Federal authorities are investigating allegations that local developer T. Conrad Monts promised to guarantee a bank loan for D.C. businessman John B. Clyburn in exchange for Clyburn's agreement to bribe a D.C. government official to win approval of Monts' office-hotel project, according to sources familiar with the probe.

The alleged deal indicates how Monts, who is known for his development of low- and moderate-income housing, figures into a broader federal probe of D.C. contracting. In contrast with others under scrutiny, Monts' place in the investigation previously was largely unknown.

Investigators have been pursuing the theory that Clyburn, a businessman with wide-ranging contacts in the D.C. government and a central figure in the probe, acted as a middleman in influencing the award of at least three other contracts or projects.

Monts, 44, headed a group of businessmen who presented an unsolicited proposal to the city in late 1985 or early 1986 to build the so-called air rights project, a $200 million complex above I-395 just south of Massachusetts Avenue NW and north of the U.S. Labor Department.

The group wants to lease or buy from the D.C. government the air rights over I-395, then build offices, a hotel and stores on a deck over the freeway, according to city officials.

Federal investigators picked up information about the alleged bribery scheme through electronic surveillance devices that were placed on Clyburn's phone and in his office during a 10-month period ending in May, according to sources. In search warrants for the businessmen's offices executed May 22, the FBI said it had probable cause to believe Monts and Clyburn had committed crimes.

R. Kenneth Mundy, Monts' attorney, said, "Monts is not guilty of any crime and we have confidence that, when all the facts are known, Monts will be exonerated of any illegal, unlawful or unethical business or personal practices. If justice has any hand in this, he should not be indicted."

Thomas R. Dyson, who represents Clyburn, said his client has not done anything wrong. "He never bribed anybody," Dyson said.

It could not be determined whether federal authorities are attempting to make a case that Clyburn carried out the alleged bribery, or only that Monts and Clyburn conspired to do so.

The air rights proposal is still under review by the city's Department of Housing and Community Development, with a decision expected shortly. Because I-395 is an interstate freeway, the U.S. Department of Transportation also must approve any development, according to Will Jackson, acting administrator of the D.C. housing agency's development division.

The original idea for the development came from a group of Saudi businessmen, who put up $100,000 in seed money, according to a spokesman for the group. They sought out Monts, who heads Travenca Development Corp., after they were told by city officials that they needed minority partners, the spokesman said.

Clyburn was included in the partnership because he had been a member of a separate partnership that in 1985 defeated several other groups in a city competition for development rights to build a $500 million office-hotel complex at the Portal site, located at the foot of the 14th Street Bridge, according to one participant in the project who asked not to be named.

Monts' group presented its proposal to a number of high-ranking city officials in the mayor's conference room in December 1985 or January 1986, according to one partner. Shortly afterwards, the Saudis pulled out of the deal because of financial difficulties stemming from an oil glut, a spokesman said, but Monts continued to pursue the proposal.

In a letter dated Feb. 26, 1987, Monts received some encouragement from Madeline Petty, then director of the housing agency, which has prime responsibility for approving the project.

Petty's letter said the housing department "has no disagreement with the basic concept of the project" and was willing to assist Monts' company in refining the proposal for a period of 90 days. During that time, the agency would not consider any other proposal for the site, the letter said.

If, at the end of three months, Travenca could convince the agency of the project's economic feasibility and the availability of private financing, the department "shall negotiate with Travenca to enter into an agreement similar to an exclusive right," the letter said.

Jackson said in an interview Thursday that the housing agency has not completed its review, but "we are pretty sure that we have a good chance of going forward." He said Travenca has provided "indications that the project is economically feasible and indications that it can be financed." He said he hoped for a decision within a few weeks.

It could not be determined whether Clyburn is still a member of the development group.

The May search warrant for Travenca's offices said the FBI was looking for records relating to the air rights project and to another Travenca proposal to develop the Camp Simms site in Southeast Washington, a former National Guard training facility.

The search warrant said agents sought evidence of relationships between Monts; Clyburn; Petty; Mayor Marion Barry; then-City Administrator Thomas M. Downs, who assigned the air rights project primarily to the housing agency; Phil Johnson, then administrator of the housing agency's development division, and Kwasi Holman, who as then-director of the city's Office of Business and Economic Development assisted in reviewing the air rights project.

They also searched Monts' and Clyburn's offices for relationships with William B. Fitzgerald, who heads Independence Federal Savings and Loan; four other financial institutions, and various partners in the air rights and Camp Simms projects.

According to associates of both men, Clyburn sought Monts' help in 1986, apparently because he felt pressured to pay off $250,000 in D.C. and federal tax liens filed against his consulting company. Two newspaper stories in April 1986 cited the tax liens and questioned whether the financial liabilities should have been considered when the city awarded contracts to the company, Decision Information Systems Corp.

Clyburn hoped that Monts, who has good contacts with bankers, would either guarantee or cosign a loan for him, according to sources. Monts referred Clyburn to Fitzgerald, one source said.

Fitzgerald declined to comment on whether Clyburn asked for or received a loan, saying that his financial institution would not disclose information about any client. According to one source, Fitzgerald called Monts seeking a guarantee for a loan for Clyburn but Monts refused.

Clyburn also was one of the initial partners in the Camp Simms proposal but pulled out following negative publicity about a drug-counseling contract he received from the Department of Human Services. The Monts group was not selected to develop Camp Simms; the city instead awarded the rights to a Delaware group in March.