The United States' traditional pro-Israeli policy was dramatically shifted toward the Arab side at a time when President Carter's family business was heavily in debt to an Arab-controlled bank.

Carter vigorously pushed the sale of F15s, our most advanced jet fighters, to Saudi Arabia while he was personally liable for about $830,000 to a bank controlled by a Saudi Arabian whose father is a close adviser to King Khalid. The loan, renewable each year, still is outstanding.

This raises the alarming possibility that American foreign policy has been used to placate a foreign investor who could ruin the president financially -- or, conversely, reward him with favorable treatment. In fact, the loan was renegotiated, with a saving to the Carter family of $60,000, at the very time the F15 deal was being pushed through the Senate by the White House.

Like other scandals that have beset Carter administration figures, the "Saudi Connection" involved complex financial wheeling and dealing. Indeed, the loan in question -- $1 million to construct a peanut sheller at the Carter family warehouse -- came in 1975 from the National Bank of Georgia, then controlled by Bert Lance, who later resigned as budget director when his financial shenanigans were disclosed.

My reporters Peter Peckarsky and Peter Grant have been investigating Carter's finances, and were able to piece together this interesting sequence of events:

By Sept. 1, 1977, the Carter warehouse, in which the president has a 62 percent interest, was $410,000 in the red. This didn't even include the million-dollar NBG loan for the peanut sheller.

On Dec. 20, 1977, Lance's Washington attorney, Robert Altman, announced that Ghaith R. Pharaon, whose father is a key adviser to the Saudi king, was buying 10 percent of the Georgia bank from Lance.

On Jan. 3, 1978, Carter met with King Khalid in Riyadh and promised to propose the sale of F15s to Saudi Arabia.

On Jan. 4, 1978, Lance got a highly unusual $3.5 million loan from Agha Hasan Abedi, president of London's Bank of Credit and Commerce International, who reportedly was the middleman in the Pharaon-Lance deal. The loan was made solely on the basis of an oral promise to repay, without specified terms or documents in writing.

On Jan. 5, 1978, Pharaon paid the financially strapped Lance $2.4 million for 10 percent of NBG stock, thus acquiring a controlling interest in the bank.

On Feb. 14, 1978, the Carter administration announced its decision to sell 60 F15s to the Saudis.

On May 1, 1978, a memo in NBG files spelled out the renegotiation terms for the Carter construction loan. It resulted in a saving to the president's family of $60,000 that year.

On May 15, 1978, after persistent lobbying by the White House, the Senate approved the sale of F15s to Saudi Arabia.