ASHINGTON - Vice President Al Gore said yesterday his ''close friend'' Tony Coelho will stay on as his campaign chairman despite a government report finding questionable financial management while Coelho directed the US pavilion at the 1998 World's Fair in Portugal.
''Tony Coelho is doing a terrific job. He's my close friend, and he's going to continue doing a great job,'' Gore said on CBS's ''Face the Nation.''
''He is staying, and I haven't seen this report, but I know him,'' the vice president added.
Gore said he did not think Americans would see the report on Coelho as relevant to the campaign for the 2000 Democratic presidential nomination.
The State Department's inspector general found potential improprieties in Coelho's work as US commissioner general for the World's Fair in Lisbon, a post to which he was appointed in June 1996. The job, with the US Information Agency, included fund-raising and responsibility for the fair's US pavilion.
A report by investigators found Coelho improperly used $210,000 in donated airline tickets, unnecessarily kept an expensive chauffeur-driven Mercedes and hired his niece for a $2,500-a-month job.
The report said Coelho also obtained a personal loan of $300,000 from a Portuguese bank for a private foundation to use for a memorial sculpture, listing it as a liability on the USIA's records. The US government could be responsible if the loan is not paid, the inspector general said.
Coelho's personal lawyer, Stanley Brand, has said his client did not violate any laws in a job that did not pay him a salary.
Brand said ''there may have been management lapses,'' as in many government contract programs, but contended most of the negative conclusions were aimed at USIA officials rather than Coelho personally.
