Adrian C. Israel, the chairman of Peoples Drug Stores Inc., reportedly is preparing to merge his multibillion-dollar-a-year commodity business, ACLI International, with Donaldson Lufkin & Jenrette, the nation's seventh-largest, publicly owned securities firm.

The word on Wall Street is that the deal will be announced tomorrow.

ACLI is an acronym for A.C. and Leon Israel. Headquartered in White Plains, N.Y., the company has offices in the New York financial district and in Switzerland and other world trading centers.

Adrian Israel, 65, is nicknamed "Ace" and is regarded as one of the most successful commodity speculators in the country. But lately the speculation has centered on ACLI's failures.

It's no secret that ACLI lost a bundle when the silver market crashed last year. At least one customer stiffed ACLI for several million dollars, failing to make good on massive losses in silver futures contracts purchased through ACLI's retail brokerage subsidiary. ACLI wound up getting a couple of rusting freighters as partial payment for that customer's debts.

The silver losses forced ACLI International, the parent company, to pour several million into ACLI Commodities, the brokerage subsidiary, to keep it afloat.

Since then ACLI reportedly has been caught on the wrong side of two more market slides, in sugar and coffee.

How much ACLI lost in silver, sugar and coffee will probably never be known, because the company does not sell stock to the public or issue public financial reports. All the Commodity Futures Trading Commission will say is that ACLI's brokerage business is in compliance with the minimum financial standards for commodity brokers.

ACLI officials insist the losses in the three commodities weren't as bad as the rumors claimed, but when you're talking about dropping $20 million to $30 million in a few days, that's a lot.

There's no suggestion A.C. Israel is broke. His 1.3 million shares of Peoples are worth more than $20 million, and with 34.1 percent of Peoples stock, he's firmly in control of the biggest and most profitable of the three Washington drugstore chains.

Even by the standards of international commodity traders -- a close-lipped lot -- ACLI is a secretive company. Reportedly the company does about $3 billion a year in business.

The facts about ACLI's finances will have to be made public if Donaldson Lufkin & Jenrette does take over. DLJ is a public company, and its shareholders will have to be told what it is paying for ACLI and what it is getting for its money.

Neither ACLI nor DLJ would say anything but "no comment" on Friday. Dow Jones reported DLJ was not planning to buy ACLI for cash, but to avoid the need for borrowing money, the firm wanted to exchange its stock for equity in ACLI. Unless ACLI is worth a lot less than most people think, A.C. Israel and the other ACLI owners could come out of such a deal as the biggest stockholder in DLJ.

A.C. Israel's 34.1 percent stake in Peoples clearly puts him in the driver's seat of one of Washington's largest companies, but another of the District's biggest businesses is conspicuously lacking such a solid shareholder.

Nobody owns more than 6.5 percent of the shares of Woodward & Lothrop, leaving Woodies vulnerable to the kind of "bear hug" attack that captured Garfinckel, Brooks Brothers, Miller & Rhoads Inc. last week.

Garfinckel's upcoming acquisition by Allied Stores Corp. underscores the threat to Woodies' independence. Woodies' biggest stockholder is L.F. Rothschild, Underberg, Towbin, a New York investment house that has been particularly critical of Woodward & Lothrop management. It owns 6.5 percent. Other blocks of about 6.1 percent each are owned by descendants of the company's founders, Catherine W. Tyssowski of Delaplane, Va., and Nancy Luttrell Orme, of Leesburg, Va.

Even the three of them could not fend off a takeover bid, and Woodies executives know it. The question is, what can they do about it?

One of those all-too-familiar and all-too-successful business swindles is being worked in the Washington area again.

It's the old "invoice for advertising" trick. Tod Mack, who runs Maryland International Raceway in Budds Creek, got one in the mail at his Great Falls office recently and passed it on as a warning.

The bill came from Market Research International in Hong Kong and said Mack's company, Good Times Inc., owed $350 on an account.

"The scam relies on making the solicitation for advertising in an obscure directory appear as if it were a legitimate invoice for services performed," said Mack, whose secretary was preparing to pay it. "The statement looks so authentic that I couldn't really blame my secretary for making out a check."

Mack spotted this one in time, but how many Washington businesses paid the bill?

Downtown businesses are organizing to support plans to tear down the Whitehurst Freeway and are beginning to push two other projects to improve pedestrian and vehicular traffic in the crowded quarter.

They're talking about three jitney routes patterned after the "Georgetown Trolley" that shuttles shoppers back and forth across M Street NW. One would run from the waterfront up Wisconsin Avenue to the Safeway store and back. Another would bus shoppers and tourists from the Foggy Bottom Metro stop into Georgetown, and the third would swing across Key Bridge to pick up people at the subway over there.

Shaping up the sidewalks is the final suggestion. The plan is to tear out the concrete and replace it with brick walks like those being installed around the new Georgetown Park project at the southwest corner of Wisconsin and M streets NW.

The problem with all three projects is money. The District can probably get federal highway funds for three-quarters of the cost of the Whitehurst Freeway replacement. Georgetown businesses are ready to share the cost of sidewalk and jitney service with the city, but squeezing money out of the District budget for those two improvements may be difficult.

A $500 million trial balloon was floated over Fairfax County last week by Paul Layman of American Equity Ltd., a developer that says it is planning a massive development in the triangle formed by I-66, US-29 and Virginia Rte. 28.

Layman told the suburban papers that American Equity will break ground Jan. 2 for a Sheraton Hotel as the first phase of a project that's supposed to take eight years to complete.

Neither Fairfax planning and zoning officials nor the county economic development authority have seen plans for the project, however, and no $500 million project has ever cleared the county bureaucracy in less than four months.

In trying to interest The Washington Post real estate section in a story, Layman admitted he's really just testing the water to see what public reaction will be.

Sheraton has made no commitment to run the hotel, he acknowledged, and the development partnership is still in the formative stage.