By Marjorie Williams
Washington Post Staff Writer
Thursday, May 9, 1991; Page D1

Margery Pepperell Kimball Clifford, known to her friends as Marny, has a reputation for plain speaking. She is explaining what a difficult time her husband has had lately.

How painful it is for him to hear his good name, after all these years, linked to wrongdoing. How much he has aged since investigators began asking how this revered elder statesman came to be fronting for a group of Middle Eastern investors who apparently circumvented U.S. banking laws. How tired he is of saying, over and over, that things are not what they seem."The trouble is," she explains, "you'd say exactly the same things if you were guilty. Think about it – you would."

She has summarized Clark Clifford's problem more neatly than reams of investigators' reports ever could.

"I just find it totally hard to believe he's gotten into any kind of problems," says Democratic lawyer Berl Bernhard, voicing the commonsensical puzzlement that is almost universally shared in Washington: "One, he doesn't need to. And two, you know, the thought that someone in some way misled or deceived him – it's possible, but it makes me say, Good Lord, these people must be very clever. Because he is not what you'd call ingenuous."

These people are the high-rolling bankers who Clifford says may -- may, he emphasizes – have taken advantage of his good name. The story is complicated in its details, but simple in its essence:

In the late '70s, a group orchestrated by a Luxembourg-based bank, Bank of Credit and Commerce International (BCCI), tried to buy a Washington-based bank holding company, Financial General Bankshares. BCCI was a sprawling and secretive international bank, with tendrils everywhere but little accountability to any nation that might regulate its operations. The American bank resisted, and the deal disintegrated under a mass of lawsuits.

Subsequently, a group of Middle Eastern investors – all of them banking clients of BCCI – offered to buy the bank.

Federal and state regulators were concerned: Were these investors fronting for BCCI? No, the feds were told. Was BCCI lending them money to buy the bank? No – and furthermore the investors intended to be passive investors, with no interest in the running of the bank. Would BCCI be in any way involved in the running of Financial General? No. Its only possible role was to be an occasional adviser to the investors, who after all were long-term BCCI clients.

The man who made all these representations on the investors' behalf was Clark Clifford. Other lawyers were involved, of course, and some of the wealthy investors themselves traveled from Saudi Arabia and Kuwait to explain their intentions to a special meeting of Federal Reserve Board officials and state banking regulators in April 1981.

But it was Clark Clifford, silver-haired and silken-voiced elder statesman, who introduced the investors, vouched for them and gave the regulators his personal assurance that the deal was in order. "There is no function of any kind on the part of BCCI," Clifford told the hearing. "I know of no present relationship. I know of no planned future relationship that exists."

He himself had agreed, he added, to act as chairman of the bank, ensuring an important layer of insulation between the day-to-day operations of the bank and the passive investors in the Middle East. He had already recruited, for the prospective board of directors, such distinguished Americans as his friend Stuart Symington, former senator from Missouri.

"I am comforted," he told the hearing about the deal, "that I know that it's good for our country."

The deal went through, the company was renamed First American Bankshares, and Clifford, at 75, became chairman of the largest bank holding company in the Washington area. Robert A. Altman, 33, his closest colleague in the law firm Clifford & Warnke, became president. Neither of them had ever run any business larger than a 20-lawyer law firm.

Today First American Bankshares is an $11 billion enterprise with subsidiaries in six states and the District, and more than 180 bank branches in the Washington area alone. But rumors have surrounded the real ownership of the company ever since its sale. In 1988, a BCCI officer arrested in a federal money-laundering sting operation told a wired undercover agent that BCCI owned First American. Clark Clifford, he said, was BCCI's attorney in Washington, and a formidable figure: "I mean," the man said, "Clark Clifford is sort of the godfather of the Democratic Party."

The rumors were borne out early this year when BCCI, under new management and under pressure from investigators, acknowledged illegally owning a controlling interest in First American. At several points, an audit showed, First American's nominal investors bought new shares in First American's holding company, financing the purchases with loans from BCCI; the investors never paid off the loans, and so BCCI gained control of the shares by default.

The Federal Reserve Board ordered BCCI to divest itself of whatever shares it holds in First American. BCCI filed its proposed divestiture plan with the Fed last week.

The complexity of the relationship between the two banks is increased by the fact that Clifford's law firm represented both BCCI and First American for most of the 1980s. Clifford and Altman played a leading role in shaping BCCI's defense against the money-laundering charges. These charges added a lurid taint to the story when investigators learned that some of the laundered money, funds of Panamanian strongman Manuel Noriega, was moved through an account in First American.

Yet Clifford and his partner have disclaimed any knowledge of BCCI involvement in First American's affairs. They still speak of the problem in the subjunctive voice, about the shares BCCI allegedly, or possibly, controls. Clifford has been in full operating control of the bank, he says. If any illegality took place, Clifford says, it was done behind his back. "It wasn't anything that we did. We haven't done a thing. We've run the bank and run it honestly."

There has been, in friends' and allies' comments about Clifford, a faith that his problems will work out: that somehow Clark will explain everything. Says his friend and longtime client Pamela Harriman, "It seems incredible to me, with all of Clark's long knowledge of people, that this was possible. But I'm absolutely convinced that there was no wrongdoing done with his knowledge."

That was before Sunday, when The Washington Post reported that Clifford and Altman were able to buy stock in First American's holding company in 1986 and 1987 with money loaned to them almost risk-free by BCCI. Between them they have made $9.8 million – two-thirds to Clifford and one-third to Altman – in pretax profit by reselling 60 percent of the stock to a man who also financed the purchase with a loan from BCCI.

Here, too, Clifford and Altman say everything is aboveboard: They bought stock in lieu of compensation, they say. Clifford has been paid only $50,000 in salary each year, and Altman has not drawn a salary. They paid interest and fees on the loans. They had the permission of the directors of First American's holding company, and filed the required notices of the stock purchases with American banking authorities.

But the directors of the holding company, who approved the deal, numbered only four. Two of them were longtime friends of Clifford's – Symington, now deceased, and retired Lt. Gen. Elwood P. Quesada. The other two were Clark Clifford and Robert Altman.

The most striking things about the deal are that Clifford and Altman never had to put up any money of their own, and that they were able to sell the stock for three times what they paid for it.

It is the development that takes the story beyond the realm of international wire transfers and the complexities of offshore banking, and into the readily grasped realm of political nightmare.

"I think it makes everything that much worse," says one heavyweight lawyer. "Because it reflects on his statements, and Altman's statements, that they were operating the bank independent of BCCI. Why would BCCI, in effect, give them that money? It makes it all much stickier."

The Partner Theory
How could a man who valued his reputation so highly have been either seduced or gulled into lending that reputation to clients who used it so crassly?

Why did a man in his seventies and eighties, after a career like Clifford's, borrow this trouble?

For every unanswered question, some admirers of Clifford's like to steer a reporter toward a single answer: that his problems are the fault of his younger partner. Go get Altman, they whisper, off the record, at interview's end. It's got to be Altman.

For the past decade and more, Altman has been Clifford's closest associate, working with him on his most important cases and handling the day-to-day business of running the bank. And whereas Clifford had been a millionaire for decades at the time the bank deal was struck, Clifford's friends say, Altman was a nakedly ambitious young man still on the verge of the big time. Perhaps he pushed Clifford into the deal, they say, or misled him along the way about the true nature of First American's relationship with BCCI.

Clifford and Altman appear a study in contrasts: Altman, now 44, is married to actress (formerly Wonder Woman) Lynda Carter, who passes, in Washington, for glitz. He lives in an enormous new mansion in Potomac, where he throws parties for an enormous collection of new friends. When Altman and Clifford work cases together, it is said in the legal community, they are a formidable tag team: Clifford is the genial good cop who calls up and confers the compliment of humbly introducing himself to a new adversary; Altman is the one who calls later and threatens scorched earth if you don't back down.

It could be seen as the familiar case of the powerful man who assigns his more disagreeable deeds to a surrogate, as George Bush did with Lee Atwater. But the bond between Clifford and Altman is also a personal one: At this point Altman may be his mentor's chief intimate. Clifford was best man at Altman's wedding, and became the godfather of Altman's son, James Clifford Altman.

"It's almost like a father-son relationship, in a way," confirms Marny Clifford. Clifford is the father of three daughters and very much a man of his generation where gender roles are concerned: His firm has no women partners, and he is given to referring to female support staff as "girls." Altman says, "I suppose he wanted to pass on to someone that which he had learned over 50 or 60 years."

Clifford firmly closes off any implication that Altman could have acted at any point without his knowledge. "I have been in charge of the matter," he says firmly. "I have set the policy and he has complied with the policy I have set."

Altman echoes that statement – and minimizes his own role in the pair's decision to become involved in the operations of the bank, saying, "I think the whole idea kind of challenged [Clifford]. He took it on and I went along for the ride." He amends himself quickly: "Well, that's a little casual."

Since the stock deal was revealed, only a few of Clifford's friends cling to some hope that Altman will be shown to have abused Clifford's trust.

But all along, those tempted to attribute the scandal to the hunger of the younger man have underestimated the role of Clifford's own drive, a force so insistent that it has kept him working long past the point where other men, willingly or not, have come to rest.

To understand what kept Clifford striving, you would have to go far back, to the era before radio. To a time when lamplighters walked the neighborhoods of St. Louis in the evening, a day when little boys read Horatio Alger books for ideas of how to be men.

What His Father Taught
In his great gift for self-presentation, Clifford carries most visibly the legacy of his mother, Georgia McAdams Clifford. She was the sister of the dashing liberal editor of the St. Louis Post-Dispatch, Clark McAdams, and her family were all vibrant, colorful souls.

Georgia Clifford was a professional storyteller. She was president of the National Story Tellers' League, and in the '30s she had her own show on the CBS radio network. Quite deliberately, she taught Clifford and his sister to revere language, and to present themselves with flair. He believes she is one of the reasons he was drawn to the high dramatics of trial law as his first career, and the source of the subtler thespian gifts he brought to his role in Washington.

But the most important legacy was his father's. Clifford's bond with his father was a powerful one: It was not until his father died, he writes, that he felt free to join the Navy, setting in motion his entire new career.

Neither in person nor in his book does Clifford use the word "failure" to describe his father, but this is the sense that hangs heavy in his descriptions. "It's going to sound queer," Clifford says, "but I think he felt that the greatest accomplishment of his life was getting my mother."

Frank Clifford's career was with the Missouri Pacific Railroad, and as Clifford grew up his father was making the slow rise through the executive ranks – partly by virtue of having as a mentor the railroad's executive vice president. Clifford recalls of his father, "There was a spring in his step and a new sparkle in his eye. ... And, of course, the railroad was my father's whole life. He never worked for anybody else." But the boss died suddenly, of a heart attack. New management was brought in, and Frank Clifford's career was swiftly, permanently sidetracked. His spirit, his son says, was crushed.

"The spring went out of his step and the sparkle went out of his eye," Clifford recalls, "and I was old enough then that he could talk with me about it. ... And the lesson from that my father passed on to me – and he meant to pass it on to me – was, try to plan your life so that it is not dependent upon others. ... The more you can construct and structure your own life based upon your own efforts and the less subject your life is to the direction and control of others, the happier you're going to be."

The lesson, absorbed when the son was in college, could be traced through Clifford's entire career: going into law and then setting up his own firm, where no single client could make or break him. Resisting government appointments by Kennedy and especially the domineering Johnson.

But even before Frank Clifford's career collapsed, he had striven to give his son a stern message about work. "From the time I was four or five," Clifford writes, "he began to impress me with the fact that to live was to work."

Look at Clifford's life through the lens of that proposition, and a pattern announces itself. He graduated from high school at 15. He had ulcers by the time he was in his thirties. The word he uses most often to characterize his life is discipline.

"He's a true workaholic," says Marny Clifford, "one of the worst I've ever seen. He's on a treadmill – he can't get off it."

"Except for golf, I can't think of anything he really enjoys outside of the office," says Pamela Harriman.

Lawyer Paul Warnke says of his 84-year-old partner, "Clark is here certainly always five days a week, usually six and sometimes seven."

"He doesn't like vacations," says his wife. "Hates them." For years, he took only a week's vacation every year – an all-male golf trip to a Fort Lauderdale, Fla., house made available to him by Phillips Petroleum, on whose board he used to sit.

For the past nine years, since he began running the bank, he says proudly, he hasn't taken any vacation.

The One Essential
Clark Clifford can't possibly need the money ... This is the bedrock, puzzled response to Clifford's troubles, in living rooms and law firms all around Washington.

And it's true. Not only does he have more money than he needs; he doesn't especially seem to enjoy the money he has. The house where the Cliffords have lived since 1950 appears to bear this out. It is a historic landmark, a 19th-century clapboard farmhouse where J.E.B. Stuart's men were bivouacked during the Civil War. The land it occupies, just off Rockville Pike, is quite valuable.

And yes, the Cliffords have servants, including the man who answers the door and later brings iced tea on a little round platter to Marny Clifford and her visitor. And yes, there are sleek dark cars in the garage, a dowdy Fleetwood and a more dashing black Jaguar.

But there are few other signs of wealth in this house, which displays the confident negligence of the upper class. Paint is cracking on the wall of the main stairway; in the living room the slipcovers are worn dull, having served their masters since 1931. In the dining room, there are small tendrils of dust on the walls, near the ceiling. Pointing out her collection of Chinese porcelain, displayed on the walls of the room, Marny Clifford says, with reflexive Yankee frugality, that of course these are pieces she's had for ages: They've gotten so expensive she can't afford to buy any more.

Clark Clifford just doesn't care much about possessions, or social life, or any of the things that most Americans think of as sources of pleasure. "Clark is a very simple soul, he really is," Marny Clifford explains. "I can't remember him ever, in all the years I've been married to him, wanting something. I can think of a thousand things I want; most people can. But he is very strange that way."

There is, however, something he needs.

She finishes her tour of the house in the den, where the memorabilia of his career are displayed. She points at the photos on the wall nearest the front of the house, of the friends and acquaintances who enlivened five decades of life in Washington. They are all pictures of dead men.

"Stu," says Marny Clifford sadly, at the photo of the late Stuart Symington, for decades Clifford's best friend. "Omar Bradley, he's dead." She points, and points again. "Tom Clark's dead. Bill Douglas is dead." She shakes her head. "Bob Lovett, Averell. Jimmy Forrestal, he's dead."

Clifford had outlived, by 1981, almost all of his old colleagues.

He had outlived his presidents and, in a way, his party, which had lost a landslide to Ronald Reagan. Although he had been consulted from time to time by President Carter, assigned the odd trouble-shooting trip abroad, it had been years since he was a White House regular.

He had even outlived many of his clients. "I think that as you get to be mid-seventies, you look around and all of a sudden your clients have retired," says partner Warnke. "The [corporate] general counsels are years younger than you are, so as a result your younger partners are much more apt to get new business than you are. And Clark, I think, did not want to have nothing to do."

It seems possible, then, that the Arab buyers of Financial General Bankshares had something incalculably valuable to offer the 75-year-old Clark Clifford.

To live is to work.

"I think, at the time, without considering, I was looking at other contemporaries who were 75, looking to see what they did," Clifford says. "Some of them would go with their wives each morning to the market and help with the marketing, help pushing those carts and all. Well, I didn't find that very appealing. Another was to go down to the post office every morning and get the mail. That wasn't anything that excited me much. A lot of them go to Florida and disappear. Some of them just sit on the front porch and rock and wait to die." He infuses the syllable with drama, then adds the dryly comic punctuation: "That didn't appeal to me either."

Both the darkness and the humor of this meditation have a calculated quality. If a true feeling animates it, it sounds like contempt for all those cart-pushers and mail-fetchers.

Clifford recalls that "back when I used to take vacations, about the second or third or fourth day I would have had enough." He gestures around at his dusky office, cocooned by its heavy drapes.

"This is my life here. This is what I do."

Tallying the Loss
"I had been me-tic-u-lous-ly careful through the years that I not get involved in a posture that would be embarrassing for me," says Clark Clifford, tapping a long finger on his desk. "It is very easy to do in Washington. And it didn't happen to me. I've been here all these years, you see, then I ran into this recent problem."

This recent problem. In a series of interviews, Clifford replies to questions about the bank with a quality that looks very much like bafflement. Again and again, he makes arguments that run counter to everything Clark Clifford has stood for in more than four decades of Washington life.

"When people say, 'Oh, Clifford must have known,' the fact is, I would have been the last one to know," says Clifford. "I would have been the last one [BCCI] would have told. ... Because maybe they did use my good name at the beginning. Maybe they did depend to some extent upon my reputation. All right, if that's an asset then it's an asset. But they wouldn't tell me what was going on, because the day they would have told me was the day that I would have left them."

I was blind, says the man who made a career of seeing around corners.

"At the time, under the conditions that existed, it all seemed perfectly appropriate," he says of his stock deal. "Let me add that there's nothing illegal in any way with the deal regarding the purchase of the stocks."

I am within the letter of the law, says the man who always understood – who taught some of the most powerful men of his time – that in Washington, once you are reduced to arguing the law you have already lost the case.

Only one, or at most two, people know what really happened in Clifford's stewardship of the bank, down to his most personal motives. Whether he led or followed; whether he was involved from the start in a foreign bank's scheme to gain control of an American outlet, or passively allowed it to develop behind his unassailable image; whether Clifford was lied to or deluded himself.

But the truth is that Clifford is proud of his bank. His picture has graced its annual reports; he once even appeared in a First American commercial. When his friend and fellow lawyer Edward Bennett Williams was dying of cancer, Clifford was anxious to show him around the bank before he was too ill to go out. Lawyer Bob Strauss describes how he, Clifford and Williams had lunch at the bank's offices, in the shadow of the great, grave oil portrait of Clark Clifford, Bank Chairman. "It was almost like a father showing off accomplishments to his son," says Strauss.

Clark Clifford's ultimate mistake may have been that, after a lifetime of making Washington believe in his legend, he fully believed in it himself.

Clifford came along in an era when great corporate wealth was learning how to counter a whole new generation of government regulation. He became the fig leaf assuring postwar Washingtonians that all the profitable transactions here between public and private power, business as usual, are simply the workings of a mighty democracy.

If Clark Clifford could be what he was – "adviser to the presidents" – at the same time he was making millions of dollars, year in and year out, working for the biggest corporations in America; if he could nip across Lafayette Square from his office to help Lyndon Johnson sort out the Six-Day War in between helping General Electric and McDonnell-Douglas and Knight-Ridder and scores more to palliate the wearisome meddling of the federal government; if Clark Clifford could do all this, then surely the ... friendly relationship of political power and corporate wealth in Washington is just the natural order of things.

As Mr. Integrity, the man who wrote the warranty of Washington's basic virtue, Clifford has been selling his reputation for a long, long time. It was as heady a role as exists in Washington, perhaps in all of corporate America. He seems baffled, so late in life, that the safe haven of his reputation cannot protect the man who needs it now.

Clifford says he regrets nothing. He looks back a decade, to his initial involvement in the bank, and says, "Given the facts as I knew them then, I would make the same decision."

But sitting in his curtained office, closed away from the White House, the Capitol, the power centers of the city he once owned, he does say he is full of misgiving. "I'm mystified," says Clark Clifford. "And I want to tell you that in the process I've lost something that I worked for for 62 years.

"To a certain extent I've lost my good name, and I'm deeply sorry about that."