A little more than a year ago, Hale Champion was a loser. He ran in the March 9 Massachusetts primary as a delegate to the Democratic national convention, pledged to Rep. Morris K. Udall (D-Ariz.). Although he came in second in the Mass primary, just slightly behind Alabama Gov. George C. Wallace and well ahead of Jimmy Carter, Champion couldn't pull enough votes to get on the delegate's train to New York. One might have thought that Champion's political career would end there. But in the wake of Jimmy Carter's march through the primaries and his choice of Cabinet nominees, Champion was about to find resurrection.

Throughout nearly all of 1976, local media ranging from The Crimson to the Globe speculated about which members of the Harvard-MIT community would be called upon to spend a year or two in Washington. After all, the last Democratic administration created a demand for a Boston-Washington shuttle flight all by itself.

But with the advent of the Georgia mafia and lots of rhetoric about new faces, that kind of mass migration was just not going to be repeated. Those few Harvard academics who started preaching peanut power last spring seemed genuinely pessimistic about their own chances for an administration post, so administrators like Champion--who had supported other candidates--were largely ignored.

Come January of 1977, however, it was a different story. Carter turned to a veteran--indeed an architect of the Great Society--Joseph A. Califano Jr., for his Secretary of Health, Education and Welfare. Califano, a graduate of Holy Cross College and Harvard Law School, was known as a policymaker, a man who steered his own course. When he went looking for people to fill the sub-Cabinet posts at HEW, he wanted someone with financial expertise to serve as Undersecretary, the number two post in the department. He obviously wanted a Democrat, and preferably a liberal one, with some experience health, education or welfare, but he really didn't care who his nominees had supported in the primaries.

Champion fit the bill pretty well. He was a reporter on a financial beat for the San Francisco Chronicle in the 1950s, and spent the year 1956-57 at Harvard as a Nieman Fellow in journalism. He was press secretary to Edmund G. Brown Sr. in his campaign for Governor of California, and was the state's director of finances in 1961-62. He also had experience as the vice president of the University of Minnesota for finances, planning and operations, and served as the director of the Boston Redevelopment Authority in 1968-69. Champion came to Harvard as one of President Bok's new vice presidents, and began to enforce a policy under which each of the University's faculties was financially like a "tub on its own bottom;" they were all to balance their budgets and make themselves secure and independent.

But Champion was more than a mere overseer. He launched his own projects, like the Mission Hill Medical Area power plant and housing project in Roxbury and the plan to set up a new, quasi-independent firm to manage Harvard's endownment portfolio, instead of farming it all out to independent brokerage houses. Some, like the Med Area power plant, met with opposition, but most were implemented in one way or another. And Champion, unlike two of Bok's other V.P.'s, had no major blots on his record. Yes, the power plant plan caused an unlikely alliance of opposition between Roxbury residents and the Boston Edison Company, but it is being built. Charles U. Daly, Bok's first vice president for government and community affairs, lost the Kennedy Library to UMass-Boston despite his long ties to the Kennedy family and his one-time post in the Kennedy White House. Steven S.J. Hall, Bok's first vicepresident for administration, displayed an extraordinary inability either to get along with the faculty or to keep his mouth shut. Generally, Hall would dream up a new costsaving procedure like using palm-print bursar's card checking machines for the dining halls, and casually tell a reporter about it before consulting with anyone else. But Champion's projects went through, and he knew how to move quietly through the University.

Friends in D.C.

Champion not only had a good resume, but he had friends who remembered him. Among them was Daley, who is now in Washington working on a citizens' review of the workings of Congress. Daly is very friendly with a lot of Washington biggies, including House Speaker Tip O'Neill, so apparently when he suggested that the Carter team consider Champion as Under-secretary of HEW, his suggestion was not considered lightly--particularly when other political heavyweights echoed the idea.

On January 19, Carter announced that he had chosen Champion as the department's Undersecretary and the next day sent the nomination to the Senate for confirmation. Two months later, Champion was still only an acting undersecretary, and his nomination hadn't even made it out of the committee. What was the problem?

The problem was Flora Souza. Flora Souza is the president of Home Health Inc., a California health care company that HEW pays through the Medicare program. In early January, the Social Security Administration notified HEW's office of investigations that there might be fraud involved in the department's payments to Souza's companies. Enter John J. Walsh, director of HEW's office of investigations.

Walsh is a career investigator. From 1938 until 1953, he worked for the FBI, and from 1963 to 1976 for the Senate Government Operations Committee's permanent subcommittee on investigations. In 1976, he became HEW's first chief investigator; above all, he says, he wanted to maintain his independence from the rest of the department, especially its Office of the General Counsel (HEW's chief lawyer).

Meanwhile, a Congressional committee began investigating the possibility of fraud in the Souza case, and Walsh notified his superiors, including Champion, of the investigations.

On February 4, Walsh was summoned to Califano's office, and found Califano, Champion, and HEW's General Counseldesignate Thomas Barrett in the office. Walsh says Califano asked him if he had begun the Souza investigation, and then told him that he should henceforth clear all investigations with the General Counsel's office. Califano also asked Walsh to wait until after Barrett had drawn up a plant for the investigation.

Walsh was upset. In his experience, he says, investigations that proceed under the direction of a general counsel usually don't produce anything because the lawyers are overly cautious in their investigating techniques. So he went back, asked for more specific instructions on how to proceed with other investigations, and, feeling that he did not have Califano's full support or confidence, resigned, effective March 6.

On March 8, the health subcommittee of the Senate Finance Committee held its first set of hearings on Hale Champion's nomination as Undersecretary. Most of the questions were routine. But then Sen. Herman E. Talmadge (D-Ga.), chairman of the health subcommittee, asked Champion about the Souza case and Walsh's resignation. Champion replied that Walsh had simply been instructed to keep the General Counsel's Office informed of his activities, not to actually "clear his work" with the counsel. Champion also said that until the HEW Inspector General was installed in the then empty post--Congress had only created the post last year--Walsh was to report to him.