new ethics rules that he’d signed into law as the Ethics in Government Act of 1978. For his companies to be held in a true blind trust, he would have had to have maintained a strict wall between himself and Kirbo. But Kirbo still served as an adviser to Carter, with a June 1980 story in the Times noting that Kirbo was both a frequent guest at the White House and had advised the president on staffing decisions.
Given that relationship, Carter’s team reported financial details of his businesses, describing the trust as “open” (under the definitions of the new law) as opposed to “blind.” It was at this point that the loan to Billy Carter in 1977 was made public.
By then President Carter was a millionaire, worth about $5 million in 2019 dollars. The trust was worth about $784,000, about $3.7 million now.
That October, the special counsel, Curran, cleared anyone of wrongdoing in the bank loans investigation.
“The special counsel said, ‘No evidence whatsoever was discovered that any monies were diverted from the warehouse into the campaign,' ” The Post reported. “As for whether any criminal charges were warranted, Curran said ‘the answer is also a clear no.’ ”
The only person considered for charges was an employee of the bank.
In November 1980, Carter lost his reelection bid in the face of a stagnant economy and international tensions. The following January, Ronald Reagan was inaugurated, and Carter returned to Plains.
In March 1981, the need for the semi-blind trust gone, the warehouse company was sold to an Illinois feed company for $1.2 million.
By then Trump, 21 years younger, was already a millionaire in Manhattan. He wouldn’t be president for another 36 years.
