Lawyers for Financial General Bankshares Inc. yesterday asked the Federal Reserve Board to hold public hearings on the role played by Bert Lance in the effort by a group of Middle Eastern investors to buy control of the bank holding company.
Financial General also called on the Fed to air charges that two of the Middle Eastern businessmen associated with Lance received illegal payments from American companies.
The latest round of criticism was fired by Financial General's management in a three-quarter inch sheaf of "comments" opposing an application by Credit and Commerce American Holdings for a bank holding company.
Approval of the bank holding company application is the next hurdle the Middle Eastern group, which owns 20 percent of Financial General's stock, must clear before it can proceed with plans to make a public offer to buy the rest of the shares.
Although such applications are usually handled with little public controversy, the Federal Reserve is required to hold public hearings when state banking officials object. In three of the four states where Financial General has banks -- Virginia, New York and Tennessee -- state officials have opposed the plan.
Citing sworn testimony given by Lance in a civil lawsuit opposing the takeover, Financial General lawyers contend that President Carter's former budget director has been involved in the dispute. The bank holding company application of filed by CCAH says Lance will play no role in the company.
If the company's claim is correct, Lance could be in violation of an agreement he made to settle a complaint by the Securities and Exchange Commission and the comptroller of the currency. Lance agreed last April to stay out of banking for six months and to give federal authorities 60 days notice if he returns to the business. Although the six months is up now, Financial General contends Lance was involved in the takeover during that period and has not notified authorities of his return to banking.
The company's latest complaint also asks the Federal Reserve to air charges that illegal payments were made by American firms to two of Lance's associates, Kamal Adham, former chief of security for Saudi Arabia, and Faisal Saud al Fulaig, former chairman of Kuwait Airlines.
Adham and al Fulaig, who are major shareholder in the company that wants to buy Financial General, have been linked to illegal payments by Boeing Co. in connection with airplane sales. If the payments violated U.S. laws, the two could be disqualified from banking in the country.