Bert Lance, the former federal budget director, is representing a group of investors, believed to be Middle Easterners, who are seeking to buy control of a Washington-based bank holding company, The Washington Post has learned.
During the past week, the Lance group has sought control of Financial General Bankshares, the $2.2 billion company that controls Union First National Bank of Washington and nearly a dozen Maryland and Virginia banks.
The Security and Exchange Commission, which already has spent six months investigating Lance's Georgia financial dealings, has begun pouring over Financial General's records.
Yesterday, the Office of the Comptroller of the Currency, which also investigated Lance last summer before his resignation from the government, was interviewing principals of the bank holding company about the Lance takeover attempt.
Principals and attorneys of Financial General refused comment yesterday. One company official who refused to be identified said, "We still only know a little bit about what's going on."
Financial General stock did not open for trading on the American Stock Exchange Friday because of confusion about who was seeking control of the company. A company official said he expects this suspension to continue indefinitely.
Lance recently sold his stock in National Bank of Georgia at a profit to Saudi Arabian financier Ghaith R. Pharaon. It is perhaps significant that NBG was owned by Financial General until 1975, when Lance and two other investors bought control of the Atlanta Bank.
At the time of the stock sale it was reported that Lance had been engaged by Middle Eastern financial interests to seek out U.S. investments, principally banks.
Lance was reliably reported working as a U.S. representative of Pakistan-born London banker Agha Hasan Abidi, whose Bank Credit and Commerce manages Arabs funds. Abidi acted as a middleman in the sale of Lance's stock to Pharaon.
Sources say that Abidi is also playing a middleman role between Lance and the Middle Eastern investors in the Financial General deal. In recent weeks, Lance was in Karachi, Pakistan, and sources says the trip was in connection with his dealings with Abidi.
Lance could not be reached yesterday for comment, and his Washington attorney, Robert Altman said, "I can't comment on Financial General at all."
Yesterday it was reported that another Middle Easterner, Prince Nawaf Bin Al Saud Aziz of Saudi Arabia, bought 15,000 shares of Financial General. But company sources stressed that the prince is unconnected with the Lance group and is a friend of G. William Middendorf, the former Navy secretary who with 29 investors acquires a major interest in Financial General last summer.
As one person close to the company put it: "The Middle Easterners are monolithic."
Financial General has been having trouble since the Federal Reserve Board forced the International Bank here to sell its stocks in Financial General. The Middendorf group bought that stock, but in recent months there has been dissatisfaction with its management. At least four Financial General board members have resigned since the first of the year.
Before joining the Carter administration in January 1977 as budget director, Lance was for two years chairman of NBG in Atlanta. He was also chairman of Calhoun First National Bank in Calhoun, Ga. Lance resigned from the Office of Management and Budget last September because of alleged financial improprieties before he joined the Carter administration.
Lance's financial affairs in Georgia are under investigation by a federal grand jury in Atlanta, and the SEC is expected to file a civil fraud complaint against Lance probably next month, sources said.