As a former director of National Bank of Washington and Garfinckel's and as a close observer of events, I feel compelled to set the record straight about Wafic Said's role in the collapse of the bank. The Sept. 17 story {Washington Business} was particularly disturbing.

With regard to Garfinckel's failure, our company, SIFCORP, supported Neal Fox, the owner of Raleighs, in his purchase of Garfinckel's. We joined him, and invested $18 million. By late 1988 his retailing strategy had failed, and we supported his replacement, George Kelly, a respected retailer who had successfully managed Garfinckel's in the mid-1970s. The Post reported these changes positively on Nov. 7, 1988. We not only supported Mr. Kelly as a shareholder, we invested a further $25 million to back him when the banks refused to extend additional credit. In retrospect, we were perhaps too supportive. Garfinckel's failed, as did many other hallowed names in U.S. retailing, and SIFCORP lost its entire investment.

The misstatements with respect to NBW are far more troublesome and disserve readers who justifiably ask why NBW failed. For example, the article says Mr. Said "was at the center of events" when both Garfinckel's and NBW failed. The article continues with a single premise: that Mr. Said was the largest shareholder in Washington Bancorporation, and then leaps to the baseless conclusion that he had significant influence over the course of events at NBW, its wholly owned subsidiary. The article not only fails to state facts to support this conclusion, preferring to rely on gossip, it ignores known facts that disprove the conclusion. The article unjustly transforms Mr. Said from the single most injured victim of the NBW debacle -- he lost more money than anyone except the American taxpayers -- into a scapegoat.

Banks almost invariably fail for one of two reasons -- bad loans or poor liability management. In the case of NBW it was both. As to loans, Mr. Said did not make a single loan; he never saw a loan file; he did not recommend a single loan; he never participated in the negotiation or renegotiation of a loan. The small number of loans that were made to other companies in which Mr. Said had an interest shared the common feature that every payment was made on time, and every loan has now been repaid in full -- every penny. As will become increasingly known, loans to affiliates of other persons with close ties to the bank performed less well and have resulted in some serious losses for NBW.

The millions of dollars of bad loans at NBW are attributable to management, which made the credit decisions that led to the collapse of the bank. My own efforts, as director, to encourage the adoption of more prudent and conservative lending policies on the books at NBW were ignored. Only time will tell whether these losses were caused by poor management judgment or something worse.

The unfolding facts are showing that the collapse of NBW was accelerated by a liquidity crisis, which in turn was caused by a highly unusual and highly risky liability management policy. Once again, Mr. Said had no participation in setting this policy. Mr. Said's interests held only two of 13 board positions at Washington Bancorporation. The remainder of the directors supported management, and 11-2 votes of the board were common. My efforts failed. The minutes of the board will prove this.

We began our efforts to make publicly known our dissatisfaction with management of WBC and NBW by filing a statement to that effect with the Securities and Exchange Commission on Oct. 6, 1988. The struggle was expensive and prolonged. The chairman, Luther Hodges, remained in control until the board ceased to support him in January 1990. In February of 1990, John Toups became a caretaker chairman, and in June 1990 John Mason began his valiant effort to save NBW. We supported him wholeheartedly, but events overtook him.

The final blow to NBW came when the commercial paper of WBC could no longer be sold. The directors had no warning of this until it happened.

We can all agree that the NBW story is a tragedy. The fatal flaw in the article is that it mistakes the audience for the actors and ignores the director and playwright. This is not a case that will go away until blame has been placed where it belongs and the culprits brought to book -- which we would welcome. ZIAD H. IDILBY President, SIFCORP London