Bcci Scandal Tarnishes The Good Name Of Clark Clifford

WASHINGTON - He played poker with President Harry S. Truman and Winston Churchill. Other presidents - John F. Kennedy, Lyndon B. Johnson, Jimmy Carter - were his friends. All listened closely to his advice.

Clark Clifford's name has been synonymous with power and politics for nearly five decades.

At Truman's side, Clifford was present at the creation of NATO, the development of the Marshall Plan, the promulgation of the Truman Doctrine, the formation of the CIA and the early strategic planning of the Cold War.

He helped smooth the sad transition between the presidencies of Kennedy and Johnson. As secretary of defense, he helped persuade Johnson of the futility of escalating the Vietnam War.

He traveled around the world as a roving ambassador for Carter. He became the first Washington lawyer ever, it was said, to earn $1 million a year.

But that impressive record suffered a major blow last week with the criminal indictment of Clifford and his younger law partner and protege, Robert Altman, on charges that they helped to engineer and cover up the illegal takeover of Washington's First American Bankshares Inc. by the Bank of Credit and Commerce International and its powerful Middle Eastern owners.

Clifford's many friends and admirers in Washington and elsewhere have been half dreading, half expecting the indictments since the first allegations of BCCI's illegal ownership of First American surfaced 18 months ago.

Forced by regulators to step down as the bank's chairman last summer, and with his once-thriving law partnership destroyed by the scandal, Clifford, 85, has spent the past few months preparing his defense against the charges that threaten to overcome everything that went before.

"This is a colossal tragedy," one source close to Clifford said last week, like other friends reluctant to talk on the record for fear of hurting him.

The question that Clifford's friends and admirers still find most difficult is why would a man who had moved so smoothly in the highest circles, who had built a reputation for probity and then traded on that reputation for decades, risk his name on a controversial takeover of a local bank by a secretive institution like BCCI?

Certainly he did not need the money. Clifford was a millionaire several times over, with a reputation for frugal living that helped preserve his fortune. While he made a $6.5 million profit on a questionable trade in First American stock with money lent by BCCI - Altman, wealthy in his own right, pocketed $3.3 million on the same deal - Clifford also prided himself on not having received a salary in his nine years as First American's chairman.

Friends saw other possible motivations. "He's a man of enormous ego . . . a man without blemishes in his own mind. So he didn't think anyone would question him," said a source close to the case.

"He failed to ask himself the same question he would have asked of any client," a friend said. " `What was (the BCCI investors') motive in coming to me?' That was a terrible mistake."

Set against his friends' image of Clifford as a man of unblemished innocence and rectitude are the voluminous assertions about Clifford's conduct in the BCCI matter.

According to prosecutors, it was Clifford's blanket assurance that all was in order that permitted BCCI to carry out its secret, illegal acquisition of First American in 1982 - a charge Clifford denied again last week.

In addition, documents detail how Clifford reaped a profit at virtually no risk through insider transactions in First American stock financed by highly favorable loans from BCCI. At the same time, he was receiving millions of dollars in legal fees from First American and BCCI. According to an indictment in New York, the money Clifford and Altman received was intended to purchase their help for BCCI's secret efforts to acquire control of U.S. banks.

For years, Clifford lent his good name to clients whose reputations shined less brightly. At a 1981 Federal Reserve hearing into the takeover of First American (then known as Financial General Bankshares), Clifford, in effect, asked regulators to trust his assurances that the Arab investors who were the proposed buyers were on the up and up and that they were not being covertly backed by BCCI - a contention that prosecutors now say was wrong.

"There is no function of any kind on the part of BCCI," Clifford confidently assured the regulators. Clifford's assurances were taken at face value by the impressed regulators, who approved the takeover.

While he has earned his livelihood for decades as one of Washington's smartest lawyers, Clifford now says he was simply duped by his Arab clients in the BCCI affair.